EarthLink Wins $16 Million in Spam Case

A district court in Atlanta has awarded EarthLink $16 million in damages against a New York state man that it alleged used illegal means to send out more than 825 million unsolicited e-mail messages, commonly referred to as spam.

The court also permanently banned the defendant from spamming and from a host of related activities. These include distributing mass e-mail software and selling e-mail addresses, according to Pete Wellborn, legal counsel for EarthLink and the company's lead litigator in the case.

In a statement issued Wednesday morning, EarthLink said that a ring led by Howard Carmack obtained Internet accounts by means of stolen credit cards, identity theft, and bank fraud, and then used those accounts to send out reams of spam.

Carmack could not be reached for comment.

Carmack used the accounts of family members, including a brother, and of third parties to mask his activities. He sent out now-familiar spam messages promoting work-at-home and get-rich-quick schemes and cable television descramblers, according to Wellborn.

"This was the worst of the worst of the worst of what you see in spam," the attorney says.

Spammer Still Loose

The company began investigating the spam ring in March 2002 after what it describes as a "spike" in spam e-mail from the Buffalo, New York, area.

By October, an EarthLink team led by Mary Youngblood, EarthLink's network abuse team manager, had identified and contacted a number of people involved in the ring with Carmack. Those people fingered Carmack as the ringleader.

EarthLink pursued Carmack and shut down several accounts he used. Nevertheless, Carmack's spamming activities continued to be "a big enough nuisance" that EarthLink turned to the courts for relief, according to an EarthLink spokesperson.

Carmack did not appear in court in Atlanta on Wednesday, nor was he represented by legal counsel, according to Wellborn.

Referring to conversations he had had with Carmack, Wellborn said the defendant did not appear to take the charges seriously.

"He thumbed his nose at the lawsuit and me and the judicial system. He told me 'Nothing is in my name, so you'll never catch me,'" Wellborn says.

Unopposed by a counsel for the defendant and armed with sworn affidavits from one of Carmack's business associates and his own brother concerning his illegal spamming activity, EarthLink's attorneys had little trouble convincing the judge to rule against Carmack.

Wellborn says the ruling is a "best-case scenario" for EarthLink and Internet users weary of spam e-mail messages.

"The court's permanent injunction protects Internet users everywhere, and the $16 million damages award sends a message to everyone out there that if you keep spamming there will be a financial death penalty," he said.

ISPs Take Action

Faced with a flood of spam e-mail, major ISPs such as EarthLink have increasingly used the courts, in addition to antispam technology, to stem the tide of junk messages.

In April, America Online filed five separate lawsuits against alleged spammers as part of its antispam campaign.

Those lawsuits, filed in AOL's home state of Virginia, charge over a dozen companies and individuals with sending an estimated 1 billion spam messages to AOL members. It names suspects from Maryland and Washington state, as well as a number of John Doe defendants.

And in another sign of the increasingly litigious environment surrounding the issue of spam, the SpamCon Foundation, a nonprofit antispam group, said Wednesday that it had created a legal fund to assist antispam litigants caught up in lawsuits.

The first beneficiaries of the fund will be defendants named in a case brought by EMarketersAmerica.org, an association representing e-mail marketers, against several antispam organizations.

SpamCon is also forming a legal advisory board to help antispammers in select cases, and it hopes to help shape evolving laws and legal principles regarding spam, organization representatives said.