In the first-ever U.S. arrest of a domain-name thief, New Jersey state police have arrested a man suspected of stealing the domain name P2P.com. In an unusual celebrity twist, Donald Gonclave then sold the domain name to L.A. Clippers forward Mark Madsen on eBay for $110,000, The L.A. Times reports.
As it turns out, the basketball player is an active domain-name speculator. This is fairly well sleuthed out on NBA Fanhouse:
Madsen's activity on DNForum, as well as the big-dollar purchase of P2P.com, indicates the player was in deep in this industry. In July 2006, he sold InternetDating.com for an undisclosed amount. That same month he attempted to sell FreeCreditChecks.com and carbohydrates.com. He owned a Zach Randolph special, CaliforniaDUILawyers.com, at some point. A year ago, he offloaded dozens of Canadian domain names -- including lovelies like chocolatecandy.ca, accordians.ca, schooners.ca and the epic menstrualperiods.ca -- for $21,000. On eBay, he sold two domains in June for a total of $7,000.
As to the actual theft, we turn to Domain Name News for deep perspective on the theft and the implications (there is a civil suit against GoDaddy.com, among others.)
The name was first purchased by domain name investor Marc Ostrofsky and attorney Albert Angel and his wife Leslie Angel. They paid $160,000 to a company called Port to Print Inc. Goncalves stole the name by hacking into the Angels' AOL account, getting the GoDaddy login information and pushing the registration from the Angels' GoDaddy account to one he controlled. He then listed the name on eBay and sold it to Madsen.
According to the Angels, GoDaddy blocked their attempts to investigate the transfer, blithely telling them they should have better protected their account information. (That won't sound too good in court.) In fact, the Angels, said, GoDaddy was well aware that Goncalves was implicated in two other domain name thefts just a month prior.
The victims originally brought their case to New Jersey prosecutors in 2007 but the case was dropped through lack of evidence. It was their civil case that churned up enough evidence (via GoDaddy subpoenas and the Freedom of Information Act) to allow prosecutors to move forward.
Albert Angel heralds this as a turning point for domain name owners:
Besides wanting our domain back, we want to carve a path for others. Let’s face it the legal system has not caught up with the growth of the internet. We hope the outcome of this case paves the way and makes it easier for victims of this type of crime. These guys are thieves! Why are they not being arrested? Why are they continuing to get away with this?
But DNN points out, it's a rare name owner with the financial wherewithal to chase down thieves. And without that dogged investigation, this would never have come to criminal prosecution. Therefore, Angel says, we need federal protection for domain names.
If your car is stolen and you demand its return from a subsequent purchaser for value, you recover your car in 50 states, on well-settled common law principles. Try to recover a stolen domain name, and you have a decent chance perhaps in one state (CA) but you have bought yourself an expensive, and legally uncertain lawsuit in most other states. Short of such laws being created on a Federal basis or by each State, any business owner could lose their domain name and website and never legally be able to retrieve it. Federal laws are needed to protect every company and individual domain name owner.