Notorious spammer Alan Ralsky has been jailed for more than four years over his role in a masterminding a stock fraud spam campaign that made him an estimated $2.7m.
Ralsky, 64, from West Bloomfield, near Detroit, Michigan, was sentenced to 51 months while his son-in-law, Scott Bradley, 48, was imprisoned for 40 months over the same pump and dump stock fraud conspiracy involving thinly-traded stocks.
Each pleaded guilty to wire fraud, money laundering and violations of the CAN-SPAM Act. Two other co-conspirators, who also confessed their involvement in the scam, were sentenced on Monday. Five others face a sentencing hearing later on Tuesday.
How Wai John Hui, 51, a resident in both Hong Kong and Canada, was sentenced to 51 months imprisonment. How also agreed to forfeit $500K in ill-gotten gains. Ralsky and Bradley were each ordered to forfeit $250K that the US seized in December 2007 during a sentencing hearing at a Michigan Court on Monday.
John Bown, 45, of Fresno, California, was jailed for 32 months over his role in the scheme and ordered to pay back $120K in criminal profits.
The conspirators used spam email pushed out via a botnet network of compromised machines to promote interest in fringe stocks (US firms owned and controlled by individuals in Hong Kong and China) between January 2004 and September 2005. The tactic was designed to cause a brief spike in the price of these stocks. The conspirators bought shares in the stocks which they then sold at the peak of artificially inflated interest before the inevitable crash and burn.
The charges stem from a three-year investigation, led by the FBI with assistance from the US Postal Inspection Service and the Securities and Exchange Commission. Prosecutors expressed satisfaction with the first successful prosecutions from the case, which they hope will have a deterrent effect on other would-be spammers.
"With today's sentence of the self-proclaimed 'Godfather of Spam,' Alan Ralsky, and three others who played central roles in a complicated stock spam pump and dump scheme, the Court has made it clear that advancing fraud through abuse of the Internet will lead to several years in prison," said US Attorney Terrence Berg for the Eastern District of Michigan.
A US DoJ statement on the case, which provides further background information on the prosecution, can be found here. Samples of the spam sent by Ralsky and his cohorts can be found in a blog posting by Sophos here.
Ralsky is a recidivist fraudster and unrepentant spammer whose long career in polluting the internet with crap is documented by Spamhaus here. ®