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Colorado Penny Stock Spammer Gets Jail Time

By Robert McMillan

April 30, 2008 — IDG News Service —

A federal judge has ordered convicted spammer Eddie Davidson to just under two years in prison for sending out a large volume of spam promoting watches, perfume and penny stocks.

Davidson, 35, operated a business called Power Promoters, which sent spam from computers in his Bennett, Colorado, home. He would change the header information in his messages to make it appear as if they had come from legitimate companies such as AOL, and then send them out to hundreds of thousands of addresses.

Davidson sent the messages on behalf of an unnamed Houston company, court filings state. He was asked to promote about 19 penny-stock companies, including one called Advanced Power Line Technologies in 2006 and 2007. He would earn fees based on the trading volume of the stocks he was promoting.

The business was lucrative: The Houston company paid Davidson about US$1.4 million for his services, court documents state.

Between 2003 and 2006, when his primary source of income was spam, bank account deposits into Davidson's account totalled about $3.5 million.

Called the "Colorado Spam King" by the local paper, Davidson had pleaded guilty to criminal spam charges in December.

On Monday, U.S. District Court Judge Marcia Krieger sentenced Davidson to 21 months in jail and ordered him to pay more than $714, 000 in fines to the U.S. Internal Revenue Service.

He's set to report to federal prison in May.

Davidson is the second U.S. spammer to face jail time in recent weeks. Last month, notorious Seattle spammer Robert Soloway also pleaded guilty to criminal charges. He is facing a possible 26-year jail term and is set to be sentenced on June 20.