Los Angeles — A U.S. District Court in San Jose, California, on Thursday awarded Facebook $711 million in civil damages against Sanford Wallace, the infamous self proclaimed “spam king” who is also famed by the disrespectful nickname “Spamford.” The court found Wallace guilty of violating the CAN-SPAM act, and he could face time in prison if convicted.
Facebook on Friday said that though it has been awarded $711 million against spam king Wallace, which the social-networking site says is unlikely to pay the money but declared the ruling to create a blow in an ongoing battle against spam at the leading online social-networking service, besides the judge has recommended criminal prosecution of Wallace.
“While we do not expect to receive the vast majority of the award, we hope that this will judgment will act as a deterrent against these criminals,” Sam O’Rourke of the Facebook legal team said in a blog post announcing the ruling.
“This is another important victory in our battle against spam. We will continue to pursue damages against other spammers.” An analyst said assaults against Facebook and MySpace show spam can be profitable.
Facebook named Wallace, Adam Arzoomanian and Scott Shaw broke the law by dispatching unwanted messages and wall posts to people on Facebook, violating the Computer Fraud and Abuse Act, the California Anti-Phishing Act, and the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM).
Court documents suggests that Wallace and an associate who was later dropped from the case spammed Facebook users with phishing messages. Those who clicked on the links and offered login information to phishing sites enabled Wallace and his associate to then spam the phishing victim’s friends, in turn generating more potential phishing victims.
“Most notably, the judge directed Wallace to the U.S. attorney’s office with a request that Wallace be prosecuted for criminal contempt, which means that in addition to the judgment, he now faces possible jail time. This is another important victory in our fight against spam. We will continue to pursue damages against other spammers.”
Wallace is smartly regarded for his e-mail marketing company Cyber Promotions, which was at one time the largest source of unsolicited e-mail in the world. In the proceeding years, another Wallace venture called SmartBOT faced FTC action for infecting computers with spyware.
Facebook claims that Wallace also received payment for redirecting some spam recipients to Web sites that pay for referrals.
Expressing skepticism in his ruling that such a figure would be proportionate to Wallace’s offenses, Judge Jeremy Fogel instead awarded Facebook $710,737,650.
“The record demonstrates that Wallace willfully violated the statutes in question with blatant disregard for the rights of Facebook and the thousands of Facebook users whose accounts were compromised by his conduct,” Fogel said in his ruling.
Fogel also said that because of Wallace’s willful violation of a temporary restraining order and injunction, the Court has referred the case to the U.S. Attorney’s Office with a request that Wallace be prosecuted for criminal contempt.
“What is so startling to me was that Wallace has already been sued by MySpace previously. So it is great to see the justice system trying to remove the temptation for people to spam social networks — but evidently, it is worth the risk,” said Brad Shimmin, an analyst at Current Analysis. “Obviously since Wallace has done it before and is willing to take the risk of doing it elsewhere, it is a very lucrative practice to phish and spam people.”
Last year, MySpace was awarded a $230 million judgment against Wallace and accused associates for disseminating porn and gambling spam at the News Corp-owned online social networking service.
Also last November, Facebook won $873 million in damages — the largest award to date under the 2003 Can-Spam Act — from spammer Adam Guerbuez and his company, Atlantis Blue Capital.
Facebook believes that the judgment will help put spammers out of business.