US indicts pump-and-dump ’spam king’

A US federal grand jury in Detroit has indicted a Michigan man dubbed the “spam king” and 10 others in an international illegal bulk emailing and stock fraud scheme, the US Justice Department said on Thursday. The 41-count indictment charges Alan Ralsky, 52, of West Bloomfield, Michigan, his son-in-law, and nine others with operating a spamming operation that focused on running a stock “pump and dump” scheme.

“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 email promotions,” US attorney Stephen Murphy said in a statement.

Under the scheme, the group sent spam touting thinly traded Chinese penny stocks, drove up their stock price, and reaped profits by selling the stock at artificially inflated prices, the statement said.

Detroit Free Press said prosecutors described Ralsky as one of the most prolific spammers in the US.

According to the indictment, Ralsky’s group used various illegal methods to maximise the amount of spam that evaded spam-blocking devices and tricked recipients into opening, and acting on, the advertisements in the spam.

The indictment followed a three-year investigation. Investigators estimate that those charged earned approximately $3m (ÂŁ1.5m) during the summer of 2005 alone as a result of their illegal spamming activities.

Three people have been arrested, including Ralsky’s son-in-law, Scott Bradley, and How Wai John Hui, a dual national of Canada and Hong Kong. The others, including a Russian national, still are being sought, the Justice Department said.

Detroit News reported that Ralsky was believed to be in Europe and quoted his attorney, Philip Kushner, as saying Ralsky would voluntarily surrender to federal authorities in the next few days.

“Mr Ralsky intends to fight these charges, which are brought under a new federal statute that has not been interpreted by the courts,” Kushner told the paper.

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