WASHINGTON (Reuters) - A federal grand jury in Detroit has indicted a Michigan man dubbed the "spam king," and 10 others, in an international illegal bulk e-mailing and stock fraud scheme, the U.S. Justice Department said on Thursday.

The 41-count indictment charges Alan Ralsky, 52, of West Bloomfield, Michigan, his son-in-law, and nine others with operating an spamming operation that focused on running a stock "pump and dump" scheme.

"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.

Under the scheme, the group sent spam touting thinly traded Chinese penny stocks, drove up their stock price, and reaped profits by selling the stock at artificially inflated prices, the statement said.

The Detroit Free Press said prosecutors described Ralsky as one of the most prolific spammers in the United States.

According to the indictment, the Ralsky's group used various illegal methods in order to maximize the amount of spam that evaded spam-blocking devices and tricked recipients into opening, and acting on, the advertisements in the spam.

The indictment followed a three-year investigation. Investigators estimate that those charged earned approximately $3 million during the summer of 2005 alone as a result of their illegal spamming activities.

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. The others, including a Russian national, still are being sought, the Justice Department said.

The Detroit News reported that Ralsky was believed to be in Europe and quoted his attorney, Philip Kushner, as saying Ralsky would voluntarily surrender to federal authorities in the next few days.

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

(Reporting by Joanne Allen, editing by Jackie Frank)