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FTC, NZ Authorities Hit Massive Spam Operation

Government agencies in the U.S. and New Zealand say they have sued the people behind one of the world's largest spamming operations.

 

October 14, 2008 — IDG News Service —

Government agencies in the U.S. and New Zealand say they have sued the people behind one of the world's largest spamming operations.

The lawsuits were filed in U.S. federal court in Illinois and New Zealand High Court in Christchurch over the past week. They describe an international spamming operation run out of New Zealand, Australia and the U.S. that sold the kinds of phony male-enhancement pills, knock-off prescription drugs, sex toys and replica watches that have gummed up e-mail inboxes for years.

In addition to freezing the group's U.S. assets, the FTC is seeking damages for consumers who bought the bogus products, said Steve Wernikoff, an FTC staff attorney who worked on the case. That could end up costing the alleged spammers millions of dollars, he said. "We hope that we can shut down parts of the operation or make it more difficult for them to operate," he said.

Two brothers, Shane Atkinson of Christchurch and Lance Atkinson of Pelican Waters, Queensland, Australia, are named in the suits, as is Texas resident Jody Smith and Roland Smits, also of Christchurch.

The suits stem from a December 2007 raid by the New Zealand Department of Internal Affairs that seized 22 computers and documents from several locations in Christchurch, including the home of Shane Atkinson.

Since then, the U.S. Federal Trade Commission (FTC) and New Zealand authorities have worked together to build their case, according to Department of Internal Affairs spokesman Trevor Henry. "They have spent months just going through [the data] and analyzing and pulling it all together," he said.

The Atkinson brothers apparently knew they were attracting some unwanted attention even before the raid.

New Zealand authorities seized the computers just days after a BBC reporter, looking to track down the source of some spam in his inbox, telephoned Shane Atkinson for an interview, according to the Department of Internal Affairs.

The spamming network, which may have accounted for as much as one-third of the world's spam at one point, included operations in the U.S., Australia, New Zealand, China, India, Russia and Canada, the FTC said in a statement, released Tuesday.

After examining the products sold by the spam network, the FTC found that the spammers were selling "100 percent herbal" male-enhancement pills, called VPXL, that did not work as promised, and which were certainly not all-herbal. The pills contained sildenafil, the active ingredient in Viagra, and could have been dangerous to people who were also taking nitrate-based drugs used to treat conditions such as high blood pressure, diabetes or heart disease.

 
 
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