State's first spam lawsuit settled

Wednesday, May 24, 2006

State's first spam lawsuit settled
All together, California companies will pay $4.1 million

The owners of two California companies have agreed to settle with the state of Washington in the state's first anti-spam lawsuit filed under a 2004 federal law.

The settlements announced Tuesday by state Attorney General Rob McKenna netted the state $530,000. Added to the earlier penalties, restitution and other fines the companies were ordered to pay last year, the state now has been awarded a total of $4.1 million.

The 2004 suit against the marketing firm AvTech Direct charged the company with sending more than 1,500 unsolicited spam e-mail messages to Seattle Public Schools employees.

According to the complaint, the company had been sending the e-mail messages to market the sale of desktop computers to consumers in Washington and nationwide since at least 2003.

AvTech, which also operated under the name Educational Purchasing Services, advertised the computers for another company called MD&I, which assembled and shipped the units to consumers.

"Deceptive e-mails are not only a nuisance, but illegal," McKenna said in a statement. "This lawsuit will help offset some of the damage done to the Seattle School District, whose employees were peppered with annoying advertisements, and sends a message to other spammers that breaking the law can lead to serious penalties."

In the Tuesday settlement, AvTech owner Gary Hunziker agreed to pay $500,000 in civil penalties and $10,000 in restitution to the School District. An AvTech manager named Arlene Sediqzad also agreed to pay $10,000 in attorneys' costs, as well as a judgment of $180,000 that was suspended on condition she comply with the other terms of the settlement.

MD&I and its owner Min Hui Zhao, known as Michael Zhao, agreed to pay $10,000 to resolve claims against him.

Including the recent settlement, the district has been awarded $385,000 in restitution.

"We're pleased that this case had the outcome that it did," district spokeswoman Patti Spencer said. This type of spam, she said, is "costly and lead(s) to unnecessary time and inconvenience for all concerned."

P-I reporter Sam Skolnik can be reached at 206-448-8334 or samskolnik@seattlepi.com.

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