Arrest in New Jersey for Domain Name Theft
Trenton, NJ – Members of the New Jersey State Police Cyber Crimes Unit arrested a Union County man on July 30th for stealing a domain name, the first known arrest for this crime in New Jersey. Detectives charged Daniel Goncalves, 25, of Union Township, with theft by unlawful taking or disposition, theft of identity, and computer theft, all crimes of the second degree. Troopers also executed a search warrant at his residence.
The arrest and search warrant were the culmination of a State Police investigation into the theft of P2P.com, an Internet domain name. A large volume of business and computer records relevant to the domain name theft were seized. Goncalves was processed and released on $60,000 cash bail pending court.
The domain naming system is a moderately regulated system of “registrars” who have received authority through ICANN, (Internet Corporation for Assigned Names and Numbers), to register domain names for individuals and companies. Domain names are the readable addresses used by individuals and corporations to identify their presence on the Internet. For a set registration fee, the domain names are purchased for periods of time (up to 10 years) by their registrants. There is a large community of individuals who frequently refer to themselves as “domainers” who buy and sell domain names they speculate will become more valuable over time. Two and three letter domain names are particularly valuable as they are easy to remember and generate larger amounts of traffic, which produces revenue.
P2P, LLC is such a company formed expressly for the purchase and management of one domain name, P2P.com. Because of its short length and topical relation to the exploding Peer to Peer file sharing phenomenon, P2P was particularly valuable, with an estimated value of between $160,000 and $200,000 at the time of its theft.
The New Jersey State Police Cyber Crimes Unit initiated an investigation in October 2008 into the theft of the highly valuable domain name, P2P.com. The case began when representatives of P2P, LLC contacted DSG John Gorman, the case agent, and asserted that their extremely valuable domain name had been stolen from their GoDaddy account in May of 2006. P2P, LLC, which was located in Florida, had been investigating the matter privately since May of 2007, when an individual in the “domaining” community observed irregularities in the p2p.com site content and made contact with the company to advise them. A check of the P2P, LLC corporate GoDaddy domain account revealed that the domain name had been transferred without their knowledge or consent almost a year earlier. After privately investigating the matter and consulting with several law enforcement agencies, they concluded that the suspect was located in New Jersey. P2P, LLC contacted DSG Gorman of the NJSP, who began an in-depth, long-term investigation involving the analysis of thousands of pages of evidence.
Through DSG Gorman’s investigation, it is charged that in May of 2006, Daniel Goncalves illegally accessed the GoDaddy account belonging to P2P, LLC and initiated a transfer of the domain name to his personal GoDaddy account. Records obtained from GoDaddy verified that the same IP address utilized to log into the P2P, LLC account and initiate the transfer was used to log into Goncalves’ own GoDaddy account and receive the transferred domain, completing the theft.
IP addresses are assigned to all Internet users by their service provider and rarely change within a 24-hour period. The investigation found that attempts were made shortly thereafter to transfer the domain away from GoDaddy to a different registrar, but ICANN rules prohibited this transfer for 60 days. Nine days after the 60-day GoDaddy transfer prohibition was concluded, it is charged that Goncalves moved the domain name to a different registrar.
After moving the domain name, the investigation found Goncalves again waited the mandatory 60 days and listed the name for sale on e-Bay in September of 2006, where it was purchased for just over $111,000.
The purchaser, a professional basketball player in the NBA, was unaware that the domain name was stolen.
Civil litigation is currently active regarding the ownership and money associated with P2P.com. At this time, the site has not been returned to the original owners.
“The domain name industry is in some respects still like the wild west. Many of the rules are not yet codified into state laws, let alone federal or international laws,” said Colonel Rick Fuentes, Superintendent of the New Jersey State Police.
“There is no deed for ownership of a domain name. In most cases they are protected solely by a login and password for the site through which they are registered. Nevertheless, theft is theft, and that law that can be applied whenever possession of an own-able thing is improperly transferred for gain.” Fuentes added.
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