This is a common problem. Spammers pick an address and send out mail with that address as the "From" address. There isn't much that can be done to combat this problem, because the mail is usually send out from computers all over the world and send millions of messages. The result is bounce messages back to whatever address they used.
These bounce messages usually hit non-existent addresses, causing another bounce message, and frequently a single spam message can create 3 or 4 email messages to be created and sent. If the address actually belongs to someone, they get all of these bounce messages.
There are some solutions that have a small impact, but they restrict where mail can be sent from, and frequently cause more trouble than their worth. We can set up a "Sender Policy Framework" record for your domain, but we need to list all of the possible servers that you may send mail from. If anyone using the your domain sends a message from a server that's not listed, the message could be refused. Also, not all providers recognize SPF records, so you still have the potential of having mail sent out with your domain in the from line.
You can read more about SPF records at http://www.openspf.org/. We're happy to answer whatever questions we can about SPF records, and put them in for you, if your domain is hosted at Smile.