Federal Court Orders Payment of $4 Million from Spyware Operator

Stanford Wallace, first accused by the Federal Trade Commission (FTC) in 2004 of operating a spyware operation, has been ordered to give up $4 million in ill-gotten gains by the U.S. District Court in New Hampshire. Wallace, in the nation’s first spyware case, was accused of infecting computers with a program that produced a barrage of pop-up ads. According to the accusation, two programs, “Spy Wiper” and “Spy Deleter,” were then sold to the victims to remove the offending application for $30. Last year, Wallace agreed with the FTC to stop infecting computers with such programs, and the current order also bars Wallace and his company, SmartBot.net Inc., from further spreading such applications.

Wallace, also known as the “spam king”, had been previously involved in court cases regarding the activities of his former company Cyber Promotions. In the late 1990s, Cyber Promotions was reportedly one of the leading sources of unsolicited emails and a number of ISPs sought injunctions against the company to stop the flood of spam. Wallace stated that he believes he has done nothing wrong and is being persecuted due to his prior involvement with Cyber Promotions.

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Volume IV

Federal Court Orders Payment of $4 Million from Spyware Operator