Sunday, October 16, 2005
Agents close up shop by seizing equipment from bulk e-mailer's W. Bloomfield home in recent raid.
By Joel Kurth and David Shepardson / The Detroit News
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.
Link to full story at The Detroit News
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.