Spammer Gets $11 Billion Fine

Spad writes "It's not a typo, The Inquirer (amongst others) is reporting that an Iowa-based ISP has been awarded $11.2 billion in a case against spammer James McCalla, who was found guilty of sending over 280 million illegal spam emails. Under state law, the ISP was entitled to $10 per illegal e-mail sent. According to the Quad-City Times, McCalla has also been banned from using a computer for 3 years. From the article: "CIS acknowledged that it is unlikely to see any of the judgment money but said that it was time that spammers learnt that their actions would result in an economic death penalty"."

Comments

Re:Bankrupcy?

[flicken]

According to the article, the IPS doesn't expect to collect any of the money. So it is likely that they will cancel the debt. Which means, according to IRS publication 525, that the spammer will owe taxes on the forgiven debt.

Let's see... $11.2 billion, at the highest tax bracket of 35%, that's $3.92 billion he'll owe the IRS.

IRS publication 525:

Canceled Debts Generally, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income. You have no income from the canceled debt if it is intended as a gift to you. A debt includes any indebtedness for which you are liable or which attaches to property you hold.

If the debt is a nonbusiness debt, report the canceled amount on Form 1040, line 21. If it is a business debt, report the amount on Schedule C or Schedule C-EZ (Form 1040) (or on Schedule F (Form 1040), Profit or Loss From Farming, if the debt is farm debt and you are a farmer).

Pointless

[Billosaur]

From QuadCity Times: The lawsuit claimed that McCalla sent more than 280 million illegal spam e-mail messages into CIS's network...

He claimed that under state law in effect at the time, he was entitled to $10 per illegal e-mail.

Kramer said then that he likely will not see any of the judgment money.

Then what precisely, would be the point? If the claim is that this will somehow economically damage a spammer, when in fact not even a single dollar may be paid out ultimately to the aggrieved party. Not to mention the ruling is in Iowa but the spammer is in Florida, so there may be jurisdictional disputes, reciprocity or not.

This is merely smoke and mirrors, to make some people feel like they are doing their part in the war on spam. I don't see spam drying up. It seems to be getting worse. There has to be a real crackdown, perhaps even prison time if any inroads are to be made.

Wake me when they string this spammer up to a tall tree by his thumbs.

If they are smart.

[www.sorehands.com]

Let them cancel half the debt, then report the income to the IRS and then file a report with the IRS that these guys are committing the tax fraud and send dicovery documents to to IRS and then collect the reward of the money from the IRS. That way the IRS can crawl up their ass with a microscope, then they still get some money from that.

Re:If they are smart.

[John Hurliman]

Not only that, but this company will never pay taxes again for the rest of its existence. Report 11 billion income on the books, cancel the loan and write off 11 billion to bad debt and carry that forward as a loss eternally. The company now permanently operates in the red even though they (might) pull a profit every year, and they can 1099 the guy to screw him over with a non-bankruptable debt to the IRS that will seize his assets, garnish up to 25% of his wages and destroy his credit until he's dead.

Re:Bankrupcy?

[dgatwood]

Ah, but it isn't a mockery of the court system. It is, at best, a slightly overzealous assessment of the actual damage caused by the individual. The actual damage is probably more on the order of a dollar per message instead of 10, so a more fair judgment would probably be $1.1 billion.

Either way, though, the law did exactly what it was intended to do---send a message to people who flagrantly violate the law, ethics, and basic human decency in a way that irreparably harms the general public. As such, it isn't a mockery of the court system. It is reasonable enforcement of a reasonable and just law.

More to the point, there's no way that this person could reasonably claim not to have known that spamming is illegal, harmful to a free society, and offensively unethical. Thus, this behavior can only be classified as sociopathic. Now $11 billion probably qualifies as grand larceny, so with a little luck, this will end up resulting in incarceration of the person for failing to remit the court-ordered sum. This is exactly what should happen.

Mass spammers like this are, IMHO, a danger to society, no different from terrorists threatening to blow up part of the power grid. They consume vast amounts of resources for illegal purposes, defrauding the public of those resources. As far as I'm concerned, prison would be a good start, followed by institutionalization or long-term psychotherapy, depending on the results of thorough psychological testing.

Write your congressmen and women and demand that the judgement be tripled.