Thread: Sex.com thief arrested on immigration violation in Mexico

http://www.theregister.co.uk/2005/10/28 ... _arrested/

Sex.com thief arrested
By Kieren McCarthy (kieren at kmccarthy.eclipse.co.uk)
Published Friday 28th October 2005 10:30 GMT
The con-man who stole the most valuable domain name in the world, Sex.com, has been arrested by Mexican police and handed over to US agents after nearly six years on the run.

Stephen Michael Cohen was arrested on an immigration violation by Mexican authorities and turned over to the US border patrol yesterday, the LA Times has reported. Cohen is being held without bail at the Metropolitan Correctional Center in San Diego, according to deputy marshal Tania Tyler of the US immigration service.

Cohen is wanted in the US for failure to pay $65m in a court judgement reached in April 2001. The judgement was the result of a five-year court battle by the original owner of the domain, Gary Kremen, which nearly bankrupted the entrepreneur and founder of the net's biggest dating site, Match.com.

Kremen was awarded the sum in compensation after Cohen stole Sex.com in October 1995 through an elaborate scam. Cohen then ran the site at an estimated $100m profit until the domain was finally handed back to Kremen by the court in November 2000.

As soon as he lost the case however, Cohen fled across the US border to Tijuana and refused to return. He then began to illegally siphon his money from US bank accounts to offshore tax havens through a series of ingenious shell companies. In May 2001, Cohen was officially made a fugitive from justice by the US authorities.

It was in Tijuana, sat right on the US border and where Cohen was reportedly living in a mansion, that he was arrested by the Mexican authorities. Tijuana has been used by Cohen and his associates as a base for his diverse business activities for a decade, but he fled it soon after Gary Kremen posted an award for Cohen's detention that attracted the attention of US bounty hunters, back in June 2001.

Cohen claims a shoot-out at his house between bounty hunters and Mexican police had put his life in danger. Kremen claims the event never happened, but Cohen nonetheless bought himself a house in Monte Carlo and has been living there on and off for the past five years.

Kremen has never recouped any money from Cohen but did manage to seize control of two of his houses - a shack perched on the US side of the Mexican border, and a mansion in the exclusive Santa Fe resort in San Diego.

A second court case brought by Kremen against the-then administrator of all dotcoms, Network Solutions, resulted in out-of-court settlement in April 2004 thought to be worth up to $20m.

It is unclear whether that judgement will allow Kremen to chase Cohen for the remainder of the $65m (now increased to $82m with interest). Kremen told the LA Times he hopes to get more of Cohen's assets. "I'm excited, and I'm happy to prepare for the next stage of justice. Hopefully, I'll get to them before the IRS," he said, referring to the US tax office.

During the long court case with Cohen, it was revealed that Cohen had paid almost no tax on his multi-million-dollar annual earnings over 20 years.®

www.signonsandiego.com

Internet sex peddler held on contempt charge

Man accused of hijacking Web site
By Onell R. Soto
UNION-TRIBUNE STAFF WRITER
October 28, 2005

You can't escape to Mexico with your millions.

Or so it seems for Stephen Michael Cohen, a former Rancho Santa Fe resident accused of stealing a pornographic Web site and illegally making millions of dollars from it.

Cohen, 57, was living in Tijuana. He was arrested yesterday by Mexican authorities while applying for a work permit. They turned him over to U.S. officials, who had an arrest warrant signed by a San Jose judge.

He is being held without bail and is scheduled to appear in federal court in San Diego today, said Tania Tyler, a spokeswoman for the U.S. Marshals Service, which tracks down fugitives.

"It's good that justice is served," said Gary Kremen, who battled Cohen for years over the sex.com Web site. "It actually says something about border cooperation."

After spending six years and $4.5 million in legal fees, Kremen persuaded a San Jose federal judge to award him a $65 million judgment against Cohen, who, the court found, had hijacked the domain name.

The Web site is primarily a bulletin board with ads for other Web sites offering sexual content, and at times has generated up to $1 million a month, Cohen said.

After the judgment was issued, Cohen failed to appear in court and, in 2001, a federal judge issued an arrest warrant charging him with contempt of court.

The warrant orders Cohen to remain imprisoned until he returns $25 million, which the judge said was illegally transferred out of the country.

Since then, according to court records, Cohen has been living in Tijuana.

