"Today's charges seek to knock out one of the largest illegal spamming and fraud operations in the country, an international scheme to make money by manipulating stock prices through illegal spam e-mail promotions," U.S. Attorney Stephen Murphy said in a statement.

The spam messages promoted Chinese penny stocks and drove up their prices before they were sold for profit, the government charged. Prosecutors described Raksly as a "prolific spammer."

Evaded Filters, Tricked Users

As an experienced spammer, Ralsky apparently had created ways to bypass many of the spam filters out there. The indictment claims that Ralsky used various illegal methods to evade filters and "tricked recipients into opening, and acting on, the advertisements in the spam," the Justice Department said.

The illegal activities identified in the indictment include using falsified headers in e-mail messages, using proxy computers to relay the spam, using falsely registered domain names to send the spam, and making misrepresentations in the advertising. The indictment states that Ralsky and his gang used botnets -- networks of infected PCs -- as part of the scheme.

The indictment alleges that the conspiracy earned Ralsky and his partners some $3 million in the summer of 2005 alone.

Global Criminal Enterprise

Three people have been arrested, including Ralsky's son-in-law Scott Bradley and How Wai John Hui, a dual national of Canada and Hong Kong. Ralsky is believed to be in Europe and is expected to surrender, according to his lawyer.

"Mr. Ralsky intends to fight these charges, which are brought under a new federal statute that has not been interpreted by the courts," his lawyer said.

"The flood of illegal spam continues to wreak havoc on the online marketplace and has become a global criminal enterprise," said Assistant Attorney General Alice S. Fisher. "It clogs consumers' e-mail boxes with scams and unwanted messages and imposes significant costs on our society."

While Ralsky was the mastermind of the scheme, Hui's role was to act as a "conduit" for Chinese companies who wanted their stocks pumped. The case amounts to a 41-count indictment covering three distinct, interrelated, conspiracies.