Local hacker "Memehacker" IMed in with a scoop on Alan Ralsky, the famed "Spam King" covered by the Observer and the Detroit News. Here's the breaking story:

Valleywag: Tell me the scoop in three sentences.
Memehacker: Alan Ralsky is currently being held by the feds and his file is sealed for the next 72hrs by the DOJ. We are concerned that he is going to narq out the entire network since they have enough on him to send him to jail. This means hackers, spammers, anyone who has worked in spam legally or illegally for the last 5 years at least.
The DOJ wants to do a dragnet, they have the top dog, but they want the whole system as well.
Wag: How many people could be in trouble?
MH: There is a risk of a huge network collapse in the hack scene. I couldn't estimate since I don't know who he has worked with, but it's a lot of people. Think of a huge pyramid with him at the top. He is one of the few people that has knowledge of a large part of the hackscene network.
Wag: What were Ralsky's biggest crimes? How would I explain this guy to my mom?
MH: Ralsky is known as the Spam King. He is one of the biggest spammers out there, his network and spamlists are huge. He is not afraid to use shady methods to bypass filters and to acquire new lists.
He has been known to use the hack scene to help him spam and to get him new lists to work with.

After the jump, why Ralsky would squeal.

Wag: What does he get out of ratting everyone out? And why didn't he do it in 2005 when he was raided?
MH: If he can cut a deal with the DOJ he may get a reduced sentence or even full immunity. I don't know how much he has to offer them, but taking out a network as large as his would definitely give him some bargaining power. I believe this is still the same case as 2005, they just didn't have enough on him back then to really scare him.
Shutting down his network is a lot less scary than jailtime, which was all they could do back then.
We assume that it is more this time since the DOJ sealed the case. They don't do that unless they are planning to do something during that time.
Wag: How many people would get burned? How bad could the fallout be?
MH: It depends on who did what for him, or what he knows about people. I couldn't estimate, but currently a lot of people are very scared.
It's not just about spamming, he knows stuff about other various activities in the hack scene.
Wag: Are we just talking about a bunch of kids here?
MH: Not just kids, legit spam companies that use shadier methods, older people who do spam stuff on the side to make money. There was that case a few years ago of the kid who got aol's user file and tried to sell it. Stuff like that, leaving your company, but taking some info and trading it for money or info. Sometimes people do stupid things because they are upset at their company or something.
Wag: And why get the story out there? What's your motive?
MH: Personally I want the network to be aware of what's going on. Who knows what he is saying in there, no one knows what exactly he knows.
Or what he has guessed.
Wag: And what happens when the file's unsealed?
MH: Even just some stupid kid that bragged to him about buzzing a government network to see if he could.
Then we know what the charges are, what they have on him.
And possibly the deal that was made.

Stay tuned to Valleywag as the story develops.