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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.

It's Official - Domain Thief Daniel Goncalves Sentenced to 5 Years in Prison in Precedent Setting Case

Last December I told you that a convicted domain thief named Daniel Goncalves would likely be spending five years in prison after pleading guilty in a plea bargain arrangement with the 

New Jersey Division of Criminal Justice (NJDCJ). That is the stretch in the Big House that the NJDCJ recommended and today it became official. Goncalves was sentenced to five years for stealing the domain name P2P.com from Internet entrepreneur Marc Ostrofsky and selling it on eBay.com for $121,000 to former NBA basketball player Mark Madsen Goncalves was sentenced before Superior Court Judge Stuart Peim in Union County, N.J. following a guilty plea to multiple criminal counts. Had he not pled out, Goncalves could have received 15 years in the slammer. 

In this landmark case, Goncalves became the first domain thief in history to be criminally prosecuted in the 

United States. Ostrofsky and his partners Albert and Lesli Angel worked to track down Goncalves with the New Jersey Cyber Crimes unit.  The successful prosecution sets a major precedent in that there are no laws currently in place to protect domain name theft. States like California consider an internet domain name similar to a piece of real estate. If it’s stolen the owner may have a remedy to get it returned but it’s a long and expensive process, However, most other states like New York or New Jersey consider the domain name a piece of “intellectual property” similar to a copyright or trademark, and owners have no legal recourse to get back that stolen asset.  Domain name owners hope that this case will instigate new legislation that will protect these valuable properties. 

Ostrofsky, a domain industry pioneer, is also author of the New York Times best-selling book Get Rich Click!, The Ultimate Guide To Making Money Online. He initially gained famed for selling Business.com in a transaction valued at $7.5 million in 1999. High profile transactions like that one helped to fuel interest in domain names as investment assets, but laws creating remedies for victims of domain theft have lagged behind market developments.  

Albert Angel

Marc Ostrofsky

Albert Angel, who spoke at the sentencing, said “in our effort to redress the injuries inflicted on us, we came to appreciate how undeveloped this area of the law is, and how victims of domain theft face an unmarked and totally uphill battle to get a remedy. Today’s sentencing helps to define a path for other victims and law enforcers to follow, and reinforces the likelihood that the theft of a domain can and will be prosecuted.”

The industry owes a debt of gratitude to the Angels and Ostrofsky for the years they spent pursuing this criminal and bringing him to justice. The prospect of going to jail is something other domain thieves will now have to take into consideration when contemplating whether or not they want to commit this crime.

(Posted July 22, 2011)  

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