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FTC Busts Domain Name Scammers

Posted by Soulskill on from the wrists-have-been-slapped dept.

coondoggie writes "The Federal Trade Commission said today it had permanently killed the operations of a group that it said posed as domain name registrars and convinced thousands of US consumers, small businesses and non-profit organizations to pay bogus bills by leading them to believe they would lose their Web site addresses if they didn't. As with so many of these cases however, the defendants get off paying back very little compared to what they took. With today's settlement order, entered against defendants Isaac Benlolo, Kirk Mulveney, Pearl Keslassy, and 1646153 Ontario Inc., includes a suspended judgment of $4,261,876, the total amount of consumer injury caused by the illegal activities. Based on what the FTC called the inability of the settling defendants to pay, they will turn over $10,000 to satisfy the judgment."

13 of 125 comments (clear)

  1. What happened to debtor's prison? by ZipK · · Score: 3, Insightful

    If they can't pay the full judgment, why not have them work off the bill in debtor's prison?

    1. Re:What happened to debtor's prison? by DarkKnightRadick · · Score: 3, Informative

      In the latter one, the taxpayers fund your stay. In the former, you have to fund your stay WHILE paying back what you owe. They were outlawed because people would never be able to get out of debtor's prison.

      --
      "There is a way that seems right to a man, but its end is the way of death." Proverbs 16:25 (NKJV)
    2. Re:What happened to debtor's prison? by jonadab · · Score: 3, Informative

      Debtor's prison does not exist in the US, for historical reasons. (Basically, at the time our constitution was written debtor's prison was being, or had recently been, significantly abused in Europe as a political tool to squelch opposition. Our founding fathers did Not Want That Happening Here, so they proscribed debtor's prison entirely.)

      The provision that prevents our congressmen from being stopped and prosecuted if they are on their way to a session of congress exists for similar reasons. Also the third amendment in the Bill of Rights.

      However, we *can* throw somebody in prison for a crime, and I'm pretty sure fraud on this kind of scope qualifies. Unfortunately, our courts are generally pretty soft on white-collar crime. But that's not a constitutional issue, just a practical and social and judicial one. Come to that, our entire judicial system is pretty severely broken at this point.

      --
      Cut that out, or I will ship you to Norilsk in a box.
  2. DROA by vlm · · Score: 5, Informative

    That would be DROA

    http://en.wikipedia.org/wiki/Domain_Registry_of_America

    I got their invoices all the time. Good for a laugh at least. I'm sure they scammed thousands.

    --
    "Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
  3. Not debtor's prison by NEDHead · · Score: 4, Interesting

    They should be pounding rocks with a sledge hammer for 20 years instead. If the penalties for screwing with people's lives through these kinds of scams, identity theft, and all the botnet thievery were serious and enforced, maybe there would be less of it. In a time when our lives are increasingly open - and privacy a joke - then righteous behavior becomes a (inter) national necessity. Otherwise we have anarchy.

  4. Another pointless FTC slap on the wrist by sirwired · · Score: 4, Insightful

    Honestly, I don't know why the FTC even bothers. If these clowns aren't criminally prosecuted, what exactly is the point? $10k, and an order to Go Forth and Sin No More is just a waste of time.

    And the "Go Forth" orders are routinely ignored... I think Kevin Trudeau has been slapped by the FTC for infomercial scams no less than three times, and he still doesn't give a $hit.

    SirWired

    1. Re:Another pointless FTC slap on the wrist by Anonymous Coward · · Score: 5, Insightful

      Riddle me this: Why is it that these guys get their judgement whittled to $10,000 for doing an active crime with victims, while some guy who left a directory full of songs on LimeWire gets stuck with a multi-million dollar amount that the only way it can be discharged is an immediate bankruptcy... and most likely a judge would turn that down?

      Yes, IP violations are crimes, but scamming people out of money is a far greater crime than downloading the latest remix of "Oops I Did It Again."

      I wish the FTC would have gone whole hog on these people, wage garnishment, tax return attached, property seized, etc. so the fine is paid.

    2. Re:Another pointless FTC slap on the wrist by Pharmboy · · Score: 4, Insightful

      The obvious lesson here is that if you *MUST* either download a song, or scam thousands of businesses out of hundreds of dollars each, the federal government wants you to NOT download the song. Why else would the punishment/fines be higher?

      --
      Tequila: It's not just for breakfast anymore!
  5. Wrong business by uffe_nordholm · · Score: 3, Insightful

    Let's see if I get this right: the guys make a little over 4M dollars, get fined 10K dollars and can "keep" the rest because they have already spent it? If this is true, I'm in the wrong business!

  6. Re:Blame Canada by greed · · Score: 5, Informative

    Not to detract from the humour.... If you incorporate without a name, you get to be known by the serial number associated with your incorporation.

    There was a similar scam in Canada, with some registrar sending out renewal notices to other registrar's customers. I forwarded one to the RCMP fraud division, and they said it wasn't technically illegal so they wouldn't do anything.

  7. Re:Headline by drewhk · · Score: 3, Funny

    Yeah, like putting them into the automatic mail sorting system.

  8. Re:Blame Canada by Monkeedude1212 · · Score: 4, Interesting

    I forwarded one to the RCMP fraud division, and they said it wasn't technically illegal so they wouldn't do anything.

    You know, that's the RCMP's answer to everything. I have sent them so many tips on how to catch these guys - from the phone numbers they call from, the email servers they use, the post box they send from, and even how I as a regular citizen was capable of tracking all that info to at least a common city - if not an address that they could raid.

    However, there is nothing I can do, and the police all claim that this kind of cyber crime isn't in their jurisdiction, so no one does a damn thing about it. I had someone sending me emails saying that they were going to sell me medical records for a low cheap rate - which already sounded sketchy enough as is but I decided to follow it through on the premise that if this was someone illegally selling that kind of stuff I could aid in his capture.

    However, the RCMP basically told me that until they actually sell it - it wasn't enough for them to go on, and that following through would make me a criminal for purchasing it, and that they weren't capable of following the lead. That was the day I lost my faith in the legal system.

  9. My boss got suckered. by AsmordeanX · · Score: 3, Interesting

    Our domain was up for renewal in September. In July we get a letter from Domain Registry of Canada (Domain Registry of America is their US version). Looking like a normal and official bill, the boss paid it by VISA despite it being nearly 10x what a domain registrar should be charging. The next day I'm going through the paperwork and find the DROC invoice. I'm baffled because they are not our domain registrar. First thing I do is call our real company and confirm that the domain is still locked. I also renewed at the time just to make sure. I then called DROC and after a few minutes on hold I was assured that the charge was cancelled. I contacted VISA the next day and was informed that the charge had been cancelled. They seemed to be pretty routine and mechanical about cancelling people though I imagine a few people never realized they had been suckered.