HerbalKing principals indicted by FTC and New Zealand

The #1 worst spam gang on the Internet for much of 2007 and 2008, and active since at least 2005, has been indicted by the US Federal Trade Commission (FTC) in conjunction with simultaneous charges in New Zealand and possibly Australia & India. Several co-conspirators formed the HerbalKing spam gang. The primary perpetrators are well-known to Spamhaus: Brothers Lance and Shane Atkinson (former partners of ROKSO listed spammer Mike Van Essen), Roland Smits and Jody Smith, who has his own ROKSO records.

As HerbalKing is infamous for both the content and the volume of their fraudulent penis enlargement spam, Spamhaus congratulates the FTC and New Zealand's Department of Internal Affairs on their fine choice of spammers for legal action. Even this initial action may help lessen the spam sent by the gang, as, at the request of the FTC, a US court has issued a temporary injunction prohibiting the HerbalKing defendants from spamming and making false product claims and has frozen the defendants' US assets. Sadly, if like most criminal spam gangs, many of their assets will be banked "off-shore". The FTC documents list shell-corporations and banking in Cyprus and the Republic of Georgia.

Fines or other penalties are decided at a later phase of the suit. The FTC uses US civil law, not criminal law. But it can refer cases to criminal prosecution, especially in situations where the defendants have violated earlier orders which is what the Atkinsons seem to have done. Spamhaus is hopeful that further criminal charges may be filed as a result of this civil investigation.

Authorities in New Zealand have also taken legal action, working in tandem with the FTC. New Zealand has anti-spam laws and Spamhaus hopes this case will finally convince spammers there that the laws have teeth.

One interesting item to note is the location of one of the gang members as specified by the FTC's documents: "Lance Atkinson of Pelican Waters in Queensland"; this is Australia. People who follow spamming and national laws may be aware that Australia has some of the world's strongest anti-spamming regulations: Spam is just not allowed there. The Australians have used the laws to nail ROKSO listed spammers before. In the past, these were civil actions, but the law does seem to include the ability to charge botnet-using spam gangs such as HerbalKing and its members under the Cybercrime Act of 2001.

UPDATE: 2008-10-15 10:20 GMT - 24-hours after this announcement, Spamhaus is still seeing a flood of HerbalKing spam flowing into its spamtraps. This is not unusual due to at least two factors. 1) Botnet spam systems are very automated and will continue to spam even if the operators do not log-in and control them. These spammers set up tens-of-thousands of domains and the spam systems rotate in new ones every day. 2) Spammers such as this gang and the Russians, Chinese, Indians and others they work with care little about the law. Spamhaus notes that most will not quit spamming until they are behind bars (and in one case even that did not stop the spammer from trying!)

Additional reading:

• The 10 Worst ROKSO Spammers
• HerbalKing ROKSO
• Jody Smith ROKSO
• FTC press release and other documents
• NZ Department of Internal Affairs press release- New Zealand news item
• Spamtrackers.eu: Herbal King
• Herbal King/Elite Herbal: Legal actions in New Zealand and United States

History:

• Shane Atkinson Wikipedia entry
• NZ connection in US spam prosecution (2004)
• FTC Announces First Can-Spam Act Cases (2004)- Court Orders Permanent Halt to Illegal Spamming, Bogus Claims (2005)