'Halvarez' at Snapnames auctions uncovered

[prague7]

Ooer - this one's going to run for a while... :O

From DomainNameNews:
SnapNames User Name “Halvarez” Was Nelson Brady, VP of Engineering Bidding on Domain Names [Updated]

[Updated] According to a statement from Oversee.net’s SnapNames, an employee was found to have bid in 5% of their auctions since 2005 and in some cases arranged for a partial refund of the sales price after winning an auction. DNN also confirmed the bidder as Nelson Brady, the VP of Engineering. He was bidding under the username “halvarez”.

From Snapnames:
SnapNames User Name “Halvarez” Was Employee Bidding on Domain Names

To avoid any question about whether the company benefited from this conduct, SnapNames will offer a rebate to impacted customers, including 5.22% interest (the highest applicable federal rate during the affected time period), of the difference between the prices they paid in winning auctions, and the prices they would have paid had the employee not bid in the auctions. Impacted customers will be notified by SnapNames or its representative with instructions for the offer of a rebate.

SnapNames also has taken further action to ensure its policies regarding auctions are followed, and the company remains committed to taking whatever action is necessary to protect the integrity of its auction platform.

SnapNames deeply regrets this situation and is committed to addressing its customers’ needs quickly and fairly.

There's also a FAQ page at Snapnames

 

[larryharlow]

This could be the end of Domaining.

How so?

1. Will you trust anyone(auction companies) from now on?

2. Snapnames say theres more than 50.000 auctions affected: Do your math.


yeah, maybe not.

 

[WORDSWORTH]

It doesn't surprise me that this kind of thing has happened although I can't believe it took so long for them to discover. That's the most shocking part of all IMO. If someone could get away with this for four years, I wonder how many other fraudulent accounts are operating?

 

[Peter]

This could be the end of Snapnames...

Who actually believes it's just one user account affected?

I very much doubt it will be the end of snapnames. Look at registerfly, what they did was blatant theft and fraud but people still use them (maybe not as many).

This should spell the end for drop catching but I very much doubt it will have much affect.

To be honest who is to say that it is only snapnames who have done this? Or are they the only people who have come clean (well sort of)?

 

[bmugford]

Yeah, I have the same questions. There is more to this story that has been told so far.

Brad

As I understand their explanation, 'halvarez' would pay for the domain at the winning bid price if they won the domain name., then SnapNames would rebate a portion of the cost to his account.

What happened to all the domains that halvarez won? Were they being parked? If so, by who?

 

[Peter]

really wonder how this was not caught, or how it was allowed to go on.
What happened to all the domains Halvarez won? Who paid for those?

To be hones the announcement is purposely vague about the matter. They state that the auctions he won he paid a refund into a dummy account. What it does not say is did he keep the domain and refund the extra he bid up or did he drop/ re auction those domains?

What is more confusing is that the email states that 5% of all auctions since 2005 have been affected. They also state that the bulk was between 2005 and 2007. So what is the real figure of how many auctions were affected during this period? Are they purposely trying to make it look like a lower % by telling us how many were affected over a longer period?

Another question is what are they going to do with regards to legal action against this ex employee? Also how do they plan on refunding people with dead accounts. People move on and payment method become out of date. Is this money going to be paid into a fund or will it stay in their bank?

 

[Ms Domainer]

*

Namepros, what are YOU so afraid of?

I posted what I thought was a valid thread regarding a list of domains on which Halvarez had bid, and you removed it without comment.

Bah!

*

 

[Peter]

As I understand their explanation, 'halvarez' would pay for the domain at the winning bid price if they won the domain name., then SnapNames would rebate a portion of the cost to his account.

What happened to all the domains that halvarez won? Were they being parked? If so, by who?

Can you shed light on why WOW! was banned on Namepros. I seem to have forgotten but if I remember correctly he has been banned for some time.

---------- Post added at 11:14 PM ---------- Previous post was at 11:12 PM ----------

This could be the end of Domaining.

this will not be the end of domaining but it will be very damaging. Not only will domainers lose confidence from end users but this will give politicians more excuses to "regulate" the industry like they have been doing for years,

Do you want the corrupt politicians who most of which do not have any understanding or knowledge of the industry setting up the framework for regulating the industry?

