By Paul Judge, CTO, CipherTrust, Inc.
Will other spammers take heed? Don’t count on it. Jeremy Jayneswas on top of the world. By age 28, he owned a million-dollarhome, a high-class restaurant, a chain of gyms and countlessother toys. Yet those were only the spoils of his main line ofbusiness, which was swindling innocent people out of their moneythrough email scams. From an unassuming house serving as hiscompany’s headquarters in Raleigh, NC, Jaynes sent an estimatedten million messages a day pitching products most recipientsdidn't want, amassing an estimated $24 million fortune in theprocess. Using aliases such as Jeremy James and GavenStubberfield, Jaynes spammed his way up to the #8 position onSpamhaus’ Register Of Known Spam Operations (ROKSO) and grossedas much as $750,000 a month, allowing him to live like a king.
However, Jaynes ran head-on into an information superhighwayroad block when a Virginia judge sentenced him to nine years inprison for his November 2004 conviction on felony charges ofusing false IP addresses to send mass email advertisements (somejust call it spamming). The conviction was a landmark decision,as Jaynes became the first person in the United States convictedof felony spam charges. Though his operation was based in NorthCarolina, Jaynes was tried in Virginia because it is home to alarge number of the routers that control much of North America'sInternet traffic (it’s also the home of AOL and a governmentbuilding or two).
He should’ve Used the Privacy Software During the trial,prosecutors focused on three of Jaynes’ most egregious scams:software that promised to protect users' private information; aservice for choosing penny stocks to invest in; and awork-from-home "FedEx refund processor" opportunity thatpromised $75-an-hour work but did little more than give buyersaccess to a website of delinquent FedEx accounts. Soundfamiliar? Anyone with an e-mail address has received countlessmessages originating from Jaynes’ operation. (If you’re stillwaiting on your privacy software to show up, it’s probably safeto stop checking the mailbox.)
Jaynes got lists of millions of email addresses through a stolendatabase of America Online customers. He also illegally obtainede-mail addresses of eBay users. While the prosecutors stilldon't know how Jaynes got access to the lists, the AssociatedPress reported that the AOL names matched a list of 92 millionaddresses that an AOL software engineer has been charged withstealing.
When Jaynes’ operation was raided, investigators found that thehouse from which he ran his operation was wired with 16 T-1lines (a large office building can get by on a single T-1 linefor all its users). Investigators also entered into evidenceto-do lists handwritten by Jaynes. Take a look at Jeremy Jayne'smeticulously detailed lists at:
* www.ciphertrust.com/images/jaynes_notes1.JPG *www.ciphertrust.com/images/jaynes_notes2.JPG *www.ciphertrust.com/images/jaynes_notes3.JPG
Good Work if You Can Get (Away With) It The economics ofspamming makes Jaynes’ decision to build a career of itunderstandable, though not noble. Spammers work on the law ofaverages, which would seem like an odd strategy considering thatthe average response rate for a spam message is just one-tenthof one percent. However, once you do the math even thisminiscule response rate can make one very wealthy very quickly.If a spammer sends one million messages pushing a product widtha $40 profit, a response rate of 0.1 percent works out to 1000customers, or $40,000 per million messages sent. Since eachmessage costs only fractions of a penny to send, and Jaynes wassending literally billions of messages a year, it’s easy to seehow he pulled in $400,000 to $750,000 a month, while spendingperhaps $50,000 on bandwidth and other overhead.
The fact that spamming can be such a profitable undertakingmeans that the profession is not likely to go anywhere in thenear future. Spammers have financial motivation to come up withinnovative ways to avoid detection, and they have begun to joinforces. While the landmark decision handed down in the Jaynestrial may serve as a deterrent to some would-be spammers, it isunlikely that the threat of prosecution will keep futurespammers from refining their trade. For now and the foreseeablefuture, the answer still lies in technology, not lawenforcement.
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