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Prolific penis pill pushers fined almost $19m

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Internet Security Threat Report 2014

Federal authorities have imposed almost $19m in fines on an enterprise accused of spamming the world with billions of emails advertising male-enhancement pills and other pharmaceuticals.

Lance Thomas Atkinson, a New Zealand citizen who resides in Australia, was fined more than $15.15m for his role as the mastermind of the vast spam network, which operated under the affiliate umbrella Affking. Three companies affiliated with his US accomplice, Jody Smith, are liable for $3.77m.

Previously, the defendants were slapped with fines that could only be described as paltry compared to the proceeds of their enterprise. While the increased fines are good news, it's unclear if they will ever be paid. Even after the FTC obtained a $2.2m judgment against Atkinson in 2005, he continued to recruit spammers for his various websites, according to FTC attorneys.

Atkinson recruited spammers from all over the world to push pills for male enhancement, weight loss, and mood disorders. Operating under names such as Target Pharmacy, Canadian Healthcare and Inet Ventures Pty Ltd of Australia, the businesses said sales of the drugs was legal and protected by SSL encryption, claims the Federal Trade Commission said were false.

Richard Cox, CIO of junkmail crusader Spamhaus.org, said Atkinson and Smith were "probably the most prolific spammers at the moment" when federal authorities hamstrung the operation in October 2008. The men took great pains to distance themselves from the operation, creating a handful of shell companies located throughout the world to launder the large sums of money they brought in and to purchase domain names and credit card services.

Smith pled guilty in August to conspiracy to traffic counterfeit goods, and faces a maximum of five years in prison. Sentencing is scheduled for December in US District Court in Missouri. He has agreed to pay $212,000 and has assigned the rights to money held in two bank accounts that have been frozen.

The fine against Atkinson was imposed in a default judgment and order (PDF) issued Monday by US District Judge Virginia M. Kendall of the Illinois Eastern Division. ®

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