MySpace Says It Has Won $234M Spam Judgment

The popular online hangout MySpace has won a $234 million judgment over junk messages sent to its members in what is believed to be the largest anti-spam award ever.

A federal judge in Los Angeles ruled against a notorious "Spam King," Sanford Wallace, and his partner, Walter Rines, after the two failed to show up at a court hearing, MySpace told The Associated Press on Tuesday.

Wallace earned the monikers "Spam King" and "Spamford" as head of a company that sent as many as 30 million junk e-mails a day in the 1990s. He left that company, Cyber Promotions, following lawsuits from leading Internet service providers such as Time Warner Inc.'s AOL, only to re-emerge in a spyware case that led to a $4 million federal judgment against him in 2006.

"MySpace has zero tolerance for those who attempt to act illegally on our site," said MySpace's chief security officer, Hemanshu Nigam. "We remain committed to punishing those who violate the law and try to harm our members."

Rines and Wallace created their own MySpace accounts or took over existing ones by stealing passwords through "phishing" scams, Nigam said.

They then e-mailed other MySpace members, he said, "asking them to check out a cool video or another cool site. When you (got) there, they were making money trying to sell you something or making money based on hits or trying to sell ring tones."

MySpace said the pair sent more than 730,000 messages to MySpace members, many made to look like they were coming from trusted friends, giving them an air of legitimacy. Under the 2003 federal anti-spam law known as CAN-SPAM, each violation entitles MySpace to $100 in damages, tripled when conducted "willfully and knowingly."

In court papers, MySpace said the activities resulted in bandwidth and delivery-related costs, along with complaints from hundreds of users. The company also said some of the outside Web sites contained adult material, potentially harming teens who use MySpace.

The judgment is a big victory for MySpace, although service providers often have a tough time collecting such awards. But even if the News Corp.-owned site never collects, it hopes the judgment deters other spammers.

"Anybody who's been thinking about engaging in spam are going to say, `Wow, I better not go there,"' Nigam said. "Spammers don't want to be prosecuted. They are there to make money. It's our job to send a message to stop them."

The Los Angeles-based company described the amount of the award as a "landmark."

John Levine, a board member for the anti-spam advocacy group Coalition Against Unsolicited Commercial Email, said that past spam judgments he knows of have been in the tens of millions of dollars.

He said he would be surprised, though, if MySpace ever collected.

"The giant judgments are all defaults, which means they don't necessarily even know how to find the spammer," Levine said.

There was no telephone listing for Wallace in the Las Vegas area, where he moved to in 2004 to pursue night club promotion work. Service was disconnected for two listed numbers for Rines in Stratham, N.H., his last known address; a third number in Stratham was unlisted.

U.S. District Judge Audrey B. Collins awarded $157.4 million jointly against Rines and Wallace and an additional $63.4 million against Rines under CAN-SPAM — plus $1.5 million more against the pair under California's anti-phishing law. Collins also issued injunctions barring similar activities in the future.

MySpace has another anti-spam case pending against a high-profile defendant, Scott Richter, who it claims gained access to MySpace profiles using stolen passwords and then sent spam bulletins from those accounts.

MySpace said the junk messages from Wallace and Rines came after Richter's.