Through the courts, Kremen had obtained several of Cohen's assets in the United States, including a Rancho Santa Fe mansion.

He says that, with interest, Cohen now owes him $82 million.

In addition to owning sex.com, Kremen was the founder of match.com, a dating Web site he has since sold.

Cohen's 21-year-old daughter, Jhuliana, was arrested in June after trying to smuggle marijuana into the United States through the San Ysidro border crossing. She is scheduled to be sentenced Monday.

Kremen has sued her as well, accusing her of allowing her father to put various business interests in her name, including ownership of a large Tijuana strip club.

This isn't Cohen's first time in custody.

In 1993, he was sentenced to 46 months in federal prison after he was convicted of bankruptcy fraud in San Diego federal court.



www.signonsandiego.com


Web site figure ordered to N. Calif.


$65 million judgment awaiting jailed man
By Onell R. Soto
UNION-TRIBUNE STAFF WRITER
October 29, 2005

A former Rancho Santa Fe man jailed on contempt charges involving the theft of a pornographic Web site was ordered transferred to Northern California yesterday, where a $65 million judgment against him awaits.

Stephen Michael Cohen, 57, was arrested Thursday in Tijuana and appeared in San Diego federal court yesterday, where he admitted he was the man named in a 2001 arrest warrant signed by a San Jose federal judge.

"I don't have a lot of financial wherewithal," Cohen said, noting the large judgment against him and asking for a court-appointed lawyer.

A defense lawyer made the same argument earlier in the brief hearing.

"I think you'll find some disagreement on that from some quarters," Judge Leo S. Papas had said in response.

Cohen used a forged letter to gain control of sex.com, which he used to create a pornography Web site that took in more than $40 million, the San Jose judge found.

The judge found Cohen in civil contempt after he failed to appear in court, moved money overseas and moved to Mexico.

Gary Kremen, the rightful owner of sex.com, spent $4.5 million in legal fees searching for Cohen and his assets after winning the $65 million judgment.

He was able to seize Cohen's Rancho Santa Fe home and money in some bank accounts, but says Cohen still owes him, with interest, about $82 million.

Cohen remained elusive, if not silent.

Kremen said in an interview this year that he frequently got calls from Cohen from Mexico.

In Tijuana, Cohen lived in a penthouse apartment in the upscale Chapultepec neighborhood near the city's center, but often ate hot dogs at the Tijuana Costco.

"He was very cheap," said Alejandro Osuna, a Tijuana lawyer hired by Kremen to track down Cohen.

In court papers, Kremen says Cohen used some of the money he made from the online pornography business to buy a Tijuana strip club in his daughter Jhuliana's name.

Jhuliana Cohen, 21, is scheduled to be sentenced Monday in San Diego federal court after pleading guilty in August to trying to smuggle marijuana across the San Ysidro border crossing June 22.

Her lawyers say she made a youthful mistake by agreeing to transport the drugs for a man she met in a bar and will pay for it by never being able to visit the United States again.

A longtime resident of both sides of the border, she has long been in the sights of investigators looking for her father. Three years ago, a deputy U.S. marshal hoping to arrest Stephen Cohen attended her graduation from Torrey Pines High School.

Cohen divorced Jhuliana's mother years ago and married a Mexican woman.

But it was his divorce last year from that woman, Rosa Cohen, that was his undoing, said Tim Dillon, another of Kremen's lawyers.

Once the marriage ended, Cohen lost his right to remain in Mexico as her husband, and he had to renew a residency work permit.

He could have paid $100 to have a lawyer go down to the immigration office Thursday, but instead appeared personally, Osuna said.

Mexican and U.S. agents, tipped off by Kremen's lawyers and investigators, were waiting for him.

After the Mexican officials arrested Cohen, he was whisked off to the San Ysidro border crossing, where he was turned over to U.S. authorities.

In court yesterday, a disheveled Cohen, dressed in a white jail-issue jumpsuit, said he was hoping to quickly resolve his situation.

After the judge denied him bail, he asked the judge for a few days in San Diego's federal jail before being sent to San Jose.

"I have an attorney that's trying to negotiate a settlement in this case," he said.

The judge wouldn't grant him the extra time, but said it's possible the marshals wouldn't move very quickly to get him north.

No civil lawyer appeared in court on Cohen's behalf, and a private investigator who said he was working for Cohen's family said he didn't know the name of anybody who could speak on his behalf.