Sometimes I receive an email to my admin account stating that the email I sent
to an inva...@mydomain.com was not sent. The message has an attachment and when you open them down eventually you find a
spam email that is FROM the invalid_user@mydomain to a vali...@mydomain.com

How is this happening? What do I look at?

From an external account I teleneted in and sent a message from the
inva...@mydomain.com to vali...@mydomain.com. And it worked... so I
thought it is an open relay. But when I try any of the websites etc. to check for this none of them can find
an open relay on my mail server.

This is a delivery status notification from icarus, running the Courier mail server, version 0.47.

The original message was received on Thu, 18 Oct 2007 23:46:17 -0600 from localhost (localhost [127.0.0.1])

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UNDELIVERABLE MAIL

Your message to the following recipients cannot be delivered: some...@mydomain.com