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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"."

27 of 478 comments (clear)

  1. Bankrupcy? by srock2588 · · Score: 5, Insightful

    Are you allowed to declare bankrupcy if you owe money via criminal court order?

    This dude just got F'd in the A.

    --
    Ehh...this is the life we chose.
    1. Re:Bankrupcy? by dr_dank · · Score: 5, Informative

      Are you allowed to declare bankrupcy if you owe money via criminal court order?

      Nope, judgements and federally subsidized loans cannot be discharged by bankrupcy.

      --
      Where does the school board find them and why do they keep sending them to ME?
    2. Re:Bankrupcy? by flicken · · Score: 5, Interesting
      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).

      --
      20 mil and I will! Learn Esperanto with 20M others.
    3. Re:Bankrupcy? by Anonymous Coward · · Score: 4, Informative

      IANAL, but No.
      It looks like cancelling a loan as a gift is simply counted as a gift (incurring gift taxes) instead of straight income (as with an otherwise-forgiven loan). The first $11,000 is tax-free; the next $9,089,000 counts against the $1 million lifetime gift limit, and then gets gift-taxed.

    4. Re:Bankrupcy? by dgatwood · · Score: 4, Interesting
      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.

      --

      Check out my sci-fi/humor trilogy at PatriotsBooks.

    5. Re:Bankrupcy? by pizzaman100 · · Score: 3, Funny

      They won't pay any taxes that way, but their attorney will take 40%. ;)

  2. Chew on your own hay by suso · · Score: 5, Funny

    That's ok. MR JAMES MCCALLA read an email a week ago about how to get out of debt by declaring bankruptcy.

  3. you can count on friends by BushCheney08 · · Score: 4, Funny

    Perhaps he should contact his friend in Nigeria.

    --
    Be a real patriot: Question authority. Think for yourself. Formulate your own conclusions.
  4. Re:I would rather that... by grungebox · · Score: 4, Insightful

    ...their actions would result in an economic death penalty.

    How about a real one?


    So you equate a sentence for spamming with a sentence used on serial murderers and the like? What even happened to that whole "let the punishment fit the crime" doctrine? I think the financial penalty along with any possible jail time is plenty.

  5. Re:Guess they learnt their lesson! by Anonymous Coward · · Score: 5, Informative

    This is from http://www.askoxford.com/asktheexperts/faq/aboutsp elling/learnt?view=uk

    These are alternative forms of the past tense and past participle of the verb learn. Learnt is more common in British English, and learned in American English. There are a number of verbs of this type (burn, dream, kneel, lean, leap, spell, spill, spoil etc.). They are all irregular verbs, and this is a part of their irregularity.

    Now you learnt something else: Google is not an answer to everthing.

  6. Re:Guess they learnt their lesson! by jimjamjoh · · Score: 3, Funny

    http://dictionary.reference.com/search?q=learnt

    you might also check out the definition for "comeuppance" while you're there

  7. Pointless by Billosaur · · Score: 4, Interesting

    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.

    --
    GetOuttaMySpace - The Anti-Social Network
  8. Re:Would love to see more of this by Anonymous Coward · · Score: 5, Funny

    Personally I love my server setup to deal with Spam: greylisting -> postfix -> mailscanner -> razor2 -> pyzor -> dcc checks -> spam assassin -> clamav -> bitdefender -> mailscanner -> ~/Maildir I haven't had a real spam get into my INBOX in months

    Wow, do you get any mail at all?

  9. Erm, what? by LordPhantom · · Score: 3, Insightful

    Ok. Let me preface this by saying I'm all for getting rid of spam and spammers.
    That said, 11 BILLION dollars? That's more than the GDP some nations.... it's not only improbable that they'll collect, but what is the real point of asessing such a sum? They might have assigned a billion gazillion trillion quillion dollars for all that amount matters. My concern is "how will that help deal with the rest of them", so my cheering for this judgement is a bit tempered by the insanity of the judgement. Indebting an individual or even small group of individuals with 11 billion dollars is just as bad against spammers as the idiotic size of the RIAA lawsuits from a few years ago - last thing we need is sympathy for spammers because the hammer of justice fell too hard....

  10. Not exactly... by flyinwhitey · · Score: 5, Informative

    "* LAWSUITS AND JUDGMENTS

    The filing of either a Chapter Seven straight bankruptcy or Chapter
    Thirteen debt adjustment immediately stops any lawsuits from being filed
    or judgments being taken against you. If a law suit is pending at the
    time of such filing, it can go no further. If a judgment has been
    taken, its enforcement can go no further. If a creditor has a judgment
    and is garnishing your wages, the garnishment can be stopped. Filing
    for Chapter Seven straight bankruptcy may relieve you of the obligation
    to pay the judgment. In a Chapter Thirteen debt adjustment, you may be
    able to satisfy the judgment over a period not to exceed five years. If
    the judgment has placed a lien on your home, that lien can be removed if
    it interferes with your homestead. If lawsuits or judgments are a
    threat or reality, the protection afforded under the bankruptcy laws may
    be an appropriate solution for you."

