Alan Ralsky, the man the feds nicknamed the "Godfather of Spam," was sentenced to 51 months in prison for his part in a stock fraud and spamming scheme. Three other people were sentenced as well.
The so-called "Godfather of Spam" was among four people sentenced today in federal court in Detroit for involvement in a stock fraud scheme that leveraged on a virulent spam campaign.Alan M. Ralsky, 64, of West Bloomfield, Mich.,was sentenced to 51 months in prison for conspiring to commit wire
fraud, mail fraud and violate the CAN-SPAM Act, as well as engaging in
money laundering, wire fraud and violating CAN-SPAM. Also convicted was
Scott Bradley, 48, ofWest Bloomfield; How Wai John Hui, 51, of Hong Kong and Canada;
and John S. Bown, 45, of Fresno,Calif.Those three were sentenced to 40 months, 51 months and 32 months, respectively.
"With today's (Nov. 23) 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 U.S.
Attorney Terrence Berg for the Eastern District of Michigan, in a
statement. "I commend the FBI, the Postal Inspection Service, and theIRSCriminal Investigative Division for their determined and careful investigation in this case which lead to today's result."
The charges arose from a three-year investigation involving the FBI, IRS,U.S.Postal
Service and the U.S. Securities and Exchange Commission. According to
authorities, from January 2004 through September 2005, Ralsky, Bradley,
Bow, Hui and others engaged in a related set of conspiracies designed
to use spam e-mails to manipulate thinly
traded stocks and profit by trading in those stocks once their share
prices increased after recipients of the spam e-mails traded in the
stocks being promoted.Ralsky was
accused of heading the spam e-mail operation, while Bradley, Ralsky's
son-in-law, served as the spam ring's chief financial officer and
director of operations. Bown, who was chief executive officer of
Internet services company GDC Layer One, served as the ring's chief
technology officer, and Hui, CEOof
China World Trade, was the lead dealmaker representing the companies
whose stocks were being promoted via spam e-mail, authorities said.Many of the spam e-mails promoted thinly traded "pink sheet" stocks for U.S.companies owned and controlled by individuals in Hong Kongand China,
according to the feds. The e-mails contained false and misleading
information or omissions and were created and sent using software
programs that made it difficult to trace them back to the conspirators.
According to the indictment, the group falsified "headers" in the
e-mail messages, used bots to relay the spam, and also made
misrepresentations in the advertising content of some of the underlying
e-mail messages. They also used falsely registered domain names to send
this conspiracy Ralsky and the others were able to manipulate the stock
market and maximize their profit," said FBI Special Agent in Charge
Andrew G. Arena, in a statement. "They flooded our e-mail boxes with
unwanted spam e-mail and attempted to use a botnet to hijack our
computers assist them in the scheme. Cyber crime investigations
are a top priority of the FBI and we will continue to aggressively
investigate those individuals who use and hide behind computers to
commit various crimes."
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