Microsoft to spend spam king cash on net crime

Software giant Microsoft will invest the $7m it is expecting from a damages settlement with "spam king" Scott Richter into fighting internet crimes, paying its legal bills and "rewarding" the state of New York.

The announcement was made by Microsoft general counsel Brad Smith in an open letter posted on the company's website.

After covering its legal expenses, Microsoft will dedicate $5m dollars to helping law enforcement agencies address computer-related crimes, Smith said.

Smith said in the letter: "In appreciation of the role of the New York attorney general, another $1m of this settlement money will be directed to New York state... to expand computer-related skills training for youths and adults."

Describing Richter - who is said to have sent or assisted others in sending more than 38 billion emails per year - as one of the world's most "prolific" spammers, Smith called the settlement a milestone and expressed hope that the decision would send a clear warning to those dabbling in spamming.

Richter could have paid a fraction of the millions if he had settled at the end of 2004 when Microsoft allegedly offered to settle the dispute for $100,000.

Then, Richter said: "We told them where they could go stick it. It's nothing but harassment. It's free publicity for them. They pay a few thousand bucks to file the lawsuits. They get a bunch of free press, and people sign up for their spam-fighting products."

At the end of March, Richter filed for Chapter 11 bankruptcy protection for his email marketing company, OptInRealBig.com. One condition of the settlement with Microsoft was that Richter would file a motion to dismiss the bankruptcy proceedings.

Munir Kotadia writes for ZDNet Australia