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11/24/2009
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'Godfather Of Spam' Gets Four Years In Prison

Prosecutors hope the prison sentence sends a message to spammers.

Notorious spammer Alan M. Ralsky, from West Bloomfield, Mich., was sentenced to more than four years in prison on Monday for his involvement in a stock fraud spam scheme.

Three of his associates -- Ralsky's son-in-law Scott Bradley, also from West Bloomfield, John S. Bown, from Fresno, Calif., and How Wai John Hui, a resident of Hong Kong and Canada -- also received prison sentences.

Bradley and Hui received 51 month sentences, like Ralsky, while Bown received a 32 month sentence.

Indicted in December 2007, the four men subsequently pleaded guilty to wire fraud, mail fraud, and CAN-SPAM Act violations, among other charges.

"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," said U.S. Attorney Terrence Berg for the Eastern District of Michigan in a statement.

Berg commended the FBI, the Postal Inspection Service, and the IRS Criminal Investigative Division for their respective roles in the three-year investigation that halted the illegal spamming.

The pump-and-dump scheme involved sending spam messages to promote the sale of "pink sheet" stocks, thereby artificially inflating the price so that prior holders of the stock could sell for a profit.

Assistant Attorney General Lanny A. Breuer declared that the sentences handed down to Ralsky and his associates send "a powerful message to spammers whose goal is to manipulate financial transactions and the stock market through illegal e-mail advertisements."

Google in October reported that while Q3'09 average spam levels were down 8% from Q2'09, the overall number of spam bytes processed per user has grown, with Q3'09 rates up 123% from Q3'08.

In other words, the decline in the number of spam messages has been more than made up for by the increase in the size of spam messages.

InformationWeek has published an in-depth report on e-discovery. Download the report here (registration required).

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