Kiwi spammer gets $21m fine

Kiwi spammer Lance Atkinson has been fined US$15.1 million (NZ$21m) by a United States judge for his part in a spamming operation.

Atkinson, who now lives in Queensland, had admitted his involvement in a spam operation that sent millions of email messages marketing "male-enhancement" drugs and weight loss pills to computer users around the world. He was fined $100,000 in the High Court at Christchurch last December.

The US Federal Trade Commission (FTC) took its own action against Atkinson, whom it identified as the operation's ringleader.

It said that Atkinson and US resident Jody Smith recruited spammers from around the world and sent billions of e-mail messages directing consumers to websites operated by an affiliate program called Affking.

"The defendants' spam messages deceptively marketed (the drugs) in violation of  federal law.

"They falsely claimed that the medications came from a US-licensed pharmacy that dispenses FDA-approved generic versions of drugs such as Cialis, Propecia and Viagra."

The drugs were shipped from India and had not been approved by the FDA.

The FTC also said Atkinson and Smith made false claims about the security of customers' credit card information and other personal data provided when they bought goods.

FTC spokesman Steven Wernikoff called it one of the largest spamming operations they had seen.

It had generated over 3 million complaints over a period of six to eight with duped consumers forking out over $15 million.

Mr Wernikoff told Radio New Zealand it was difficult to track Aitkinson but they had eventually traced the money through many different countries which had led them to him.

He said they hoped this case would serve as a warning to spammers.

Department of Internal Affairs deputy secretary Keith Manch told Radio New Zealand Aitkinson's punishment was more severe in the US because the fine had taken into account the large amount of money consumers had paid.

Mr Manch said the punishment would be enforced despite Aitkinson being in Australia.

"New Zealand is not a safe place for spammers," he said.

Spam was an ongoing problem which they were targeting consistently, he said.

New South Wales University law professor Graham Greenleaf said it was quite possible the judgment would be enforceable in Australia, and Atkinson could stand to lose everything.

Australia has robust arrangements with the US for the enforcement of court judgments and Australia's federal court had itself issued million-dollar fines for spamming, he said. "One would think whatever assets he has got, they would be rather in danger."

Mr Manch said the department appreciated assistance it received from the Federal Trade Commission that helped it break the spamming operation and gather evidence for its prosecution.

Smith is awaiting sentencing and could face up to five years in prison.

He has been ordered to pay up to US$212,000 but could also be liable for a penalty of up to US$3.77 million.

- with MICHAEL FOX, Stuff.co.nz, and NZPA

- © Fairfax NZ News