Online Marketers Settle in 1st Joint State-FTC Action

Rhett Pardon
LOS ANGELES — A pair of Los Angeles online marketers have settled with the state of California and the Federal Trade Commission over Can-Spam violations.

Rick Yang and Peonie Pui Ting Chen, and the spam operation they ran under the corporate names Optin Global Inc. and Vision Media Limited Corp., will pay $2.4 million to the state and federal governments. Yang, who also goes by the nickname Calvin Ho, is owner of the companies; Chen is the president.

California Attorney General Bill Lockyer said the pair flooded computers with 2 million spam messages in one year, pitching an array of products and services, including mortgage services, car warranties, travel deals, prescription drugs and college degrees.

After the 12-count indictment, which resulted in a freeze on their assets — including a Las Vegas residence and several bank accounts — and temporary restraining order stopping their unlawful spam, the defendants allegedly went out of business.

Lockyer in a statement said he plans to ramp up efforts to pursue other spammers with help from the FTC.

“Con artists use spam as a high-tech crowbar to open the door to fraud and ID theft,” he said. “I will continue to work cooperatively with federal regulators, the high-tech industry, businesses and others to try to stem the spam tide."

The case marked the first joint state-FTC action brought under the federal Can-Spam Act (Controlling the Assault of Non-Solicited Pornography and Marketing Act) that took effect in 2004. Lockyer also brought the lawsuit under California's anti-spam law.

Part of the settlement includes a provision giving leniency to the pair for helping the government agencies target other companies using their services.