Microsoft alleges JDO Media, run out of a tidy ranch house, deluges computer users with junk e-mails.
By KRIS HUNDLEY
Published March 16, 2004
OCALA - John McLeod might call himself a serial entrepreneur.
Microsoft Corp. calls him a spammer.
Last week, as part of a joint legal effort against unsolicited junk e-mail by the four largest Internet providers, giant Microsoft sued McLeod's JDO Media Inc.
The company operates out of McLeod's Ocala home in the tree-lined subdivision of Shady Wood, about two hours north of the Tampa Bay area.
According to Microsoft, JDO Media and unnamed John Does are among the nation's "most notorious large-scale spammers," responsible for millions of illegal e-mail messages sent in violation of the new federal Can-Spam law, which went into effect in January.
McLeod, a lanky 59-year-old, is keeping his mouth shut. Answering the door at his neatly kept ranch home Friday afternoon dressed in jeans and an Old Navy T-shirt, McLeod said, "I can't say anything. It wouldn't do me any good."
With a silver cell phone jammed to one ear, the white-haired and mustachioed McLeod was good-natured but firm in declining interviews. He identified his lawyer as Andy Jaffee of Michigan "or Ohio," but no lawyer by that name was found in either state.
Asked whether JDO Media operates out of his $70,000 home, with its Welcome wreath on the door and Santa collection in the front hall, McLeod said, "Actually we do."
Despite the homey surroundings, Microsoft contends that JDO Media, run by McLeod and 23-year-old David Penn of Ocala, deluges e-mail users with a tsunami of spam with misleading subject lines. Among them:
"This is your lucky day," "Elite, Professional Invitation," and "Warning!! These three minutes could change your life."
The suit says the real purpose of these messages is to promote JDO Media's multilevel marketing program, which in turn tells members how to generate more leads for the program and for other products through spam.
The lawsuit alleges that many of JDO Media's spam messages are sent through computers hijacked via the Internet from unsuspecting victims, disguising the true sender.
Among the Internet domains JDO Media used to advertise its products and services, the complaint says, are clickforsuccess.org, kash4u.net and my3minutemovie.org, none of which are now in operation.
Internet experts say they're not surprised by Microsoft's allegations that a massive spam operation could be housed in a nondescript neighborhood in Ocala.
"With a fairly sizeable PC and a good fast connection to the Internet, a mom-and-pop operation can send out millions of e-mails a day," said Stu Sjouwerman, founder and chief operating officer of Sunbelt Software in Clearwater, which produces antispam software. "And getting e-mail addresses is no problem because spammers simply swap databases of 5-million to 20-million names at a time. There's a wealth of addresses."
JDO Media is not McLeod's first venture in multilevel marketing, where salespeople often make more money recruiting other salespeople than from actual product sales. After working in sales and management with Allstate Insurance in Ocala until 1996, McLeod started Satellite International Telecom the following year with partner Sidney Dosh.
"It was a multilevel marketing program that sold prepaid telephone cards," said Dosh, who was vice president while McLeod was president. "We would hold rallies in different locations and explain the potential for earnings. People would buy our sales kits and whoever sold a kit would get a commission."
Dosh said the business was fairly successful initially, then went down the tubes as long-distance prices plummeted. The company was dissolved in late 1999, but Dosh has no hard feelings toward his former partner.
"John has real sales ability and is a very people-oriented person," he said. "We probably could have succeeded if the process of long distance hadn't become so competitive."
From 1998 to 2000, McLeod started three more companies in Ocala: International Wealth Builders, F.M.M.S. and Galaxy Depot. After the editor of the WorldWide Scam Network raised questions on his Web site in late 2001 about International Wealth Connection's operations, McLeod replied, defending his companies.
"One of our methods of product distribution is multilevel marketing," McLeod wrote in an e-mail to the WorldWide Scam Web site. "There are no scam artist (sic) at Galaxy Depot Inc. Just a dedicated management team, along with many core industry leaders, who believe in us and our vision."
Stephen D. Foster, who was a partner with McLeod in Galaxy Depot and F.M.M.S., said Galaxy Depot was, in fact, a dud.
"We wanted to get salespeople who would sell Web sites to small companies door-to-door," said Foster. "If we could have gotten 500 customers, we would have had a very nice business. In fact, we probably only sold a couple."
Since Galaxy Depot went out of business, McLeod has started three more companies, including JDO Media in January 2003.
Tracking down spam creators is no easy task.
The spammers often use Internet providers outside the United States. That makes it tough to filter out bogus Web addresses, which can change on a weekly basis, said Eric Feinstein, president of Internet Junction, an ISP provider in Tampa.
"We have all these filters for all these locations and, like clockwork, every Sunday night, which is Monday morning in Asia, we need to put new addresses in the filter."
Feinstein, whose ISP has 20,000 customers, figures he has three full-time staffers searching for spammers who constantly change identity. "We probably reject 70 percent of all e-mail that comes in here (as spam)," he said. "But it's a constant struggle."
Feinstein and Sjouwerman, the Clearwater software executive, applaud the big Internet providers' lawsuits against major spam operations, but say that's just one part of the puzzle.
"This is just putting a head on a spike and hoping the rest get scared," Sjouwerman said. "Spam is a technological problem, and legislation just by itself will not cut it, especially when half of all spam comes from outside the U.S. It's like a game of Whack-a-Mole. They just stick their heads up somewhere else."
- Times researcher Kitty Bennett and Times staff writer Robert Trigaux contributed to this report. Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.
