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hoax mails

I recently came across a software (GhostMail 5.1) which lets you send
e-mails to anyone assuming any email address. The sender ( a friend of
mine) had assumed the identity as
his_name@his_domain .

Seeing this , i was amazed that the whole purpose of password protection
in emails
is a fake ,  when anyone can send any mail with a reply to address as

I even came across this text , a technique for sending fake e-mails. You
telnet to the smtp port of a mail server use the following commds and
a fake mail with a different return address. I tried this and it does
work . Although you can
get the ip address of the sender .

Is there a way of defeating this???
And i don' wanna use  filters. The person can assume a diffent name and
can mail from a different mail server each time he mails.

Mohit Sood