'Halvarez' at Snapnames auctions uncovered

prague7 · Nov 4, 2009

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

John Slaney · Nov 5, 2009

Disturbing news.

What I can’t comprehend is how he hid his identity for so long, without SnapNames knowing, assuming that is true.

I spend the majority of each year in Asia but keep all my banking/mail etc on my Canadian address. When I purchased my first domains the registrar sent me an email to verify who I was. I had to fax a copy of my passport and drivers liscense. This happened at one other registrar as well as my hosting company. No problem-Just looking out for fraud (since my ip and billing info didn’t match). I also bought some type of plr package from ebay. It was under $5.00. They suspended my account until I could provide a copy of my most recent credit card statement and some other identification. I wasn’t going to call my accountant to fax ebay a bunch of info so I could buy the odd piece of junk on ebay.
Registering at Snapnames, I believe you need to provide credit card info. I assume he must have used a company card issued under a registered company, if not what name did he use? Was any check done to verify the company credit card and if "Hank" was entitled to use it?

Snapnames have been questioned about this guy many times over the years. How thoroughly did they “look into it”. Where was he bidding from (ip)? Did it match his company location? Did they talk to him on the phone? He was obviously very active at SnapNames. I am not sure about the domain business, but in other types of businesses, if you have a high volume customer there is some marketing dollars for golf, dinners, concert tickets/sports tickets etc. Why wasn’t “Hank” ever taken out to dinner or for a round of golf? Why didn’t they talk to him on the phone?

Was his bidding history ever reviewed? It is pretty clear he was using a bot. Is there something in his bidding history that shows this? Many bids at the same time, or at least in a period of time to prove it couldn’t have been done manually.

What is sad about this (besides the members of this board and all other domainers who have been burned by this guy) is the potential spin off effect. I didn’t deal with SN, but I was just about to. I opened an account at Moniker on the weekend and was getting ready to transfer some domain to them, just for the purpose of listing at SN. I won’t now, not yet anyway. How many other people will be hesitant to deal with SN? Will SN be finished? Maybe not, but it will be hurting for a while, either from loss of clients, or legal fees. If it isn't finished, people will probably unfairly lose their jobs as a result- Where is the money going to come from to pay for compensation and legal fees? Moniker and Overee will have some damage as a result, too. How large-who knows yet.

Members of the domain community have suspected this for years. How hard would it have been to verify this guy- before it came to this? Someone dropped the ball on this one, IMO.

RogueWriter · Nov 5, 2009

Man, by the time lawyers get ahold of this, and start asking for punitive damages, snapnames is going to be toast, imo. No way the company walks away from this. Not a lawyer, of course, but wow, I can almost see some lawyer spell checking the word 'egregious' right now, lol.

TT · Nov 5, 2009

This is now twice snapnames has in one way or another tried to deflect internal problems.

Remeber back in 2006 when the supposed "Iranian Hack" happened and all our credit card info and other personal info wasat risk. Now we have a VP involved in this fraudulent business practice. I have read enough I know I have lost many times to Halverez and a few other suspicious accounts, And its ironic that most names won by these ficticious winners are by and large always sent to PPC and "NEVER" developed.

Snapnames and Internal Fraud seem to go hand in hand over and over.

F.B.I Offices in Portland Oregon contact info is
1500 SW 1st Ave, Suite 400
Portland, OR 97201
Phone: (503) 224-4181
Fax: (503) 552-5400
E-mail: [email protected]

Heck The Feds could walk to snapnames offices from their headquaters

homebuyer · Nov 5, 2009

Fishy

I just logged into my snapnames account to see in which auctions I had bid against Halvarez and what a surprise, I can no longer see all of the auctions in which I competed. My account only shows order history dating back to November 2007. I have been bidding there since before 2007, and if I remember correctly, before then it was with cheapsnaps.com and Snapnames.

