America's first felony spam trial is underway here, with three North Carolinians accused of pushing penny stocks and other online gimmicks to millions of America Online users via unsolicited emails.
One of the three, Jeremy Jaynes, is accused by himself of sending or trying to send 7.7 million spam messages under false names or fake company designators to AOL users – in one day during July 2003. Those messages promoted a get-rich-quick scheme inviting users to become home Federal Express refund processors, or a purported gimmick to help users pick the best penny stocks.
It was using fake identities to beat AOL spam filters that got Jaynes, his sister Jessica DeGroot, and Richard Rutkowski into trouble, Virginia assistant attorney general Russell McGuire told the jury in his opening arguments.
The defense is preparing to try proving that Jaynes, DeGroot, and Rutkowski did nothing illegal because Virginia's law – which some consider the harshest in the U.S. – does not outlaw spam unless prosecutors prove the suspects intentionally hid the origin of their messages and that the messages were unsolicited.
"Marketing via the Internet," said DeGroot's attorney, Thomas Mulrine, "is not a crime. It may be annoying to you, but it's not a crime to market on the Internet."
Among other things, the Virginia law allows prosecutors to seize assets from anyone caught sending spam into Virginia. Jaynes, DeGroot, and Rutkowski are accused of running afoul of Virginia's law because America Online is headquartered in Dulles, Virginia. Each of the defendants faces up to five years behind bars if convicted.
The good news, if you can call it that, is that neither Jaynes, DeGroot, nor Rutkowski are even close to being among the world's worst spammers. Fourteen out of the top 20 among the world's 200 worst spammers hail from the United States, according to anti-spam group and Web site Spamhaus's Registry of Known Spam Operations, and none of the three is known to be tied to those offenders in any way, shape, or form.
The reigning king of the spam jam remains Alan Ralsky, most notorious for having to settle a major litigation case with Internet service provider Verizon. The other 14 American spam kings, according to Spamhaus, are Net Global Marketing Amadeo Belmote's Data One Marketing, America Find, Andrew Amend's US Health Laboratories, Andrew Westmoreland, Angelo Tirico, Anthony (Tony) Banks, Bill Stanley's telekomeurope.com, Bill Waggoner, Bonnie Dukarossa's Bullet 9 Communications, Brendan Battles's IMG Online, Brian David Westby's Married But Lonely, and Brian Farrow's Yeshost/Hivelocity Services.
Number 11 on the list, however, is a name familiar to the Adult Internet: the so-called "Australian Porn Mafia," an unofficially partnered group of four Queensland Adult Internet entrepreneurs said to control most of Australia's Adult Internet industry.
Dean Shannon, John Johnson, Greg Lasrado, and Scott Phillips haven't done much if any business together in the past few years, though they are believed to have remained social companions who often swapped business methods and strategies.
But Lasrado recently got into boiling water with the Australian Taxation Office, which ordered Commonwealth bank to assign receiver managers to his GDL Investments, through which he bought a sumptuous clifftop property hoping to develop it, following months of reported financial trouble – trouble from bouncing a check to a tree surgeon to an alleged $300,000 cash theft from his bedroom, and to a court battle exposing a taste for high-ticket credit shopping.
In August, Lasrado was hit by the ATO for hundreds of thousands of dollars in unpaid back taxes, confirming he got an over $800,000 bill and saying ATO's judgment was based on wrong information about how many people worked for him. But liquidators were assigned to his Netbill Pty. Ltd. and Pacific Networks Australia in June.
The U.S. government is familiar enough with Lasrado, too, as a mousetrapper – he agreed to settle with the Federal Trade Commission in 2001, over a scheme that hijacked Web surfers by copying existing sites, and coding the copies with instructions that redirected the surfers to various Adult sites while disabling their "back" and "exit" commands, forcing them to withstand an assaultive flood of porn images and advertisement windows.
