Spammer gets hit with an $11 BILLION fine

[SirFozzie]

Good. wish we could take it out of his hide, a penny at a time.. Ah Hate Spammers ;) The good thing is that they can go after the firms he spammed for as well.

A SMALL ISP in the town of Clinton, Iowa, has just won one of the largest payouts ever extracted from a spammer.

The firm, CIS Internet Services, won $11.2 billion from James McCalla, from Florida, who was found to have sent millions of unsolicited e-mails advertising mortgage and debt consolidation services through the ISP's network.

A lawsuit claimed that McCalla sent more than 280 million illegal spam e-mail messages. Firms advertised in the spam had already been ordered to cough up a billion dollars in damages.

Prosecutors argued that under state law in effect at the time, CIS was entitled to $10 per illegal e-mail.

The Iowa court was told the defendants "falsely and illegally" represented that their e-mails originated from the CIS domain The e-mails used the cis.net as a return address to disguise the source of the e-mails to avoid complaints.

CIS acknowledged that it is unlikely to see any of the judgement money but said that it was time that spammers learnt that their actions would result in an economic death penalty.

[albionmoonlight]

If he sends an email to 11.2 billion people asking them each for a dollar, then he will be able to pay his fine.

[rkmsuf]

He got off light. Should have been 100 billllllion dollars to really teach him a lesson.

[SirFozzie]

But then he'll be on the hook for $112 Billion dollars in damages :)

[Draft Dodger]

If he sends an email to 11.2 billion people asking them each for a dollar, then he will be able to pay his fine.

:D

[SirFozzie]

Oooh.. I like this idea someone on /, posted.

According to the article, the ISp doesn't expect to collect any of the money. So it is likely that they will cancel the debt. Which means, according to IRS publication 525, that the spammer will owe taxes on the forgiven debt.

Let's see... $11.2 billion, at the highest tax bracket of 35%, that's $3.92 billion he'll owe the IRS.

IRS publication 525:

Canceled Debts Generally, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income. You have no income from the canceled debt if it is intended as a gift to you. A debt includes any indebtedness for which you are liable or which attaches to property you hold.

If the debt is a nonbusiness debt, report the canceled amount on Form 1040, line 21. If it is a business debt, report the amount on Schedule C or Schedule C-EZ (Form 1040) (or on Schedule F (Form 1040), Profit or Loss From Farming, if the debt is farm debt and you are a farmer).

The ISP might not be able to get anything.. the IRS, however.. :D

[Desnudo]

He got off light. Should have been 100 billllllion dollars to really teach him a lesson.

I think that's a little harsh. At least leave him some walking around money.

[rkmsuf]

I think that's a little harsh. At least leave him some walking around money.

maybe they could have sent him 11 billion email ads for penis enlargement.

[sachmo71]

wonderful!!!!

[BrianD]

IRS publication 525:

Canceled Debts Generally, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income. You have no income from the canceled debt if it is intended as a gift to you. A debt includes any indebtedness for which you are liable or which attaches to property you hold.



You don't have to include a forgiven debt on your income if it is a gift? Do you still have to report it for gift tax? If not, that would be a nice way around a gift tax.

[Swaggs]

I hate spammers and am happy to see anything to deter them.

With that said, I wonder how they managed to measure damages at that cost? Anyone know?

[SirFozzie]

I hate spammers and am happy to see anything to deter them.

With that said, I wonder how they managed to measure damages at that cost? Anyone know?

If you look at the article, apparently the ISP can charge the spammer $10 per email sent

[Raven]

I'm glad to hear this.

But now, won't spammers just be sure to send from outside the U.S?

[Ben E Lou]

I think that's a little harsh. At least leave him some walking around money.There's one in every crowd.

[Tekneek]

I'm glad to hear this.

But now, won't spammers just be sure to send from outside the U.S?

Most spammers are setting up fraudulent dialup accounts with stolen credit card profiles, so moving to foreign ISPs is not really on the map for them. Since they aren't intending to pay their way, they would not be keen to take on international long distance rates to dialup to an offshore ISP. There are other things they can do, but most spammers aren't savvy enough to find other ways to get their junk out. Some are surprising every now and then, but they all get caught eventually.

[SirFozzie]

The hardcore spammers.. the top 10 which are responsible for about 70% of the spam you see, are moving offshore. However, the CAN SPAM law allows the people they spam for to be sued as well.. Kinda like starving them of business. If they even have a drop box here in the states to take orders, they can be sued.

[Esquared1]

Trust me, they need the money in Clinton IA.