CAN-SPAM Claims Its First Victims

PHOENIX – After a June trial lasting three weeks, Jeffrey A. Kilbride of Venice, Calif. and James R. Schaffer of Paradise Valley, Ariz. were sentenced Friday to more than five years in federal prison for having sent millions of unsolicited commercial e-mails containing sexually explicit materials.

This was the first conviction obtained under 2003's "Controlling the Assault of Non-Solicited Pornography and Marketing Act," or CAN-SPAM, although three associates of Kilbride and Schaffer had previously pled guilty to offenses under the Act, and had testified against the defendants at their trial.

Prosecutors charged that the pair had sent out "millions" of unsolicited sexually-oriented e-mails altogether, and that during just nine months in 2004, Kilbride, Schaffer and an associate had sent more that 600,000 advertisements for adult websites, earning them more than $2 million in commissions.

The CAN-SPAM Act provides that all unsolicited e-mails must have accurate "To," "From" and routing information; that the subject line cannot be misleading as to the e-mail's contents; that the e-mail be labeled as an advertisement and include the sender's actual physical postal address; and the e-mail must contain a legitimate "opt-out" method for those who do not wish to receive future similar e-mailings.

It came out at trial that the defendants had used falsified headers and domain names to direct recipients of the e-mails to sexually-oriented websites, earning millions of dollars through the redirects. Testimony also revealed that after the CAN-SPAM Act became law, the defendants took steps to relocate their business overseas so as to evade prosecution under the Act.. By remotely logging in to servers located in Amsterdam, the U.S. Department of Justice said in a press release, the men were able to make it appear that the messages they were sending originated abroad, when they were actually being sent from Phoenix.

In all, Kilbride and Schaffer were convicted of several felony counts of obscenity, fraud, conspiracy and money laundering, and were sentenced to 72 months and 63 months, respectively. The pair were also fined $100,000, ordered to pay $77,500 in restitution to AOL, Inc., and ordered to forfeit to the government more than $1.1 million earned from the spamming operation.