    It appears that in some states the law is a little different, but generally the answer is yes, you can file bankruptcy.

    --
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  11. Re:I would rather that... by nharmon · · Score: 4, Insightful

    Someone once calculated that the amount of time it takes you to download a spam message, identify it as spam, delete it, multiplied by the number of spam messages, equals a time equivilent to many of lifetimes.

    So, collectively, his spamming robbed humanity of lifetimes worth of time that could have been spent doing something else.

    But I do agree with you. Death sentences for spammers is just silly.

  12. Man, I really pissed off the grammar nazis... by digitaldc · · Score: 4, Funny

    ...and the spelling nazis at the same time! Guess I learnt my lesson :(

    --
    He who knows best knows how little he knows. - Thomas Jefferson
  13. Re:I would rather that... by BushCheney08 · · Score: 5, Funny

    I can't even begin to tell you how many times I've passed up opportunities to get laid because I was just too busy deleting spam...

    --
    Be a real patriot: Question authority. Think for yourself. Formulate your own conclusions.
  14. Re:By economic death penalty they must mean... by Jerry+Rivers · · Score: 3, Insightful

    "We have people who will devote months of their lives to sit on juries and render verdict even though everybody knows from the start that what the jury says is irrelevant because everything gets rewritten on appeal anyway."

    So what are you saying here? That the jury system should be eliminated? That there should no appeals of verdicts, ever? You say the system is "broke" but you offer no constructive alternative. You have no faith in the justice system yet imply that an authoritarian-style system of summary conviction is somehow better.

    I understand your cynicism but please try and avoid promoting injustice in the name of expediency.

    --
    The pursuit of absolute tolerance leads to the most rigorous and ludicrous intolerance. - REX MURPHY
  15. If they are smart. by www.sorehands.com · · Score: 5, Interesting

    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.

    1. Re:If they are smart. by John+Hurliman · · Score: 5, Interesting

      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.

  16. Re:The problem is Visa/MC/PayPal by scovetta · · Score: 5, Insightful

    Probably not the easiest thing to do:
    1. Although most spammers are trying to sell "products", there are plenty (Nigeria, Phishing, etc) that don't.
    2. It's extremely easy to accept credit cards (takes about 2 days to use PayPal-- I'm sure it's similar for other companies)-- Placing the burden of spammer-checking on the credit card gateways (or parent companies) would significantly increase the cost to businesses of accepting credit cards.
    3. It's be rather easy for me to spam YOUR product in an attempt to (a) blackmail you, or (b) get credit card companies to drop you (in the case of a competitor).
    3a. It would be equally easy for you to spam and then claim that it's actually me doing it.
    4. What about companies that accept PayPal (or similar)?

    Personally, I think we're on the right track. Tougher laws, better technology. I don't think we need more to add more bloat to the process of selling products.

    --
    Wer mit Ungeheuern kämpft, mag zusehn, dass er nicht dabei zum Ungeheuer wird. --Nietzsche
  17. RICO/IOCCA = 3x statuatory damages by Anonymous Coward · · Score: 3, Informative

    CIS (the ISP) was asking for punative damages equal to the (original) statuatory damages, which the judge granted them. Plus RICO and the Iowa Ongoing Criminal Conduct Act allowed them to tripple the statuatory damages. So, instead of paying $10/email, they ended up paying $40/email. See the Court docs here.

  18. Re:Would love to see more of this by Sneftel · · Score: 4, Funny

    greylisting -> postfix -> mailscanner -> razor2 -> pyzor -> dcc checks -> spam assassin -> clamav -> bitdefender -> mailscanner -> ~/Maildir

    I'm going to send you an email about Nigerian unaccredited penis enlargement viagra. I'm guessing your computer will catch on fire.

    --
    The opinions stated herein do not necessarily represent those of anybody at all. Deal with it.
  19. Finally! by Tom · · Score: 3, Interesting

    After 10 years or so, we've finally arrived at the stage where we threaten the only thing that matters to the spammers: Their money.

    This might be a good turning point, especially with these ridiculously silly amounts which actually do mean that life, economically, is over for you. Everything the guys ever earns above and beyond whatever the minimum-for-life-that-you-can't-legally-take-away is in his jurisdiction will go poof, for the rest of his years.

    In other words, the spam equation just changed from "make tons of money, if caught, lose some and continue" to "make tons of money, if caught you're pretty much dead". That's a different game.

    --
    Assorted stuff I do sometimes: Lemuria.org
    1. Re:Finally! by taustin · · Score: 3, Interesting

      First, judgements have a statute of limitations in pretty much all states. 10 years is common. After that, the judgement disappears.

      Second, bankruptcy costs a few hundred bucks. If the spammer has any other significant debt, this judgement will actually do him a favor by clearing all his debt out.

      The net effect of this will be zero, or actually enable the spammer to expand his operation with upgraded equipment.

  20. something's missing by brainspank · · Score: 3, Funny
    A lawsuit claimed that McCalla sent more than 280 million illegal spam e-mail messages.

    $280m * $10 = $2.8b ( != $11b )

    maybe they converted to Canadian for bigger effect...

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    It's only a model.