Notorious spammer Alan Ralsky faces up to 87 months' imprisonment after pleading guilty to participation in a pump-and-dump stock spam scam.
Ralsky, 64, of West Bloomfield, Michigan and four accomplices pleaded guilty on Monday to conspiracy to various wire fraud, mail fraud, money laundering and CAN-SPAM Act offences, as part of a racket estimated to have netted $3m in illicit profits over just 18 months.
Between January 2004 and September 2005, the group used junk mail to build interest in low-value, thinly-traded stocks owned by individuals based in China and Hong Kong.
The spam emails falsely claimed the stocks were about to surge, in a bid to tempt recipients to invest. The gang invested in the stocks while they were low then sold them as they reached a peak of false expectation, before the inevitable crash'n'burn.
The masterminds of the fraud - Ralsky and his son-in-law Scott K Bradley, 38, also of of West Bloomfield, Michigan - face prison sentences of up to seven years and six and a half years, respectively, under the terms of a plea bargaining agreement. Each also faces possible fines of up to $1m.
John S Bown, 45, of Fresno, California, who admitted using a botnet of compromised PCs to distribute spam, faces five years behind bars and a fine of up to $75,000 over his role in the scam. Bown, the former chief exec of ISP, GDC Layer One, served as the CTO of the scam business, according to prosecutors.
The trio, along with their partners in spam - William C Neil, 46, of Fresno, California, and James E Fite, 36, of Culver City, California - are due to be sentenced in Detroit on 29 October. Three others, one based in China, have also admitted involvement in the scam, while a further three people are awaiting trial. The case was brought following a three-year FBI-led investigation.
A DoJ statement on the case, explaining the mechanisms of the scam and charges against the gang in greater depth, can be found here. ®
Ralsky is a recidivist fraudster and unrepentant spammer. He unwisely boasted of his activities to local paper Detroit News back in 2002, letting slip enough information for mischief-makers to figure out his new home address and sign him up to a huge slew of advertising mailing lists and catalogues. He subsequently complained about this "harassment".
His career in spam is recorded in an extensive entry on Spamhaus' ROKSO list here.