October 28, 2005 11:57 AM PDT

Sex.com domain hijacker captured

Sex.com hijacker Stephen M. Cohen was taken into custody Thursday by U.S. enforcement officials, ending four years spent on the lam after a court ordered him to pay $65 million in restitution.

Cohen's arrest adds a new chapter to a bizarre, high-profile case borne out of the dot-com bubble. In late 2000, a U.S. District Court ordered Cohen to return control of the Sex.com domain, which he had been using to operate a pornography site, to its original owner, Gary Kremen. Then in 2001, the court ordered Cohen to pay Kremen a $65 million judgment.

Cohen, a fugitive residing in Tijuana, was detained by Mexican authorities when he tried to renew his work permit to operate another Internet pornography site. Mexican authorities, aware that Cohen faced an outstanding arrest warrant in the U.S., turned him over to the U.S. Marshals Service and U.S. Border Patrol, said Tania Tyler, a deputy marshal and spokesperson for the Marshals Service.

"He was running a similar Internet business in Tijuana and living quite large," said Tyler.

Tyler noted that Cohen was arrested for contempt of court, stemming from his failure to pay restitution. Cohen is scheduled to appear Friday in a U.S. District Court in San Diego, where he will be informed of the reasons for his arrest and given his next court date.

Five years ago, a U.S. District Court ruled that Cohen had hijacked the Sex.com domain from Kremen, who registered the domain in 1994 but then didn't use it.

Cohen had sent a fraudulent letter to Network Solutions, the domain registrar, stating that Kremen was no longer interested in the Sex.com domain and had authorized its transfer to him. Cohen subsequently started an Internet pornography site.

Upon learning that the domain name was transferred without his permission, Kremen, founder of Match.com, not only launched a legal battle against Cohen but also Network Solutions' parent company, VeriSign. The lawsuit against VeriSign carried great significance.

The decision by a federal appeals court found Internet domain names should be treated as real property, which then allowed site hijacking to be considered theft. Last year, Sex.com and VeriSign settled their case. Terms of the settlement were not disclosed, but sources close to the agreement said it was in excess of $15 million.

 

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