According to media reports, a businessman from Hong Kong has pleaded guilty 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 scam. As part of his plea agreement with prosecutors the 50-year-old businessman could face a sentence of between 63 and 78 months in jail.
However, like many cases of cybercrime that we encounter today, Hui was not working alone. He is believed to have been part of a gang which included the notorious Alan Ralsky.
In the past Ralsky has claimed that he is not a spammer, but a legitimate email marketer who abides by the law. However, the Department of Justice claims that in the summer of 2005 alone, Ralsky made $3 million through illegal spam operations.
Hui’s fellow gang members Francis “Frankie” Tribble and Judy Devenow pleaded guilty to conspiracy and other charges in October, and are scheduled to be sentenced next year. They have all agreed to give evidence against Ralsky.
Stock manipulation spam (also known as “pump-and-dump scams”) are not as prevalent as they used to be, partly because of action taken by the SEC to shut them down, and partly – perhaps – because of the economic downturn.
Certainly they were much more common between 2004 and 2006 when Hui is said to have been involved in the conspiracy. Nevertheless, it’s good to see the authorities pursue cases like this, and bring the perpetrators to justice.