Major Spam Purveyor Agrees To Pay Settlement - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News
News
6/15/2005
04:57 PM
Connect Directly
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%

Major Spam Purveyor Agrees To Pay Settlement

Defendant will pay nearly $500,000 to settle charges he caused $5.9 million in consumer injury with spam schemes involving anti-aging and weight-loss products.

Creaghan A. Harry is getting off easy. The accused spammer and perpetrator of fraud, based in Boca Raton, Fla., has agreed to settle charges brought against him by the Federal Trade Commission for $485,000, less than a tenth of the estimated $5.9 million consumer injury the FTC attributes to his sham anti-aging and weight-loss products.

Harry gets to keep the bulk of his $2.4 million estate thanks to Florida's homestead and asset-protection laws. Though the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, signed into law in April, includes homestead-protection limitations that might have enabled the FTC to seek more of Harry's assets, the agency decided in a 4-to-1 vote not to risk the almost half-million-dollar settlement for a potentially larger sum.

Steven Wernikoff, staff attorney for the FTC, notes in an E-mail message that the agency based its monetary judgment on the defendant's ability to pay. "The Florida homestead exemption protects a primary residence from most involuntary liens regardless of the circumstances," he writes. "Thus, Mr. Harry was left with some equity in his homestead. This exemption frustrates the ability of the commission to obtain maximum recovery for consumers."

The irony is that, according to court filings, the complex network of businesses Harry used to peddle his quack cures barely touched Florida. Allegedly, he paid a California company to manufacture "Supreme Formula HGH"--ostensibly a human growth hormone product that promotes weight loss during sleep and prevents biological aging--and paid a South Dakota company for customer order fulfillment and credit-card processing.

The FTC claims Harry had proceeds from the sale of his bogus health products wired to a bank account in Latvia, all the while concealing his identity using the name Greg Miller and various unregistered business located in Canada, Sweden, and Switzerland with names such as Scientific Life Nutrition and Rejuvenation Health Corp. Web sites that sold his products don't identify any business name and are registered to individuals in China, court documents note.

While the continued abundance of spam suggests that prosecuting spammers is a quixotic crusade, Wernikoff believes legal pressure helps. "We believe it does have a practical effect," he says, noting that technological countermeasures and education are also part of the solution.

Certainly the Can Spam Act of 2003 is helpful for prosecutors. The FTC charges the defendant with numerous violations of the law, including sending messages with false and misleading header information, failure to provide a valid opt-out mechanism, and routing messages through poorly secured third-party computers, or "open proxies."

But when thousands of people are paying $80 online for supposed hormones that prevent aging, increase memory, boost sexual potency, and erase cellulite, law and technology face a real challenge in compensating for lack of common sense.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2019 State of DevOps
2019 State of DevOps
DevOps is needed in today's business environment, where improved application security is essential and users demand more applications, services, and features fast. We sought to see where DevOps adoption and deployment stand, this report summarizes our survey findings. Find out what the survey revealed today.
Commentary
Will AI and Machine Learning Break Cloud Architectures?
Lisa Morgan, Freelance Writer,  6/10/2019
Slideshows
9 Steps Toward Ethical AI
Cynthia Harvey, Freelance Journalist, InformationWeek,  5/15/2019
Commentary
Humans' Fascination with Artificial General Intelligence
Guest Commentary, Guest Commentary,  6/6/2019
Register for InformationWeek Newsletters
Video
Current Issue
A New World of IT Management in 2019
This IT Trend Report highlights how several years of developments in technology and business strategies have led to a subsequent wave of changes in the role of an IT organization, how CIOs and other IT leaders approach management, in addition to the jobs of many IT professionals up and down the org chart.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll