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First spammers charged under new US law

Matt Hines CNET News

Published: 30 Apr 2004 08:50 BST

The US Department of Justice has filed a criminal complaint against four Detroit-area men under the federal Can-Spam Act, in the first case sparked by the legislation.

In a filing on Wednesday in the US District Court of Michigan, federal attorneys contend that Daniel J. Lin, James J. Lin, Mark M. Sadek and Christopher Chung violated the terms of the Can-Spam Act by creating massive email campaigns that marketed fraudulent weight-loss products. The Can-Spam Act takes aim at individuals who create and dispense unsolicited and fraudulent email.

Gina Balaya, a spokeswoman for the US Attorney's Office of Detroit, said Chung and Sadek were arrested and appeared in court on Wednesday. The men were subsequently released on unsecured bonds of $10,000 (£5,654).

The two Lins have not yet been reached by authorities, she said. The criminal complaints are good for a period of 30 days, during which Assistant US Attorney Terry Berg will decide whether to seek an indictment.

According to court documents, the four men are accused of generating hundreds of thousands of different emails that hid their identities and advertised a weight loss patch. The emails were sent out under a variety of company names, including AIT Herbal, Avatar Nutrition and Phoenix Avatar, identified collectively as the Avatar Companies. The emails were allegedly sent to millions of email accounts over the course of several years.

The Federal Trade Commission is also involved in investigating the operation, and it said in the filing that it had received more than 10,000 complaints regarding the Avatar operation and had discovered 97 different Web site domain names purportedly being used by the involved individuals to advertise the diet patches. Investigators then followed a paper trail via the US Postal Service, which led them to the four men.

In order to prove the apparently fraudulent nature of the email campaigns and the product being marketed, the investigators relied on the expertise of Dr. Michael Jensen, a professor at the Mayo Medical School. Judging from the ingredients used to create the product, Jensen confirmed for the government that the so-called diet patch would not work.

In April, the US Sentencing Commission sent Congress sentencing guidelines for the Can-Spam Act, adding penalties for people convicted of sending spam via someone else's computer without permission or obscuring the message's origin. In that proposal, the commission retained a controversial proposal to compare spam offenses to theft, fraud and property destruction for the purposes of sentencing.