No Evidence Tying Banks to Spammers, Court Says

(CN) - A federal judge refused to revive claims that six international banks provided credit card services to illegal online pharmacies based in Russia.

In 2011, Project Honey Pot sued two Russian men, Boris Livshits and Andrey Chernuk, for allegedly operating illegal online pharmacies.

Describing itself as a spam-tracking network, Project Honey Pot says it "allows spammers, phishers, and other e-criminals to be tracked throughout their entire 'spam life cycle.'"

Its website says it is "the first and only distributed system for identifying spammers and the spambot they use to scrape addresses from your website. ... Harvesting email addresses from websites is illegal under several anti-spam laws, and the data resulting from Project Honey Pot is critical for finding those breaking the law."

The complaint against Livshits and Chernuk said the men's pharmacies are not licensed, do not require customers to have a prescription and market their services through false advertising.

Noting an alleged reliance "on the use of the Visa card network to obtain payments from customers," Project Honey Pot also sued six banks in Europe, Asia and the Caribbean that allegedly conspired "to provide merchant account card processing services."

"The complaint provides that the banks 'knew or willfully disregarded information showing' that Livshits and Chernuk were illegally offering to sell counterfeit prescriptions online to customers in the United States," according to the court. "This knowledge is purportedly based on Visa's requirement that acquiring banks investigate electronic merchants through a physical inspection of the business and other methods."

U.S. District Judge Leonie Brinkema closed the case in April 2012, but Project Honey Pot tried to revive the claims on the basis of alleged new evidence.

Brinkema refused last week.

"Plaintiffs' new evidence purports to show that DnB Nord and Raiffeisenbank provide credit card processing services to some online pharmacies," the ruling states. "Specifically, plaintiffs' counsel obtained from blogger Brian Krebs a stolen dataset of 900,000 sales transactions for Glavmed, which Krebs identifies as 'a Russian affiliate program that pays webmasters to host and promote online pharmacy sites.'"

But "plaintiff's 'new' evidence still does not link the defendant banks with Virginia customers, Chernuk, Livshits, or a single transaction at issue in this case," Brinkema wrote.

"Officials for both DnB Nord and Raiffeisenbank stated under oath that the banks do not 'solicit or initiate business' in the commonwealth," the decision states.

"DnB Nord also averred that [it] does not conduct any business activities in the Commonwealth, nor does it provide credit card processing services for any of the individual defendants or pharmacy merchants identified in the complaint," Brinkema added.

"The relationship between a bank as transaction processor and the ultimate consumer in Virginia, without more, is far too attenuated to meet the requirements of the Virginia long-arm statute and the federal Constitution's due process guarantee."

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