BUSTED: Anti Spam Forces Bankrupt Super-Spammer Scott Richter

Microsoft scores one for the good guys Scott Richter, the self-proclaimed “Spam King,” just can’t seem to get enough attention. Admittedly responsible for sending literally billions of Unsolicited Commercial Email messages (UCE), Richter made headlines again recently when his spam-fed cash cow, OptInRealBig.com, filed for bankruptcy protection in U.S. federal court in his home state of Colorado. According to Richter’s father (who is also his attorney), “It’s the legal fees that are battering the company. OptIn is profitable but for these lawsuits.”

At the time of its bankruptcy filing, OptInRealBig.com claimed assets of less than $10 million and liabilities of over $50 million. Richter claimed his company made $15 million a year sending more than 15 million email messages per day. However, in 2003, OptInRealBig was dealt a powerful 1-2 punch from Microsoft and Eliot Spitzer, the Attorney General of New York; both sued Richter under local state anti spam laws. Although the New York case was settled out of court last year, Richter has had no such luck dealing with Microsoft, whose claims top $19 million.

A Case of Global Amnesia?
Richter's company and others like it market products ranging from diet pills to pornography. He’s also been accused of using spam to extract personal information from unsuspecting recipients. For instance, one alleged scheme hatched by Richter and his associates promised recipients a copy of a "Girls Gone Wild" DVD if the recipient registered on a website. The registration information was then used to bombard the recipient with more and more spam.

Richter contends that his methods are all legal, and that he’s just a regular guy trying to do right by the world; he’s even gone so far as to claim that he’s a “victim” of overzealous anti spam companies and prosecutors. “We don't spam,” explained Richter in an August 2004 PC World interview. “The biggest problem is when people get an email that they think they didn't sign up for or don't remember signing up for, and they call it spam.”

To hear Richter tell it, tens of millions of people simply forgot that they had previously asked to receive his messages. According to the state of New York, however, he falsified header information and used deceptive routing and domain purchase practices in order to get his messages through. The lawsuit also accused Richter of using a network of approximately 500 “zombie” computers to send his messages. When asked how so many users could have subscribed and not remember doing so, Richter claimed the signups must have been via anonymous "partners of our partners" web sites, the names of which slipped his mind.

Not Just an Online Threat
Evidently not satisfied with stealing bandwidth, Richter also shows a penchant for heavy equipment. In an unrelated 2003 case, he was put on probation after pleading guilty to a felony charge of receiving stolen items worth more than $10,000. According to court records, an informant's tip regarding a stolen Bobcat loader led undercover officers to Richter. Over the course of 13 months, the officers proceeded to strike deals with him for a Honda generator, hundreds of cases of cigarettes, three laptop computers and other items, all offered at suspiciously low prices and purchased in some of Denver’s seediest neighborhoods. In addition to probation, Richter was also ordered to pay $38,000 in restitution for the stolen goods.

Despite his guilty plea, Richter maintains his innocence, saying he pleaded guilty to the felony charges because it was "easier to be done with it," and he had "too much stuff going on in my life."

What’s Next for Scott Richter?
The 5-year-old OptInRealBig.com, which employed 25 people last year and had 350 clients, will continue to operate under Chapter 11 bankruptcy protection. While the bankruptcy filing shows the power of legislation and legal action from parties with a vested interest in stopping spam, Richter is not likely to fade quietly into the sunset. Under Chapter 11 bankruptcy laws, the company must follow a court-supervised “debt rehabilitation” plan to pay off creditors, but is not required to modify its business practices. None of OptInRealBig’s assets will be liquidated, meaning the company’s stable of spam cannons will remain active. The bottom line: Scott Richter will not be required to stop sending UCE in the immediate future, pending ongoing litigation intended to determine exactly what spam is in legal terms. In the meantime, the best defense against spam is a comprehensive gateway solution that will guard against all manner of email threats, especially spammers like Scott Richter.

About the author:
Paul Judge, CTO, CipherTrust, Inc.
Dr. Paul Judge is a noted scholar and entrepreneur. He is Chief Technology Officer at CipherTrust, the industry's largest provider of enterprise email security. The company’s flagship product, IronMail provides a best of breed enterprise anti spam solution designed to stop spam, phishing attacks and other email-based threats. Learn more by visiting www.ciphertrust.com/products/spam_and_fraud_protection today.
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Anti-Spam Case Study: Pacesetter Claims Service

When catastrophe strikes, many insurance companies tend to get flooded with new claims. These sudden surges in client demands can be overwhelming, and that's where Pacesetter Claims Service, an independent adjusting agency, comes in.

Founded in 1997, Pacesetter Claims Service is a well-established company with offices in five different states, as well as Puerto Rico. They are dedicated to providing the extra support companies such as American Family Mutual Insurance and Farmers Insurance Group need in the aftermath of a catastrophic event.

