The Attorney General of Texas has filed a lawsuit against two alleged spammers, charging that they violated the federal CAN-SPAM law in sending out hundreds of thousands of unsolicited e-mails relating to mortgage loans, refinancing and other services.
The lawsuit names Ryan Samuel Pitylak of Austin, Texas, and Mark Trotter of Encinitas, Calif., as alleged spammers who profited by selling consumers’ information to “lead-generating entities which in turn sell the information.”
Microsoft Corp. has also launched a civil lawsuit against the two men, claiming they sent millions of unsolicited spam e-mails to Internet users.
Mortgage spam, or unsolicited e-mail, has been identified by some spam-trackers as a growing source of spam e-mail. NetIQ.com, a technology company that offers security management and other services, reported last year that mortgage spam was the fastest-growing category of spam, growing about 42 percent from 2003.
And Commtouch Software Ltd., which develops anti-spam technologies, reported that mortgage and refinancing-related e-mails accounted for about 9.3 percent over the overall spam volume in August 2004, ranking third on the list behind drug-related and software-related spam. Also that month, Commtouch reported that most spam e-mails originated in the United States, with 41.6 percent of the overall volume; South Korea, at 14.3 percent; and China, with 13.7 percent. The U.S. share was down from about 60 percent in June, the company also reported.
Some of the e-mail messages associated with Pitylak and Trotter’s business operations included such subject headings as: “Equity Release Statement,” “Mortgage Notice,” Urgent: Household Loan Memorandum: Please Read,” and “Residence Loan Memorandum: Please Read,” among others, the lawsuit states.
Lin Hughes, a lawyer for Pitylak and Trotter, has said in news reports that the men have worked to adhere to the CAN-SPAM law that took effect in January 2004. Various news sources have reported that Pitylak is a student at the University of Texas at Austin and that he owns a house valued at about $450,000, while Trotter’s California home had a purchase price of about $1.16 million.
The lawsuit charges that Pitylak and Trotter are associated with spam e-mails that included misleading statements. “(Some) e-mail messages related to mortgage services included statements designed to make the recipient believe defendants are actual lenders and exercise some control over the interest rates or terms available to the recipient,” according to the lawsuit.
“In other mortgage related e-mails, (the senders) represent that they will take extensive steps to help find the best rate and mortgage available for the recipient. In truth defendants are not licensed mortgage brokers or mortgage bankers and are therefore legally prohibited from offering or providing any lending packages,” the lawsuit states.
Spamhaus.org, a nonprofit international spam watchdog organization based in the United Kingdom, has listed Pitylak, Trotter and another man, Steve Goudreault, as “major spammers, sending spam to generate ‘leads’ they then sell. Pitylak has been spamming for years, used to be in Michigan, moved to Texas.”
Pitylak, Trotter and Goodreault appear on Spamhaus’ Register of Known Spam Operations, which contains “information and evidence on known professional spam operations that have been terminated by a minimum of three Internet Service Providers for spam offenses.”
The spam crackdown in Texas is not isolated.
Last year, the Massachusetts Attorney General’s Office initiated legal action against William Carson, a Florida spammer who reportedly agreed to pay $25,000 and refrain from other violations of the federal law. Carson had allegedly sent out e-mail spam relating to low-interest mortgages.
Also, MessageLabs, which provides e-mail security services, announced in its 2004 annual report that dozens of people were arrested or charged with crimes relating to spam and other computer-related crimes last year as a part of a federal law enforcement operation.
“The operation built a database of known spammers, drawing from law enforcement agencies and private companies. It also used online decoys to catch spammers and purchased products advertised in spam so that financial records could be traced to the ultimate source of the message,” MessageLabs reported.
The company also reported that its anti-spam security service scanned more than 12.6 billion e-mails during 2004, and about 73.2 percent were identified as spam. In 2003, 40 percent of the e-mails scanned by the company were identified as spam.
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