December 30, 2003
An Unrepentant Spammer Vows to Carry On, Within the Law
By SAUL HANSELL
Alan Ralsky, according to experts in the field, has long been one of the most prolific senders of junk e-mail messages in the world. But he has not sent a single message over the Internet in the last few weeks.
He stopped sending e-mail offers for everything from debt repayment schemes to time-share vacations even before President Bush, on Dec. 16, signed the new Can Spam Act, a law meant to crack down on marketers like Mr. Ralsky.
He plans to resume in January, he said, after he overcomes some computer problems, and only after he changes his practices to include in his messages a return address and other information required by the law, the title of which stands for Controlling the Assault of Non-Solicited Pornography and Marketing.
That is quite a switch for Mr. Ralsky, who has earned a reputation as a master of cyberdisguise. By his own admission, he once produced more than 70 million messages a day from domains registered with fake names, largely by way of foreign countries - or sometimes even by way of hijacked computers - so that the recipients could not trace the mail back to him.
Most experts in junk e-mail, known as spam, have dismissed the new federal law as largely ineffectual. And many high-volume e-mailers say the law may even improve the situation for them because it wipes away a handful of tougher state laws.
But Mr. Ralsky, who lives in a Detroit suburb, says the law's potential penalties - fines of up to $6 million and up to five years in jail - are making him rethink his business.
"Of course I'm worried about it," he said after the law was signed. "You would have to be stupid to try to violate this law."
No one is saying that e-mail in-boxes will be clean of spam any time soon. But the world is getting to be a much more hostile place for spammers, particularly those who send some of the most offensive messages. The biggest threat is not so much the new law, though it is expected to play a role in stepped-up enforcement, as the increased willingness of prosecutors to go after spammers.
In recent weeks, federal and state authorities have finally gotten the attention of spammers with a series of tough civil and criminal actions.
"These suits sent a shock wave through the spam world," said Steve Linford, the director of the Spamhaus Project, an organization that tracks bulk e-mailers and tries to thwart their moves. "Lots of spammers are asking, 'Are we next?' "
Some bulk e-mailers, like Scott Richter, who was a principal target of a civil suit filed last week by the New York attorney general, Eliot Spitzer, vow to continue. But Mr. Richter has lost some major clients, including mainstream companies like Omaha Steaks.
Still, in the week after the suit was filed, Mr. Richter's company, OptInRealBig.com, was actively sending e-mail messages promoting dozens of products, including laser guns, breast enlargement pills and Christian dating services.
Others say they have been beaten down by blacklists created by antispammers and filtering systems run by Internet service providers.
"E-mail is not working any more," said Brendan Battles, a longtime marketer who has sold CD-ROM's containing long lists of e-mail addresses. "More people are mailing and you get less and less response." Mr. Battles says he has virtually given up the business.
"E-mail marketing is a good thing," Mr. Battles said. "I create jobs. But the media has made e-mail out to be some sort of terrorist plot."
Not long ago, Mr. Ralsky, like many other bulk e-mailers, had high hopes that the new federal law would help legitimize his operation. Just after Thanksgiving, he sat on a cream-colored couch in the basement of his large home in Bloomfield Hills, Mich., an affluent suburb of Detroit, talking of how he expected the new law to make his business easier. He would identify himself, as required, and would honor any requests to be removed from his mailing lists, he said. He said that he was counting on Internet providers, in return, to stop trying to block his messages.
But more recently, Mr. Ralsky said in a follow-up interview by telephone, he has come to the conclusion that the law is more one-sided than he originally thought. Internet providers, he figures, will be able to tag and discard his mail with more certainty.
"The law was not written for a commercial e-mailer," he said. "I don't think what they are doing is fair." He suggested that the law was largely a plot by the big companies that connect homes and businesses to the Internet to keep all the profits from online marketing for themselves.
"I have never once been ashamed of what I do," he said. "I feel this is a business that has afforded me and my customers a better way of life."
At the age of 58, Alan Ralsky seems an incongruous character in an industry largely made up of men from the Nintendo generation.
"I am the oldest spammer you know of," Mr. Ralsky said. "You have a bunch of kids in their late 20's doing this with a lot more technical knowledge than I have. But they don't have any business sense."
Mr. Ralsky started delivering newspapers in his native Skokie, Ill., at the age of 7 and has been working ever since. Both his parents are deaf.
"It was a wonderful thing that I had deaf parents," he said. "I was proud of them and tried to be as helpful as I could, but you do grow up fast."
