Roxanne Appleby
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Detroit News, 1/12/06
http://www.detnews.com/apps/pbcs.dl...0369/1003/METRO
Feds to send spammer to slammer
West Bloomfield resident faces at least 2 years in prison for sending millions of junk e-mails.
David Shepardson / The Detroit News
DETROIT -- A West Bloomfield man, the lead defendant in the nation's first anti-spam prosecution brought under a 2004 law, has reached a plea deal that will result in at least two years in prison.
Daniel J. Lin is expected to plead guilty in U.S. District Court on Tuesday to three felony counts, including two charges of fraud in connection with electronic mail, according to a court filing and his Detroit attorney, Juan Mateo.
Lin was charged with three other West Bloomfield men in April 2004 with sending millions of illegal spam e-mails. Prosecutors said they illegally used well-known company and government computers -- including Ford Motor Co., Amoco, Unisys, the U.S. Army Information Center and the Administrative Office of U.S. Courts -- to send junk e-mail that appeared to be legitimate.
Spam, the pesky junk e-mail that floods computer users' inboxes, still costs consumers and businesses billions of dollars to try to eliminate, in addition to lost productivity.
Terry Berg, first assistant U.S. attorney in Detroit, filed court papers Tuesday disclosing that the government had filed three criminal charges against Lin on Tuesday "for plea purposes." The other three men remain under investigation.
Berg and the court confirmed Wednesday a plea date is set for Tuesday. Lin faced up to 5 years on each of the spam counts and up to 10 years on an unrelated gun charge. Under terms of the plea agreement reached with federal prosecutors, Lin faces between two years and 57 months in prison. He also is expected to plead guilty to being a felon in possession of a firearm stemming from a previous undisclosed felony in Oakland County.
"This case took a tremendous amount of work to resolve but I believe Mr. Lin is satisfied with the resolution," Mateo said Wednesday. "The reality is he's looking at going to prison."
Federal prosecutors charged the four men in 2004 following an investigation by the U.S. Postal Inspection Service. The case got widespread notice as the first to be brought nationally by the Justice Department under the CAN-SPAM act, which prohibits deceptive spam e-mails.
President Bush signed the CAN-SPAM Act in December 2003, after getting bipartisan support in Congress, nearly 10 years after two lawyers in Arizona sent the first mass unsolicited commercial e-mail. The law took effect Jan. 1, 2004.
The act established requirements for those who send commercial e-mail, spells out penalties for spammers and companies whose products are advertised in spam if they violate the law, and gives consumers the right to ask e-mailers to stop spamming them.
The act bans false or misleading header information; prohibits deceptive subject lines; requires that e-mail give recipients an opt-out method and requires that commercial e-mail be identified as an advertisement.
Lin, Chris Chung, Mark M. Sadek and James J. Lin were charged with sending millions of spam e-mail messages to sell phony diet aids and illegally imported erectile dysfunction medicine.
The complaint was dismissed in June 2004 as officials said they needed more time to build the case. Federal agents combed through thousands of computer records worldwide, including Canada and Germany, to make the case.
The men allegedly sent spam to more than 1 million people. In one instance, the men sought to send more than 5 million spam e-mail messages that were blocked by a German company.
The Federal Trade Commission had received more than 10,000 complaints regarding spam sent by the Avatar companies, which sent e-mail using "proxy computers" -- computers owned by other companies that hide the true source of the bulk e-mails. The owners of those computers don't know their equipment was being used.
Spam accounts for 70 percent of all Internet traffic, the FTC said in a report released last month. An earlier report said spam costs companies about $20 billion a year in lost productivity and computer costs.
But spam has declined -- AOL says its members received 75 percent less spam in 2004 than in 2003 -- and most computer users say they get fewer spam today than they did in 2003.
Consumers Union says consumers spent $2.6 billion over the last two years on anti-spam efforts, while businesses reportedly spent $1 billion in 2004, the FTC said.
