Should 'spam king' Soloway pay the price for worse?

Spam king Robert Alan Soloway faces charges of mail and wire fraud, money laundering, and aggravated identity theft.

Notorious spam king Robert Alan Soloway is scheduled to be sentenced Monday by the US District Court in Seattle after pleading guilty to single counts of mail fraud, e-mail fraud, and tax evasion. Judge Marsha Pechman, who is presiding over the case, has scheduled a two-day hearing starting Friday to allow prosecution and defense to get their final arguments before the court.

The first two charges carry maximum sentences of 20 years and five years respectively, while the tax evasion charge carries a maximum penalty of one year. Soloway also faces fines of up to US$250,000 on the first two counts and an additional $25,000 for tax evasion.

Soloway was originally indicted last year on a 40-count charge that included mail and wire fraud, money laundering, and aggravated identity theft. The indictment alleged that between October 1997 and May 2007, Soloway ran a company called Newport Internet Marketing (NIM), selling e-mail spamming services and a software product that let others send spam of their own.

According to court documents, the company was originally set up to sell that software. In 2002, Soloway expanded his business to include tiered spamming services of his own.

According to court papers, Soloway customers purchasing the $195 "bronze" level of service were told that their messages would be sent out to 2 million e-mail address in 15 days, while those buying "platinum"-level service for $495 were promised their message would get delivered to 20 million e-mail addresses in the same time frame. In addition, Soloway claimed that his company had created a database containing over 157 million permission-based, opt-in e-mail addresses which customers could use to target spam by geography or audience interest.

The original indictment charged Soloway with using legitimate e-mail address and domain names so as to make it appear that the spam was originating from someone else. Victims whose domain names and e-mails were thus forged often ended up in spam blacklists, and had their own servers and e-mail inboxes flooded with bounced spam messages.

Often the spamming services and the products which Soloway advertised and sold via the dozens of sites he operated did not deliver as promised, and customers who sought to get refunds where in turn threatened with collection activities.

In a pre-sentencing memorandum, prosecutors noted that Soloway was known worldwide for the volume and "markedly malicious nature of his criminal spamming activity," and his fraudulent promotion of spam. The memorandum, which recommends a nine-year prison sentence for Soloway, pointed to his "brazen and even boastful claims that he is above the law and anyone -- including federal judges -- who would dare attempt to seek his compliance with it." They noted that Soloway pleaded guilty to the three single counts 10 days before he was to go on trail.

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Defense attorney Richard Troberman argues that Soloway deserves at most two years in prison. In a pre-sentencing memorandum, Troberman argued that the case against Soloway is nothing more than a spam case, which under the CAN-SPAM Act carries a maximum penalty of 5 years in prison.

In a pre-sentencing memorandum, Troberman argued the government had "dressed up its indictment to include counts of mail and wire fraud". He claimed that though the government has attempted to show Soloway as having defrauded a large number of people, the record in fact shows that only 75 of over 100,000 customers ever complained about product or service. He claimed that Soloway's company had received five times more favorable feedback than complaints over its history. "That is an enviable record for any business," Troberman noted in his memo.

The memorandum also noted that Soloway had been diagnosed at an early age with Tourette Syndrome, Attention Deficit Disorder, and Oppositional Defiant Disorder. The medications he used to control symptoms from these disorders, alleged Troberman, may explain his sometimes "erratic and anti-social behavior" and the manner in which he reacted to those who complained against his products and services.

Troberman admitted that Soloway's activities might have been a major annoyance to Internet users, but claimed the sentence recommended by the prosecution is wholly disproportionate to the nature of his offenses. "It equates to a guideline sentence for an armed bank robbery in which a firearm was discharged," the defense noted.

The memorandum also pointed to the sentences handed down to the various defendants in the Enron case and argued that Soloway's crimes were much less severe than those in the Enron case, though the recommended sentence was greater by comparison.