Seattle - Attorney General Rob McKenna today announced settlements with representatives of two California businesses accused of blanketing the Seattle School District and other organizations with junk e-mails. The settlements resolve Washington’s first lawsuit under the federal anti-spam act filed in 2004 and bring the total penalties, restitution and other fines assessed in the case to more than $4.1 million.
“Spam costs businesses billions in lost productivity and other expenses,” McKenna said.
“ Deceptive e-mails are not only a nuisance, but illegal. This lawsuit will help offset some of the damage done to the Seattle School District, whose employees were peppered with annoying advertisements, and sends a message to other spammers that breaking the law can lead to serious penalties.”
The Attorney General’s Consumer Protection High-Tech Unit sued AvTech Direct, a now-defunct California marketing firm, and MD&I, a California-based corporation that sells computers, in October 2004 in U.S. District Court. The suit charged the businesses and their owners with violations of the federal anti-spam, Washington’s anti-spam act, and the state Consumer Protection Act for sending unsolicited e-mails to employees of nonprofit organizations.
A judge entered an order of default against AvTech in December 2005 after the company’s legal counsel withdrew from the case and AvTech failed to obtain new representation. The company was fined $3 million in civil penalties – $2,000 for each of 1,500 unsolicited commercial e-mails sent to the Seattle School District between May and July 2004. AvTech was also ordered to pay $375,000 restitution to the Seattle School District and $67,882 in attorneys’ fees and costs.
The state has since reached settlements with two of the remaining defendants and was granted summary judgment against the final defendant:
- A judge ordered AvTech owner Gary Hunziker to pay $500,000 in civil penalties and $10,000 in restitution to the Seattle School District. Hunziker resides in California.
- Arlene Sediqzad, an AvTech manager, agreed to pay $10,000 in attorneys’ fees and costs. She also agreed to pay $180,000 in civil penalties and damages, suspended on condition of compliance with all terms in the settlement. Sediqzad, also known as Arlene Grant, lives in Woodland Hills, Calif.
- MD&I, which has headquarters in El Monte, Calif., and its owner, Min Hui Zhao, agreed to pay $10,000 to resolve claims against them. Zhao, also known as Michael Zhao, resides in Arcadia, Calif.
According to the state’s complaint, AvTech, which also operated under the name Educational Purchasing Services, advertised and marketed desktop computers for MD&I, which assembled and shipped them to consumers. AvTech’s e-mails offered a “limited allotment of brand new, top-of-the-line, name-brand desktop computers at more than 50% MSRP.” AvTech claimed the computers, which were priced at $297, featured “the latest Intel technology” when they did not.
The Attorney General’s Office alleged that AvTech altered or concealed header information to make it appear the messages were sent from other sources and used deceptive subject lines such as “Staff Bulletin.” The company also continued to send e-mails to recipients who requested not to receive future solicitations via an “unsubscribe” link or by phone.
The court orders prohibit AvTech, Hunziker and Sediqzad from using false subject lines in e-mails send to Washington residents, misrepresenting the identity of the sender, continuing to send unsolicited e-mails to consumers who requested not to receive them, falsely implying that a commercial message is official or originates from the recipient’s place of business and similar deceptive practices.
MD&I and Zhao are restrained from violating state and federal anti-spam laws. When entering into a business agreement with an outside marketing firm, they must determine in advance how products will be being advertised.
AvTech and MD&I Complaint
Default Order and Relief for AvTech
Summary Judgment for Gary Hunziker
Stipulated Judgment for Arlene Sediqzad
Stipulation and Order of Permanent Injunction for MD&I and Min Hui Zhao
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Kristin Alexander, Public Information Officer, Attorney General’s Office, (206) 464-6432, firstname.lastname@example.org
Katherine Tassi, Assistant Attorney General, (206) 389-3974, email@example.com