Two men have been convicted by a Phoenix jury on all eight counts brought against them relating to a pornographic spam operation, including the US's first convictions under its CAN-SPAM Act.

The Controlling the Assault of Non-solicited Pornography and Marketing Act (CAN-SPAM) was designed to crack down on the transmission of pornography in commercial bulk unsolicited E-mails.
Jeffrey Kilbride and James Schaffer were convicted of two violations of the CAN-SPAM Act. One of the counts charged that they sent multiple electronic commercial mail messages containing falsified header information. The other count stemmed from the fact that the pair sent E-mail messages using domain names that had been registered using materially false information.
Kilbride and Schaffer were also convicted on one count of conspiring to commit fraud in connection with electronic mail and four counts of felony obscenity charges for transporting hard-core pornographic images of adults. Finally, they were also found guilty on a federal money laundering charge for moving funds inside and out of the US to conceal or disguise the nature, location, source, ownership or control of the proceeds from those materials.
"Through their international spamming operation, these defendants made millions of dollars by sending unwanted sexually explicit E-mails to hundreds of thousands of innocent people, including families and children, while simultaneously using sophisticated Internet technology to try to conceal their identity," says Assistant Attorney General Alice Fisher. "This prosecution, the first of its kind under the CAN-SPAM Act, demonstrates the Department of Justice’s commitment to protect American families from receiving unsolicited spam E-mail."
In 2003, Kilbride and Schaffer established a spamming operation that grossed more than $2-million over the course of its operation. Their business model consisted of sending millions of unsolicited E-mail messages which advertised commercial Internet pornography Web sites. For each person directed to one of these Web sites, Kilbride and Schaffer earned a commission. Hard-core pornographic images were embedded in each E-mail and were visible to any person who opened the mail.
When the CAN-SPAM Act came into effect in 2004, Kilbride and Schaffer arranged to remotely log on to servers in Amsterdam to make it look like their spam messages were being sent from abroad when, in reality, Kilbride and Schaffer were operating their business from inside the US.
The "From" names and E-mail addresses used to send the spam messages differed from the "Reply to" addresses, making it impossible for recipients to identify the actual sender of the messages or to reply to the E-mail. In addition, the domain names used to send the spam were registered in the name of a fictitious employee at a shell corporation Kilbride and Schaffer established in Mauritius. Further, the duo used bank accounts in Mauritius and the Isle of Man to receive and funnel the proceeds from the operation and to further insulate themselves from detection by US law enforcement.
Witnesses called during the three-week trial included three associates who pleaded guilty to conspiring with Kilbride and Schaffer and aiding and abetting the operation as a whole. Witnesses from AOL and the Federal Trade Commission (FTC) confirmed that more than 660 000 complaints were received about the spam, including some who had set parental controls to protect their children from accessing graphic sexual content.
Kilbride and Schaffer face a maximum penalty of five years in prison for each CAN-SPAM and obscenity offence, as well as a fine of up to $500 000 and a maximum of 20 years in prison for money laundering. Sentencing is set for  24 September.