America Online Inc. won a $13 million judgment yesterday against a prominent spam gang in its first case filed under a law allowing seizure of spammers' assets.
Following the ruling by the U.S. District Court for the Eastern District of Virginia, AOL said it does not know how much of the $13 million award it will be able to recover.
One spammer, Braden M. Bourneval, a 20-year-old chess champion from New Hampshire, cooperated with AOL in the investigation and agreed to surrender gold, cash and a 2003 Hummer H2 to the company.
The company has been unable to locate the other main spammer named in the suit, Davis Wolfgang Hawke, who has been associated with neo-Nazi groups.
The Internet provider said it will give property confiscated from Bourneval to its subscribers -- the Hummer, which once bore a vanity tag reading "CASHOLA," $75,000 in cash and $20,000 in gold.
Bourneval's property was seized under the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, known as the CAN-SPAM Act, which allows companies to take the assets of spammers when recovering damages. The act went into effect in January 2004.
AOL's deputy general counsel, Curtis Lu, praised the law for helping the Internet provider take action against spammers and said the lawsuit would help discourage other senders of unsolicited e-mail marketing.
"There are only a couple of dozen spammers who are responsible for the highest volume," he said. "This shows that under the tool that Congress gave us with CAN-SPAM we can really reach out and touch them . . . and when we find them we are going to hurt them badly."
Products hawked by the spammers included ephedra, "personal lie detectors" and a CD-ROM pitched as "the Banned CD," which purported to contain underground information about avoiding taxes and changing identity.
John R. Levine, chairman of the Anti-Spam Research Group and author of "The Internet for Dummies," said that the two spammers are "quite well known" in the anti-spam community but that he was skeptical that a single judgment will have a broad impact.
"It certainly will have some effect," he said. "But we will need hundreds of these high-profile cases to make a significant dent against spammers. In any case, I'm very glad that AOL and Microsoft have spent lots of their own money to go after these guys."
AOL said yesterday that it had received 130,000 complaints about unsolicited mail that it traced back to operations run by the two men. Under the CAN-SPAM Act, AOL sought statutory damages of $100 for each complaint, though the company believes the spammers are responsible for billions of e-mails sent to its members. At the height of their activities, AOL believes, the spammers were making $100,000 per week.
AOL will give away the confiscated items through a free raffle on its site, which it dubbed the "AOL Spammer's Gold Sweepstakes." The Internet provider also said that it would donate tens of thousands of dollars worth of seized computer equipment to public schools in Northern Virginia.
The company's announcement followed another major spam settlement this week. On Tuesday, software giant Microsoft Corp. announced that one of the world's top three spammers had agreed to pay $7 million in a settlement with the company.