No place can spam like South Florida
Unwanted e-mailers thrive with schemes.
By Ian Katz
Business Writer
May 8, 2005
No place does spamming and scamming quite like South Florida.
Together, Broward, Palm Beach and Miami-Dade counties are home to more
spammers than any country on Earth. And it's not just the annoying
pitches for mortgages and sex pills. Increasingly, law enforcement
officials are finding that junk e-mail is a favored weapon of predators,
an easy way for criminals to target a world of potential victims from
behind a wall of anonymity.
More than a quarter of about 180 hardcore spammers tracked by watchdog
group Spamhaus are based in Florida, and most of those are in the
tri-county area. The city with the most spammers in the world is Boca
Raton. Eleven are listed by Spamhaus as based there, though anti-spam
groups say they think that figure misses dozens who send spam at least
part-time.
Why South Florida? Spammers and anti-spam groups cite a combination of
reasons. They include the warm weather and laid-back lifestyle, lenient
bankruptcy laws, proximity to Internet data centers, a history of
telemarketing and e-mail marketing, and the state's longstanding image
as a good place to do dirty business.
South Florida is so notorious that some experts attributed a short-term
decline in global spam after last year's hurricanes to the assumption
that the storms disrupted spammers' operations.
And the FBI's North Miami office receives so many fraud complaints that
only major cases get the bureau's attention. "If you come in with a $1
million case, we'll put you in line with all the others," said LeVord
Burns, supervisory special agent.
The FBI has found spam to be a natural accomplice for scammers. Unlike
direct mail and telemarketing, e-mail is cheap, global and often
untraceable. "You can hit a button and reach millions of people," Burns
said. "It's like fishing. You just dangle a line out and wait for
someone to bite on it."
All too often, the trails lead to South Florida. When Sandra Allen and
tens of thousands of other victims bit on a work-at-home spam, the
Federal Trade Commission investigated and found a South Florida
operation at the heart of the alleged scheme.
Allen, 56, who lives in Ashtabula, Ohio, 55 miles east of Cleveland,
received an e-mail claiming she could make as much as $3,000 a week
stuffing envelopes.
Diabetes, heart disease and arthritis prevent Allen from working outside
the home, so she saw the e-mail as a heaven-sent opportunity. She sent
the $105 required to get started to SR & Associates, which had a Weston
mailing address, but she never got a penny back.
The FTC is now suing three people who allegedly operated under the names
SR and Sun Ray Trading Inc., accusing them of using the
envelope-stuffing offer to steal at least $1.4 million. Defendants
Rolando Galvez-Garcia, Kostadin Osvaldo Marte Tavarez and Anneelises
Flores Adino lived or worked in South Florida.
Galvez-Garcia's lawyer, Jorge Calil of Miami, said someone registered
Galvez-Garcia as an agent of the companies without his knowledge. Jason
Wandner, a Miami lawyer representing Marte Tavarez, said his client
wants to resolve the case amicably. The FTC thinks that Flores Adino has
left the country.
Another inquiry led the FTC to South Florida when the agency began
checking out reports of bogus human growth hormone sold over the Web.
Last year, Creaghan Harry, 37, of Highland Beach, was accused of
defrauding thousands of customers of hundreds of thousands of dollars.
He allegedly spent spam with links to Web sites selling the bogus growth
hormone.
"LOSE WEIGHT WHILE YOU SLEEP WITHOUT DIETING OR EXERCISE," read millions
of the e-mails. Human growth hormone, or HGH, is produced by the
pituitary gland. As a drug, it has been approved by the Food and Drug
Administration to help unusually short children grow, but some
proponents also claim it has anti-aging benefits.
Because spammers often route their e-mails through hosts overseas, spam
is difficult to trace. So to solve cases, investigators usually follow
the money trail.
The FTC suit, filed in Illinois because undercover purchases of Harry's
products were made there, alleges that the tablets contain amino acids
that in the doses prescribed would have no effect on the person taking them.
The two sides have reached a settlement, but neither would give details.
Harry declined to answer several questions the South Florida
Sun-Sentinel asked him about the case. But in an e-mail exchange, he
said he agreed to a settlement because he would otherwise face years of
litigation over the FTC's disagreement with the claims he made about his
products.
South Florida's reputation as a hotbed for mass e-mailers makes it a
perfect home for a place called the Bulk Email Software Superstore.
Nestled inconspicuously among medical offices in the Belle Terre East
Medical Center in Coral Springs, the store is a one-stop shop for bulk
e-mailers.
It doesn't look like much of a superstore. Cardboard boxes and huge bags
of plastic foam peanuts sit between several desks in an office barely
large enough for about eight people. Most of the space is used for a
side business, 1st Class Cigar Humidors.
The store is far more convincing online. Its site, www.americaint.com,
offers an array of legal products -- including programs that help place
Web site names on search engines and lists of 1 million e-mail addresses
costing $39.95 each.
The store also sells bulletproof hosting services, in which the host
refuses to shut down the site despite requests from spam fighters. A lot
of bulletproof hosting is farmed out by companies to Web hosts in China,
making it more difficult for law enforcement to shut down a spammer's
Web site. The Bulk Email Software Superstore offers a bulletproof
service for $399 a month, plus a $99 set-up fee.
The company says it complies with a federal law that went into effect
last year regulating how bulk e-mail can be sent -- and its clients
range from real estate agents to tax accountants trying to legally
expand their businesses.
Though many spammers operate legally, law enforcement officials are
concerned that some South Florida spammers will use e-mail to rip people
off, given the area's history as a scam capital.
South Florida had a reputation as a Shangri-La for hucksters long before
spam became a scourge. In the late 1980s and early 1990s, so many
scammers were selling penny stocks by cold-calling from so-called boiler
rooms in Boca Raton that a stretch of Federal Highway in the city was
known as the "maggot mile." The area has also been known as the center
of the legitimate and sleazy sides of the telemarketing business.
The perception that South Florida is a spam capital is well-ingrained. A
dropoff in spam after last year's hurricanes caused some to wonder
whether spammers had been temporarily shut down.
Adding to the speculation was the fact that a group monitoring phishing,
a scheme in which spam is used to lure people into giving up bank
account or credit card information at phony Web sites, reported an
unusual decline in September, the month hurricanes Frances and Jeanne
hit South Florida.
Experts are divided on how much credence to give the theory, but some
say it may have validity. Adam Brower, who tracks spamming activity for
Spamhaus, said he thinks it does because e-mail administrators told the
group they were getting noticeably less spam after the storms.
Staff researchers Barbara Hijek and William Lucey contributed to this
report.
Ian Katz can be reached at ikatz@sun-sentinel.com or 954-356-4664.
Copyright © 2005, South Florida Sun-Sentinel
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