2 Dec 2009

US authority determined to collect $21m spam fine

7:29 am on 2 December 2009

The US Federal Trade Commission says it will work with Australian authorities to try to collect a multimillion-dollar fine from a New Zealand spammer.

Lance Atkinson, of Christchurch, has been fined $NZ21.2 million by an American judge after sending billions of unsolicited e-mails advertising bogus health products and weight loss pills.

The judge found Atkinson and his company, Inet Ventures Pty, limited violated the Federal Trade Commission Act.

New Zealand's Department of Internal Affairs says Atkinson ran the world's largest spam network which organised and paid people to send spam e-mail marketing Herbal King, Elite Herbal and Express Herbal branded pharmaceuticals.

Atkinson, who now lives in the Australian state of Queensland, admitted his part in the spamming operation a year ago and was fined $100,000 by the High Court in Christchurch.

The department's investigation also led to fines for Atkinson's brother, Shane Atkinson, and Roland Smits, both of Christchurch.

An investigation into Lance Atkinson's activities began two years ago when the department raided a number of his Christchurch properties.

The Federal Trade Commission in the United States says it received more than three million complaints about spam messages connected to the gang. It took separate action against Atkinson, resulting in the huge fine.

Attorney Steven Wernikoff headed the case for the commission. He says the US had great co-operation from New Zealand authorities and it will now work with Australian agencies to collect the fine.

"There's some hurdles that need to be crossed; the judgement is with the US court and we would need to have that judgement reciprocated in Australia where Lance Atkinson is now.

"But we're up for the challenge and we're going to do everything that we can to attempt to enforce the judgement."

Mr Wernikoff says the next step will be to get the assistance of the US Department of Justice to file an action in the Australian courts on behalf of the commission to try to collect the fine.

Internal Affairs deputy secretary Keith Manch says the penalty will act as a sure deterrent for other would-be spammers in New Zealand.

"There's always spamming operations going on and the beauty of this case shows that there's strong international cooperation. And whether it takes a year or two years, we will follow it through and judgements will be entered and will be pursued.

"New Zealand is not a safe place to be a spammer."

Complex case

The Federal Trade Commission's Steven Wernikoff told Morning Report it took considerable international cooperation to find out who was behind the messages and to prosecute Atkinson.

"The messages are sent with false from lines through a network of compromised computers, so it's almost impossible to trace back who was responsible for sending the messages.

"Ultimately, we ended up purchasing a number of products undercover and tracing the money back to see who was profiting from it. It involved many different information from many different countries."

Mr Wernikoff says consumers ended up spending more than $US15 million, but it is not clear exactly how much money Atkinson made.