This error is returned by your SMTP server. In other words, the problem is in the sender or recipient email address.
Check the sender and recipient addresses, double check the spelling, remove additional spaces.
Make sure your machine is trusted to send mail from the sender's domain. Make sure that you have the correct reverse DNS lookup set up.
Consider using IMail.Forward method when forwarding messages:
IMail email = ...
IMail forward = email.Forward().Forward("from@example.com").Create();
// Smtp code goes here