CPA Empires Loses SIX Million Dollar Judgement To Myspace

by Jeremy Schoemaker on June 16, 2008 · 58 comments

I always try to come up with a reason to show the Daily Show video with Scott Richter. Its pretty frickin hilarious.

A good reason came up today. Just so happens CPA Empire Scott Richter got drilled with a 6 million dollar fastball right in the nuts. To quote the story:

MySpace can collect $6 million from a notorious Internet marketer accused by the popular online hangout of spamming its users.

An arbitrator has ruled that Scott Richter and his Web marketing company, Media Breakaway LLC of Westminster, Colo., must pay MySpace $4.8 million in damages and $1.2 million in attorney’s fees for barraging MySpace members with unsolicited advertisements. Media Breakaway and its employees were also banned from the site.

MySpace, a unit of News Corp. (NWS), had alleged that some of the messages were sent from accounts whose sign-on information had been hijacked by “phishing.” Media Breakaway countered that rogue business affiliates – independent contractors who sent messages for Media Breakaway – were to blame for phishing and other improper behavior.

Shawn Collins, Close personal friend of Richter, and owner of the Affiliate Summit linked us up with CPA Empires press release which is a interesting spin on the situation mostly talking about how CPA Empire got away with paying 95% less then what was originally demanded.

Shawn’s comments –

“Big headache as a result of rogue affiliates. Any affiliate programs still automatically approving affiliates should take heed.”

I agree with Shawn on this one. There are a lot of companies that embrace any and all comers. HUGE MISTAKE. Fraudsters love to jump from company to company.

I will add my own 2 cents and say that I honestly do not feel that Richter knowingly participated in a phishing scam and if there was evidence to say he had knowledge the judgment would have been for a ton more. When I highlighted fraud that was occurring in the past on CPA Empires network they have been very quick to fix it.

When this story first broke in January of 2007 a lot of people were talking about how this could be the end of CPA Empire much like how Richter’s other company that had to closed its doors and filed bankruptcy after being nailed with a 7 million dollar judgment against Microsoft.

Richter and company have come a long way since then and this 6 million dollar judgment is probably in line with what Myspace figures CPA Empire profited. Course that is just my guess. I think if true revenue numbers were revealed CPA Empire is probably doing the largest revenues of all the privately held affiliate companies and they eat this 6 million for breakfast.

full disclosure

About the author...

– who has written 2858 posts on ShoeMoney.com.

Jeremy "ShoeMoney" Schoemaker is the founder & CEO of the ShoeMoney Blog, Elite Retreat Internet Conference, & the PAR Program. In 2013 Jeremy released his #1 Amazon Best selling Autobiography titled "Nothing's Changed But My Change" - The ShoeMoney Story. Jeremy currently lives in Lincoln Nebraska with his wife and 2 daughters.


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{ 55 comments }

1 Dwarf Shrimp Blog

Ouch! That hurts the wallet quite a bit! It sucks that they got nailed with that even when they tried to fix the issues when they were told about it!

2 Michael D

Interesting point of view on this. I’d expect traditional media is going to portray a certain amount of bias in any stories about online marketers.

3 Darwin

Would be interested to know if MySpace receives the judgement will they share the proceeds with their subscribers, who are the actual victims of the spamming.

4 Gordon

anything even slightly related to spam / phishing / internet scams makes great news that consumers eat up, so the defendants will rarely get their side of the story out on those.

5 Sports Picks

I don’t understand how they can be held responsible for the actions of the “fraudsters”.

6 izum

lol 6 mil is nothing compared to how much they made from myspace

7 markus941

i got 2 friend requests on Facebook from Scott Richter in the past 2 weeks (his actual account it seems like). Looks like he’s using some automated system to add friends there.

Love the video. How do people not get it when the Daily Show is on the phone asking for an interview?

8 MouthyGirl

I think you’re prolly right, but and this is just me playing devil’s advocate, if he did knowingly do this, (again hypothetical) do you think the price tag was high enough?

9 MouthyGirl

I definitely think the news media will have a field day blowing this all out of proportion.

10 Hustle Strategy

So could SEOBitch sue all of her friends for sending her spam about digg this and stumble that? I always feel a bit slimmy asking others that I don’t know that well to check out my site…

11 Hustle Strategy

true. either way, this video should be shown atleast once a week (or maybe month)…

12 Tyler Dewitt

Interesting story…

They stepped way to far in the black area. I don’t see anything wrong with e-mailing someone through actual e-mail if you have a good reason–maybe to ask them a question on something or if you can get in touch with someone that might be interested in something you have (if that made any sense), but they went way to far out there with what they was doing (unethical black areas).

I receive solicited e-mails all the time from other companies (outsource companies in India) which that don’t bother me to much because its a manual sent e-mail and they know who there e-mailing, but people that just randomly send e-mails that are automated to just any one like Viagra and other related e-mail like that are uncalled for.

I might be wrong, but an example would be Unique Blog Designs you said they e-mailed you to ask you about your design which was a unsolicited e-mail now that would be ok because they “knew” who they was e-mailing and not just randomly scraping e-mails.