Having multiple offices spread across the country, and no way of predicting where or when the next disaster will strike, immediate, effective communication, such as email, is vital for Pacesetter's success. With the company dealing with upwards of 100 to 150 emails per day that are not only valid, but also possibly contain critical information from multiple sources, filtering out the junk email becomes essential.

According to Pacesetter IT Coordinator David Borg, more than 80% of their incoming email was a bombardment of spam. Pacesetter couldn't afford to have their employees wasting time sorting through these unwanted emails. They also didn't want to risk the possibility of inadvertently filtering out legitimate messages. They needed a highly effective, highly accurate anti-spam software solution to their spam problem.

Solution
Choosing Securence was an easy decision for Pacesetter Claims Service. Securence offered everything Pacesetter was looking for: accuracy, ease of use, great customer service and cost effectiveness.
"The reps stayed in touch real closely in the beginning to make sure things went smoothly," says Borg, who also likes the option that Securence is a service as opposed to just an application he has to install and maintain himself. Perhaps most importantly, Borg is impressed with the accuracy of Securence's email filtering software. "During our 30-day trial period," says Borg, "we didn't have any false positives, and the few junk e-mails that did slip through were because we couldn't completely secure things on our end. We're extremely satisfied."

By selecting Securence, Pacesetter Claims Service was able to reduce their incoming junk email by more than 80% with nearly perfect accuracy.

About the author:
Joe Caldwell
Securence offers anti-spam software, antivirus software and internet filtering software for business and consumers. http://www.securence.com
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Anti Spam at the Enterprise Level

Every one of us knows how spam impacts us. Every day we either get a ton of spam - or if we're fairly well protected by spam filters - only a few pieces.

Like a large number of people, I don't use any spam filters. Ah. You think I'm insane. But wait. My problem is that I get a lot of email from marketing types which I want to receive. And the spam filtering software is not very sensitive to my needs. Even white-listing doesn't always work. So, I prefer to get all that spam and just delete it.

Now this solution can work for me despite the time it takes to delete my daily overdose of spam. However, at the enterprise level, it's a whole different story. If you have a relatively large internal network with even a modest number of email users, you're looking at a major problem. And the more users you have, the worse the problem is.

Sure, you can put up software on the mail server. Works, kind of. But pretty soon you may find you need to upgrade the mail server. And that's after you already put it on a stand-alone machine.

Rather than continuing to buy ever more expensive software to run on a machine that keeps needing to be upgraded, you might want to think about a dedicated anti spam appliance.

To give you some idea of what's possible let's take a look at Barracuda Networks dedicated anti spam appliance. All you need to do is put this baby in front of your mail server. I say baby, advisedly because this one will learn by doing and by training provided by your users.

Dean Drako, CEO of Barracuda Networks said, "Bayesian filtering is still one of the most accurate defenses against spam. The new plug-ins allow users to directly train the Bayesian filter, making the Barracuda Spam Firewall even more accurate based on the users individual email preferences. Viruses and other threats can infect the network quickly if they are not stopped at the network edge. With Intent Analysis our customers have an advantage over these threats because the Barracuda Spam Firewall is able to block them real time. Consequently we have consistently been a first responder when some of the most malicious virus attacks have hit, saving our customers from potentially devastating damage to their networks."

This is one beautiful little machine. A Barracuda Spam Firewall can support from 1,000 to 30,000 active users. It can usually be installed in less than five minutes and receives automatic hourly updates for new forms of spam and viruses. It has a 10 layer defense system beyond the use of open source anti spam and anti virus solutions: denial of service and security protection, IP block list, rate control, virus check with archive decompression, proprietary virus check, user specified rules, spam fingerprint check, Intent Analysis, spam rule-based scoring, and Bayesian analysis. Plus it also does both inbound and outbound email filtering with the inclusion of sophisticated outbound email filtering techniques (just in case you've got a spam zombie on board or somebody's got an infected PC).

However, it isn't exactly cheap. Still, when you consider the time, bandwidth, user frustration and potential hardware upgrade costs, the price may look a lot more reasonable. You can check it out at http://www.barracudanetworks.com/

If you are in the market for an anti-spam appliance, the Barracuda Spam Firewall isn't your only choice. The impact of spam on internet businesses - even those who primarily use it for just email - is so great that a simple search for "anti spam appliance" will find you a number of alternatives to examine. Even McAfee is getting into the anti spam hardware game.

I'm hoping that it won't be too long before I can pick up a Bayesian multi-level anti spam, anti virus firewall appliance for my home PC that keeps me safe and cuts my need to delete without deep-sixing the email I want or costing me more than I can afford. I suspect it's on the way.

About the author:
Richard Keir writes in a variety of areas involving eBusiness and the internet. For more on spam visit http://anti-spam.werkz.org and for general eCommerce go to http://building-ecommerce-websites.com
Copyright 2005 Richard Keir
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