Mesa, AZ e-mail spammer on hook for $720 million from Web Hosting / ISP
Joseph A. Reaves / The Arizona Republic / Dec. 20, 2004 12:00 AM

The attorney who won a $720 million damage award against a little-known Valley firm for clogging the Internet with spam e-mail said Sunday that he does not expect to collect anywhere near that much money.

But he said the three people who ran the company have "substantial personal assets" and he intends to make them pay.

Kelly Walsh of Atlanta, one of the nation's leading attorneys in the fight against unsolicited junk mail, said a ruling Friday by a judge in Iowa was "a victory for all of us" badgered by unsolicited junk e-mail. advertisement U.S. District Judge Charles R. Wolle ordered AMP Dollar Savings Inc. of Mesa and two Florida firms to pay a total of $1.08 billion in damages for sending out millions of bulk e-mails that clogged the computers of a small Internet service company in Iowa. AMP alone was ordered to pay $720 million.

"Obviously, I don't really believe any of these spammers has a billion dollars or $720 million or anything like that," Walsh told The Republic by telephone Sunday.

"In the case of AMP Dollar Savings, they are basically a shell for the spammers that were running it. We are now in the process of moving forward against the individuals who have substantial personal assets."

AMP Dollar Savings Inc. was registered with the Arizona Corporation Commission as a limited liability corporation from Nov. 12, 1997, until Nov. 8 of this year when it was ordered dissolved for failing to file its most recent annual reports.

Public records on the Corporation Commission WebSite show AMP last filed an annual report for the 2002 business year in June 2003. The accountant listed as agent for the corporation, Gary C. Brown of Paradise Valley, resigned as AMP's representative on Oct. 31, 2003.

A woman who answered the phone at Brown's home Sunday said he was unavailable.

Corporation Commission records list Henry S. Perez of Fountain Hills, formerly of Gilbert, as AMP's president and chief executive officer. The only other officer listed on AMP's papers with the Corporation Commission was treasurer Suzanne K. Bartok.

Property records filed with the Maricopa County Recorder's Office identify Bartok as Perez's wife.

A telephone number listed for Perez and Bartok in Fountain Hills was disconnected. So, too, was the most-recent business number for AMP Dollars Savings of Mesa.

"Simply because you stop doing business, it doesn't absolve you of liability for what you have done in the past," Walsh said. "If that was the case, Enron would have had a quick out."

The ruling against AMP and the Florida firms came in a lawsuit filed Oct. 10, 2003, in U.S. District Court for the southern district of Iowa.

Robert Kramer of Clinton, Iowa, filed the suit, claiming that as many as 300 companies bombarded his small firm, CIS Internet Services, with millions of unwanted e-mails for months at a time. CIS provides e-mail service to about 5,000 subscribers in eastern Iowa.

Judge Wolle found that AMP Dollar Savings alone originated at least 20,000 e-mails a day from August to December 2003 and pushed them through CIS' computers.

The e-mails directed readers to two sites run by AMP, both of which offer to help loan companies find prospective customers. An Internet search showed that both sites are registered to Perez, along with another site that was purchased on Nov. 8, the day the Arizona Corporation Commission dissolved AMP Dollar Savings.

Kramer claimed the e-mails AMP sent were directed to mostly bogus addresses lifted from a CD-ROM titled "Bulk Mailing 4 Dummies."

Court documents showed the CD-ROM includes more than 2.8 million addresses with a "cis.net" domain.

Nearly all those addresses were fictitious and never had been assigned to CIS subscribers, Kramer said. But in his lawsuit, he contended the bogus addresses clogged his computers, forcing him to spend hundreds of thousands of dollars to upgrade his systems and damaging his relations with his customers.

In his ruling, Wolle also ordered Cash Link Systems of Miami to pay Kramer $360 million and held Florida-based TEI Marketing Group liable for $140,000 in damages.

The judge invoked Iowa law that allows plaintiffs to claim damages of $10 for each spam message. He then tripled the damages using provisions of the federal Racketeer Influenced, Corrupt Organizations Act.

Calls to CIS for Kramer's reaction went unanswered Sunday, but during the weekend he told his hometown newspaper, the Clinton Herald, that the ruling was a victory for everyone who is bothered by spam mail.

"It brought tears to my eyes," he said.