Officers of defunct Niagara Falls e-mail marketing firm MonsterHut were no-shows as New York Supreme Court Justice Lottie E. Wilkins handed down a judgment against them last month.
In a ruling dated May 8, Wilkins barred MonsterHut CEO Todd Pelow and the company's chief technical officer, Gary Hartl, from doing business in New York state until they post a $100,000 surety bond. Wilkins also ordered the two to pay New York $65,500 in civil damages — $500 “for each of the 131 deceptive or unlawful e-mail campaigns sent to consumers” — plus $2,000 in costs.
Though it appears MonsterHut's officers were prolific spammers, they were prosecuted not for spamming, but for misrepresenting that their e-mail lists were permission-based. Spamming is not illegal in New York.
State Attorney General Eliot Spitzer sued MonsterHut in May 2002, alleging it had sent 500 million e-mails to consumers falsely claiming they had “opted in” to receive them. More than 750,000 consumers asked to be removed from MonsterHut's list, and more than 40,000 consumers complained, Spitzer's office alleged.
It is rumored that Pelow has since moved to Florida and Hartl to Canada. When asked whether spamming New Yorkers from Florida or Canada would constitute doing business in New York, assistant attorney general Stephen Kline of Spitzer's Internet Bureau said: “The ruling affects them no matter where they are.”
Importantly for other e-mail marketers, the court rejected MonsterHut's argument that it ought not be liable because it obtained the lists from third parties that claimed the lists had been opted in. This means that in New York, the marketer sending the offer is as legally responsible as the list owner for representing accurately to consumers that they have “opted in,” or given permission to receive marketing e-mail from the sender.
“When they [marketers] make a promise, it must be factually accurate,” Kline said in an earlier interview about this case. “Where [the ruling affects marketers] is not necessarily that they have to go about changing their practices in how they collect e-mail addresses. They just have to be specific and clear about the way they describe it. The problem with MonsterHut was one of disclosure.”
Also in New York in May, Howard Carmack, aka the “Buffalo Spammer,” was arrested. This also was not for spamming, but involved identity theft.
According to Internet service provider EarthLink, Carmack used 343 stolen identities to sign up for e-mail accounts through which he sent about 857.5 million spam e-mails pitching spamming software, herbal sexual stimulants and bulk e-mail lists. The ISP claims that Carmack repeatedly opened e-mail accounts with EarthLink using personal information from Buffalo-area residents.
In October, Carmack also assumed the identity of an unsuspecting North Dakota man to get an extra phone line to avoid blocks placed on his other lines by EarthLink, the ISP alleges.
Carmack's charges include second-degree forgery, criminal possession of a forgery device and two counts of first-degree falsifying business records, all felonies; and two counts of third-degree identity theft, a misdemeanor. He faces 3 1/2 to seven years in prison.