13 Stak Loaded: How to make money doing nothing!

It’s definitely high enough. Barely anyone aside from musicians use Myspace for business so if you’re just messing around with a bunch of kids who really cares? I know Myspace doesn’t, they just saw an opportunity to milk someone for money and they jumped on it, which is what any good business would have done.

14 Nicole Price

Whoa! Windfall for MySpace! The law of Torts has show once again how much we all have to mind our p’s and q’s!

15 Melvin

whew! big blow for cpa empire… i really feel they are a very unqiue affiliate program.. maybe they can tighten everything starting today..

16 fred

I like how Richter says they had bad affiliates. I can provide IM’s direct from Richter telling people what to do to play the myspace game. I think 6mm is small time with what they made!

17 Jack Snack

This is good news since 6 million is truly a drop in the bucket. CPA Empire does 70 gs a day easy.

18 Binary Ant

If they are judged and punished with a $6million indemnity surely it is because they have that money. I don’t know if they are guilty or not, but when you are making a lot of money with a company I think it is normal to have lawsuits like this almost every day if you don’t put extra care in every step you take.

19 Andrew

lol @ 6 million, it is nothing compared to the billion dollar lawsuit that youtube faces.

20 Daniel Ted

Myspace sucks.

21 Not John Chow

I agree. Unwanted email is a problem. Just like telemarketers calling your sell phone.

22 Dean Saliba

Good! It is people like him, and his employees, that forced me away from MySpace.

23 gurtey

big bucks …6 Million

24 Mr MultiVar

That was a very funny video, thanks for sharing.

25 Geiger

CPA Empire is one of the most annoying interfaces to use. They use the same software as Market Leverage but they don’t seem to have the bandwidth or server capacity to handle it (it’s always slow). I use them ONLY when they are the sole program with a specific offer that I want.

26 forumistan

You are totally right that, 6 mil is nothing compared to how much they made from myspace..

27 Jason Green

This might encourage CPA networks to be a bit more vigalant about where their affiliates get traffic from. If the earnings for CPA Network were around that of the 6 million dollar fine then that’s a lot of traffic sent through the CPA Empire affiliate program. For example if it was a lead payout of $5 that converted 1/20 times that’s 24 million visitors sent through the CPA Empire affiliate tracking system.

I know CPA Empire is handling millions in traffic levels – but 24 million visitors is not a small number and worth looking at where the traffic is coming from.

My second thought is that the cost of a lawsuit (and subsequent fine) is actually less than the profit that CPA networks make by not checking up on large & mysterious traffic sources, as most of the time most companies don’t take the CPA networks to court.

28 Goran Website

Darwin, you are onto a great thing.

29 Goran Website

Well, companies will need to invest more in protecting their IP

30 Goran Website

No one wants to give out cash without gain. Maybe they got some advertising though.

31 Goran Website

I agree with you Geiger.

32 Erik Peterson

Glad these scumbags are getting what they deserve.

33 Geiger

I took one of their spoofs about “Gaydar” and through up a Homometer.com site.

34 JumbarTheThg

Just testing to see if this works.

sent from: fav.or.it [FID166614]

35 Paul

Isn’t 6 million a little much?

36 Start Blogging

Eh. I hate that spam crap. $6 million to Myspace is probably not even on their scale of what they are earning anyways.

37 Johnny Boy

that is freakin funny.. what a interview!

38 jason

I never liked myspace, I used it some to keep in contact with a few friends but thats about it.
But oh well so they sued the big spammer, probably so they wouldn’t have any competition when they start bombarding us with spam and advertising

39 Forumistan

Myspace sucks :)

40 Bradley

it does!

41 Geiger

NeverBlueAds seems to be one of the most ethical of the bunch in my personal opinion.

42 Geiger

I wonder if the government is using any of the Million dollars that Azoogle gave them.

43 Evan

Ya that interview is a hoot!

44 Goran Website

6 million is a lot of cash which ever way you look at it, but compared its nothing

45 Web Marketeer

Good point! Spam sucks and the internet needs a general clean up, that’s for sure!

46 Web Marketeer

Fat chance! Great idea though. If there was a reward system for identifying spam and spammers, and turning them in the internet would be a much better place.

47 Web Marketeer

The money seems like a drop in the bucket compared to the revenue that CPA empire makes. It can be seen as a mere rap over the knuckles, and I think they can count themselves lucky there were affiliates to blame for this, otherwise the penalty would’ve been much higher.

48 PPC

Nailed in the nuts indeed! Rogue affiliates were blamed and the amount awarded was neglible in relationship to the original amount sued for.

49 PPC

Agreed 100%

50 PPC

Just like the “how to kill with a knife” search that is tied to a gunshot homicide?

51 PPC

Start policing them affiliates, indeed!

52 PPC

They got off lightly, just the linkbait this is garnering them is worth bucketloads already!

53 lawrenceq

I want in! How can I become a high-volume e-mail deployer.

54 Eva White

Spam is the new taboo word in computer lingo. I know everyone hates spam and its good that someone is trying to control it.

55 kral

thank you

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