Authorities say since 2003, Robert Alan Soloway, 27, has clogged millions of computers around the globe with billions of spam e-mails, reports CBS News correspondent Bill Whitaker. They charged him with 35 counts of fraud, identity theft and money laundering.
They say he'd claim to be a legitimate Internet marketer, get clients' money and their computer ID, then use that ID to mass-mail junk mail, adds Whitaker.
"He's one of the top 10 spammers in the world," said Tim Cranton, a Microsoft Corp. lawyer who is senior director of the company's Worldwide Internet Safety Programs. "He's a huge problem for our customers. This is a very good day."
Soloway pleaded not guilty Wednesday afternoon to all charges after a judge determined that — even with four bank accounts seized by the government — he was sufficiently well off to pay for his own lawyer.
Soloway has been living in a ritzy apartment and drives an expensive Mercedes convertible, said prosecutor Kathryn Warma. Prosecutors are seeking to have him forfeit $773,000 they say he made from his business, Newport Internet Marketing Corp.
A public defender who represented him for Wednesday's hearing declined to comment.
Prosecutors say Soloway used computers infected with malicious code to send out millions of junk e-mails since 2003. The computers are called "zombies" because owners typically have no idea their machines have been infected.
He continued his activities even after Microsoft won a $7 million civil judgment against him in 2005 and the operator of a small Internet service provider in Oklahoma won a $10 million judgment, prosecutors said.
U.S. Attorney Jeff Sullivan said this case is the first in the country in which federal prosecutors have used identity theft statutes to prosecute a spammer for taking over someone else's Internet domain name. Soloway could face decades in prison, though prosecutors said they have not calculated what guideline sentencing range he might face.
"Certainly Mr. Soloway is not the only spammer — he is just one of them — but we do want to send a message to these [individuals], that you are not going undetected," Sullivan told CBS Radio.
Soloway used the networks of compromised computers to send out unsolicited bulk e-mails urging people to use his Internet marketing company to advertise their products, authorities said.
People who clicked on a link in the e-mail were directed to his Web site. There, Soloway advertised his ability to send out as many as 20 million e-mail advertisements over 15 days for $495, the indictment said.
The investigation began when the authorities began receiving hundreds of complaints about Soloway, who had been featured on a list of known spammers kept by The Spamhaus Project, an international anti-spam organization.
The Santa Barbara County, Calif., Department of Social Services said it was spending $1,000 a week to fight the spam it was receiving, and other businesses and individuals complained of having their reputations damaged when it appeared spam was originating from their computers.
"This is not just a nuisance. This is way beyond a nuisance," Warma said.
The Spamhaus Project rejoiced at his arrest.
"Soloway has been a long-term nuisance on the Internet - both in terms of the spam he sent, and the people he duped to use his spam service," organizers wrote on Spamhaus.org.
Soloway remained in federal detention pending a hearing Monday.