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GoDaddy Targeted in Domain-Theft Lawsuit

Discussion in 'BlackHat Lounge' started by The Scarlet Pimp, Aug 14, 2009.

  1. The Scarlet Pimp

    The Scarlet Pimp Jr. VIP Jr. VIP Premium Member

    Apr 2, 2008
    Likes Received:
    Chair moistener.

    If a thief steals a car, authorities usually return it to the rightful owner if they find it.

    But if a prime piece of online real estate ? a domain name ? is stolen, it may not be as simple to get back.

    Just ask Marc Ostrofsky.

    The Houston dot-com figure, known for selling the web domain Business.com for $7.5 million, says he and his partners have spent 30 months and $150,000 trying to recover the allegedly stolen name P2P.com.

    Ostrofsky's experience illustrates that a lack of criminal prosecutions in such cases and laws in the area can make getting stolen sites to the rightful owners difficult.

    Ostrofsky, who owns a host of domain names and founded the domain holding company IREIT, and his business partners paid $160,000 in 2005 for the name P2P.com. They hoped to use the site to develop a peer-to-peer sharing site as the file-sharing concept grew in popularity.

    In 2006, someone allegedly stole the name and resold it on eBay to professional basketball player Mark Madsen of the Los Angeles Clippers, who didn't know it was stolen, according to New Jersey police.

    ?I own lots of Internet sites and domains and knew it would be big name when I got it,? Ostrofsky said. ?But there's no law to protect me to get the asset back.?

    Earlier this week, New Jersey police arrested a suspect. Authorities claim Daniel Goncalves, 25, allegedly moved ownership of the domain name to himself after hacking into an online account of one of the owners. He then resold the name for $111,000 to Madsen.

    Madsen released a statement saying he was cooperating with authorities.

    ?I am not able to comment further at this time, except to say that I have great respect for our legal system and am confident that justice will be achieved at the conclusion of the proceedings,? Masden said.

    Getting a stolen domain name back proves difficult because unlike the theft of cars and other property, there's been little prosecution for theft of such Internet real estate.

    Jeff Becker, an intellectual property attorney in Dallas, has recovered names that infringed on trademarks through civil lawsuits and the use of the Anticybersquatting Consumer Protection Act, specifically designed to protect companies from such violations.

    But P2P.com's case is about stolen property, not trademark infringement, he noted.

    Adding to the difficulty is that domain names aren't physical property, but a right to contract, he said, because owners pay for the right to use the name.

    ?Here it's allegedly stolen property,? he said. ?It will be novel issue.?

    New Jersey state police say ownership of the name is frozen until the outcome of the criminal and civil cases related to the site.

    A spokeswoman for the FBI in Houston said cases of domain theft are usually referred to the domain hosting company to determine the rightful owner.

    Ostrofsky and his business partners, Albe and Leslie Angel of Florida, have filed a motion in court seeking permission to file an amended civil lawsuit that includes Go Daddy, the domain company that oversaw the accounts. The lawsuit claims Go Daddy transferred ownership and control of P2P.com without proper authorization and failed to use proper discretion when the theft was brought to its attention.

    ?At this time, Go Daddy is not involved in a lawsuit involving P2P.com. If we are named in such a suit, we will vigorously defend any claims made,? said Christine Jones, general counsel for the Arizona-based company.

    Michael D'Aquanni, who represents Goncalves in the civil case, said the Angels have subpoenaed many parties over the past two years, including Go Daddy.

    ?They never produced any documents that show my client hacked ? and initiated the transfer of P2P,? he said. ?If they have the documents, they should turn them over.?

    States tend to handle the issue differently and federal prosecutors usually have more pressing issues to deal with, said Albe Angel, Ostrofsky's business partner and a former federal prosecutor.

    Angel said he couldn't persuade Florida prosecutors in Miami to pursue a case against Goncalves and that New Jersey police picked it up after letting it go cold for months. Meanwhile, he used his resources as an attorney to gather enough evidence for the civil suit, which is pending.

    ?We're in a veritable blizzard of uncertainty because it is by its very nature an interstate offense, and you're not quite sure which authorities to turn to,? Angel said.

  2. Jcsarokin

    Jcsarokin Power Member

    Mar 2, 2009
    Likes Received:
    Los Angeles / Beverly Hills
    About fucking time. Godaddy is/are a bunch of thieves.
  3. spsfinest

    spsfinest Junior Member

    Jul 25, 2009
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    If I read the story correct the only person who did anything wrong was the hacker who took the domain and sold it.

    Godaddy didn't gain anything from any of this but they could have simplified the whole thing by just providing the billing information from Ostrofsky which there should be something showing they charged him money.
  4. heiny

    heiny Regular Member

    Dec 5, 2008
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    Godaddy only got a shabby procedure of transferring domains. That was their only "mistake". Can't put the blame on them.

    The guy who allegedly hacked the domain and transferred it is literally fucked. 5+ years in pen for 111k USD. I know I wouldn't trade that for a buttraping of the worst kind :/ Good luck to him spending all his money on defense lawyers.

    GoDaddy & IREIT got deep pockets...You think the hacker does? I doubt it. Good luck to him; he needs it.