Snapnames needs to restore the complete records to each member's account. Each winning bidder who competed with the shill bidder needs to have his/her winning bid bill recalculated to the opening $59 or $69 bid, and then be refunded all moneies paid above that. Additionally, snapnames should credit each of the defrauded winner's account in an amount that is three times the winning bid. Furthermore, the bidder who came in second to the shill bidder should receive either the domain name that was missed out on, or additional compensation from snapnames.

This is a sad day for domainers. If anything, this fraud should be the catalyst that legislators need to enact legislation to require online auctioneers to be licensed and regulated.

One more thing. Snapnames needs to immediately publish a list of all of the domain auctions the shill bidder competed in, as well as disclose if the shill bidder was working for them and competing in auctions in their partner sites, like cheapsnaps.com

DomainsHouse · Nov 5, 2009

in the meanwhile halvarez.com and .net are already taken.
the best thing to do is going to the auctions and bid, not letting these people making what yuppies did with other markets during decades.

RogueWriter · Nov 5, 2009

I'd be willing to bet that right now, today, would be a great day to bid at snapnames and get honest results, lol.

gazzip · Nov 5, 2009

Jeffrey said:
Ironically, I was more of suspicious with Namejet than Snapnames, the bids at NJ are usually high than in SN.

Ironically after using snapnames for around 4 years each day I trusted snapnames far more than I ever did GoDaddy or Pool, I was/am still undecided about NameJet.

Bummer, but snapnames should have listened to the earlier warnings, there where quiet alot of them and they should have been at least looked into.

A sad day indeed

.

---------- Post added at 07:23 AM ---------- Previous post was at 07:22 AM ----------

homebuyer said:
I just logged into my snapnames account to see in which auctions I had bid against Halvarez and what a surprise, I can no longer see all of the auctions in which I competed. My account only shows order history dating back to November 2007. I have been bidding there since before 2007, and if I remember correctly, before then it was with cheapsnaps.com and Snapnames.

They have been made aware of our concerns about that and if they have any sense they will restore our records.

.

owntype · Nov 5, 2009

Check this Snapnames whois record

One man team? I don't believe it.

shane mac · Nov 5, 2009

So, the shill bidder carries the can? Are we to believe that he was acting alone? How far up the chain of command was this practice schemed?

alibaba · Nov 5, 2009

Crap

Oversee Rob said:
Recently, SnapNames discovered that an employee had set up an account on the SnapNames system under a false name and, under this name, bid in SnapNames auctions. This is a clear violation of our internal policy and was not approved by the company. We deeply regret that this conduct has impacted our customers.

Extent of impact

This conduct affected a small percentage of SnapNames auctions:

· Bidding affected approximately five percent of total SnapNames auctions since 2005, most of which occurred between 2005 and 2007.

· The incremental revenue from the bidding represented approximately one percent of SnapNames’ auction revenue since 2005.

No matter the level of impact, SnapNames takes this matter extremely seriously. When the matter was discovered, the company immediately closed the account in question and began a thorough investigation. The employee has also been dismissed from the company.

SnapNames further discovered that, on certain recent and limited occasions, when the employee won an auction, the employee secretly arranged to refund from SnapNames to the fictitious account a portion of the winning bid amount.

Remedy to affected customers

Though on some occasions the employee won the auction, in many instances the bidding caused the ultimate auction winner to pay more for a name than had the employee not participated in the auction.

SnapNames neither condones this conduct nor wants to be perceived as benefiting from the conduct. Accordingly, we have decided that regardless of the circumstance, in every auction where the employee’s fictitious account submitted a bid which resulted in a higher price being paid by the winning bidder, SnapNames will offer a rebate, with 5.22% interest (the highest applicable federal rate during the affected time period), to affected customers for the difference between the prices they actually paid and the prices they would have paid, had the employee not bid in the auctions. The rebate will be available in cash or in credit on the SnapNames platform, at your discretion.

SnapNames has moved quickly to address this situation. The company has retained Rust Consulting, an independent third party, who will administer the rebate offer. Within the next week, Rust Consulting will contact affected customers to provide details regarding the offer.

