Legal News

There’s an article in today’s Salt Lake Tribune about an indictment against a person who allegedly created companies that allegedly tricked businesses and individuals into paying around $1.8 million for “phony renewal services” for domain names.

The Acting US Attorney in Utah sent out a press release announcing the news that a 24 count mail fraud and money laundering indictment was issued for Ronald Robert Scott of Draper, Utah. The mail fraud charges carry potential penalties of up to 20 years in jail each, and the money laundering charges potentially carry penalties of up to 10 years in jail for each charge. The indictment also seeks a return of $1,864.484.51.

According to the Salt Lake Tribune article,

The indictment alleges that Scott created two fictitious entities, DomainNameUSA.net and Netsolutions.net, and obtained mailing lists of entities throughout the nation and their domain names.

He then allegedly created invoices telling the registrants that their domain name was about to expire and asking for renewal fees ranging from $25 to $199 for periods of one to five years.

I have received plenty of official-looking letters in the mail regarding domain name renewals, but since I know my domain registrars very well, I have always thrown these letters in the trash.

From what I’ve seen in Google (searching for domain name renewal scam, there are a number of companies that send similar letters in the mail. Andrew has an article about one, PC World discusses an email-based domain renewal scam, and even CatholicWeb.com has information about something that sounds similar.

Keep in mind, as the press release further notes, “an indictment is not a finding of guilt. Defendants charged in indictments are presumed innocent unless or until proven guilty in court.“

I read an interesting Ohio Supreme Court ruling, and I think it would behoove anyone who posts comments on Internet forums and blogs to read. In the case of Kauffman Racing Equip., L.L.C., v. Roberts, the state Supreme Court ruled that a Virginia resident, Scott Roberts, will need to respond to a court case brought against him in Ohio by Kauffman Racing Equipment (KRE), an Ohio company that does business throughout the United States.

KRE claimed that “Roberts posted numerous rancorous criticisms of KRE on various websites devoted to automobile racing equipment and related subjects.” From my review of the comments, they are similar in affect to those I see posted on domain forums and blogs about some of the domain companies with whom many of us do business. Here are a couple that were listed in the Court’s slip opinion referenced above:

• “Now, I have and have had since the day the block was delivered, a USELESS BLOCK.   I didn’t say worthless!   I plan to get a lot of mileage out of   it[.]   And when I’m [sic] done Steve Kauffman will be able to attest to its worth.”
• “You don’t seem to understand.   As far as Steve kauffinan [sic] is concerned the issue is resolved. * * * Again, this is not to get a resolution.   I have a much bigger and dastardly plan than that and this is the perfect place to start. * * * (LOL) * * *   Here is another good board to visit! * * * Just trying to help other potential victims.”   (Emoticons omitted.)

The crux of the case is that Scott Roberts felt the Ohio court didn’t have jurisdiction since he is not a resident of the state of Ohio. After KRE filed its case in an Ohio court in 2006, the court ruled that it didn’t have jurisdiction, and the company appealed to the Fifth District Court of Appeals, which reversed the trial court’s decision.

In it’s slip opinion issued a week ago, the Ohio Supreme Court ruled that because Roberts’ comments would cause harm to the Ohio company in the state Ohio, the case could be brought against Roberts in Ohio. I have no legal background so I won’t get into a discussion about why the court made its findings, but I do think it’s important for people in this business to take note.

If you post something defamatory or negative about a company in another state, you may not be immune from a court case in that other state, which can obviously be expensive and burdensome. People often post things rapidly out of frustration or anger, and as the saying goes, you can’t unring a bell. There’s an interesting article about the case on RCPF.org.