MySpace Wins $234 Million Verdict Against Notorious Spammers (Sanford Wallace and Walter Rines)

MySpace was awarded $234 million in statutory damages, the largest ever anti-spam verdict made under CAN-SPAM and apparently under any law. This is also the first time damages have been awarded under the California Anti Phishing Act.

The case was won against two notorious spammers, Sanford “Spamford” Wallace and Walter Rines.

Wallace and Rines spammed MySpace by creating their own accounts and stealing the passwords of others. They then went on to mass message users an estimated 735,925 times. Each of these messages warrant up to $300 in damages under the 2003 federal anti-spam law CAN-SPAN because they were conducted “willingly and knowingly”. Source: TechCrunch

U.S. District Judge Audrey B. Collins in Los Angeles awarded $157.4 million jointly against Rines and Wallace and an additional $63.4 million against Rines under CAN-SPAM - plus $1.5 million more against the pair under California’s anti-phishing law.

In the late 1990s, Sanford Wallace’s company, Cyber Promotions, aka Cyberpromo, was widely blacklisted as a source of unsolicited email. Wallace’s high-profile pro-spam stance and unrepentant persistence earned him the derisive nickname “Spamford”. Prior to his email spam ventures, Wallace had gained notoriety in other questionable marketing circles, as a heavy utilizer of junk fax marketing, a practice outlawed in the U.S. since 1991. In 1995, Wallace formed Cyber Promotions, entering the spam market. Thanks to a self-marketing campaign, Cyberpromo rapidly became the most successful seller of email marketing - as well as the number one source of unsolicited email. His activities won him the 1997 Ig Nobel Prize.

Odysseus Marketing and its principal Walter Rines, a former associate of Sanford Wallace, was also charged by the FTC with capturing, compiling and attempting to sell user data, and uploading software onto users’ computers that reformatted search engine results to place his ad clients at the top.

MySpace has another anti-spam case pending against a high-profile defendant, Scott Richter, who it claims gained access to MySpace profiles using stolen passwords and then sent spam bulletins from those accounts.

While the amount may never be collected, this should send the strongest possible message against the spammers. Technology alone cannot stop spamming, but with legal help we surely can put an end to spamming on the internet.

Other sources: AP, Wikipedia etc.