Four accused of violating spam law

Three federal agencies are throwing the book at several people they say sent millions of fraudulent e-mail messages hawking diet products that were unlikely to work.

The U.S Attorney’s Office in Detroit on Wednesday arrested Christopher Chung and Mark Sadek, who operated Phoenix Avatar, a company that prosecutors said sent millions of fraudulent spam messages in violation of the new federal Can-Spam law. James and Daniel Lin, who prosecutors said worked with Mr. Chung and Mr. Sadek, were expected to turn themselves in to authorities.

The U.S. Postal Inspection Service also charged the defendants with mail fraud, and the Federal Trade Commission (FTC) is pursuing civil charges against the defendants, who the FTC says led consumers to forward nearly 500,000 messages to its spam database.

The FTC also has filed civil charges against Global Web Promotions, an Australian company that sent millions of fraudulent e-mail messages advertising diet patches and human growth hormones.

Investigators said they were able to find the defendants by tracking their trail of money.

“Our start to this and many other investigations is we buy the product and we see who charges our credit card,” said Howard Beales, director of the FTC’s Bureau of Consumer Protection.

The defendants in the Phoenix Avatar case face up to five years in jail on violations of the Can-Spam act, including using fraudulent e-mail headers and subject lines and failing to include a valid postal address in the messages. They face up to 20 years in jail for the mail-fraud violations.

Officials did not pursue criminal charges against Global Web Promotions and collecting from that operation could prove tricky because it is based outside the United States. But Mr. Beales said the FTC was confident that it could stop the sale of the company’s products in the United States.

“The feds bringing the heat against these spammers and their clients is a great victory for everyone who’s been victimized by spam,” said Marc Sunner, chief technology officer for Messagelabs, a British Internet security company. “It is exactly the legal approach that’s needed to stop these guys dead in their tracks.”

But these arrests likely will not free e-mail inboxes of spam. The Phoenix Avatar defendants are not among the worst spammers in Michigan, let alone the nation, antispam groups said.

“Michigan has really been the cesspool of e-mail for a while,” said Matthew Prince, the founder of Unspam, a Chicago spam-fighting company. “It’s good to see they are doing something, but I feel that it’s just the tip of the iceberg.”

Spamhaus, a British antispam organization, lists Detroit-area resident Alan Ralsky as the world’s worst spammer. Mr. Ralsky was not named as a defendant in either of the cases filed this week. But Mr. Beales of the FTC did not rule out a relationship, saying that further investigation of spam cases often uncovers new connections.