Two convicted for porn spam operation

Two men were convicted in Arizona Monday on eight criminal counts, including money laundering and transportation of obscene materials, in connection with running a pornographic spamming business, the U.S. Department of Justice said.

A jury in U.S. District Court for the District of Arizona in Phoenix convicted Jeffrey A. Kilbride, 41, of Venice, Calif., and James R. Schaffer, 41, of Paradise Valley, Ariz., on all eight counts they faced. The trial, which began June 5, was the first to include charges under the Controlling the Assault of Non-solicited Pornography and Marketing (CAN-SPAM) Act, a law passed by the U.S. Congress in 2003 in an effort to crack down on unsolicited commercial e-mail.

The men made “millions of dollars by sending unwanted sexually explicit e-mails to hundreds of thousands of innocent people, including families and children,” Alice Fisher, assistant attorney general for the DOJ’s Criminal Division, said in a statement.

Kilbride and Schaffer started their spamming operation in 2003, and they made more than $2 million by sending out spam e-mail advertising porn Web sites, the DOJ said. The two earned a commission for each person directed to one of the sites.

“Hard-core” pornographic images were embedded in each e-mail and were visible to any person who opened the e-mail, the DOJ said.

Kilbride and Schaffer were convicted of two violations of the CAN-SPAM Act. One of the counts charged that Kilbride and Schaffer sent multiple electronic commercial mail messages containing falsified header information. In the other count, the two were charged with sending e-mail using domain names that were registered using false information.

Kilbride and Schaffer were also convicted on one count of conspiring to commit fraud in connection with electronic mail and four counts of felony obscenity charges for transporting hard-core pornographic images of adults. They were also convicted on a federal money laundering charge for moving funds inside and out of the United States to conceal the ownership of those funds.

The two face a maximum penalty of five years in prison for each CAN-SPAM and obscenity offense, as well as a fine of up to $500,000 and a maximum of 20 years in prison for money laundering. Sentencing is set for Sept. 24.

When the CAN-SPAM Act went into effect in January 2004, Kilbride and Schaffer arranged to remotely log on to servers in Amsterdam, to make it look like their spam messages were being sent from abroad, when in reality Kilbride and Schaffer were operating their business from inside the United States, the DOJ said.

Eight U.S. residents who complained to either the U.S. Federal Trade Commission or AOL traveled from Massachusetts, Texas, Iowa, and California to testify in the trial and to describe how their families, including some children, received the spam.

AOL and the FTC received more than 660,000 complaints about the defendants’ pornographic spam, including some from people who had set parental controls to protect their children from accessing graphic sexual content.