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Another major spammer smackdown
Posted on May 20, 2005

Feds shut down company owned by spam king.

Online Payment Solutions in Burnsville, Minn., owned by an internationally known e-mail spammer, illegally sold more than $20 million worth of prescription drugs by phone and the Internet before federal authorities shut it down last week. Online Payment Solutions is a company that runs several Web sites, including Xpress-RX.com.

U.S. District Judge Michael Davis granted prosecutors' request to shut down several online pharmacies related to Xpress Pharmacy Direct, according to court documents.

Davis also froze the assets of several top ranking employees of the company, including owner and operator Christopher Smith.

Christopher William Smith, also known as Chris Johnson, Bruce Jonson, Robert Jonson, Dieter W. Doneit-Schmitz, and Eric Smith, had amassed so much wealth from his pharmacy business that he could afford houses in Prior Lake and Burnsville and keep a fleet of luxury automobiles (2006 Mercedes Benz S65, 2004 Lamborghini Murciélago, 2005 Mercedes Benz C55A, 2001 Ferrari, 2001 BMW M5 Sedan, 2004 Mercedes Maybach, 2005 Jeep Wrangler, 2004 Cadillac DeVille Limousine, 2003 Chevrolet Tahoe, 2001 Hummer H1, etc.) according to court documents. The papers also allege that he submitted false information to obtain a Minnesota drivers' license for one of his aliases.

But even as Smith began building Xpress Pharmacy Direct in 2002, he was being pursued as Rizler, one of the country's top e-mail spammers who filled the inboxes of billions of e-mail accounts with offers for sexually explicit websites, penis enlargement drugs, generic Viagra and online college degrees. In 2002, Time Warner Cable obtained an injunction barring Smith from selling cable television descrambler devices through e-mails, part of a spamming operation that helped earn him a reputation within anti-spamming circles.

Although Smith allegedly built the business from spam-related profits, it doesn't appear that Smith actually sent spam to advertise the pharmacy sites. Witnesses told investigators that he bought ads in magazines and had sales reps field calls at the Burnsville, MN offices of Online Payment Solutions.

On the Web, Xpress-RX.com claims it is a legal pharmacy. You get prescription drugs like Vicodin by filling out a very basic form online. A doctor supposedly reviews the form, but employees said the only time people got denied was when their credit cards did not go through.

The Murcielago is perhaps one of the most sought-after exotics in the world. Valued at over $230,000, it can attain a top speed of 205 MPH and can accelerate from 0-60 in less than 3.5 seconds

Federal officials say they ordered Ambien, Cialis, Lipitor, Vicodin ES, and Xanax -- without prescriptions -- from Xpress Pharmacy Direct in Burnsville.

Sometimes they received generic pills instead of the name brand.

"The feds said there were no doctors involved, that's why we got shut down," employee Anthony Darst said. "Basically, we were selling to anyone who wanted anything."

Most of the drugs were sold at higher-than-market prices, a surefire indication the sales were fraudulent, according to the feds.

A doctor in New Jersey, Philip Mach, allegedly was paid $7 for every prescription he wrote on behalf of Smith's operation. The FBI said Mach wrote over 20,000 prescriptions, most of which were filled by a pharmacy in California and one in Oregon.

One special agent described the case as a "multi-agency investigation involving a large-scale Internet-based operation that has been defrauding consumers and distributing prescription drugs, including controlled substances, without appropriate prescriptions in violation of a host of criminal statutes."

Prosecutors alleged in court documents that the company mislabeled, mispackaged and repackaged prescription drugs. It also overcharged consumers and dispensed drugs, including painkillers, without valid prescriptions, according to federal prosecutors.

One of Smith's attorneys, Bill Michael, disputed the government's allegations.

"I think that what the United States Attorney's office and the Department of Justice has done is shut down a company that was on the cutting edge of using technology in the health care industry," he said.

As part of the investigation, federal authorities have already seized more than $4 million in assets from the company and its top employees, including a $1.1 million house, $1.8 million in cars and $1.3 million in cash.

"The bust didn't get much media attention. But make no mistake; this is potentially another major spammer smackdown. Smith has been on the Spamhaus Rokso list for years, and xpress-rx.com was practically synonymous with illegal Vicodin sales," said Brian McWilliams, a journalist who wrote the 2004 book "Spam Kings."

RELATED STORY:
July 6, 2005 Rizler defies judge's orders, got caught and goes to jail
July 8, 2005 Spam king Christopher 'Rizler' Smith to be released on $50,000 bail
SOURCE: Star Tribune; Business Week; spamkings.oreilly.com