Microsoft and New York State Attorney General Eliot Spitzer teamed Thursday to announce a set of lawsuits aimed at bankrupting a spammer Spitzer characterized as the world's third most prolific sender of unsolicited commercial e-mail.
Using evidence gathered in cooperation with Microsoft through the company's Hotmail e-mail service, Spitzer is filing suit in New York's Supreme Court against OptInRealBig.com LLC president Scott Richter and several other companies that allegedly send as many as 250 million e-mail messages each day. During the course of a one-month investigation conducted in May and June, Microsoft intercepted more than 8,700 messages sent to dummy Hotmail accounts it had set up as "spam traps."
Those messages contained more than 40,000 fraudulent statements such as faked sender identifications and transmission paths and deceptive subject lines, according to the complaint. Spitzer said the state will seek penalties of US$500 per fraudulent act, a fine that could total $20 million.
Microsoft plans to file its own lawsuit in its home state, Washington, seeking a judgment of $18.8 million against the same defendants named in New York's lawsuit, Microsoft General Counsel Brad Smith said at a joint press conference with Spitzer, in New York.
"We need to change the economics of spam," Smith said.
Spitzer estimated that Richter's company brings in several million dollars a month from its e-mail marketing activities.
The suit targets Westminster, Colorado-based OptInRealBig and its president, Richter, whom Smith described as the ringleader of a collection of businesses working together through a series of subcontracting arrangements. Also named in the suit are New York City-based marketer Synergy 6 Inc.; its president, Justin Champion; Plano, Texas-based Delta Seven Communications LLC; and Delta Seven's operators, Paul Boes and Denny Cole.
OptInRealBig said it will have no comment until later this week, until after it has had a chance to review the complaint filed against it. Representatives of Synergy 6 did not respond to a call seeking comment.
Spitzer said his office's litigation will not be affected by the CAN-SPAM Act signed into law Tuesday. That law, which takes effect Jan. 1, enacts federal regulations barring deceptive e-mail practices like those alleged in the New York case, but it also sets liability caps lower than the penalties sought by Spitzer.
Microsoft filed a spate of U.S. and U.K. civil suits in June against a number of organizations it said were blitzing its customers with unwanted e-mail. The company will continue working on antispam cases with state attorneys general, including those in New York and Washington, along with the U.S. Federal Trade Commission, Smith said.
Critics doubt legal actions will slow the spam onslaught, citing the jurisdictional limits of U.S. legal powers and the fly-by-night nature of many spamming operations, but Smith said Microsoft is confident that legal hounding will discourage spammers.
Spitzer said that even if operators move their technical infrastructure overseas, U.S. state and federal prosecutors will be able to pursue penalties against those who live in the country.
"We have the capacity to bring action against an offshore entity," Spitzer said. "Enforcement does become a bit more problematic, but we will go to the effort and do what needs to be done."