Alleged Cyber-Extortionist Indicted: Feds Say Anthony Digati Tried To Chill, Defame Business On Internet To Extract $200,000 In Bizarre Social-Networking Plot

Unhappy with an entity with which you have a dispute? Want to chill them to get your way by threatening to use keyword targeting and social networking? Want to start a wild spin campaign to misinform the public and slime people and entities you perceive to be your enemies?

Want to suggest a person or entity submits to your demands or else? Want to suggest you’ll be aided in your efforts to get what you want by thousands — if not tens of thousands — of like-minded, online acquaintances and colleagues?

A California man has been indicted in New York on federal charges of extortion through interstate communications. Federal prosecutors also are seeking the forfeiture of Anthony Digati’s computer and other equipment alleged to have been used in an ever-escalating bid to extort money from New York Life Insurance Co. because he was unhappy with a product purchased from the firm.

U.S. District Judge Denny Chin — the judge who presided over the Bernard Madoff case — has been assigned to hear the Digati case. Digati, 52, of Chino, Calif., faces a maximum of two years in federal prison and a fine of up to $250,000 — or twice the gross pecuniary loss or gain derived from the offense — if convicted.

Digati registered a domain in February that used New York Life’s name in its URL, according to records. He then embarked a relentless hectoring campaign aimed at fashioning “false public statements” and threatening to transmit millions of spam emails “in an effort to damage the reputation of New York Life and cost the company millions of dollars in revenue,” according prosecutors.

The intent, according to prosecutors, was not to inform or educate. Rather, it was to “extort” money from New York Life by keeping it in a constant state of threat and suggesting the demand for a payment of $198,303.88 would escalate into a demand for $3 million if the lower demand was not met.

New York Life called the FBI.

Part of Digati’s strategy, according to prosecutors, was to “drag [New York Life’s] company name and reputation . . .  through the muddiest waters imaginable.”

Digati’s website included this text, according to records:

• These things, unless you honor the below claim, WILL HAPPEN on March 8, 2010.
• As you have denied my claim I can only respond in this way. You no longer have a choice in the matter, unless of course you want me to continue with this outlined plan. I have nothing to lose, you have everything to lose.
• My demand is now for $198,303.88. This amount is NOT negotiable, you had your chance to make me an offer, now I call the shots.
• I have 6 MILLION emails going out to couples with children age 25-40, this email campaign is ordered and paid for. 2 million go out on the 8th and every two days 2 million more for three weeks rotating the list. Of course it is spam, I hired a spam service, I could care less, The damge [sic] will be done.
• I am a huge social networker, and I am highly experienced. 200,000 people will be directly contacted by me through social networks, slamming your integrity and directing them to this website within days.
• I think you get the idea, I am going to drag your company name and reputation, through the muddiest waters imaginable. This will cost you millions in lost revenues, trust and credibility not to mention the advertising you will be buying to counter mine. Sad thing is it’s almost free for me!
• The process is in motion and will be released on March 8th, 2010. If you delay and the site goes live, The price will then be $3,000,000.00.

Meanwhile, prosecutors said Digati flooded the company with email directed at executives, employees and a board member.

“[H]e directed the recipients to his website and stated, ‘I HIGHLY suggest you visit this website and contact me afterwards,'” prosecutors said.

Later, according to prosecutors, Digati sent an email that said the “[c]lock is ticking” and prompted New York life employees, executives and a board member again to visit his website.

A grand jury returned the indictment after Digati was arrested by the FBI in March. The original case was filed via criminal complaint.

“In this computer age, cyber-extortion has become an emerging tool for criminals to hold businesses at virtual gunpoint, threatening them with widespread spamming and other Internet-based attacks,” U.S. Attorney Preet Bharara said in March, after Digati’s arrest.

“With the assistance of the FBI, our Office will work to safeguard the Internet and prosecute computer-savvy criminals who seek to harm the well-being of businesses and our economy,” Bharara said.