A Hong Kong businessman was sentenced to 5-7 years in prison for his role in a spam campaign meant to artificially pump up his company’s stock. 50-year-old John Hui How Wai pleaded guilty in a federal court. The former CEO of China World Trade was part of a spam gang which included the infamous Alan Ralsky.

          “The alleged association with spam king Alan Ralsky really spells out the seriousness of this case,” said Graham Cluley, senior technology consultant at Sophos. “While Ralsky has always maintained he is not a spammer, but a legitimate e-mail marketer, the US Department of Justice claims that in the summer of 2005 alone, Ralsky made US$3 million through illegal spam operations. This is likely to just be the tip of the iceberg if it’s true that Ralsky is involved in other scams too.”

Other members of the gang have also pleaded guilty and will be sentenced later this year. They have all agreed to testify against Ralsky. Known as “pump and dump”, the scheme involves sending millions of spam messages hyping a particular stock and luring the recipients into investing in it believing they are getting a valuable stock tip worth millions. This artificially inflates the stock, which allows the spammers to sell their shares and make a tidy profit while the folks who fell for the scheme generally lose their investments.