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Tuesday, March 18, 2008

"Spam king" pleads guilty to felony fraud

Slashdot It! Robert Soloway, crowned the "spam king" by federal prosecutors for having sent millions of unwanted e-mails around the globe, pleaded guilty Friday to felony mail fraud, fraud in connection with electronic mail and failing to file a tax return in 2005, the year he made at least $300,000 through his junk e-mail business. Soloway appeared at a hastily scheduled hearing in U.S. District Court in Seattle, where he was set to go to trial in two weeks on a 40-count indictment that included seven counts of aggravated identity theft — which carries a mandatory two-year prison sentence added on to any other sentence — and 13 counts of money laundering. However, federal prosecutors dropped all of those charges — some of which had been filed under an admittedly "novel" reading of the identity-theft statute — and all but one of the spam-related charges in exchange for Soloway's guilty pleas. Indeed, the most serious charge Soloway now faces deals not with spam but with nonelectronic mail fraud stemming from his failure to live up to promises he made regarding his e-mail-marketing software. That charge carries up to a 20-year prison sentence. The electronic-mail fraud charge is punishable by up to five years in prison. The tax charge is a misdemeanor and carries a maximum one-year sentence. The law also allows for fines against Soloway and his business of up to $625,000 on all charges. Both sides agreed to let U.S. District Court Judge Marsha Pechman determine not just the amount of prison time Soloway, 28, might serve but also the number of his victims, the size of any fine and the amount of restitution he may be ordered to pay. "We believe that there were extensive losses to thousands of victims," said Assistant U.S. Attorney Kathryn Warma. Richard Troberman, Soloway's attorney, said the government's decision to dismiss 37 counts — including all of the identity-theft cases — demonstrates that the case "turned out to be very different from was originally charged." "We feel that when it comes time for sentencing, we like our chances," he said. Federal prosecutors accused Soloway of defrauding customers who paid him to send out high volumes of commercial e-mail or who bought his software to send spam themselves. For $495, customers reportedly could have Soloway send e-mails to 20 million addresses for 15 days or sell them 80,000 e-mail addresses. Troberman said early reports that Soloway was responsible for sending penis-enhancement ads and pornography proved untrue after the government was able to examine the servers used by Soloway's company, Newport Internet Marketing, also known as NIM. Warma said the government still believes Soloway is responsible for some of those acts, and intends to present evidence of them to Pechman during Soloway's June 20 sentencing. One thing is clear from the plea agreement: Soloway does not have a lot of assets for the government to seize. Among the items Pechman will be asked to consider for forfeiture are Soloway's collection of 24 pairs of sunglasses, valued at more than $3,700; 27 pairs of shoes, worth more than $7,400; and clothing worth about $14,200. Get Daily Updates via Email Protect your computer with Windows Onecare Get paid $7.50 for reviewing my post Ad Space

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