World's biggest spam operator shut down

SAN FRANCISCO -- The world's largest spam e-mail operator has been silenced.

Federal authorities say they've shut down HerbalKing, a global spam gang responsible for billions of spam messages promoting prescription drugs, "male-enhancement" pills and diet pills. On Tuesday, a federal court in Chicago, acting on a complaint from the Federal Trade Commission, ordered a halt to its operations, pending trial. A federal judge said HerbalKing engaged in spamming and deceptive marketing.

Some anti-spam organizations, such as The Spamhaus Project, estimate up to one-third of the world's spam e-mail came from the group during its heyday this year and last.

According to papers filed in federal court, Lance Atkinson, 26, who lives in Australia, and Jody Smith of Texas oversaw a vast international operation under four companies they controlled: Inet Ventures, Tango Pay, Click Fusion and TwoBucks Trading.

The FTC alleges Atkinson and Smith are liable for spamming and all claims they have made about their advertised products. Atkinson allegedly hired spammers from around the world and provided them with text and hyperlinks to websites for his companies. The spammers were paid by commission, the FTC says.

The unwanted commercial e-mail promoting the websites was relayed via thousands of compromised PCs, often referred to as a botnet.

The spam gang included participants in the U.S., Australia, New Zealand, China, India, Russia and Canada, according to the FTC.

In June 2005, the FTC won a $2.2 million judgment against Atkinson and another business partner for running a similar spam affiliate program that marketed herbal products.

The shutdown isn't likely, however, to ease the crush of spam, says Paul Ferguson, an advanced threat researcher at computer-security vendor Trend Micro. "Someone else will fill the void," Ferguson says. "While it's great they caught these guys, the last time a major spam king was busted, the spam increased."

The FTC says authorities closed the operation by working for months with law-enforcement authorities in Australia and New Zealand, and FBI offices in Chicago and St. Louis, says Steve Baker, director of the Midwest region for the FTC.