‘Spam king’ Wallace indicted for Facebook spam

Self-described spam king Sanford Wallace surrendered to the FBI today after being indicted on charges he broke into Facebook accounts to send 27 million spam e-mails on the social network.

Wallace, 43, was indicted in July by a San Jose, Calif., grand jury on three counts of intentional damage to a protected computer and two counts of criminal contempt, according to the U.S. Attorney’s Office in the Northern District of California. Wallace allegedly compromised approximately 500,000 Facebook accounts during three separate attacks on the social-networking giant between November 2008 and March 2009.

If convicted of all charges, Wallace could face nearly 40 years in prison and fines of more than $2 million.

Wallace, who was ordered by U.S. District Court Judge Jeremy Fogel in 2009 not to access Facebook, was also charged with violating that order by accessing the social network on an airline flight from Las Vegas to New York in April 2009 and by maintaining an account under the name David Sinful-Saturdays Fredericks for a few weeks earlier this year.

Fogel awarded $711 million to Facebook against Wallace in October 2009 for violating the Can-Spam Act, which bans “false and misleading” marketing e-mails. At the time, Fogel also found that Wallace “willfully violated” a temporary restraining order and preliminary injunction issued in the case and referred the matter to the U.S. Attorney’s Office for prosecution of criminal contempt, which resulted in the the indictment.

The case stemmed from a lawsuit Facebook filed against Wallace and two others in February 2009 that alleged they used phishing sites or other means to fraudulently gain access to Facebook accounts and used them to distribute phishing spam throughout the network.

Wallace earned the nicknames “Spamford” and “spam king” for his past role as head of CyberPromotions, a company responsible for sending as many as 30 million junk e-mails a day in the 1990s.

In May 2008, Wallace and another defendant were ordered to pay MySpace.com $234 million following a trial at which Wallace repeatedly failed to turn over documents or even show up in court.

Wallace has also been previously sued by the Federal Trade Commission and companies such as AOL and Concentric Network. In May 2006, Wallace and his company Smartbot.net were ordered by a federal court to turn over $4.1 million.

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Facebook Finds Ways Shift Social Networking Offline

By Nick Clayton

Facebook is moving from a purely online existence into the real world. It is experimenting with technology that allows its members to carry out a variety of social networking tasks without the need for a computer or smartphone. Instead they use RFID chips embedded in wristbands or badges.

The system was first tried last summer at Coca-Cola Village, an Israeli amusement park. More recently, visitors to the Dutch Autorei exhibition could “Like” their favorite Renault cars by swiping their badge on special pillars.

This summer the technology has been extended into the hospitality industry. Amsterdam manufacturing company Dorst Lesser has constructed a network at the Ushuaïa Beach Hotel in Ibiza, Spain. This is a new, trendy resort property aimed at well-heeled clubbers. Rooms in the summer season cost upwards of around €500 a night. It is also used almost daily as a paying concert venue attracting audiences of several thousand poolside.

Guests and concert-goers are given a slim wristband which they can synchronize to their Facebook profile. Swiping these across pillars located throughout the hotel allows them to check-in to Facebook Places, take pictures for upload or post a status update.

Other Facebook users can see the content when it is posted on an Ushuaïa guest’s wall. Their friends can then connect to the hotel’s wall and its website.

In the first seven days of operation the hotel says it doubled its Facebook Fans conversion rate from 1,000 to 2,000 a week. Guests took around 1,200 pictures.

Niels Verhoeven, creative director of Dorst Lesser said that every picture posted on Facebook is shared with an average of 100 friends. “That is a lot of media value for the company,” he said.

The advantage for guests, he said, is that they do not have to bring laptops or risk high roaming charges on their smartphones. “The wrist bands are also waterproof so you can go swimming with them on,” he said.

It was Facebook that contacted his company, he said, after it saw the work done for Renault. “They are good at supporting companies that are doing something innovative.” Facebook in turn said it was “constantly developing our services to find synergies between the virtual and real worlds.”

Mr. Verhoeven said the Ushuaïa project and the idea of connecting to Facebook without a computer or phone had attracted interest from hotels and other businesses worldwide. “We’re now particularly looking to grow in India where a lot of Facebook users are.”

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