Herbal Supplement Spammer Actually Goes to Jail

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If you were on the Internet in 2005 or 2006, you almost certainly also received spam for an herbal weight loss supplement called ‘Hoodia’, among others, and, if you received spam for Hoodia, then it’s also almost certain that Brian McDaid was behind it. In 2007, the Federal Trade Commission (FTC) nabbed McDaid, a chiropractor from Thorndale, Pennsylvania, and charged him with false and deceptive business claims, and several violations of the Federal anti-spam law, CAN-SPAM.

(You can read the FTC’s full case memorandum laying out the case against Brian McDaid here – this will download a PDF of the document.)


 

The FTC often goes after big spammers, but the public doesn’t often hear about it. Oh sure, the FTC sends out press releases, but the general public rarely sees them, and so doesn’t realize that there is a war on spam, and that the good guys are fighting the good fight. (And we are proud to number among those who are doing their part, at least in some small way – for example I (Anne) authored part of our Federal anti-spam law – the part that says if you have someone spam on your behalf, you are responsible under Federal law and can go to prison for it. And our SuretyMail email accreditation service helps ISPs and spam filters to separate the good senders from the bad.)

Here, for example, is the FTC’s first press release on McDaid:

FTC Stops Spammers Selling Bogus Hoodia Weight-Loss Products and Human Growth Hormone Anti-Aging Products
Alleges Defendants Send Illegal E-mails via Web Form Hijacking and Make False and Unsubstantiated Product Claims

Spammers must stop sending unwanted and illegal e-mail messages about hoodia weight-loss products and human growth hormone anti-aging products the Federal Trade Commission alleges don’t work. At the FTC’s request, a district court judge ordered a halt to the e-mails and to product claims that the FTC charges are false and unsubstantiated.

According to the FTC’s complaint, the operation was responsible for spam messages that were sent to consumers. The illegal e-mails then drove traffic to the defendants’ Web sites. Those sites sold two types of products under a variety of names. Pills that allegedly contained hoodia gordonii and caused significant weight loss were sold under names such as “HoodiaHerbal” and “Hoodia Maximum Strength.” So-called “natural” products that were supposed to elevate a user’s human growth hormone (HGH) level and thereby dramatically reverse the aging process were sold under names that included “Perfect HGH” and “Dr-HGH.”

The FTC alleges that the claims made for the products were false and unsubstantiated. According to the FTC complaint, the defendants falsely claimed that their supposed “hoodia” products cause rapid and substantial weight loss, including as much as forty pounds in a month; cause users to lose safely three or more pounds per week for multiple weeks; and cause permanent weight loss. In fact, the weight-loss claims were false. The complaint also charges that the defendants falsely claimed that their supposed HGH products would contain human growth hormone and/or cause a clinically meaningful increase in a consumer’s growth hormone levels. According to the FTC, the defendants also falsely claimed that their HGH products would turn back or reverse the aging process, including: lowering blood pressure, reducing cellulite, improving vision, causing new hair growth, improving sleep, improving emotional stability, speeding injury recovery, relieving chronic pain, increasing muscle mass, and causing fat and weight loss.

The FTC’s spam database has received over 85,000 spam messages sent on behalf of the operation. According to court documents filed by the FTC, many of these e-mail messages were sent using Web form hijacking – a particularly insidious form of spamming. In Web form hijacking, the spammer injects the spam message into form fields on an innocent, third-party Web site (often a “Contact Us” form). The message uses the resources of and appears, deceptively, to come from the victim Web site operator’s mail server. This is the first time the Commission has filed a case against spammers using this tactic.

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Herbal Supplement Spammer Actually Goes to Jail

The FTC alleges that the operation violated the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 “CAN-SPAM Act” by initiating commercial e-mails that: contained materially false and misleading header information; contained deceptive subject headings; failed to provide clear and conspicuous opt-out links; and failed to include a physical postal address.

The complaint was filed against Sili Neutraceuticals, LLC and Brian McDaid, individually and doing business as Kaycon, Ltd. The federal district court judge ordered an ex parte temporary restraining order and asset freeze. A hearing is scheduled for August 27, 2007 to determine whether to extend the halt to the defendants’ claims and the asset freeze until the Commission’s case is resolved. The FTC ultimately seeks to permanently bar them from further violations and make them forfeit their ill-gotten gains.

The Commission vote to authorize staff to file the complaint was 5-0. The complaint and temporary restraining order were filed under seal in the U.S. District Court for the Northern District of Illinois.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Now, how many of you saw that (that is, how many of you who aren’t in the anti-spam or email policy industries)?

Anyways, that was back in 2007. Fast forward to 2012 – in fact, just last month (the wheels of justice do indeed turn slowly) – when McDaid, now charged, adjudicated, and found guilty, had a sentencing hearing and did, in fact, receive a prison sentence.

John Levine, who is the president of the Coalition Against Unsolicited Commercial Email (CAUCE) and who has been involved in the anti-spam fight as long as just about anybody, was there at the sentencing hearing, where he testified on the prosecution’s behalf.

Explains Levine:

“Today was the sentencing hearing. McDaid’s lawyer had claimed in the sentencing brief that (more or less) spam is a victimless crime because it’s all filtered out, and in this case McDaid had provided refunds to anyone who ordered and wanted their money back.

At the government’s request, I testfied as a technical expert on spam, explaining that 90% or more of all e-mail is spam, which places a technical and personnel burden on mail system operators, as well as wasting the time of recipients. McDaid’s lawyer tried to argue that some spam is CAN SPAM compliant. I said that yes, a little bit is, but I’d be surprised if it’s more than 1% or 2%, and the vast majority of spam is illegal. The judge, who like most Federal judges was clearly very smart but not a technical expert, asked a few questions, and mentioned the spam he got in his own inbox, which was not a good omen for the defendant.”

The prosecution asked for prison time of three to four years, the defense asked for no prison time, and just probation or home detention.

The judge gave McDaid two years in prison, and a year of probation.

According to John Levine, McDaid is due to report for prison next week, on June 29th.

Will this stop McDaid from ever spamming again? Maybe. Will it deter other spammers? Probably not. But it does demonstrate that the Feds take spamming seriously, and they will go after those who are spamming (at least if they hit the FTC’s radar).

Speaking of which, remember, you can always report spam (including phishing or other suspicious email) by forwarding it to spam@uce.gov

  
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Herbal Supplement Spammer Actually Goes to Jail

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1 Reply to “Herbal Supplement Spammer Actually Goes to Jail”

  1. So the FTC is actually doing something – when is the Federal “Do Not Call” people going to do something? I’ve been on the list since it’s inception, checked to make sure it is current, and STILL get an average of 5 calls a day! You take the phone number and check online complaints – and you find hundreds of complaints about the same numbers. So WHAT is our tax money being spent for – certainly NOT for anything to do with stopping phone calls!

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