Lance Atkinson, the notorious Australia-based ringleader of the Herbal King spam gang, was fined over $15 million in a default judgment, the U.S. Federal Trade Commission (FTC) announces. Jody Smith, a U.S. resident and one of his co-conspirators, has agreed to forfeit over $800,000 and is faced with a prison sentence.

According to the authorities, Lance Thomas Atkinson built his spam enterprise by establishing a world-wide network of affiliates that pushed junk mail on his behalf, deceptively advertising a variety of unregulated meds. This operation came to be known in the information security community as the Herbal King network and as anti-spam outfit Spamhaus reveals, it was responsible for 1/3 of the global spam traffic during 2007 and 2008.

Lance Atkinson and his co-conspirators, including his brother Shane, created a multitude of shell companies in different countries to serve their money laundering efforts. Jody Michael Smith, of Texas, was in charge of running the U.S. arm of the operation, through two Delaware-incorporated companies called Tango Pay and Click Fusion. Atkinson and Smith "are probably the most prolific spammers at the moment," commented Richard Cox, Spamhaus' CIO, back in October 2008, when the FTC froze the gang's assets in the U.S.

Lance Atkinson, who is a New Zealand national, was subsequently tried in his home country under the Unsolicited Electronic Messages Act of 2007. In December 2008, a judge ordered him to pay a fine of $57,000 for his actions that impacted New Zealand computer users. The fine was negligible compared to the millions of dollars Atkinson made from his illegal business.

Smith pleaded guilty to a charge of conspiracy to traffic counterfeit goods back in August and faces a maximum sentence of five years in a federal prison. Additionally, under the settlement with the FTC, he agreed to pay $212,000, as well as relinquish any rights to $547,000 held in a Israeli bank and $91,000 previously frozen in U.S.

In related news, local New Zealand media reports that Shane Atkinson, Lance Atkinson's brother and accomplice, was fined $100,000 by a High Court in Christchurch. A third co-conspirator from New Zealand named Roland Smits was also ordered to pay a $50,000 fine for his role in the Herbal King operation.