'Godfather of Spam' sentenced to four years
Alan Ralsky, the 'Godfather of Spam', has been given over four years' jail-time for running a 'pump-and-dump' spam operation.
On Monday, Michigan resident Ralsky was sentenced to 51 months in prison and ordered to forfeit $250,000 (£150,000) by a Federal court in Detroit, the US Department of Justice (DoJ) said in a statement on Monday. The money Ralsky must forfeit was originally seized by the US government in December 2007.
"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," US Attorney for the Eastern District of Michigan Terrence Berg said in the statement.
Ralsky was sentenced with his son-in-law Scott Bradley and two others. Bradley was jailed for 40 months, and also had to forfeit $250,000 for his part in the operation.
Fellow conspirator How Wai John Hui was sentenced to 51 months in prison and had to forfeit $500,000, while John Bown was sentenced to 32 months in jail and had to forfeit $120,000.
Pump-and-dump stock manipulation involves sending out spam to artificially increase the price of previously bought 'penny' stock, and then trading in that stock to make a profit. Many of the spam emails the gang sent out promoted "thinly traded" stocks for US companies owned and controlled by individuals in Hong Kong and China, according to the statement.
"The spam emails contained materially false and misleading information or omissions and were created and sent using software programs that made it difficult to trace them back to the conspirators," the DoJ statement said.
Ralsky was the chief executive of the operation, while Bradley served as chief financial officer and director of operations. According to the statement, Hui was the "lead deal maker" and represented the companies that were being promoted by the spam, while Bown was the chief technology officer. Bown was indicted for conspiring to commit fraud by creating a botnet. Ralsky, Bradley and Hui were indicted on fraud and money-laundering charges.
A further six people were sentenced on Tuesday by the same Detroit court for their involvement in the operation, according to a Department of Justice statement on Tuesday.
Frank Tribble, who planned and directed stock trading, got 51 months for his part in the operation. Judy Devenow, who managed the spam, was sentenced to 18 months. William Neil, who created and served one of the computer spam networks, was sentenced to 35 months in jail. James Bragg and James Fite, who were contracted spam-mailers, were both sentenced to 12 months plus one day.
David Patton was sentenced to one day in jail and forfeited $50,100 for creating and selling the spam-mailing program used by the gang. Patton was also fined $3,000, and Devenow was fined $7,500.