US ‘Spam King’ Arrested for Hacking 500,000 Facebook accounts

Wall of spam cans
Spam Wall by Freezelight (Flickr)

Sanford Wallace, also know by his nickname “Spam King”, surrendered to FBI agents in Las Vegas on Thursday, he was charged in  San Jose with six counts of fraud with electronic mail, three counts of intentional damage to a protected computer and one count of criminal contempt.

Sanford Wallace had allegedly sent more than 27 million spam messages by compromising the friend lists of 500,000 Facebook accounts and stole personal information between November 2008 and March 2009.

Prosecutors say Wallace found a way to evade Facebook’s spam filter then automated a method to farm friend lists and post messages. Wallace was also believed to have collected email addresses and passwords for Facebook accounts using a deceptive method then sending them to a affiliate website where Wallace was paid for the users he redirected.

Sam O’Rourke updated a October 2009 post about spamming titled “The Fight Goes On“, saying “we applaud the efforts of the U.S. Attorney’s Office and the FBI to bring spammers to justice and will continue to pursue and support both civil and criminal consequences for spammers and others who attempt to harm Facebook or the people who use our service. ”

Facebook has previously won $711 million in damages in 2009 from Sanford Wallace though he previously filed for bankruptcy. MySpace also filed a suit in 2007 after the spammer created 11,000 fake profiles to direct websites to questionable content.

News Corp. Sells Myspace on Cheap

News Corp. has finally unloaded the fledgling MySpace to Specific Media for $35 million. The amount Rupert Murdoch’s News Corp. purchased it for was $580 million six years ago. News Corporation will also keep a minority stake in the company though the ownership stakes owned by each company and Justin Timberlake is unknown.

Myspace, an old social networking favorite, is focused on entertainment. As part of the new deal, Justin Timberlake will ‘take an ownership stake and play a major role in developing the creative direction and strategy for the company moving forward,’ according to a Specific Media press release. The singer saying ‘I’m excited to help revitalize Myspace by using its social media platform to bring artists and fans together in one community.’

During January, Myspace reduced staff by 47% with around 500 staff members losing their jobs. It is expected that at least 150 employees will be removed from the company with  a further 150 employees put on a transition plan, where they can continue working for a few extra weeks while finding a new job.

Users Flee Myspace, Facebook on the Rise

Myspace Website

Myspace has lost 14.4% of its user-base in one month from January to February 2011 according to comScore statistics. MySpace has plummeted from 73 million visitors to 63 million visitors.

Earlier this year,  MySpace had announced nearly halving its workforce leaving 500 people without a job. News Corp. purchased MySpace for $580 million in 2005 near the height of MySpace’s popularity which enjoyed a nearly 200% increase in views from 2005 to 2006.

Facebook overtook its social networking competitor, Myspace, as early as April 2008 according to comScore statistics and MySpace seems to be unable to regain its winning formula (and users).More than 50% of internet users in the United States of America aged over 12 years old are connected on Facebook, according to Edison Research in a 2,020 persons survey.