BUSTED: Anti Spam Forces Bankrupt Super-Spammer Scott Richter

BUSTED: Anti Spam Forces Bankrupt Super-Spammer Scott Richter

Microsoft scores one for the good guys Scott Richter, the
self-proclaimed “Spam King,” just can’t seem to get enough
attention. Admittedly responsible for sending literally billions
of Unsolicited Commercial Email messages (UCE), Richter made
headlines again recently when his spam-fed cash cow,
OptInRealBig.com, filed for bankruptcy protection in U.S.
federal court in his home state of Colorado. According to
Richter’s father (who is also his attorney), “It’s the legal
fees that are battering the company. OptIn is profitable but for
these lawsuits.”

At the time of its bankruptcy filing, OptInRealBig.com claimed
assets of less than million and liabilities of over
million. Richter claimed his company made million a year
sending more than 15 million email messages per day. However, in
2003, OptInRealBig was dealt a powerful 1-2 punch from Microsoft
and Eliot Spitzer, the Attorney General of New York; both sued
Richter under local state anti spam laws. Although the New York
case was settled out of court last year, Richter has had no such
luck dealing with Microsoft, whose claims top million.

A Case of Global Amnesia? Richter’s company and others like it
market products ranging from diet pills to pornography. He’s
also been accused of using spam to extract personal information
from unsuspecting recipients. For instance, one alleged scheme
hatched by Richter and his associates promised recipients a copy
of a “Girls Gone Wild” DVD if the recipient registered on a
website. The registration information was then used to bombard
the recipient with more and more spam.

Richter contends that his methods are all legal, and that he’s
just a regular guy trying to do right by the world; he’s even
gone so far as to claim that he’s a “victim” of overzealous anti
spam companies and prosecutors. “We don’t spam,” explained
Richter in an August 2004 PC World interview. “The biggest
problem is when people get an email that they think they didn’t
sign up for or don’t remember signing up for, and they call it
spam.”

To hear Richter tell it, tens of millions of people simply
forgot that they had previously asked to receive his messages.
According to the state of New York, however, he falsified header
information and used deceptive routing and domain purchase
practices in order to get his messages through. The lawsuit also
accused Richter of using a network of approximately 500 “zombie”
computers to send his messages. When asked how so many users
could have subscribed and not remember doing so, Richter claimed
the signups must have been via anonymous “partners of our
partners” web sites, the names of which slipped his mind.

Not Just an Online Threat Evidently not satisfied with stealing
bandwidth, Richter also shows a penchant for heavy equipment. In
an unrelated 2003 case, he was put on probation after pleading
guilty to a felony charge of receiving stolen items worth more
than ,000. According to court records, an informant’s tip
regarding a stolen Bobcat loader led undercover officers to
Richter. Over the course of 13 months, the officers proceeded to
strike deals with him for a Honda generator, hundreds of cases
of cigarettes, three laptop computers and other items, all
offered at suspiciously low prices and purchased in some of
Denver’s seediest neighborhoods. In addition to probation,
Richter was also ordered to pay ,000 in restitution for the
stolen goods.

Despite his guilty plea, Richter maintains his innocence, saying
he pleaded guilty to the felony charges because it was “easier
to be done with it,” and he had “too much stuff going on in my
life.”

What’s Next for Scott Richter? The 5-year-old OptInRealBig.com,
which employed 25 people last year and had 350 clients, will
continue to operate under Chapter 11 bankruptcy protection.
While the bankruptcy filing shows the power of legislation and
legal action from parties with a vested interest in stopping
spam, Richter is not likely to fade quietly into the sunset.
Under Chapter 11 bankruptcy laws, the company must follow a
court-supervised “debt rehabilitation” plan to pay off
creditors, but is not required to modify its business practices.
None of OptInRealBig’s assets will be liquidated, meaning the
company’s stable of spam cannons will remain active. The bottom
line: Scott Richter will not be required to stop sending UCE in
the immediate future, pending ongoing litigation intended to
determine exactly what spam is in legal terms. In the meantime,
the best defense against spam is a comprehensive gateway
solution that will guard against all manner of email threats,
especially spammers like Scott Richter.

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