This case was originally filed in Oct. of 2004. Finally, we have a resolution to the issue. We will trace Sanford Wallace’s own comments while the case was pending and provide guidance for you.
Some people never change
Sanford Wallace is a name you probably remember from his days as one of the worlds largest Spammers via Cyber Promotions. When this dried up for “Spamford” via numerous law suits he “retired”, and eventually moved into Spyware via drive by silent downloads, front men to buy Campaigns and continued to make money using these deplorable techniques.
Let’s take a look at exactly what Sanford Wallace said about his Spyware actions. In these posts he is using a user name of “lwrules” and as the former owner of this Forum, I can tell you with 100% assurance that it’s really him:
His words before the FTC sued him:
“First off, Passthison’s change in business model addresses silent downloads, not active-x.
With that said. If using active-x increases your eCPM enough to compensate for loss of *some* visitors, then there is absolutely ZERO reason *not* to use it in my opinion.
By using active-x, you are seeking PERMISSION to install software. Assuming you do so in a way that is not designed to TRICK your users into downloading anything, then you are doing ASBOLUTELY NOTHING wrong and it is within your rights to do so. Just like pop-ups, if you use active-x to monetize your site, it’s your decision. In my experience, I don’t believe it will scare away too many visitors as long as you don’t popup too many screens per session.”
Source: http://www.geekvillage.com/forums/showthread.php?s=&threadid=24806
AFTER the FTC sued him in this case he said:
“Also this whole claim of creating a problem and selling the solution is not as clear cut as the FTC puts it in its complaint. There are a lot of issues here.So go on and continue making 12 cents per 1000 impressions and pat yourselves on the back for doing the right thing.”
“The FTC is painting a picture of us creating a malicious problem and then selling the solution. That is a convenient, press friendly allegation.”
“The truth is we never did anything with the intent to damage anybody, nor do I believe we used exortion type marketing. We never attempted to interfere or burden people anymore than pop-ups and other aggressive ads would interfere with a computer’s operation.”
Source: http://www.geekvillage.com/forums/showthread.php?t=25621
The FTC and the courts think otherwise. Mr. Wallace owes 4 Millon plus, your thoughts and actions are deplorable and your justifications are false. The FTC says:
“For Release: May 4, 2006 – A default judgment against Wallace and Smartbot.Net orders them to give up $4,089,500 in ill-gotten gains. The order also bars them from downloading spyware onto consumers’ computers; from downloading any software without consumers’ consent; from redirecting consumers’ computers to sites or servers other than those the consumers selected to visit; from changing any Web browser’s default home page; and from modifying or replacing the search features or functions of any search engine. A settlement with defendants OptinTrade and Jared Lansky, bars the same practices that are barred in the Wallace and Smartbot.Net judgment. Lansky, an ad broker who disseminated ads containing Wallace’s spyware, will give up $227,000 in ill-gotten gains.”
Source: http://www.ftc.gov/opa/2006/05/seismic.htm
The defult Judgement: http://www.ftc.gov/os/caselist/0423125/WallaceFinalJudgment.pdf
The front man: OptinTrade and Jared Lansky ordered to pay 227K
Part of this deception was to use this front man who is acting as an “ad broker”. Lansky purchases Campaigns from well known Networks like Advertising.com, starts the Campaign with compliant NON Syware creatives, and then Wallace and Lansky slip streams his Spyware laden creatives into the “banner stream” over the weekend, and then cancells the Campaign on Monday morning.
My final thoughts
Affiliate Programs and all Advertising Netowrks MUST perform “due dillegence” BEFORE you partner with anyone on planet earth. So Lansky is an “ad broker” and you let money drive the partnership with this “Criminal” as opposed to actually conducting due dilligence and placing ALL new clients on a provisional basis so they don’t have access to their banner stream to switch creatives without your exspress prior permission.
Unfortunetly, none of these legal procedures involves jail time. In my world, all of the Spyware cases would involve time in federal prison for 10 to 20 years. This would be the ultimate hammer!
Some of the threads I have posted contain comments from Webmasters/Publishers. Lots of these folks think its fine to infect, damage, and exploit their site visitors via Spyware in exchange for money. More law suits against Publishers are needed and it would certainly be nice if a few of them could also spend 10 to 20 years in federal proson.
Edited Insert: A very personal piece of advice for Sanford Wallace
Sanford, I’ve seen and heard your “DJ” gig in Vegas. Your very good. Some of these DJs make over 100K per year. You have all the talent and exposure to do this. Stay OFF the Internet, pay back all the money you owe the FTC (4 MIllion plus) via monthly payments, and continue to enhance your DJ career. Thanks to Brian for the initial News of your DJ gig at http://spamkings.oreilly.com/archives/2005/01/no_more_exploit_1.html