 

[deb]

To be hones the announcement is purposely vague about the matter. They state that the auctions he won he paid a refund into a dummy account. What it does not say is did he keep the domain and refund the extra he bid up or did he drop/ re auction those domains?

What is more confusing is that the email states that 5% of all auctions since 2005 have been affected. They also state that the bulk was between 2005 and 2007. So what is the real figure of how many auctions were affected during this period? Are they purposely trying to make it look like a lower % by telling us how many were affected over a longer period?

Another question is what are they going to do with regards to legal action against this ex employee? Also how do they plan on refunding people with dead accounts. People move on and payment method become out of date. Is this money going to be paid into a fund or will it stay in their bank?

They should rename it SNAPMONEY

 

[johname]

As I understand their explanation, 'halvarez' would pay for the domain at the winning bid price if they won the domain name., then SnapNames would rebate a portion of the cost to his account.

What happened to all the domains that halvarez won? Were they being parked? If so, by who?

If any of us "joes" tryed getting a partial refund Snapnames would show us the back door. Aparently Hank was getting alot of partial refunds, huge red flag that was allowed to go on for 4 years.

Cant see how this is just one person

 

[telking]

Like others have said I believe this is the tip of the iceberg.
I'm now wondering if there were other accounts other than Halverez.
How will we ever know if a bidding war is legit?

 

[bmugford]

Yeah, I have a hard time seeing this as a 1 man operation. At best SnapNames was negligent to ignore the red flags for 4 years.

This "Halvarez" has been talked about on forums for years. SnapNames.com has been warned and nothing came of it. This whole story is fishy.

In the end who knows how much money "Halvarez" or any other shill made for them.

Their reputation and credibility will forever be tarnished.

Brad

If any of us "joes" tryed getting a partial refund Snapnames would show us the back door. Aparently Hank was getting alot of partial refunds, huge red flag that was allowed to go on for 4 years.

Cant see how this is just one person

 

[DN BROKER]

i had this issue 2 years ago, when all my bids were outbid by someone that made no sense, i got screwed at the end of the day and paid way to much... the problem was i could not reverse the damage, since i had proxy bid placed, and the problem is, the bidding stopped when my proxy bid hit its maximum, im very much disturbed by this news.

 

[deb]

i had this issue 2 years ago, when all my bids were outbid by someone that made no sense, i got screwed at the end of the day and paid way to much... the problem was i could not reverse the damage, since i had proxy bid placed, and the problem is, the bidding stopped when my proxy bid hit its maximum, im very much disturbed by this news.

Yep that was a common theme...

 

[GF]

*

Namepros, what are YOU so afraid of?

I posted what I thought was a valid thread regarding a list of domains on which Halvarez had bid, and you removed it without comment.

Bah!

*

I deleted the thread because there is already one active. If you have a question about moderator actions, please send it by PM.

Thanks!
Galel

 

[TheBaldOne]

Well a VP at SnapNames has been schill bidding, a point often raised in threads on many domaining forums, no doubt it is time to look at other aspects of domaining where numerous domainers notice strange activity - perhaps top of the list is 'parking'!

 

[DN BROKER]

I'm a DomainSponsor and/or Moniker customer too. Have my accounts there been subject to inappropriate conduct?
No. The activity was limited to SnapNames.

How can I go about getting my rebate?
If you were a bidder in an impacted auction, you will be contacted by Rust Consulting with details regarding the rebate offer.

When did you discover this conduct?
In October 2009.

How long had this been going on?
Since March 2005.

How many people at SnapNames were involved?
The account was managed by one employee, whose employment has been terminated.

What methodology did you use to determine the rebate being offered?
SnapNames retained an experienced, independent accounting forensics firm to calculate the amount on a customer-by-customer basis, the precise amounts due to each. In the communication we'll send through Rust Consulting, we can provide more detail about how figures were calculated.

What financial controls are currently in place at other Oversee companies to prevent future inappropriate activity?
SnapNames experienced a breach of internal policy and the company has taken corrective measures to deal with the situation, including the offer of a rebate. We will continue to review internal systems with the assistance of outside experts to ensure compliance and effective internal controls.