More than 30 cases have been brought under the CAN-SPAM act by state and federal law enforcement, along with 20 enforcement actions by the FTC.
In March 2005, the FTC settled civil charges against Lin and the three men, along with their company, Phoenix Avatar LLC. The defendants agreed to pay a $20,000 civil penalty. The FTC has the authority to bring civil charges for illegal spam use.
Daniel Lin was separately indicted in October 2004 with being a felon in possession of a firearm. The plea deal will allow Lin to resolve that case as well by pleading guilty to one count of being a felon in possession.
Lin has stayed out of trouble since he was charged and sought to get on with his life, Mateo said. He was married Nov. 23 in West Bloomfield; Judge O'Meara gave Lin permission to travel to Hawaii for his honeymoon.
According to government records, the four West Bloomfield men had generated more than $100,000, selling more than 100 orders weekly for at least five months. The weight-loss aids included a $59-a-month herbal weight-loss patch that officials say didn't work.
They were accused of selling the products to people around the world and mailing them from the Birmingham post office in Oakland County.
One of the men's shell companies listed its business address as a Detroit restaurant and two nightclubs.
During the April 2004 federal raid of the home of the Lin brothers and Chung in West Bloomfield, federal agents seized more than a dozen computers, hard drives and modems and thousands of pages of records. They also seized a half-dozen guns, boxes of ammunition and a "how-to" book on white-collar crime during their search of the home on Ten Hill Drive in West Bloomfield, according to court documents.
Through a spam e-mail sent to the FTC, the agency made a test purchase from Avatar and got a "premium diet patch" Jan. 15 that bore a return address of a U.S. post office box in West Bloomfield.
A federal grand jury issued subpoenas to AOL that showed most of the AOL e-mail addresses the men used to send spam were phony.
The name "spam" comes from a Monty Python's Flying Circus skit, in which Spam -- the canned meat -- appears in every dish served in a restaurant.
You can reach David Shepardson at (313) 222-2028 or dshepardson@detnews.com.
http://www.detnews.com/apps/pbcs.dl...0369/1003/METRO
Feds to send spammer to slammer
West Bloomfield resident faces at least 2 years in prison for sending millions of junk e-mails.
David Shepardson / The Detroit News
DETROIT -- A West Bloomfield man, the lead defendant in the nation's first anti-spam prosecution brought under a 2004 law, has reached a plea deal that will result in at least two years in prison.
Daniel J. Lin is expected to plead guilty in U.S. District Court on Tuesday to three felony counts, including two charges of fraud in connection with electronic mail, according to a court filing and his Detroit attorney, Juan Mateo.
Lin was charged with three other West Bloomfield men in April 2004 with sending millions of illegal spam e-mails. Prosecutors said they illegally used well-known company and government computers -- including Ford Motor Co., Amoco, Unisys, the U.S. Army Information Center and the Administrative Office of U.S. Courts -- to send junk e-mail that appeared to be legitimate.
Spam, the pesky junk e-mail that floods computer users' inboxes, still costs consumers and businesses billions of dollars to try to eliminate, in addition to lost productivity.
Terry Berg, first assistant U.S. attorney in Detroit, filed court papers Tuesday disclosing that the government had filed three criminal charges against Lin on Tuesday "for plea purposes." The other three men remain under investigation.
Berg and the court confirmed Wednesday a plea date is set for Tuesday. Lin faced up to 5 years on each of the spam counts and up to 10 years on an unrelated gun charge. Under terms of the plea agreement reached with federal prosecutors, Lin faces between two years and 57 months in prison. He also is expected to plead guilty to being a felon in possession of a firearm stemming from a previous undisclosed felony in Oakland County.
"This case took a tremendous amount of work to resolve but I believe Mr. Lin is satisfied with the resolution," Mateo said Wednesday. "The reality is he's looking at going to prison."
