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A Michiganman called “the world’s most notorious illegal spammer” by a federal prosecutor has pleaded guilty to fraud and money laundering charges.
As part of his plea, Alan M. Ralsky, 64, of West Bloomfield, Mich., admitted to overseeing a spam operation that sought to manipulate stock prices for profit. Ralsky was one of five defendants in the case to plead guilty June 22 for their roles in the scheme, which used spam to lure people into trading weak stocks. Once the recipients traded in the stocks and their price shares increased, the ring would trade in the stocks and pocket the profits.
The other defendants to plead guilty in the case June 22 include: Scott K. Bradley, 38, of West Bloomfield, Mich.; John S. Bown, 45, of Fresno, Calif.;William C. Neil, 46, of Fresno,and James E. Fite, 36, of Culver City, Calif. Three other defendants pleaded guilty previously.
The ring functioned from January 2004 to September 2005. According to authorities, Ralsky served as the chief executive officer for the spam operation, while his son-in-law, Bradley, served as its chief financial officer and director of operations. Bown, who was chief executive officer of an Internet services company called GDC Layer One, served as the spam operation’s chief technology officer. Neil was one of his employees at GDC Layer One, and was accused of building and maintaining a network used to send the spam.
Rounding out the team was Fite, a spammer-for-hire who contracted others to send spam e-mails as part of the conspiracy.
Many of the spam e-mails promoted “pink sheet” stocks for U.S.companies owned and controlled by individuals in Hong Kongand China. The spam e-mails contained “materially false and misleading information” and were created and sent using software programs that made it difficult to trace them back to the conspirators, federal authorities said in a statement. According to the indictment, the conspirators used wire communications, the U.S.mail and common carriers to further their frauds. The conspirators also engaged in money laundering involving millions of dollars generated by their manipulative stock trading.
“Alan Ralsky was at one time the world’s most notorious illegal spammer,” said U.S. Attorney Terrence Berg, in a statement. “Using the Internet to manipulate the stock market through spam e-mail campaigns is a serious crime, and this case serves notice that federal law enforcement has both the capability and the will to successfully investigate, prosecute and punish such cyber-crimes.”
All five defendants, who were indicted in 2007, are scheduled to be sentenced in October. Cases against three other defendants are still pending.