BREAKING: First Ever Criminal Prosecution for Domain Name Theft Underway

[elitedomains]

Over the years hundreds of stories of domain name theft have been reported, most famous among them of course is the theft of Sex.com. Even as recent as last week, reports of stolen domains sent a chilling reminder through the domain industry as valuable domains Before.com, Adios.com and others were stolen from Warren Weitzman. Until recently, there hasn’t been a case of a domain theft where the thief was caught and arrested. However, on July 30th, Daniel Goncalves was arrested at his home in Union, New Jersey and charged in a landmark case, the first criminal arrest for domain name theft in the United States.

In a similar fashion to the Sex.com theft, the events that led to Goncalves arrest involve a long back story, one that spans well over 2 years, and many players. Although insiders familiar with this case contend that Goncalves has stolen other valuable domains, this case centers on the theft and subsequent sale of the domain name P2P.com.

The Victims

In 2005, internet entrepreneur and domain name investor Marc Ostrofsky and attorney Albert Angel along with his wife Lesli Angel partnered to purchase the domain name P2P.com for $160,000 from a Wisconsin company, Port to Print Inc. The domain industry was heating up in 2005, as was the emerging peer to peer music business and the co-owners of the domain name saw a great deal of potential with this investment and future development of the domain.

Ostrofsky is a well known investor in the domain space. His name was etched in domain name history with his 1999 sale of Business.com for $7.5 million and the multi-million dollar domain holding company,IREIT, that he helped form with investment backing from Howard Schulz and Ross Perot. Albert Angel is an attorney and former Justice Department prosecutor with a background in internet payment processing. Angel and Ostrofsky have known each other for over 25 years and have done business together in other ventures.

The Angels had already invested in a small portfolio of domain names including profreedom.com and drugoverdose.com (2 more domains reportedly stolen by Goncalves). As a nurse who dealt with teen drug abuse issues, Lesli Angel became interested in buying and building sites on domains in the late 90’s. Domains such as drugoverdose.com gave her a means to reach out to some of the same audience that she was already helping as a nurse. As the domain space heated up, Angel continued buying domains and built up a portfolio of around 800 domain names.

The Accused

Daniel Goncalves, the 25 year old law firm computer technician arrested on Thursday, reportedly hacked in to the Angel’s AOL email account, used that information to retrieve the login details for the P2P.com from the GoDaddy.com domain account. Goncalves performed an internal “domain push” transfer,which in effect transfered the domain name to another Godaddy account that he owned. Goncalves reportedly also falsified Paypal.com transaction records in an attempt to cover his trail and provide evidence that made it appear that he purchased the domain name for $1,500 from the Angels. The domain was listed in the name of Daniel Louvado during this time period (a bogus name consisting of Goncalves first name and his fiances last name).

In late 2006, Goncalves put the domain name P2P.com up for sale on eBay.com and on September 24, 2006 the eBay.com auction for the domain P2P.com closed in the amount of $111,000.

CONTINUED...

[4u-domains]

great news.... might help a bit...

[Poohnix]

There was a bunch of threads about this a week ago when the news broke...

[4u-domains]

Great old news.. hoped it helped a bit.

[Poker]

Breaking news...about a week ago that is

[DNBA]

good stuff

[katherine]

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

[TheLegendaryJP]

I think over all 5 years while not a huge amount is still significant enough to make a statement.

[jaydub]

Looks like you did your part in this as well Josh...nice job
Must have been frustrating at times but it seems the team persevered.

[TheLegendaryJP]

Looks like you did your part in this as well Josh...nice job
Must have been frustrating at times but it seems the team persevered.

Yeppers, it took a bunch of people but at the end of the day the Angels really went to task on this taking it farther and dealing with more than anyone I have seen prior! If anyone's hand should be raise it should be theirs.

[jaydub]

Hear..Hear. and a tip of the hat to them...

If anyone's hand should be raise it should be theirs.

[DaddyHalbucks]

Sweet!

Meet your new roommates --Buster and Reemer.

[katherine]

And Big Bubba

[Gerakus]

Nice Article, thanks for the reference.

[eeedc]

You would think that with a valuable domain name or any valuable asset one would try to confirm that the seller owned the asset. I can feel sorry for the basketball player if he in good faith bought a hot domain name, but did the pervious owners value their privacy so much that they did not list their real name on the registration or used some throw-away email they never read? If nothing else with a $100.000+ eBay auction, one would think some watcher would look into it.

Unless all the other bids on eBay were fake (which I would not doubt with a criminal selling) there was another bid for slightly under the winning bid so two or more people make the mistake? There should be an easy way to do "title searches" for domain names.

[Dynamic1]

I think over all 5 years while not a huge amount is still significant enough to make a statement.

Hopefully they will keep making statements!

[katherine]

And for those who missed that epic thread:
Potential LL .com Stolen !

[jacal1]

Perhaps I am stating the obvious, but the great thing about this is how seriously the legal system took the case, fully relaizing the value of the domain and tretaing this case with the weight that would be given to theft of more tangible "property".