Your business and ongoing relationship are important to us and we can assure you that we have taken all necessary steps to ensure the integrity of the platform and reinforced controls and procedures to avoid any possibility of further breach. These include:

· Enhanced monitoring of bidding activity for suspect behavior

· Additional controls over financial transactions

· Specific domain name registration policies for employees

In the meantime, if you have any questions, you may consult the FAQs here, or contact the SnapNames support team:

By e-mail: [email protected]

Phone: +1 (866) 690-6279 (toll-free in the U.S.)
+1 (503) 241-8547 (outside the U.S.)

SnapNames, and all in the Oversee family of companies, are deeply disappointed with this incident. Since its founding in 2000, SnapNames has been committed to the principles of fairness and trust; the company wants to assure customers—through both words and actions—that it remains committed to those principles.

Thank you again for your business, and for your ongoing trust in SnapNames.

Rob McClinton
Oversee Support

ya ya

aceeca · Nov 5, 2009

Snapnames ...an Overlook.net company

RicoShay · Nov 5, 2009

aceeca said:
Snapnames ...an Overlook.net company

lol

Overlook.halvarez

domainerd1 · Nov 5, 2009

Found this when I typed "Snapnames Scam" into Google. More bad behavior not related to this story, it would appear.

SnapNames.com - Scam Company & Shady Registrar Partners - Protondomains & Media Web Plus

Brujah · Nov 5, 2009

I remembered this from 2007 on Frank's Blog.

4: For those of you that still buy names on "The Drop", what services do you use and have the most success with. (Perhaps include a success story as well?)

***FS*** I like Snapnames because they run an honest block. The prices are higher at Snap because they are honest and because they have done a good job securing high quality invetory (they run all their names across the block and don’t hold back the good ones for themselves). People ask me why I would spend so much money (millions a year) at Snapnames but not buy lower priced names more aggresively on chatboards and privately. The answer is: Snapnames is more than an auction block… they are a clearing house. They provide certainty of title so I know the name isn’t stolen, they facilitate the authcodes and assist in transfering names to my prefered consolidation registrar. If I buy a name privately I might not get the authcode. I didn’t pay 15k to buy your name so I could chase you around the world to unlock the name and provide an authcode. I paid you 15k because I am hoping to develop the name at one point in the future, that assumes I’ll be able to renew it.. Snap hands the name off safe and secure. Lastly, Snapnames provides a "daily show". There is almost always something good crossing the block. I think there is a HUGE opportunity to create a vibrant secondary market based on their model. Maybe they will be the ones to do it.

http://www.sevenmile.com/2007-03/5-answers-to-5-very-common-questions/

kev · Nov 5, 2009

Why are the admin over at DNF deleting all threads related to this subject?

maxeaus · Nov 5, 2009

domainerd1 said:
Found this when I typed "Snapnames Scam" into Google. More bad behavior not related to this story, it would appear.

SnapNames.com - Scam Company & Shady Registrar Partners - Protondomains & Media Web Plus

The more we open the closet the more skeletons that start falling out. 8-X

rupert · Nov 5, 2009

@kev

I think they've just merged them into one.
An important message from Snapnames - Page 26 - DNF - Domain Sales, Domain Forum, Domain Appraisals, Domain Registrars

canswift · Nov 5, 2009

I have just had an email from Snapnames customer support saying that they "anticipate that we will be changing the web interface today or tomorrow, to let customers have access to the entire Order History".

Well, that's a start at least...

larryharlow · Nov 5, 2009

My history was deleted too.

tetrapak · Nov 5, 2009

kev said:
Why are the admin over at DNF deleting all threads related to this subject?

They don't, they just merge them.

maxeaus · Nov 5, 2009

This article i just plucked off the other forum, very concise IMO.

