The New Zealander identified by the United States Federal Trade Commission as the ring leader of an international spam network has been ordered to pay $US15.15 million by a US federal judge.
A year ago Lance Atkinson, who lives in Pelican Waters, Queensland admitted his part in the spamming operation in the High Court in Christchurch and paid a financial penalty of $NZ100, 000 plus costs of almost $NZ8000. The FTC took separate action against him but not his brother Shane and Christchurch courier Roland Smits who just last month were ordered to pay $100,000 and $50,000 respectively for their parts in the operation.
These settlements marked the final stage of Operation Herbal King, an investigation conducted by the Department of Internal Affairs’ Anti-spam Compliance Unit, the FTC and other overseas agencies. Within three months of the passing of the Unsolicited Electronic Messages Act in 2007, the Department had shut down the New Zealand component of what the anti-spam organisation, Spamhaus, ranked as the largest pharmaceutical spamming operation in the world. The spam gang deceptively marketed products such as male-enhancement pills, prescription drugs and weight-loss pills.
The operation organised and paid affiliates around the world to send spam emails marketing Herbal King, Elite Herbal and Express Herbal branded pharmaceutical products. These were manufactured and shipped by Tulip Lab of India, through a business known as the Genbucks Affiliate Programme. This business was operated by Genbucks Ltd, a company incorporated in the Republic of Mauritius.
Lance Atkinson’s American accomplice in the network, US resident Jody Smith, has had to turn over nearly all his assets to the FTC. He will pay approximately US$ 212,000 and will also assign any rights he has to US$ 91,000 frozen in the name of one of his co-defendants, and US$ 547,000 that may be held for his benefit in an Israeli bank. In addition to the US$ 15.15 million that Atkinson and his company, Inet Ventures Pty Ltd, have been ordered to pay, the three companies affiliated with Smith are liable for US$ 3.77 million. Smith is awaiting sentence on a criminal charge of conspiracy to traffic counterfeit goods and faces up to five years in prison.
Internal Affairs Deputy Secretary Keith Manch said the Department appreciated the co-operation its Anti-Spam Compliance Unit received from the FTC.
“The FTC provided technical information making it possible for our investigators to identify the spammers and obtain evidence of the offending,” he said.
The Department acknowledged the assistance of the following in the investigation: Telecom New Zealand; Vodafone New Zealand Limited; Safecom Services (Gen-i); DMZGlobal (TelstraClear Ltd); Phil Hay, Senior Threat Analyst, M86 Security Labs; consultants Dr John R. Levine and Henrik Uffe Jensen; CSL NRW.NET Computer Service Langenbach GmbH; email compliance and anti-spam company, LashBack; Simon Cox and Richard Vadon, British Broadcasting Corporation.