Federal prosecutors charged the four men in 2004 following an investigation by the U.S. Postal Inspection Service. The case got widespread notice as the first to be brought nationally by the Justice Department under the CAN-SPAM act, which prohibits deceptive spam e-mails.
President Bush signed the CAN-SPAM Act in December 2003, after getting bipartisan support in Congress, nearly 10 years after two lawyers in Arizona sent the first mass unsolicited commercial e-mail. The law took effect Jan. 1, 2004.
The act established requirements for those who send commercial e-mail, spells out penalties for spammers and companies whose products are advertised in spam if they violate the law, and gives consumers the right to ask e-mailers to stop spamming them.
The act bans false or misleading header information; prohibits deceptive subject lines; requires that e-mail give recipients an opt-out method and requires that commercial e-mail be identified as an advertisement.
Lin, Chris Chung, Mark M. Sadek and James J. Lin were charged with sending millions of spam e-mail messages to sell phony diet aids and illegally imported erectile dysfunction medicine.
The complaint was dismissed in June 2004 as officials said they needed more time to build the case. Federal agents combed through thousands of computer records worldwide, including Canada and Germany, to make the case.
The men allegedly sent spam to more than 1 million people. In one instance, the men sought to send more than 5 million spam e-mail messages that were blocked by a German company.
The Federal Trade Commission had received more than 10,000 complaints regarding spam sent by the Avatar companies, which sent e-mail using "proxy computers" -- computers owned by other companies that hide the true source of the bulk e-mails. The owners of those computers don't know their equipment was being used.
Spam accounts for 70 percent of all Internet traffic, the FTC said in a report released last month. An earlier report said spam costs companies about $20 billion a year in lost productivity and computer costs.
But spam has declined -- AOL says its members received 75 percent less spam in 2004 than in 2003 -- and most computer users say they get fewer spam today than they did in 2003.
Consumers Union says consumers spent $2.6 billion over the last two years on anti-spam efforts, while businesses reportedly spent $1 billion in 2004, the FTC said.
More than 30 cases have been brought under the CAN-SPAM act by state and federal law enforcement, along with 20 enforcement actions by the FTC.
In March 2005, the FTC settled civil charges against Lin and the three men, along with their company, Phoenix Avatar LLC. The defendants agreed to pay a $20,000 civil penalty. The FTC has the authority to bring civil charges for illegal spam use.
Daniel Lin was separately indicted in October 2004 with being a felon in possession of a firearm. The plea deal will allow Lin to resolve that case as well by pleading guilty to one count of being a felon in possession.
Lin has stayed out of trouble since he was charged and sought to get on with his life, Mateo said. He was married Nov. 23 in West Bloomfield; Judge O'Meara gave Lin permission to travel to Hawaii for his honeymoon.
According to government records, the four West Bloomfield men had generated more than $100,000, selling more than 100 orders weekly for at least five months. The weight-loss aids included a $59-a-month herbal weight-loss patch that officials say didn't work.
They were accused of selling the products to people around the world and mailing them from the Birmingham post office in Oakland County.
One of the men's shell companies listed its business address as a Detroit restaurant and two nightclubs.
During the April 2004 federal raid of the home of the Lin brothers and Chung in West Bloomfield, federal agents seized more than a dozen computers, hard drives and modems and thousands of pages of records. They also seized a half-dozen guns, boxes of ammunition and a "how-to" book on white-collar crime during their search of the home on Ten Hill Drive in West Bloomfield, according to court documents.
Through a spam e-mail sent to the FTC, the agency made a test purchase from Avatar and got a "premium diet patch" Jan. 15 that bore a return address of a U.S. post office box in West Bloomfield.
A federal grand jury issued subpoenas to AOL that showed most of the AOL e-mail addresses the men used to send spam were phony.
The name "spam" comes from a Monty Python's Flying Circus skit, in which Spam -- the canned meat -- appears in every dish served in a restaurant.
You can reach David Shepardson at (313) 222-2028 or dshepardson@detnews.com.
