A man described as one of the most prolific senders of spam e-mail in the US was among 11 people accused in an indictment unsealed of defrauding people by manipulating Chinese stock prices.
Alan Ralsky, 52, of suburban West Bloomfield Township, made approximately US$3 million through the scheme in summer 2005 alone, US Attorney Stephen Murphy said on Thursday.
Federal agents seized computers, computer disks and financial records in a raid on Ralsky's home in September 2005. But Ralsky, who said at the time that he had gathered at least 150 million e-mail addresses, was not arrested then.
In a 41-count indictment, Ralsky and the other defendants sent tens of millions of e-mail messages to computers worldwide, trying to inflate prices for Chinese penny stocks. The defendants then sold the stocks at inflated prices, Murphy said.
The defendants used a variety of illegal methods "that evaded spam-blocking devices and tricked recipients into opening, and acting on, advertisements in the spam," Murphy said in a news release.
The indictment also alleges that the defendants tried to send spam using "botnets" -- networks of computers that have been infected with malicious software coding that in turn would instruct infected computers to relay spam, the release said.
Ralsky is considered to be one of the most prolific spammers in the US, sending tens of thousands of e-mails to Internet users every day, authorities said.
"A lot of people don't ignore or delete spam," Murphy told reporters. "Unsuspecting people can be duped ... that they were looking at legitimate stock tips."
Ralsky's son-in-law, Scott Bradley, 46, of West Bloomfield Township, and Judy Devenow, 55, of Lansing were arraigned on Thursday on charges of conspiracy, fraud in connection with electronic mail, computer fraud, mail fraud and wire fraud.
A third defendant, Hon Wai John Hui, 49, of Vancouver, British Columbia, and Hong Kong, was arrested at Kennedy Airport in New York and was expected to be brought to Michigan within days, Murphy said. Murphy's office did not return telephone messages inquiring whether Bradley, Devenow or Hui had lawyers.
Seven other defendants remained at large, including Ralsky, who was believed to be in Europe. His attorney, Philip Kushner of Cleveland, told the Detroit News that Ralsky would surrender to federal authorities in a few days.
"We didn't know that an indictment was coming," Kushner said. "Mr Ralsky intends to fight these charges, which are brought under a new federal statute that has not been interpreted by the courts."
The other defendants named in the indictment are from California, Arizona and Russia.
Conviction on the most serious charges, mail fraud and wire fraud, carries as many as 20 years in prison and a US$250,000 fine. Other charges include money laundering and fraud in connection with electronic mail.
The government also seeks forfeiture of real estate, brokerage accounts, bank accounts and life insurance policies worth a combined US$2.7 million.
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