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The $11 Billion Man

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Wallace was sure he had identified one of the "John Does" in the CIS case and added McCalla's name to the complaint. McCalla responded by announcing that he would defend himself in the Iowa federal lawsuit.

Since McCalla was in South Florida and claimed not to have the financial means to appear in court, Judge Charles R. Wolle agreed to use teleconferencing to hear the case. In his first filing with the court, dated April 20, 2004, McCalla denied all allegations that he was spamming.

"These accusations jeopardize my reputation, and I intend to file a countersuit with an action for defamation if these complaints against me are not rescinded," McCalla wrote.

McCalla admits today that defending himself by phone in a high-stakes civil lawsuit might seem reckless but says he didn't have a choice. "I'm in Florida, and the trial is in Iowa. I can't afford to get there," he explains. "I thought at the time: 'How can they do this? I can't afford a lawyer for $200 per hour. I have no choice. '"

Representing himself, McCalla maintained his innocence in letters to the court. He explained that his company collected leads and provided commissions to "affiliates." Those affiliates would be paid when they sent valid Internet users to McCalla's site to fill out a form requesting information about debt consolidation. His company did not perform e-mail marketing, McCalla says, and his affiliate policy "maintained strict guidelines as to the permissible avenues of affiliate marketing." Spamming was prohibited, he claimed.

Lead generation is big business. Companies nationwide buy lists of people who might be interested in their services. Companies obtain these leads from various sources — from carnivals and trade shows (where people provide personal information to be eligible to win prizes) to lists of magazine subscribers. Spam is an increasingly popular way of generating leads. A spammer can blast out millions of e-mails advertising low mortgage rates, and a portion of people who receive the e-mail will follow a link to a website where they provide personal information. The spammer can then sell those "leads" to mortgage companies interested in drumming up new business.

In interviews with New Times, McCalla continues to deny that he sent spam and claims he does not even know how to send out e-mail in bulk. His company, he says, was simply a middle man, selling leads purchased wholesale to individual companies at a markup of about $1 to $2 per lead. McCalla cannot explain where the millions of e-mails linking to his website originated.

"I don't send out e-mail. That wasn't part of the business," McCalla says. "It basically was just buying and selling leads. There was no spamming. I was buying information and selling that information to front-end people. I was buying leads and selling it in small portions to these small companies."

Asked for the names of the companies from which he purchased leads in bulk, McCalla looked down and said, "Let me think." He then claimed he could not recall the name of even one. He also could not explain how he would drive traffic to his website, awayoutofdebtfast.com, if he were not using spam. Pressed about the origin of his website traffic, which would be essential to cultivate leads, McCalla backtracked: "The website was a front. I used it to make people think that's where the leads came from, because I didn't want the companies to know I was just a middle man."

McCalla's waffling doesn't surprise Wallace. "The fact is with all spammers, they know what they're doing is wrong," Wallace says. "They don't have a defense in court. When you follow the bread crumbs and you find the guy and you've nailed him down in records, what's his defense in court? It's either that spam isn't illegal, which they'll lose on, or that you've got the wrong guy."

McCalla's defense is a common one — that someone hijacked his e-mail address. An unknown spammer, he says, used [email protected] for e-mail bursts and registered the address as the contact e-mail for at least one spam-related website.

"They had one piece of paper with my e-mail address on it and a reference to a domain, a website, saying that I had bought it," McCalla says. "It's ridiculous. You have no information saying I did any of this. I asked for the information, and there is none. All they have is a whole bunch of e-mails, and they think that I sent them. The only reference they had was a domain that was registered under my e-mail address."

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Trevor Aaronson
Contact: Trevor Aaronson

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