U.S. charges four under new law against 'spam' e-mails

<br>WASHINGTON (AP) _ Federal authorities say they managed to pierce the murky underworld of Internet spam e-mails, filing the first criminal charges under the government's new ``can spam''

Thursday, April 29th 2004, 12:00 am

By: News On 6

WASHINGTON (AP) _ Federal authorities say they managed to pierce the murky underworld of Internet spam e-mails, filing the first criminal charges under the government's new ``can spam'' legislation.

Court documents in the landmark case in Detroit describe a nearly inscrutable puzzle of corporate identities, bank accounts and electronic storefronts in one alleged spam operation.

At one point, investigators said, packages were sometimes delivered to a restaurant, where a greeter accepted them and passed them along to one defendant.

Officials at the Federal Trade Commission, who announced the arrests in Washington on Thursday, said U.S. District Court Judge James F. Holderman froze the operation's assets at their request.

The FTC told U.S. postal investigators they had received more than 10,000 complaints about unwanted e-mails sent by the defendants.

``The cyber scam artists who exploit the Internet for commercial gain should take notice,'' said Jeffrey G. Collins, the U.S. attorney in Detroit. ``Federal law now makes it a felony to use falsehood and deception to hide the origin of the spam messages hawking your fraudulent wares.''

The FTC also announced legal actions Thursday against an Australian company, Global Web Promotions Pty Ltd., which investigators said pitched fraudulent weight-loss and growth-hormone products. It said it brought its case with help by the Australian Competition and Consumer Commission and the New Zealand Commerce Commission.

Court records identified the four U.S. defendants as Daniel J. Lin, James J. Lin, Mark M. Sadek and Christopher Chung of West Bloomfield, Mich., near Detroit.

They were accused of disguising their identities in hundreds of thousands of sales pitches for fraudulent $59.95 weight-loss products and delivering e-mails by bouncing messages through unprotected relay computers on the Internet.

``Working with law enforcement partners can maximize our impact,'' FTC Chairman Timothy J. Muris said. ``These cases should send a strong signal to spammers that we are watching their operations and working together to enforce the law.''

Chung and Sadek appeared in U.S. District Court and were released on unsecured bonds, said Gina Balaya, a spokeswoman for the U.S. Attorney's Office. An arrest warrant was issued for the Lins, but they had not been arrested early Thursday.

Sadek's lawyer, James L. Feinberg, said U.S. agents arrived at Sadek's home early in the morning ``out of the clear blue'' and arrested him.

``He was absolutely shocked,'' Feinberg said. He said Sadek will plead innocent to the criminal charges, which have not yet been challenged in court.

``No one's done this before,'' Feinberg said. ``It will be fun _ not for my client but for me professionally.''

The Lins and Chung could not be located at any of the addresses or telephone numbers listed in the court documents.

Authorities said their company sold a weight-loss patch under the corporate names AIT Herbal, Avatar Nutrition, Phoenix Avatar and others. The company allegedly operated out of Detroit and nearby communities of West Bloomfield and Birmingham.

``These people were sending spam e-mails to at least a million people,'' Balaya said.

Investigators said they consulted Dr. Michael D. Jensen, a professor at the Mayo Medical School, who confirmed that ingredients in the weight-loss product sold in the disputed e-mails wouldn't work.

The ``can spam'' legislation, which went into effect Jan. 1, requires unsolicited e-mails to include a mechanism so recipients can indicate they do not want future mass mailings.