Feds crack down on porn spam
Bingham Farms-based company, one of seven named Tuesday, agrees to pay $239K settlement.
The state of Michigan has created a registry to keep children from receiving unwanted e-mail:
• Once an e-mail address has been registered, senders of e-mail messages that advertise or link to prohibited products or services are required to remove the address from their mailing lists within 30 days.
• To register, visit www.protectmichild.com
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DETROIT -- A Michigan company that runs more than 100 explicit adult Web sites agreed to pay almost $239,000 to settle allegations that it illegally exposed consumers to X-rated spam.
MD Media Inc., based in Bingham Farms, agreed not to contest civil charges filed by the Federal Trade Commission in U.S. District Court in Detroit on Tuesday and agreed to pay $238,784 to settle the dispute.
They also agreed not to allow the marketing to continue.
"This X-rated e-mail is electronic flashing," said Lydia Parnes, the FTC's director of the Bureau of Consumer Protection.
"It exposes kids and other unwary consumers to graphic sexual content, and it is unwanted, offensive and illegal."
Many e-mail users report spam consumes lots of time to delete.
"It's really annoying because my time is limited. I don't have time to sort all that junk out," said Jack Folson, a 49-year-old Warren pharmacist.
He's been duped by spam e-mail that told him to "unsubscribe" -- only to result in more spam e-mail.
He hopes the government crackdown will help limit spam.
The FTC settled cases against seven companies around the country Tuesday; agreements in four of those cases called for civil penalties totaling $1.2 million.
MD Media, which has a Detroit bank account, apparently has no real operations in Michigan. Its owners are in Windsor, Ontario, and its computer servers are in Bridgetown, Barbados.
An attorney for MD Media, Danny E. Adams, noted that his client admitted no wrongdoing.
"It would have cost more to litigate," Adams said. He called it a technical violation, noting that outside companies promoting MD Media Web sites sent the actual spam in order to earn a commission.
Spam accounts for almost half of all Internet traffic -- and as many as 15 billion unsolicited e-mail messages a day, said a report from New York research firm Basex.
The report said spam costs companies about $20 billion a year in lost productivity and computer costs. State records show the company was incorporated in 2001. Detroit lawyer James M. Chalifoux, who is listed on MD Media's articles of incorporation, said he has no affiliation with the company and simply helped the owner file paperwork. Chalifoux said he didn't remember anything about the company or its owner.
According to the state Bureau of Commercial Services, MD Media was dissolved a year ago for failing to file annual reports. President David Kooner attempted to submit reports for 2002 through 2005 in June, but the filings have not been accepted because the company owes the state $20 in fees, said Carol Meyers, an administrative assistant with the bureau.
Under the CAN-SPAM Act, commercial e-mailers of sexually explicit material are required to use the phrase "SEXUALLY EXPLICIT" in the subject line of the e-mail message and to ensure that the initially viewable area of the message does not contain graphic sexual images.
"By filing the lawsuit, we do not seek to suppress the transmission of material -- even adult material.
"We merely insist that sexually explicit email messages are properly labeled," U.S. Attorney Stephen J. Murphy III said.
Many of the spams contain sexually explicit photographs.
Other companies paying fines are BangBros.com Inc., based in Florida, which will pay $650,000 in civil penalties; APC Entertainment, Inc., also based in Florida, which will pay $220,000; and Pure Marketing Solutions, LLC, a Florida company, and Internet Matrix Technology, a corporation based in Louisiana, which will together pay $50,000.
The FTC was assisted by Microsoft Corp., which has spam-collector accounts and passes the spam onto the government.
The settlement still must be approved by U.S. District Judge John Feikens.
A Justice Department criminal investigation into four alleged West Bloomfield spammers continues more than a year after it began.
In April 2004, federal prosecutors charged four West Bloomfield men Wednesday with sending more than 1 million illegal e-mail messages, the nation's first case under the act.
The charge was dismissed in June 2004, pending further investigation.
Detroit News staff writer Nick Bunkley contributed to this report. You can reach David Shepardson at (313) 222-2028 or dshepardson@detnews.com.
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