Financial penalties of $200,000 could be imposed on each of three New Zealanders facing the first court action under the country’s anti-spam law introduced last year.
The Department of Internal Affairs (DIA) has asked the High Court to impose the penalties on the three men, who are alleged to have been involved in a major international spamming operation said to have netted them more than US$2 million (NZ$3 million).
The court action follows a raid on four Christchurch addresses last December and comes after the introduction of the Unsolicited Electronic Messages Act in September 2007.
In its statement of claim, the DIA alleges that company directors Shane Atkinson, of Christchurch and his brother Lance Atkinson of Queensland, along with Roland Smits, a Christchurch courier, were involved in sending more than two million emails to New Zealand addresses alone between 5 September and 31 December 2007.
They are alleged to have earned sales commissions of more than US$2 million from the operation that marketed pharmaceutical products manufactured in India through a business known as the Genbucks Affiliate Programme. This business was operated by Genbucks Ltd, a company incorporated in the Republic of Mauritius, the DIA claims.
The department says Shane Atkinson was co-manager of the Genbucks Affiliate Programme; Lance Atkinson, trading under the name of Sancash, recruited and paid spammers to market Genbucks products, adult sex toys and replica watches, while Roland Smits registered the internet domain names used in the Sancash spam emails and created the alternative subject lines used to avoid interception by internet service providers' spam filtering software.
According to the DIA, it worked with international agencies for two months, gathering evidence on the Christchurch spamming operation.
This includes the United States’ Federal Trade Commission, which has filed its own complaint in the US District Court against Lance Atkinson, his Australian company, Inet Ventures, an American citizen, Jody Smith, and three US companies over spamming activities conducted after Internal Affairs seized computers and records from the Christchurch operation.