Friday, January 04, 2008

Spam King Indicted -- But What Took Them So Long?

I don't mean to splash cold water on the indictment yesterday of the "spam king," Alan Ralsky, and ten others on multiple stock fraud charges. Nor do I wish to cast aspersions on what the Justice Department describes as a massive, multiyear investigation.

The Justice Department announcement says that this was a heckuva effort:

The charges arose after a three-year investigation led by agents from the Federal Bureau of Investigation, with assistance from the U.S. Postal Inspection Service and the Internal Revenue Service revealed a sophisticated and extensive spamming operation that, as alleged in the indictment, largely focused on running a stock pump and dump scheme, whereby the defendants sent spam touting thinly traded Chinese penny stocks, drove up their stock price, and reaped profits by selling the stock at artificially inflated prices.
But what the Justice Department doesn't say is that Ralsky was hardly holed up in some cave in Afghanistan. He was operating out in the open, and was even the subject of an article in the New York Times, for Pete's sake. The Spamhaus Project has a file on this man a mile long, and notes that the FBI raided his house three years ago.

OK, it takes a while to build a criminal case. But what about the SEC? Why hasn't it ever taken action against Ralsky? After all, his spams went out to millions upon millions of people, and I presume that the SEC must have gotten wind of them at some point.

The whole thing seems fishy to me. Still, I am glad to see that a notorious spammer is getting his just desserts.

© 2007 Gary Weiss. All rights reserved.

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Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

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