New York, Microsoft Team to Sue Spammers

NEW YORK -- Microsoft and New York State Attorney General Eliot Spitzer have teamed on a set of lawsuits aimed at bankrupting a spammer that Spitzer characterizes 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 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 8700 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, as well as deceptive subject lines, according to the complaint. Spitzer says the state will seek penalties of $500 per fraudulent act, a fine that could total $20 million.

Several Targets

Microsoft plans to file its own lawsuit in its home state of Washington, seeking a judgment of $18.8 million against the same defendants named in New York's lawsuit, Microsoft General Counsel Brad Smith said in a joint announcement with Spitzer here on Thursday.

"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-based marketer Synergy 6; its president, Justin Champion; Plano, Texas-based Delta Seven Communications; and Delta Seven's operators, Paul Boes and Denny Cole.

Representatives of OptInRealBig said the company has no comment until they have the chance to review the complaint. 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 January 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.

Ongoing Effort

In June, Microsoft filed a spate of civil suits, in the United States and the United Kingdom, against a number of organizations it says are 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. Smith says Microsoft is confident that legal hounding will discourage spammers.

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, he adds.

"We have the capacity to bring action against an offshore entity," Spitzer says. "Enforcement does become a bit more problematic, but we will go to the effort and do what needs to be done."