[ISN] FBI puts stop to spam king

[InfoSec News]

http://www.detnews.com/2005/technology/0510/16/B01-349738.htm

By Joel Kurth and David Shepardson
The Detroit News
October 16, 2005

Michigan's unapologetic king of bulk e-mail is in trouble again. This
time, an FBI raid has closed what some consider one of the world's
largest houses of spam.

Warrants unsealed last week revealed that agents in September seized
computers, laptops, financial records and disks from the
8,000-square-foot home of Alan M. Ralsky. The $750,000 West Bloomfield
mini-mansion was built off profits from the 100 million electronic
offers for everything from Botox to mortgages that Ralsky sends every
day.

FBI agents even took a copy of a 2002 Detroit News story that called
Ralsky the "poster boy for spam."

"We're out of business at this point in time," Ralsky said last week.  
"They didn't shut us down. They took all our equipment, which had the
effect of shutting us down."

The raid is the latest episode in a cat-and-mouse game between
anti-spammers and Ralsky, 60, a gregarious, heavy-smoking ex-convict
considered Public Enemy No. 1 in some pockets of the Internet.

In 2002, Ralsky agreed to an undisclosed cash settlement to end a
landmark lawsuit from Verizon Internet Services, which alleged he
twice paralyzed its network in 2000 with his pitches for diet pills,
vacations and such. The deal forbade Ralsky's companies from sending
spam on its networks.

Last year, Michigan lawmakers passed legislation that allows parents
to put their children's e-mail addresses on do-not-spam lists. Even
though he insists he doesn't target kids, Ralsky was an inspiration
for the bills.

"Michigan has been called a cesspool for Internet spam, and Ralsky is
recognized as one of the worst," said the bills' sponsor, Sen. Mike
Bishop, R-Rochester.

"I've been waiting for this moment. I knew it was a matter of time
before the law caught up to him."

Terry Berg, the top deputy in the U.S. Attorney's Detroit office,
declined to comment on the probe.

The home of Ralsky's son-in-law, Scott Bradley, also of West
Bloomfield, was also raided in September.

The federal CAN-SPAM law that took effect last year tries to make
spammers play fair.

It bans tricks, such as misleading subject lines or e-mails that
appear to be from friends. Commercial e-mail must be clearly
identified as such, and must label porn pitches as "sexually
explicit."

The law also forbids spammers from using multiple e-mail addresses or
domain names to camouflage their identities. Penalties include up to
20 years' imprisonment and an $11,000 fine per offense.

Warrants show FBI agents sought evidence Ralsky and Bradley sent
commercial e-mail using at least 14 domain names.

"I'm not a spammer," Ralsky said. "I'm a commercial e-mailer."

Ralsky spent "tens of thousands of dollars" on software to comply with
the law, said Philip Kushner, his Cleveland lawyer.

"Alan Ralsky believes he's complied with the laws," Kushner said.  
"These are new laws that, in some cases, have never been interpreted
by any courts or used before."

During previous discussions with The News, Ralsky called bulk e-mail
"the greatest business in the world." It's revived his life and won
him many foes.

A former insurance agent who made $500,000 a year in the 1980s, Ralsky
hit the skids in the 1990s. He lost his license in Illinois, declared
bankruptcy and served three years' probation on a felony related to
falsified bank records.

In the late 1990s, Ralsky sold his used car, bought two computers and
reinvented himself on the Internet. He makes money sending bulk e-mail
on behalf of clients selling products or services -- a gig he's said
puts small merchants on equal footing with giant companies.

As he's become more outspoken, Ralsky claims he's received numerous
death threats. A few years ago, Ralsky was deluged with hundreds of
unwanted magazines at his house, after anti-spammers signed him up for
subscriptions.

"Ralsky is quite public about his activities," said Lih-Tah Wong,
president of Computer Mail Services, a Southfield company that sells
anti-spam software to companies.

"For every one like Ralsky, there are thousands of others who are
hiding in the shadows and scurrying away like cockroaches when the
light is shone upon them."

A recent study by the research firm International Data Corp. predicted
spam would increase to 7.6 trillion messages this year from 4.5
trillion in 2003.

The investigation by the FBI's cyber crimes unit is one of several
ongoing in Michigan. None has come to trial.

John Mozena, a Grosse Pointe Woods anti-spam activist, said the weak
law only allows authorities to crack down on the "most egregious"  
spammers. He said he helped FBI agents with technical expertise before
the Ralsky raid.

You can reach Joel Kurth at (313) 222-2610 or jkurth at detnews.com