'Spam gang' leader gets $15m fine

The mastermind of a "vast international spam network" has been ordered to pay a fine of $15m (£10m) by US courts.

New Zealander Lance Atkinson and his US accomplice Jody Smith sent billions of illegal e-mails marketing prescription drugs and and weight-loss pills.

US authorities claimed the gang - known as HerbalKing - "deceptively marketed" the drugs on the internet.

Three companies affiliated with Mr Smith are liable for a further $4m, following the case.

The fines follow a lengthy investigation by the Federal Trade Commission (FTC) into the gang, which used a global network of operatives to send out the junk messages.

The e-mails marketed various pills which the gang claimed were generic versions of US-branded and licensed medications.

However, they were actually imported from India, unapproved and "potentially unsafe" according to authorities.

The FTC also said that Mr Atkinson and Mr Smith failed to protect the security of customer payments by claiming that they were using SSL (Secure Socket Layer) encryption technology to process payments even though they were not.

Following the ruling, all the assets of Jody Smith have been frozen and he faces a jail sentence up to five years after pleading guilty to "conspiracy to traffic counterfeit goods". He will be sentenced in the US in December.

Mr Atkinson will only have to pay his part of the $15.15m fine if he enters the US.

In a separate ruling, Lance Atkinson's brother Shane was earlier fined by a New Zealand court for sending spam e-mails. He has been ordered to pay $112,000 (£67,500).

Collectively, they were named the "number one worst spam gang on the internet" for 2007 and 2008 by anti-spam body Spamhaus.

They are thought to have been active since at least 2005 and at their peak may have accounted for one third of the world's junk e-mail.

Spamhaus estimates that more than 90% of all e-mail is spam.

BBC News

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