Queensland spam king fined $US16 million by US authorities

A New Zealand citizen living in Queensland has been ordered by the US Federal Trade Commission to pay $US16 million for running an illegal spam enterprise, which experts have called the biggest in the world.

While Lance Atkinson has previously paid a $100,000 fine to New Zealand authorities, that penalty only related to emails sent within that country and not the billions sent within the US and other countries.

However, Atkinson will only be forced to pay the fine if he enters the US. He also has a $US2.2 million fine against his name that was handed down in 2005.

The FTC said Atkinson, along with accomplice Jody Smith, sent billions of emails offering prescription drugs and weight-loss pills giving themselves the title “HerbalKing”. However, the authorities said the two “deceptively marketed” the products.

Spamhaus, which tracks the world’s biggest spam operations, said HerbalKing was the “number one worst spam gang on the internet” for 2007 and 2008. At one point during its operation, HerbalKing may have accounted for over one third of all junk email, it is believed.

The pair said they had sourced the drugs from a licensed pharmacy in the US, but in reality, the FTC said, the pills were shipped from India and were “potentially unsafe”. Billions of emails were sent, with servers hosting websites for the drugs in China.

It was also said Atkinson and Smith did not securely protect their customers’ payments. While the pair advertised the use of “Secure Socket Layer” encryption technology, which is used by many large retailers to protect credit card payments, they were not using the system at all.

The FTC said Atkinson and Smith controlled a botnet of 35,000 computers, which enabled them to send up to 10 billion email messages per day. Atkinson’s brother and another New Zealand resident are also believed to have been involved in the illegal campaign.

Additionally, operatives in Cyprus and Georgia processed credit card information given by recipients of the emails.

Fines have also been lodged against four companies related to the spam campaign, including “Inet Ventures” – an Australian-registered company that recorded over three million complaints within a six-month period regarding the emails.

Authorities around the world, and in Australia, are beginning to crack down harder on infringers of spam prevention laws.

The Australian Communications and Media Authority recently hit telecommunications giant VHA the largest fine in its history for spam messages, accepting enforceable undertakings including a $110,000 financial component.