Infamous spam king Alan M. Ralsky is on the run following the Jan. 3 indictment of Ralsky and 10 others for operating a sophisticated spam scam involving pump-and-dump Chinese stocks.
The 41-count indictment, unsealed in a Detroit federal court, claims Ralsky, 52, and his fellow defendants operated a wide-ranging international fraud scheme involving millions of illegal e-mails touting thinly-traded Chinese penny stocks. Ralsky profited by selling the stock at artificially inflated prices.
Only two of the defendants appeared in court Jan. 3 for arraignment. Ralsky is reportedly at large in Europe.
According to the indictment, Ralsky and his group earned approximately $3 million on the scheme during the summer of 2005. Ralsky faces charges including conspiracy, fraud in connection with electronic mail, computer fraud, mail fraud, wire fraud and money laundering.
The illegal e-mail practices cited in the indictment include evading spam-blocking devices, falsifying headers and domain names, using proxy computers to distribute the spam and misrepresenting the advertising content in the actual e-mail.
"Today's charges seek to knock out one of the largest illegal spamming and fraud operations in the country, an international scheme to make money by manipulating stock prices through illegal spam e-mail promotions," U.S. Attorney Stephen J. Murphy said in a statement.
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The mail and wire fraud charges carry a maximum penalty of 20 years in prison and a $250,000 fine.
"The flood of illegal spam continues to wreak havoc on the online marketplace and has become a global criminal enterprise," Assistant Attorney General Alice S. Fisher said in a statement. "It clogs consumers' e-mail boxes with scams and unwanted messages and imposes significant costs on our society."
Ralsky has long been on the Department of Justice's short list of targeted spammers. After a federal anti-spam law—the CAN SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) Act—was passed in 2004, authorities raided Ralsky's palatial, 8,000-square-foot mansion in suburban Detroit and seized his computers. The DOJ alleges Ralsky sent millions of unsolicited e-mails promoting a wide range of products from sexual enhancement drugs to get-rich-quick schemes.
In 2002, before the CAN SPAM law was in effect, Ralsky admitted in a Detroit Free Press interview that spam had made him a millionaire. "This is the greatest business in the world. I'll never quit. I like what I do," Ralsky said in the interview.
The charges against Ralsky and the others—including a dual national of Canada and Hong Kong and individuals from Russia, California and Arizona—came after a three-year investigation by the Federal Bureau of Investigation, with assistance from the U.S. Postal Inspection Service and the Internal Revenue Service.
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