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August 27, 2012

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Here's the The Lowdown from DN Journal,
updated daily
to fill you in on the latest buzz going around the domain name industry. 

The Lowdown is compiled by DN Journal Editor & Publisher Ron Jackson.

Domain Thief Lands in Jail After Picking the Wrong People to Steal From 

If you have spent any time in this business you know that domain hijacking is a serious, ongoing problem, one exacerbated by the fact that the criminals who perpetrate the thefts have little fear of prosecution. In the past victims have found that most law enforcement agencies 

have little interest in helping recover assets they don't understand, much less trying to run down crooks who execute these crimes with a keyboard rather than a gun. Many agencies consider domain theft a civil issue rather than a criminal offense (Gary Kremen eventually recovered Sex.com from career criminal Stephen Michael Cohen through a civil suit rather than a criminal prosecution). 

With little chance that he would ever have to answer for his crime, a thief stole P2P.com from co-owners Marc Ostrofsky, Albert Angel and his wife Lesli Angel in 2006 and sold it on Ebay four months later for $111,000 (the victims had purchased the domain for $160,000 in 2005). 

However, the thief overlooked one thing. Marc Ostrosky is an industry pioneer (who sold 

Business.com in a deal valued at $7.5 million) and Albert Angel is a noted attorney and former Justice Department prosecutor who wasn't going to rest until justice was served. 

Last Thursday it was when 24-year-old Daniel Goncalves was arrested at his Union City, New Jersey home and charged with the theft. The Angels' persistence got the New Jersey Cyber Crimes unit involved in the case and they are now credited with a landmark bust, believed to be the first ever criminal prosecution for domain theft in the U.S. 

The Angels and Ostrosfky sent us details of the fascinating case which we have been going through today. Adam Strong at DomainNameNews.com also received the information and he posted an excellent article this morning that runs down how this particular theft occurred and what it took to put Goncalves behind bars - at least temporarily. He is currently out on bail but he will have to answer the felony charges against him in court. 

In the meantime the victims have filed a pending federal civil lawsuit that aims to recover the domain from NBA player Mark Madsen who, not knowing it was stolen, purchased it on Ebay. The Angels and Ostrofsky are also trying to recover damages from the hacker and co-conspirators by applying common law theft, conversion, breach of contract claims, RICO claims, and to apply federal Computer Fraud and Abuse and Anti-Cyber Piracy statutes. Registrar Godaddy.com is also named in the suit for negligence and contributory trademark infringement under the Anti-Cyber Piracy statute.

We are hopeful that this arrest will be just 

the first of many that will bring some security and peace of mind to domain owners who have been victimized without repercussions in the past. The entire community owes a debt of gratitude to the Angels and Ostrofsky for putting domain theft in a spotlight that could keep similar crimes from being swept under the rug in the future.

Colonel Rick Fuentes, Superintendent of the New Jersey State Police, said “The domain name industry is in some respects still like the wild west.  Many of the rules are not yet codified into state laws, let alone federal or international laws. There is no deed for ownership of a domain name.  In most cases they are protected solely by a login and password for the site through which they are registered.  Nevertheless, theft is theft, and that law that can be applied whenever possession of an own-able thing is improperly transferred for gain.”

(Posted August 3, 2009)

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