Oversee.net & Snapnames File Lawsuit Against Nelson Brady

I just received word from Oversee.net that the company has filed a lawsuit against Nelson Brady in federal court in Oregon. Back in November of 2009, the company alleged that an employee was caught shill bidding on the Snapnames domain auction platform under the “halvarez” bidder id. The lawsuit seeks over $33 million in damages, including punitive damages.

The news release follows:

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SnapNames, and its parent company, Oversee.net, have filed suit against Nelson Brady in federal court in Oregon.

Brady is a former employee who, under the false name “Hank Alvarez,” improperly bid in certain SnapNames auctions.   In some cases, Brady also embezzled funds from Oversee by fraudulently refunding himself a share of the purchase price for names he won.

For several months, the company has in good faith attempted to settle privately with Brady to recover its losses, including the rebate fund established by Oversee to address Brady’s activities and the funds he embezzled from Oversee.   Those settlement efforts have been unsuccessful.

The suit seeks over $33 million in damages, including punitive damages.

Context

• In October 2009, Oversee discovered an employee, Nelson Brady, using an account under the false name “Hank Alvarez,” engaged in improper bidding activities in domain name auctions on the SnapNames platform.
• Oversee and SnapNames disclosed the situation to its customers and employees in November 2009.   Oversee made available to affected customers a cash rebate in the amount of overpayment, plus 5.22% interest (the highest applicable federal rate during the affected time period), of any amounts paid exceeding what the auction price would have been without employee bidding.
• Since that time, more than 60% of the aggregate rebate amount has been claimed.

Impact of Brady’s actions on auctions

Brady’s conduct affected:

• 5% of auctions since 2005
• 75% of total impacted auctions were between 2005 and 2007
• Less than 1% of SnapNames auctions during this period were won by the employee
• The remaining 4% were won by SnapNames clients.
• Brady’s bidding affected approximately 1% of SnapNames’ auction revenue during the full period.

Impact of Brady’s actions on SnapNames and Oversee

Oversee will be demanding millions of dollars from Brady for the damage he caused to Oversee and SnapNames.   No amount of money, however, could compensate the damage Brady has caused to SnapNames’ and Oversee’s reputation in the marketplace.

Law enforcement

In November 2009, Oversee voluntarily disclosed Brady’s conduct to both the US Attorney’s Office and to the Federal Trade Commission.   Oversee will not publicly discuss anything relating to law enforcement matters.

Customer Service

SnapNames customers who have questions about the rebate offer can contact the SnapNames support team:

On the web:                               http://snapnames.custhelp.com
By e-mail:                                         support@snapnames.com
Phone:                                                 +1 (866) 690-6279 (toll-free in the U.S.)
+1 (503) 241-8547 (outside the U.S.)