news 90-day jail sentence for domain investing scheme

[News]

An Ohio man has been sentenced to 90 days in jail for his role in a domain name investment scheme, reports the Cincinnati Enquirer.

The Cincinnati Enquirer reported that Aaron Pitman pleaded guilty in October to securities fraud, misrepresentation in the sale of securities, and money laundering.

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[sharfab]

Its interesting to see the State of Ohio view domain names and websites as "securities" and was able to prosecute under that term instead of just "money laundering" and "fraud"...

 

[Embrand]

Just adding a few details from the case:

1. White invested $125,000 in AutoinsuranceNow, LLC. As set forth in the operating agreement of AutoinsuranceNow, LLC, White's company, Cool Country Corporation, owned 40 percent of the entity, while API Domain Capital, LLC, which was solely owned by Pitman, owned 60 percent of the entity.

2. White invested $50,000 in Personalinjury.org, LLC. As set forth in the operating agreement of Personalinjury.org, LLC, White's company Tupper Plains Investments, LLC, owned 40 percent of the entity, and API Domain Capital, LLC, owned 60 percent.

3. White invested $200,000 in Digital Asset Brokerage Group, LLC. As set forth in the parties' joint venture agreement, White was to personally own 10 percent of this entity, and HP Insurance Group, LLC, was to own 90 percent.

4. White invested $750,000 in Dependent.com, LLC. The parties formed Cool Country Group, LLC, to hold this domain name. White's company Cool Country Corporation owned 50 percent of Cool Country Group, LLC, and RA Domain Capital, LLC, owned the other 50 percent.

White v. Pitman, APPEAL NO. C-190441, 4 (Ohio Ct. App. 2020)

 

[Samer]

Just adding a few details from the case:

1. White invested $125,000 in AutoinsuranceNow, LLC. As set forth in the operating agreement of AutoinsuranceNow, LLC, White's company, Cool Country Corporation, owned 40 percent of the entity, while API Domain Capital, LLC, which was solely owned by Pitman, owned 60 percent of the entity.

2. White invested $50,000 in Personalinjury.org, LLC. As set forth in the operating agreement of Personalinjury.org, LLC, White's company Tupper Plains Investments, LLC, owned 40 percent of the entity, and API Domain Capital, LLC, owned 60 percent.

3. White invested $200,000 in Digital Asset Brokerage Group, LLC. As set forth in the parties' joint venture agreement, White was to personally own 10 percent of this entity, and HP Insurance Group, LLC, was to own 90 percent.

4. White invested $750,000 in Dependent.com, LLC. The parties formed Cool Country Group, LLC, to hold this domain name. White's company Cool Country Corporation owned 50 percent of Cool Country Group, LLC, and RA Domain Capital, LLC, owned the other 50 percent.

White v. Pitman, APPEAL NO. C-190441, 4 (Ohio Ct. App. 2020)

what happens now?

 

[Technical Support]

Oh, that's big investment

 

[TauseefKhan]

Interesting read

 

[The Durfer]

Its interesting to see the State of Ohio view domain names and websites as "securities" and was able to prosecute under that term instead of just "money laundering" and "fraud"...

yea! domain names are securities. whoohoo.

 

[Bob Hawkes]

Even reading the appeal document linked, still not absolutely clear to me what the proposed development was to be. The prices paid seem unreasonably high.

The appeal document has this information that is relevant.

"According to the complaint, Pitman proposed that White invest in various entities, and that Pitman utilize his experience to acquire, develop, market, and ultimately sell the purchased domain names for a profit. White relied on Pitman to identify the domains to purchase, with the belief that the domain names would be purchased from disinterested third parties and that any subsequent sales of the domain names would be arms-length transactions."​

When I first saw title, I thought court had ruled against domain fractional ownership, ruling that they must be treated as securities, and all security regulations followed. I think that question has come up previously. But it seems the key issue here is that it was not revealed that the transactions were not arms length, and undisclosed interests were present.

Thanks for drawing our attention to the case.

Bob

 

[creataweb]

I thought this was connected until reading the article linked

https://www.namepros.com/threads/reviews-of-baseballworlds-investing-and-development-group.1003582

 

[garptrader]

Money laundering with domain names....

 

[lock]

We need a holding cell here. Always someone trying to qualify.