Judge Awards $65MM in Adult Entertainment Cyber Case

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.

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