Judge Awards $65MM in Adult Entertainment Cyber Case
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In a verdict that ends a contentious debate over who owned popular URL sex.com, a federal judge has awarded $65 million to an entrepreneur who claimed his Internet domain name was hoodwinked by an online pornographer.
U.S. District Judge James Ware found Stephen Cohen liable for fraud and forgery in a five-year battle over the ownership of the URL, sex.com. The judge slammed Cohen with a bill for $40 million in compensation for lost profits and an additional $25 million in punitive damages.
Ware's order also included a warrant issued for Cohen's arrest with the stipulation that it would remain in effect until he surrenders all of his property to the court.
Cohen, who has previously served time in federal prison for bankruptcy fraud and impersonating an attorney, lives in Tijuana, Mexico. According to plaintiff Gary Kremen's attorneys, Cohen has stashed his assets, estimated to be in the millions, in offshore accounts.
In recent months, a tale of a smart entrepreneur, who scored a major domain name in the early days of the Internet, has unfolded across Internet publications. The something for everyone adult content site, sex.com, was viewed as a lucrative investment by California-based entrepreneur Gary Kremen, who bought the site name in 1994 -- a time when domain names were still abundant.
Kremen's lawyers accused Cohen of seizing control of the sex.com URL in 1995 by forging a transfer of ownership documentation to Network Solutions Inc., which sells Web site addresses. Then, lawyers said he opened shop in the British Virgin Islands and whipped the site into a hardcore porn site.
Cohen claimed he legally purchased the sex.com domain for $1,000 through Online Classifieds, which held the site registration.
But Ware's ruling said it was clear that Cohen had "devised and executed a fraudulent plan to steal the domain name sex.com from Gary Kremen."
Neither of the parties could not be reached for comment by press time.
Appearing in court, Kremen, who also launched singles Web site Match.com, said he intends to cut the amount of hard core pornography available on his site.