Detroit - A man described as one of America's most prolific senders of spam e-mail was among 11 people accused in an indictment of defrauding people by manipulating Chinese stock prices.
Alan Ralsky, 52, of suburban West Bloomfield Township, made about $3m 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 150m 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.
Used a network
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.
Spam is the sending of unwanted bulk e-mails touting goods and services. Ralsky is considered to be one of the nation's most prolific spammers, 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 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.
Defendants
Seven other defendants remained at large, including Ralsky, who was believed to be in Europe. Robert Harrison, an attorney for Ralsky at the time of the 2005 raid, said on Thursday that he no longer represented him.
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 $250 000 fine. Other charges include money laundering, fraud in connection with electronic mail and computer fraud.
The government also seeks forfeiture of real estate, brokerage accounts, bank accounts and life insurance policies worth a combined $2.7m.
Ralsky has been a target of anti-spam efforts for years.
Verizon Communications sued him in 2001, saying he shut down its networks with millions of e-mail solicitations. He settled in 2002 and promised not to send spam on its networks to more than 1.6m customers in 40 states.
A federal law that took effect in 2004 bans the use of misleading subject lines and the sending of commercial e-mail messages that appear to be from friends. It also bans use of multiple e-mail addresses or domain names to hide senders' identities.
The FBI raided Ralsky's house in 2005, with agents seeking evidence that Ralsky and Bradley used at least 14 domain names to send commercial e-mail.
- AP