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EarthLink wins $16 million settlement in spam case

By Paul Roberts, IDG News Service
May 8, 2003 12:00 PM ET

IDG News Service - A district court in Atlanta on Wednesday awarded Internet service provider EarthLink Inc. $16 million in damages against a New York man who 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 undertaking a host of other activities related to spamming such as distributing mass e-mail software and selling e-mail addresses, according to Pete Wellborn, EarthLink's lead litigator in the spam case.
In a statement Wednesday morning, Atlanta-based EarthLink said a ring led by Howard Carmack obtained Internet accounts using stolen credit cards, identity theft and bank fraud, then used those accounts to send out reams of spam. Carmack couldn't be reached for comment.
Carmack used the accounts of family members, including a brother, and those of third parties to mask his activities, sending out by-now familiar spam e-mail for "work at home" and "get rich quick" schemes and cable TV descramblers, according to Wellborn. "This was the worst of the worst of the worst of what you see in spam," he said.
The company first began investigating the spam ring in March 2002 following what it described as a "spike" in spam e-mail from the Buffalo, N.Y., area. By October, an EarthLink team led by Mary Youngblood, EarthLink's network abuse team manager, identified and contacted a number of individuals involved in the ring with Carmack. Those people fingered Carmack as the ringleader.
EarthLink pursued Carmack and shut down several accounts he used. However, Carmack's spamming activities continued to be "a big enough nuisance" that EarthLink turned to the courts for relief, according to an EarthLink spokeswoman.
Carmack didn't appear in court in Atlanta, nor was he represented by legal counsel, according to Wellborn. Referring to conversations he had with Carmack, Wellborn said the defendant didn't seem to take the charges against him 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.'"
Without opposing counsel and armed with sworn affidavits from one of Carmack's business associates and Carmack's own brother concerning his illegal spamming activity, EarthLink's attorneys had little trouble persuading the judge to rule against Carmack.
Wellborn said the ruling was 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," hesaid.
Faced with a flood of spam e-mail, major Internet service providers have increasingly used the courts, in addition to antispam technology, to stem the tide of junk messages.
In April, America Online Inc. filed five separate lawsuits against alleged spammers as part of its antispam campaign. Those lawsuits, filed in AOL's home state of Virginia, charge more than a dozen companies and individuals with sending an estimated 1 billion spam messages to AOL members. Individuals from the states of Washington and Maryland were named in that case, in addition to a number of John Does.

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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