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Judge Rejects Guilty Plea In Spam Case

By Robert O'Harrow Jr.
Washington Post Staff Writer
Wednesday, December 22, 2004; Page E01

A federal judge declined to accept a guilty plea yesterday from a former software engineer at America Online Inc. who had been accused of stealing 92 million screen names and e-mail addresses of subscribers for use in an Internet marketing scheme.

U.S. District Judge Alvin K. Hellerstein said he was unconvinced that Jason Smathers's actions violated a new law aimed principally at the marketers who each year send billions of unwanted ads via e-mail.

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Hellerstein asked prosecutors to file a brief responding to his concerns by Jan. 12 and he scheduled another hearing for Jan. 28, according to Herbert Hadad, a spokesman for the U.S. attorney's office in Manhattan.

In June, authorities accused Smathers, who worked at AOL's Dulles headquarters, of taking the e-mail addresses of nearly all the company's subscribers in May 2003. In court papers, prosecutors said Smathers, 24, sold the names to another man in Las Vegas, who then resold the addresses to Internet marketers, known as spammers. Those marketers then sent out ads for herbal sexual aids, prosecutors said.

In announcing Smathers's arrest, federal prosecutors alleged that he had violated the Can-Spam law that went into effect in January.

Yesterday, prosecutors said Smathers had agreed to resolve the case by pleading guilty to charges of conspiracy, interstate transportation of stolen goods and violation of the Can-Spam law. Under the arrangement, he would have faced fines and up to two years in prison. In a hearing, prosecutor David Siegal said Smathers was responsible for billions of e-mails sent to AOL subscribers.

But Hellerstein refused to accept the entire agreement, saying it was not clear that Smathers actually deceived the recipients of e-mail solicitations as appeared necessary under the Can-Spam law. "Everybody hates spamsters, there's no question about that," Hellerstein said, according to an Associated Press report, adding: "I'm not prepared to go ahead, Mr. Siegal. I need to be independently satisfied that a crime has been created."

Smathers's attorney did not return phone calls.

Ray Everett-Church, a spam and online privacy specialist, said he does not think the uncertainty about the case reflects poorly on the Can-Spam law. Everett-Church said the law is meant to focus on the senders of "unsolicited commercial e-mail," not on alleged theft or hacking. "I'm actually not surprised," he said. "It's about fraud and deception about the sending."

Nicholas Graham, an AOL spokesman, said it is too soon to say whether the effectiveness of Can-Spam law is in doubt. He said company officials "continue to believe in this case and will continue to fully support the U.S. attorney's efforts."

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