After a stint in the Army, Mr. Ralsky had a career as an insurance agent and sales manager. Then things began to go awry. In 1992, he served 50 days in jail on a charge related to failing to deliver documents to a group of investors. Two years later he was convicted of falsifying documents that defrauded banks and was ordered to pay $74,000 in restitution.
"I was in a bad business with bad partners," he said.
In 1995, he discovered e-mail messaging.
"I took my last thousand bucks and I bought a thousand dollars worth of spam," Mr. Ralsky recalls. From the e-mail messages he was able to send for that amount of money, he said, "I got nothing, but I said, 'You know what, there is something to this. It can take a small guy and make him the equal of a Fortune 500 company.' "
His first real customer was in the business of selling remote backup systems for computers. The fee was $1,000 to send a million e-mail messages. He found 400 customers for his client. Soon Mr. Ralsky hooked up with a time-share promoter, sending out offers of three-day, two-night Florida vacations.
"From there it just got bigger and bigger and better," Mr. Ralsky said. Travel clubs and time-share offers are a staple of his business, as are debt consolidation services and e-books on how to win government grants. He says he does not deal in pills or pornography.
Mr. Ralsky's mailing list now exceeds 150 million names. Unlike many high-volume mailers, Mr. Ralsky does not claim to send only to people who ask to receive marketing pitches. He says he sees nothing wrong with sending unsolicited mail. He insists, though, that he has always honored requests for removal from his list, something now required by the new law.
"If someone is mad, all they need to do is unsubscribe," he said. "If you don't want to get it, I don't want to send it to you."
This claim is impossible to verify, because nothing in Mr. Ralsky's e-mail messages indicates that they are from him. Anyone who unsubscribed from one of his mailings had no way to know if he stopped sending messages or doubled his mailings to them, as some spammers do.
That will change if he identifies himself, as he says he will to comply with the new law.
As Mr. Ralsky's business has grown, so has the backlash. Antispam organizations, like Spamhaus and the Spam Protection Early Warning System, work diligently to identify the addresses from which Mr. Ralsky is sending e-mail messages and to urge Internet providers to evict him from their networks.
And in 2001, Verizon Online, a unit of Verizon Communications, sued Mr. Ralsky, claiming he violated its policies by sending spam messages by the millions to its Internet customers. Last year, Mr. Ralsky settled the suit, paying an unspecified amount of damages and agreeing not to send mail to Verizon Internet customers again.
Mr. Ralsky then redoubled his efforts to use fake names and other techniques so his e-mail could not be easily traced.
"I have changed the way we mail totally," he said. The spam fighters, he added, "have no idea what I'm mailing. They could never pinpoint it and say this is from Al Ralsky."
Mr. Ralsky said that he was uncomfortable about this deception, but that he had no choice. "Is putting bogus information in your registrations the right way to do business?" he asked. "No. But the Internet world has forced me to do that."
He has done business in two dozen countries, and has never visited any of them. He buys mailing lists from people in Sweden and India. And these days, he says, he sends his mail from computers in China and three other countries.
"I have been hosted in strange places in the world," he said. "For some reason the I.S.P.'s out of this country are a lot more liberal."
But, he acknowledges, they are not necessarily more reliable.
"You get good and bad in this business, and I have had all sorts of people try to rip me off," he said.
Mr. Ralsky also acknowledged that he had used "open proxies"- computers with improperly configured software that allow spammers to relay messages without the knowledge of the computer owner.
"I personally hate mailing with proxies," he said. "It's rough. But you do what you got to do."
Even before the new law was passed and the prosecutors stepped up their actions, Mr. Ralsky said the business was getting harder. It was taking more mail to get the same response. His target is to earn $500 in profit for every million e-mail messages sent; his commission is often 40 percent of the price of each product sold.
And the cost of his carefully arranged international network is going up, even more so now.
"The Chinese have decided that they will follow the law," he said. "We will have to put in our address and a real 'unsubscribe' list,'' at an added cost, he said, of $3,000 a month.
For all the obstacles, Mr. Ralsky said that he did not intend to stop sending bulk e-mail in some form.
"There is too much money involved," he said. "I'm a survivor. And when you are a survivor, you find a way to make it happen."
Link to full NY Times article
Link to "how spammers must spam" rules chart
The Register of Known Spam Operations (ROKSO) collates information and evidence on entities with a history of spamming or providing spam services, and entities affiliated or otherwise connected with them, for the purpose of assisting ISP Abuse Desks and Law Enforcement Agencies.