Sex, Jail, Gunshots, and Domain Hijacking Prevention
He owes $65 million plus interest and was jailed for contempt of court for not paying it. A year later, the money still hadn't appeared, a judge ordered him released from jail, and his lawyer was shot at. All stemming from a domain name.
The history of sex.com
It wasn't just any domain, of course. Over a year ago, in the article Sex, ICANN, and Your Domain Name, we wrote about how ex-convict Stephen Michael Cohen had hijacked the domain sex.com from its rightful owner Gary Kremen. It took five years, from the hijacking in 1995 until 2000, for the court to find Cohen guilty. A judge ordered him to return sex.com to Kremen and to pay $65 million in punitive damages and for lost revenue. Instead of paying, Cohen fled from the US to Mexico.
Although Kremen didn't recoup any money, he gained control of two of Cohen's houses, including a San Diego mansion, which he now lives in. He also reached an out-of-court settlement with Network Solutions, which had given Cohen control of sex.com, for an undisclosed amount believed to be worth millions.
In 2005, Cohen was arrested in Tijuana, Mexico, handed over to US agents, and jailed for civil contempt for not paying the amount owed.
The break from jail
Sex.com is probably the most valuable domain in existence. It can bring in up to half a million a month just in advertising revenue. During the five years that Cohen had sex.com in his control, he made millions from it. But where is that money now?
Allegedly, it's in offshore accounts in Lithuania, Liechtenstein, and the Isle of Man. But in numerous interviews in jail, Cohen didn't provide any information leading to the money. Moreover, Kremen was unable to locate Cohen's offshore bank accounts or any other hidden assets. Cohen told the court that he could only access his offshore accounts in person, which he could do only if he were freed.
Civil contempt laws didn't allow for jail time to be punitive. After Cohen spent 14 months in jail, a judge agreed to let Cohen out of jail to try to recover the money owing to Kremen. Cohen was released from jail on December 5, 2006.
On February 26, 2007, Cohen must return to court and tell the judge whether he was able to recover the money that he owes Kremen. If Cohen doesn't return to court on that date, he'll be held in contempt of court again. But if he does return to court and convinces the judge that he was unable to locate his offshore bank accounts, the judge will have to allow him to go free. That is, unless Kremen's lawyers are able to have Cohen re-arrested at that time.
The shooting
On the day that Cohen was released from jail, his lawyer in Mexico, Gustavo Cortés Carvajal, was almost killed. Cortés is believed to be one of the few people who know where Cohen has hidden the money he made from sex.com. On December 5, Cortés was traveling in a Mercedes Benz in Tijuana with colleague Jose Luis Alamillo, who was driving. Two trucks blocked the Benz. Alamillo was shot several times, but he was able to run to a local police station. Cortés managed to escape unharmed and also took refuge in the police station. A four-year-old boy in a car in the area of the shooting was shot in the head. His condition is unknown.
No evidence links Cohen with the assassination attempt on Cortés.
How safe are our domains now?
Since the infamous hijacking of sex.com, steps have been taken to increase the security of domains. We've written about how to protect your domain in the Website Source article Information Highwaymen and Your Domain.
Another step to confirm transfer authorization has been implemented for .com and .net domains. Previously, only .org domains required an AuthInfo code (also called AUTH CODE or EPP Code) to approve domain transfers. As of October 28, 2006, .com and .net domains also require an AuthInfo code for domain transfer requests to be approved. These domains no longer need to be locked. They cannot be transferred unless the domain registrant obtains the AuthInfo code from the current registrar and enters it at the control panel of the gaining registrar.
Despite the advances in domain name protection, it's still possible for domains to be hijacked. However, no one should be able to hijack a domain as easily as Stephen Cohen did in 1995, and with the right precautions in place, we can greatly increase the security of our domains.
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