Spitzer, Microsoft sue over spam ring

3 firms, 4 individuals tied to marketing campaigns using phony online data

December 19, 2003|By BLOOMBERG NEWS

NEW YORK - New York Attorney General Eliot Spitzer and Microsoft Corp., the world's largest software maker, sued three companies and four individuals yesterday, accusing them of deceptive business practices in transmitting junk e-mail.

The lawsuits allege that the people operated a New York "spamming ring" that engaged in seven illegal marketing campaigns in violation of consumer protection laws in New York and Washington, where Microsoft is based.

Among those sued were OptInRealBig.com LLC and its president, Scott Richter, ranked the world's third-largest sender of spam by the Web site Spamhaus.org.

Also sued were Synergy6 Inc. of New York and its president, Justin Champion, and Delta Seven Communications LLC and its principals Paul Boes and Denny Cole.

Spitzer and Microsoft officials accused them of using phony sender names, subject-matter headings and e-mail transmission paths.

Spitzer's lawsuit is civil, not criminal. He seeks to bar future deceptive spam by those sued and to recover $500 for each deceptive act, such as using a false name, he said.

Microsoft set up "spam trap" e-mail accounts and received 8,779 spam messages in from mid-May to mid-June sent by those sued. Those e-mails contained more than 40,000 deceptive pieces of information, Spitzer said.

"Illegal spam is having an enormously detrimental effect on the Internet and e-commerce," Spitzer said at a press conference in New York. He said his lawsuit will "send a message" to illegal spammers through the fines he seeks. "We will drive them into bankruptcy."

Synergy6, Champion and Cole did not immediately return voice mail messages requesting comment. Delta Seven and Boes could not be located.

"This is nothing but a PR stunt for Microsoft," Richter said. "We're a real company and we do everything according to the law." He called the charges "frivolous" and said OptInRealBig plans a counter-suit against Microsoft.

Spitzer alleges that Synergy6 hired OptInRealBig to distribute its e-mail solicitations. OptInRealBig, in turn, contracted with Delta Seven to send the e-mails, he said.

Microsoft also filed five lawsuits in Washington against other spammers.

Yesterday's lawsuits were the second joint legal action taken this month by a prosecutor and a company against spammers.

The Virginia attorney general indicted this month two men accused of deception in running one of the world's biggest spam operations.

The indictment was announced at the headquarters of America Online, the world's largest Internet service provider. AOL helped the attorney general track down the spammers. Spammers have until recently operated without much law enforcement interference.

Spam can represent as much as 90 percent of a company's e-mail during the holiday season, according to Ciphertrust, an Atlanta company that manages e-mail security for corporate customers.

The number of spam messages sent has grown 77 percent since last year, according to data gathered in November by Message Labs of New York, which filters e-mail for companies.

In June, Microsoft sued 15 spammers for damages allegedly caused by their sending more than 2 billion e-mail messages to users of the company's MSN Internet and Hotmail e-mail services.

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