December 21, 2004 1:41 PM PST

Judge denies guilty plea in AOL spam case

A district judge in New York has refused to accept a guilty plea from a former America Online employee charged with stealing 92 million e-mail addresses from the online giant, citing vagueness in the prosecutors' argument that the theft violated the federal Can-Spam Act.

U.S. District Judge Alvin Hellerstein on Tuesday postponed the hearing in hopes of consulting with lawmakers in Washington, D.C., about specifics in the Can-Spam Act's definition of why the defendant's practices were considered in violation of the law, a U.S. Attorney's Office spokeswoman confirmed. Hellerstein will rehear the case Jan. 28.

The judgment comes after federal prosecutors on Tuesday struck a plea agreement with former AOL engineer Jason Smathers, who is accused of filching the e-mail addresses and selling the list to spammers. Smathers allegedly used another employee's access code to steal AOL's entire database of screen names last spring, according to a court document.

Authorities said Smathers sold the list for $100,000 to Sean Dunaway, another defendant named in the complaint who runs an online gambling site. Dunaway, in turn, sold chunks of the list to an unnamed spammer who eventually cooperated with government investigators as part of the suit, the court papers said.

Users of AOL's various services are allowed to create multiple screen names to sign on, send e-mail and chat with other users on IM. While Smathers was able to download these screen names onto a separate disc, investigators said credit card numbers were not compromised during the theft.

The plea agreement could result in a prison sentence of up to two years and a hefty fine, according the Associate Press, citing a person familiar with the talks.

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