In a suit brought by Facebook earlier this year, Judge Jeremy Fogel of the U.S. District Court for the Northern District of California, issued a temporary restraining order that prohibited Wallace from accessing the social networking service. In that action, Facebook claimed that Wallace got into accounts on their system and spammed "friends" listed in the accounts.
At a hearing Friday, Facebook alleged that Wallace should be found in criminal contempt for continuing to send spam on the site, a spokesman for the social-networking website said. Judge Fogel agreed and referred the matter to federal prosecutors.
"The ruling hasn't been posted yet but we're very pleased Judge Fogel agreed that there were grounds for criminal contempt and that the U.S. Attorney's office should investigate Wallace," Facebook spokesman Barry Schnitt said in an email to SCMagazineUS.com Monday. "Fogel's ruling demonstrates that judges will enforce restraining orders and spammers who violate them face criminal prosecution."
In May 2008, Wallace and an associate named Walter Rines, were ordered to pay MySpace $223 million for a spam operation that sent junk messages to MySpace members. Up to that time, the award was believed to be the largest anti-spam award ever.
The day before Friday's hearing, Wallace declared bankruptcy, which protects him from having to pay any fines -- at least temporarily, Schnitt said.
"Wallace filed for bankruptcy, which is not unexpected and only delays our judgment temporarily," he said. "We will continue to pursue the judgment and will be reviewing his filing very closely."
In the meantime, action by the federal prosecutors could come as early as this week.
"The U.S. Attorney will investigate and decide whether to prosecute," Schnitt said. "It is worth noting that it is rare for a judge to take this action. We see [Judge] Fogel's ruling as a strong deterrent against spammers.”
The MySpace ruling was not the first judgment against Wallace. In May 2006, Wallace was fined $4.1 million, also by a federal court. And he has previously been sued by the Federal Trade Commission, AOL and Concentric Network.
Wallace could not be reached for comment.