A Hong Kong business executive pleaded guilty last week in a Detroit court for his part in a scam where tens of millions of spam messages were sent, pumping up the stock price of Chinese companies.
How Wai John Hui, a resident of Hong Kong and Vancouver, Canada, was the CEO of China World Trade, one of the companies whose stock was artificially inflated as a result of the scheme.
Hui is believed to have been part of a gang which included well-known Detroit spammer Alan Ralsky, a man listed on anti-spam outfit Spamhaus’s Registry of Known Spam Operations, or ROKSO list.
According to prosecutors, Ralsky was the ringleader in the scheme under which tens of millions of spam e-mail messages were sent to fraudulently pump up the prices of Chinese stocks held by him and other conspirators.
Hui is the third of 11 defendants who have pled guilty and agreed to testify against Ralsky and others.
As part of his plea agreement, the 50-year-old man could face a sentence of between 63 and 78 months in jail. However, if Hui gives significant help in prosecuting other defendants, prosecutors will recommend he receive a sentence of 32 to 39 months, according to reports.
Francis “Frankie” Tribble and Judy Devenow pleaded guilty to conspiracy and other charges in October, and are scheduled to be sentenced next year.
According to an indictment unsealed in January, Ralsky and the other defendants used various illegal methods in their scheme, including using false headers, proxy computers to relay the spam, falsely registered domain names, and making misrepresentations in the content of the messages.
The indictment also alleges that the defendants tried to send their spam by using a “botnet,” or a network of “robot” computers that have been infected with malicious software code that instructs the infected computers to send spam.
The indictment charges that the defendants earned profits when recipients bought the touted stocks, artificially inflating the prices and allowing the defendants to sell them at a profit. Hui’s primary role in the scheme was to act as a conduit for Chinese companies who wanted their stocks pumped by the scheme, the indictment alleged.
According to Spamhaus. since 1997, Ralsky “has grown from a small time operator to one of the bigger spam houses on the Internet with a gang of fellow morally challenged types working with him to pump out every type of sleazy deal and scam offer into millions of internet users’ mailboxes.”
Ralsky has claimed he is a legitimate e-mail marketer who abides by the law, but the Department of Justice claims that in the summer of 2005 alone, Ralsky and his fellow conspirators made $3 million through illegal spamming.
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