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The spammers who send you all those offers of cheap prescription drugsand male enhancement products have been ordered to stop it. In a rareaction, a U.S. district court not only identified the persons andcompanies behind the spam but carried out an enforcement action.
The defendants include two individuals – Lance Atkinson, a New Zealandcitizen living in Australia, and Jody Smith of Texas – and fourcompanies they control: Inet Ventures Pty Ltd., Tango Pay Inc., ClickFusion Inc., and TwoBucks Trading Limited.
A compliant by the Federal Trade Commission alleges that both Atkinsonand Smith are liable for the spamming. It holds Lance Atkinsonresponsible for all product claims, and Smith liable for claims madefor the pharmaceutical products. In June 2005, the FTC obtained a $2.2million judgment against Atkinson and another business partner forrunning a similar spam affiliate program that marketed herbalproducts.
The network has been identified as the largest "spam gang" in theworld by the anti-spam organization Spamhaus. The FTC has receivedmore than three million complaints about spam messages connected tothis operation, and estimates that it may be responsible for sendingbillions of illegal spam messages.
At the request of the FTC, the court has issued a temporary injunctionprohibiting defendants from spamming and making false product claims,and has frozen the defendants` assets to preserve them for consumerredress pending trial. Authorities in New Zealand also have takenlegal action, working in tandem with the FTC.
According to papers filed with the court, the defendants deceptivelymarketed a variety of products through spam messages, including amale-enhancement pill, prescription drugs, and a weight-loss pill.
One product called "VPXL" was touted as an herbal male-enhancementpill. Advertised as "100 percent herbal and safe," it supposedlycaused a permanent increase in the size of a user`s penis. The agencyalleged that not only did the pills not work, but they were neither"100 percent herbal" nor "safe," because they contained sildenafil –the active ingredient in Viagra.
At the FTC`s request, the pills were tested by the FDA. According tomedical experts, men taking nitrate-containing drugs – which arecommonly prescribed to treat diabetes, high blood pressure, highcholesterol, or heart disease – can experience an unsafe drop in theirblood pressure when they also take sildenafil.
The defendants also used spam e-mail to sell prescription drugs. Theyclaimed that the medications came from a bona fide, U.S.-licensedpharmacy that dispenses FDA-approved generic versions of drugs such asLevitra, Avodart, Cialis, Propecia, Viagra, Lipitor, Celebrex, andZoloft. In fact, the defendants do not operate a U.S.-licensedpharmacy. They sell drugs that are shipped from India. The drugs havenot been approved by the FDA and are potentially unsafe. FTC staffmade two undercover pharmacy purchases and were not asked to provideverification of a prescription. The drugs they received contained nodosage information or doctor`s instructions.
The FTC also alleges that the defendants made false claims about thesecurity of consumers` credit card information and the other data theywere required to provide to buy goods. In operating the onlinepharmacy, which was called "Target Pharmacy" and later "CanadianHealthcare," the defendants` Web site assured potential consumers that"TARGET PHARMACY treats your personal information (including creditcard data) with the highest level of security," according to papersfiled with the court.
The Web site went on to describe its encryptionprocess, which supposedly involved "Secure Socket Layer (SSL)technology." FTC investigators, however, found no indication that theWeb sites were encrypted using SSL technology.
The FTC also challenged claims made for a weight-loss supplement pillpurportedly containing Hoodia gordonii, a cactus-like plant found insouthern Africa that supposedly could cause users to lose up to sixpounds a week. The FTC charged that the claims were false and violatedfederal law.
According to papers filed with the court, the defendants recruitedspammers around the world to send billions of spam messages directingconsumers to Web sites operated by an affiliate program called"Affking." By using false header information to hide the origin of themessages, failing to provide an opt-out link, and failing to list aphysical postal address, the defendants violated the CAN-SPAM(Controlling the Assault of Non-Solicited Pornography and Marketing)Act of 2003.
Some security researchers believe that at one time, nearly one-thirdof the world`s spam e-mail came from a network of compromisedcomputers, often referred to as a `botnet,` that sent spam promotingthe defendants` Web sites. Their enterprise included participants inAustralia, New Zealand, China, India, Russia, Canada, and the UnitedStates.