The domain name industry gets its Bernie Madoff | Blog | Econsultancy

labrocca · Nov 5, 2009

http://www.namepros.com/domain-name-discussion/579941-snapnames-auction-question.html

http://www.namepros.com/domain-name-discussion/163933-whats-good-tactics-beating-guy-snapnames.html

http://www.namepros.com/domain-name-discussion/216933-has-halvarez-ever-won-an-auction.html

snapnames name - HALVAREZ! im sure its all legit. it just seems too close for comfort and to see the same happening to others i hope hes not a snapnames plant!!

mole from your list it looks like bonker, dubya and halvarez are some rich folks. I saw their names on most snapnames bid list. I bet they might be some type of snapnames.com bot or employees

as a newcomer i am interested in the deal with halvarez, who i gather is a cybersquatter who attempts to outbid hardworking freelancers like myself as well as high-rollers for whom money's no object. I am posting this so that i can go to the forums to learn more about this crap.

Imho 'Halvarez' looks like a script working at Snapnames.
I've saved a sample auction history: SnapNames: Bid History

What do you think about bids times and increments?

And I agree with this from SpareDomains...

SpareDomains said:
If another name was posted I would say good job. To post "Halvarez" after years of forum debates there is no way that they didn't read those threads as well, I say there is no way they didn't know what was happening, sounds to me like someone decided to unzip their lip so they decided to come clean, the better question is are you hiring now?, I'll take Halvarez3 as my employee bidding account.

And while Snap says it's just 5% of auctions I have to ask is that a percentage of auctions with bids? Because they have many domains that never sell or get bids. So is it 5% of all auctions because that might be 25-40% of auctions with bids on them. I'd like to see the math on this.

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

I agree. I don't think drop catching will get fixed until we have serious regulation with the power to penalize.

I'm now wondering if there were other accounts other than Halverez.

Logically thinking...there probably is. He would be smart enough imho to use multiple aliases to try and cover up his bidding.

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.

And this is why we should be screaming at the feds to investigate this fully. At least a state attorney general.

For those that are being offered a settlement I almost wonder if it's better to take it. What's the chances this could bankrupt the company and force them into closing? If it's possible then those suing will get next to nothing. A place like Snapnames has very little in real assets to sell and it's unlikely any other business will want to buy them. This is playing out really badly for Oversee. I do see them trying their absolute best to damage control. Giving the buyers the ability to view past history was a good move. Is it possible that they didn't know?

I have over 850 Snapnames Auctions with a 98% Win success rate since Nov-2004 Halvarez was in roughly 40% and second highest bidder....

As I mentioned earlier...is their 5% including names that were never bid on? For names with bids the number really might be a whole lot higher.

Does anyone really believe that an employee was acting alone and had a personal interest in 5% of all SnapNames auctions for the past several years?

After reading this thread and the so many various complaints I have to think more were involved and this fraud was well into the millions of dollars.

I sincerely believe that the entire domain auction industry is suspect, and it all started when ICANN started looking the other way by allowing registrars to warehouse domains and passing them on to the auction houses.

It's a dirty filthy business, based on secrecy, criminality, and money laundering.

We are just seeing the tip of a big, nasty iceberg.

I believe this too.

This is a sad day for domainers. If anything, this fraud should be the catalyst that legislators need to enact legislation to require online auctioneers to be licensed and regulated.

I wonder if this is a good opportunity to get Ebay into the game? If I was Meg Whitman I would be looking closely at being the rescuing squad to save the day for domain auctions.

Nelson Brady needs to be put in jail.

On a side note...do you think now is a good time to actually use SnapNames? Many bidders might be fleeing and with shill bidding out of the way some great deals might be found. Oh the insanity of it all.

My own blog comments too: vBum

dag · Nov 5, 2009

labrocca said:
On a side note...do you think now is a good time to actually use SnapNames? Many bidders might be fleeing and with shill bidding out of the way some great deals might be found. Oh the insanity of it all.

:hehe: I have to admit, that thought had occurred to me too...

labrocca · Nov 5, 2009

dag said:
:hehe: I have to admit, that thought had occurred to me too...

Proof we are all just sharks.

Peter · Nov 5, 2009

kev said:
Why are the admin over at DNF deleting all threads related to this subject?

Last I saw they were merging them not deleting them.

'Halvarez' at Snapnames auctions uncovered

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