A man called the "Godfather of Spam" was sentenced Monday to more than four years in prison for a multi-million dollar stock fraud scam.
Alan M. Ralsky, 64, of West Bloomfield, Michigan, was sentenced along with three co-conspirators on charges of wire and mail fraud and violating the CAN-SPAM Act, the Department of Justice announced. According to prosecutors, the men and several other individuals orchestrated a pump and dump spam campaign to manipulate thinly traded stocks from January 2004 through September 2005.
In the Ralsky case, many of the spam emails promoted thinly traded "pink sheet" stocks for U.S. companies owned by people in Hong Kong and China, prosecutors said
Ralsky's son-in-law, Scott Bradley, 48 – whom prosecutors say acted as the CFO of the spam operation - was sentenced to 40 months in prison. Both Ralsky and Bradley were also sentenced to five years of supervised release and each ordered to forfeit $250,000.
How Wai John Hui, 51, who lives in Hong Kong and Canada, was sentenced to 51 months in prison and John S. Brown, 45, of Fresno, Calif., was sentenced to 32 months in prison for their roles in the fraud scam.
"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," U.S. Attorney Terrence Berg for the Eastern District of Michigan said in a statement.
In a blog post, Graham Cluley, senior technology consultant at antivirus supplier Sophos Plc., said stock manipulation spam isn't seen much now, but that it was a serious problem "hitting the pockets of gullible investors who believed they had received inside information about a stock that was about to go stratospheric."
He added, "A strong message needs to be sent out that spam of any kind is unacceptable, but I don't hold much hope that the criminal gangs behind the deluge of spam we encounter every day will pay much attention. For them, the rewards are significant - and I suspect most of them believe the chances that they will ever be caught are minimal."