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FTC Shuts Down 'Spam Gang'

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Just when you thought no one cared that your e-mail box was overloaded with spam, along comes the Federal Trade Commission to prove you wrong.

The FTC said late Tuesday that it has shuttered an operation that sent billions of spam messages around the world directing consumers to Web sites, and that the operation was responsible for as much a third of the world's spam e-mails. According to the FTC, the operation included participants in Australia, New Zealand, China, India, Russia, Canada and the U.S.

The network was called the largest "spam gang" in the world by the anti-spam organization Spamhaus. The FTC said it has received more than three million complaints about spam messages connected to this operation, and estimates that it "may be responsible for sending billions of illegal spam messages". At the request of the FTC, "a U.S. district court has issued a temporary injunction prohibiting defendants from spamming and making false product claims, and has frozen the defendants' assets to preserve them for consumer redress pending trial."

According to the FTC, the defendants include Lance Atkinson, a New Zealand citizen living in Australia, and Jody Smith of Texas and four companies they control: Inet Ventures Pty Ltd., Tango Pay Inc., Click Fusion Inc., and TwoBucks Trading Limited. The FTC's complaint alleges that both "Atkinson and Smith are liable for the spamming."

The FTC said that the defendants "deceptively marketed a variety of products" through spam messages, including a male-enhancement pill, prescription drugs, and a weight-loss pill. One product, VPXL, was touted as an herbal male-enhancement pill, was advertised as "100% herbal and safe "and supposedly caused a permanent increase in the size of a user's penis. The FTC alleged that not only did the pills not work, but they were neither "100% herbal" nor "safe." The pills were tested by the FDA at the request of the FTC.

The defendants also used spam e-mail to sell prescription drugs and claimed that the medications came from a bona fide, U.S.-licensed pharmacy that dispenses FDA-approved generic versions of drugs such as Levitra, Avodart, Cialis, Propecia, Viagra, Lipitor, Celebrex, and Zoloft. According to the FTC, the defendants do not operate a U.S.-licensed pharmacy but do sell drugs that are shipped from India. "The drugs have not been approved by the FDA and are potentially unsafe," according to the FTC.