U.S. indicts 11 over pump-and-dump stock spam
Eleven people, including one of the top spammers in the world, were indicted
on Thursday for allegedly sending millions of unsolicited e-mails intended to
inflate the price of Chinese penny stocks.
The U.S. Department of Justice (DOJ) called the scheme one of the largest spamming
and fraud operations in the U.S. The 41-count indictment charges the defendants
with conspiracy, several types of fraud, and money laundering.
The indictment alleges the group sent spam via botnets, or networks of hacked
computers. A three-year investigation revealed the e-mails, which implored investors
to buy cheap stocks, contained fake headers and other misleading information,
the DOJ said.
After the price of a stock increased, the defendants sold at the artificially
inflated price, a practice known as a pump-and-dump scam, according to the indictment.
In mid-2005, the stock spam netted the defendants around US$3 million, the DOJ
said.
Those charged include Alan M. Ralsky, 52, of West Bloomfield, Michigan. Spamhaus,
a London-based organization that tracks spamming operations, listed Ralsky as
one of the top professional spammers in the world. Also indicted was Ralsky's
son-in-law, Scott K. Bradley, 46.
Ralsky settled with Verizon after being sued in 2002 over spam. Ralsky and
his company, Additional Benefits LLC, agreed to pay Verizon and to stop sending
spam on Verizon's network.
Three of the 11
accused have been detained, and the rest -- including Ralsky -- are being
sought, the DOJ said.
IDG News Service
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