Two Men Arrested in AOL Spam Scheme

Two Men Arrested in AOL Spam Scheme
AOL Software Engineer, Nev. Man Arrested in Spam Scheme Involving 92 Million Customer Screen Names

NEW YORK June 23, 2004 — An America Online software engineer stole a list of 92 million customer screen names that was eventually used to send massive amounts of e-mail spam, federal prosecutors said Wednesday. Jason Smathers, 24, was arrested at his home in Harpers Ferry, W.Va., and was charged with conspiracy.

Smathers, working at AOL offices in Dulles, Va., stole the list and sold it to a Las Vegas man, Sean Dunaway, who used it to promote an Internet gambling operation and sold it to spammers, a criminal complaint said.

Dunaway, 21, also was arrested at his home and was charged with conspiracy. He made an initial appearance in U.S. District Court in Las Vegas; he was released and given 30 days to appear before a U.S. magistrate judge in New York.

Dunaway declined to comment after he left the federal courthouse. Secret Service agents confiscated his computer equipment when they arrested him Wednesday, said his lawyer, Kevin Kelly.

Smathers was to appear in court in Virginia. No lawyer for him could be located; prosecutors said they didn’t know who was representing him.

Each man could face up to five years in prison and at least $250,000 in fines if convicted.

Smathers was not authorized to have access to the screen name list, which is kept in Dulles, but used another employee’s access code last year to steal it, prosecutors said.

Smathers compiled a list that also included customer ZIP codes and credit card types, prosecutors said.

AOL said it did not appear that Smathers had gained access to credit card numbers, which the company keeps in a separate facility.

“We deeply regret what has taken place and are thoroughly reviewing and strengthening our internal procedures as a result of this investigation and arrest,” AOL spokesman Nicholas Graham said.

Graham said the company fired Smathers on Wednesday as the charges were filed.

Prosecutors did not immediately say how much they allege Dunaway paid Smathers for the list, but they said Dunaway later paid him $100,000 for an updated version of it.

Dunaway then offered the list to spammers, charging them $2,000 for lists containing names beginning with a single letter of the alphabet or $52,000 for the entire list, the complaint said.

At least one spammer used the list to send advertising for herbal penile enhancement pills, prosecutors said.

AOL, owned by Time Warner Inc., has about 32 million customers worldwide, Graham said. Many customers register several different screen names for family members or themselves.

David Kelley, the U.S. attorney for Manhattan, said the arrests were two of the first prosecutions under federal “can spam” legislation that took effect early this year.

On the Net:

America Online:

(SUBS grafs 4-5 pvs, Dunaway, 21 … , with three grafs to UPDATE with comment from Dunaway’s attorney, correct Smathers’ legal representation unknown sted unavailable for comment. Version also moving on general news wires.)

photo credit and caption: Sean Dunaway, 21, walks away from the Federal Courthouse in Las Vegas, Wednesday, June 23, 2004, after an initial court appearance. Dunaway was charged with conspiracy after allegedly purchasing a stolen list of 92 million America Online customer screen names from an AOL employee, and then using it to promote an Internet gambling operation and selling it to spammers. (AP Photo/Joe Cavaretta)