The Securities and Exchange Commission (SEC) has reached a settlement with a 20-year-old Kentucky man who allegedly conned internet users into sending him money through phony investment web sites.
The regulatory agency had filed a complaint against KC Smith of Oak Grove, Kentucky, charging that he fraudulently raised $102,554 (£63,779) between May 2002 and February 2003 by promising double-digit monthly returns on two web sites and in about 9 million e-mail messages.
Without admitting or denying guilt, Smith agreed to pay $107,510 (£66,859) to settle the case.
Smith allegedly created web sites for two fictitious investment opportunities. One was called Kryer Financial, offering returns purportedly insured by the US Deposit Insurance Corporation. Smith made up this company and created a web site for it displaying the SEC's official seal.
He allegedly covered his operation by calling investors on disposable mobile phones, using online payment services that keep the payee anonymous and accessing the internet through stolen internet service provider accounts, according to the SEC. None of the raised money was invested, the commission said.
Last July a Georgia court ordered a KC Smith to pay $25m (£15.5m) to ISP EarthLink in one of the largest victories against a spammer. He was charged with sending more than 1 billion unwanted e-mails. It could not be confirmed if this was the same KC Smith who settled the SEC case.