Spam Hall of Famer Sanford Wallace faces FBI charges for Facebook scam

August 08, 2011, 6:30 AM —

Self-proclaimed “Spam King” Sanford Wallace – the most consistent, long-term threat to productivity and annoyance-avoidance on the Internet that does not involve pr0n or LOLcatz – turned himself in to the FBI yesterday for allegedly compromising half a million Facebook accounts and flooding their owners with junk email.

He returns to face 11 counts of fraud, intentional damage to protected computers and – potentially the charges with the longest-term impact – criminal contempt for violating more than a decade’s worth of court orders to stay off social networking sites and stop sending junk email, spyware and phishing scams to consumers.

[Confessions of a Facebook advertising scofflaw and 6 vacation ideas from your spam folder]

In its indictment, the FBI accuses Wallace of having gained illegal access to more than 500,000 user accounts using phishing messages that sent victims to sites that copied their user data and then spoofed their accounts as the supposed source of more than 27 million spam emails sent to Facebook members.

The charges could add up to more than 16 years in prison and $2 million in fines.

Facebook sued Wallace in 2009 in a case that ended with a federal judge ordering Wallace to stay off Facebook and pay the growing social network $711 million in damages.

That judgment echoed orders to cease and cut it the hell out that go back as far as a 1997 suit CompuServe won against him – a case in which the Ohio District Court felt the term “spam” was so cutting edge it had to add a footnote explaining the term came from Monty Python skit making fun of the quintessential mystery-meat product.

That judgment and his more recent Facebook Dislike went into Wallace’s trophy case next to a 2006 New Hampshire court judgment ordering Wallace and his Smartbot.net company to pay $4 million in fines for distributing spyware and a 2008 order from a Los Angeles court ordering him to pay $234 million for a scam against MySpace using the same phishing scam the FBI said he used against Facebook at about the same time – March 2008 to March 2009.

He also had to sign an agreement with the FTC promising to stay out of the spam business and off the social networks completely.

Rather than pay the fines or face more potential lawsuits, Wallace took off, disappearing so effectively his lawyer asked the judge to let him resign the case because even he couldn’t find Wallace to talk to him about how big a jerk he was.

He eventually came back on his own, filing bankruptcy in 2009 to avoid at least some of the fines.

He apparently went back to work, as well, extending his Facebook scam and continuing the spamming business, according to the FBI.

Wallace turned himself in and faced an initial arraignment Thursday. He’s due back in court Aug. 22.

Among his notable achievements in Facebook scamming, according to the indictment, was an app that mapped and then evaded Facebook’s spam filters to let him send spam to other members through the 500,000 accounts he compromised using phishing messages and malware-salted web sites.

It was only one in a long line of major innovations in scummy Internet marketing.

He was one of the first to automate the process of harvesting user emails by screen-scraping web sites he didn’t own, and compile networks of malware-compromised computers into botnets to help distribute spam without allowing network-based spam tracers or investigators to pinpoint its source.

Wallace began wasting the time and expensive thermal-printer resources of U.S. businesses in the early ’90s in his first semi-criminal incarnation as the “junk fax king.”

The shift of “Spamford” Wallace’s business from fax to email was, in retrospect, and important milestone in the evolution of business communications from paper to pixels.

By shifting to email, Wallace’s Cyber Promotions was one of the first companies to realize how much more productive a digital company could be than an analog. By eliminating the cost and delay of physically delivering paper documents (in person or by fax), that shift presaged the comparatively frictionless, geographically unrestricted model of e-commerce and IT-enabled process automation that turned traditional business on its head during the late ’90s.

After converting himself into the “Spam King” Wallace relentlessly promoted his ability to waste other people’s time, while apparently reveling the revulsion of his victims and their inability to stop him.

He was so universally known and reviled that, in 1997, CNET writer Janet Kornblum was able to refer to him as “perhaps the most hated man on the Net” without having to attribute the judgment, or even explain it.

“Spamford” never made it to the fin de siècle dot-com financial bubble he helped presage, however.

Facing financial difficulties and general approbation, he went back to sending junk faxes in 1997, but returned to the spam business by 2002.

On his pure record of accomplishment and the breadth of his impact on how both marketing and business operations happen online, you have to give Wallace credit as one of the real innovators of both the web and e-commerce.

He did a lot to develop and techniques mainstream businesses use to promote themselves (though the rest of us are still not happy about receiving a volume of junk mail that still equals more than three-quarters of all the messages sent over the Internet).

That credit comes with the same face-palming asterisk as the one that went to the Baseball Hall of Fame with Barry Bonds – who broke the record for both home runs and juice hits while personifying the era of unrestricted steroid abuse in baseball.

Technical innovation, in general, is good. Innovation developed and used specifically to defraud, annoy and invade the privacy of consumers doesn’t go away (as Wallace will probably do for at least three to five years) but the numbers representing it on the scoreboard to have to move from the field marked Score to the one marked Penalties.

Welcome back, Sanford; good to see you in the news again.

Especially listed in a federal indictment.

Source: PCWorld

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What Is Facebook’s ‘Smoking Gun’ in the Ceglia Case?

It sounds like the third-act reveal of some non-descript legal drama, but attorneys for Facebook are claiming that they have “smoking gun documents” in the ongoing legal battle with Paul Ceglia—the man who claims that he actually owns half of the social networking giant—but that they aren’t allowed to say what they are, by court order.

(MORE: Facebook Calls Man Claiming 50% Ownership an ‘Inveterate Scam Artist’)

The secrecy comes from the fact that Ceglia’s lawyers have heavily redacted the motion that Facebook’s law team filed last week, and the judge is still mulling whether or not to release an unredacted version to the public.

What we can see suggests that there’s something very interesting in the (redacted, of course) documents Ceglia has provided to the court already.

From the motion:

“[Ceglia] does not want the public to know what was discovered on his computers because it includes smoking-gun documents that conclusively establish that he fabricated the purported contract and that this entire lawsuit is a fraud and a lie… Rather than produce the [REDACTED] as required by the Order, Ceglia took a wait-and-see approach by making available a collection of computers, floppy disks and thousands of CDs without identifying any of the files or documents stored on them — either not realizing that the [REDACTED] remained embedded in one of the computers, or simply hoping that Defendants would not find it.”

Short of “redacted” turning out to be “signed admission that he’s making the whole thing up, neener neener neener,” it’s unclear just what the smoking gun discovered inside the document actually is, so all we can do is hope that the unredacted version is released soon… or that Ceglia follows through on the John Grishamness of what’s going on, and gives some maniacal monologue in which he explains everything for the benefit of those of us who fell asleep midway through the movie.

[via paidContent.org]

MORE: Man Suing Zuckerberg Replaces Lawyers with Cannabis Specialists

Graeme McMillan is a reporter at TIME. Find him on Twitter at @Graemem or on Facebook at Facebook/Graeme.McMillan. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

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