Will SnapNames auctions be impacted?
No. We continue to conduct daily online auctions and will host a live auction at DOMAINfest Global in January 2010. These auctions will continue, though with enhanced supervision and compliance measures.

Who can I contact with questions?
SnapNames support is available to you here:

By e-mail: [email protected]
Phone: +1 (866) 690-6279 (toll-free in the U.S.)
+1 (503) 241-8547 (outside the U.S.)

 

[whitebark]

What took them so long? The guy was probably sitting on his laptop during work hours doing this - and nobody noticed!?

 

[canswift]

I also received the email from Snapnames, and guessed "halvarez" right away. Like most I went to check my Order History to find it deleted from Dec 2007 back. Snapnames can use all the corporate-care speak they want, but deleting what seems like everyone's history during the self-confessed most affected period, is really rank...

 

[cmason]

What took them so long? The guy was probably sitting on his laptop during work hours doing this - and nobody noticed!?

The part that I am most suspect about is the continual use of partial refunds. Oversee and SnapNames would most definitely be aware of the community view of Halvarez's actions, yet internal audits did not show any issue?

When all of this started I was proud that Oversee and SnapNames took the high road in officially exposing this today, but once I heard about the "partial refunds", my view has completely changed. There is no way this should have gotten through ANY internal auditing/monitoring.

 

[deb]

Give it a week or so and there will be a class action announced imo

US$10-40m+ involved.

 

[DN BROKER]

started a thread....

 

[kev]

Message from Namejet

Dear Valued NameJet Customer,

As you may have already heard, another company in our same line of business, SnapNames, was the victim of an internal security breach. We wanted to address any concerns you may have and assure you that at NameJet we have the necessary security protocols in place to prevent this kind of incident.

What Happened at SnapNames:

According to SnapNames, an employee set up an account on SnapNames under a false name. Under this account, the employee bid in SnapNames auctions. In many instances the bidding by this employee caused the ultimate auction winner to pay more for a name than had the employee not participated in the auction. In addition, on certain occasions, when the employee won an auction, the employee secretly arranged for a refund from SnapNames. This was in violation of SnapNames internal policy, and once discovered the company immediately closed the account in question and the employee was dismissed.

We commend SnapNames for taking quick and decisive action once it discovered its security breach.

NameJet has Strict Security to Prevent Anything Similar:

You should have full confidence nothing similar has occurred on NameJet. We have security procedures and policies in place that monitor all activities to ensure that “shill” bidding does not occur. Further, employees are strictly barred from bidding on auctions and NameJet has both internal and external monitoring to ensure all security procedures are enforced. These procedures were developed and are maintained by two of the world’s largest and most trusted registrars.

Thank you for your business and for your ongoing trust in NameJet.

If you have any questions regarding this issue, please contact us at [email protected].

Sincerely,

Steve Brown
General Manager
NameJet.com

 

[DomainTalker]

Snapnames have tried to make a pre-emptive strike for integrity now (by going public in sending us emails) probably because the story was about to break......Once an internal 'shill' bidder has been unmasked - and fired - there's no way a lid can be kept on it.

I wonder how long they have known about this, internally...??!!


But, I give marks to Snapnames for meeting the situation head on.


But, it'll be very tough going for them, imo.

.

 

[JohnPK]

I don't know if this was asked or even answered before, but...

Why? Why did he do this?
If he was just an employee – what profit would he gain through shill bids?

Ok, if he won an auction he got partly refunded – but if he just wanted certain domains there should have been other "technical" means to get them completely without an auction/competing bidders.

To me it seems the only party that massively profited from this behaviour was Snapnames, and therefore management must have endorsed and/or initiated these activities.

 

[cmason]

I don't know if this was asked or even answered before, but...

Why? Why did he do this?
If he was just an employee – what profit would he gain through shill bids?

Ok, if he won an auction he got partly refunded – but if he just wanted certain domains there should have been other "technical" means to get them completely without an auction/competing bidders.

To me it seems the only party that massively profited from this behaviour was Snapnames, and therefore management must have endorsed and/or initiated these activities.

I recall reading earlier that he was potentially one of the original partners (could be wrong). If so, he probably had substantial interest in the event of sale.