Judge orders seizure of porn website assets

An American judge has ordered the seizure of the assets of www.sex.com in the latest twist in the bizarre dispute over what is considered to be one of the world's most valuable websites.

Over the last six years sex.com, true to its name, has become a highly lucrative hard-core pornography site.

According to the Miami-based Offshore Alert newsletter, a federal judge has now appointed a receiver to take control of any past earnings from the website. Offshore Alert editor David Marchant says: "This is a strange tale of sex, sleaze and money involving money siphoned off into offshore companies and banks."

The receiver is hunting the assets of American sex.com operator Stephen Cohen, who ran the porn empire from the British Virgin Islands, and is believed to hold accounts in the VP Bank (BVI) and two other banks in the British dependency.

From 1995 Mr Cohen, who had been recently released from federal prison after serving a 46-month sentence for bankruptcy fraud, built up the porn business on the sex.com site.

The company has claimed that it receives more than 100 million hits daily and that nine million registered users pay $25 a month, generating $2.7bn annually.

These figures have been challenged, but there is little doubt it is a highly lucrative site and its name will not diminish in value. The receiver is looking for at least $25m worth of assets earned from advertising.

Mr Cohen's right to the name is being challenged by net entrepreneur Gary Kremen, who says Network Solutions granted him use of the sex.com domain name in 1994.

Such names typically are valid for two years and are renewable every two years, at the discretion of the party using the name.

Mr Kremen claims that in 1995 Mr Cohen forged documents to create the appearance that he had agreed to the transfer of the domain name to Mr Cohen. The letter stated that Mr Kremen had been dismissed from his position at the company and that he no longer had rights to sex.com.

Mr Kremen once made $50m by selling the business at www.match.com. His case has had its ups and downs. At one point a judge ruled that it is impossible to steal a domain name, as it is not property.

But the current Federal Judge is likely to rule in Mr Kremen's favour as he has already ordered the return of the name to the entrepreneur, which he now owns again.

Mr Kremen's case against Network Solutions, which refused to hand over the domain name without a court order, was thrown out of court but is being appealed by Kremen.

Mr Kremen is confident of success against Cohen. "We'll be asking for some big damages," he has said.