Victims of a big fraud - And now what ?

[DomainEmpire.com]

It's the first time in my 19yr experience in the domain business that we get victims of a big fraud and I can't yet believe that, to be honest.

Well, in the first week of September I saw a domain auctioned at Flippa and I made a bid but the reserve didn't get met so the auction ended with the name unsold.

The auctioner approached me privately and proposed to close a deal out**** so we reached an agreement on a fair price and used Sedo.com for the private transaction (we had some credit there so we decided to use it despite the fact we paid a bit higher fee than on Escrow).

The transfer has successfully completed in few days so he proposed a second domain and we reached a fair agreement as well ... Again we used Sedo to close this deal and anything worked fine till Thursday when GoDaddy removed both names from our account by following an US court order.

Oh, we got shocked ! It seems this guy stolen both names from the original registrant and sold them fraudolently.

Well, we've lost an high $xx,xxx in favor of this scammer ... What next ?

Obviously we know nothing about him, we're aware of the identity theft fraud and similar stuff so, it's really worth investing on a legal action/investigation to try getting our money back ?

Obviously no, I'd say ... but I'd like to know your advice.

The only 'real data' is the bank account he has surely used to cash funds from Sedo so I've some questions here: let's suppose a judge should order Sedo rto reveal his bank account details then we should find a second judge belonging to that jurisdiction ready to order the bank to reveal their client details but what next ?

No bank account is anonymous, he might have used a nominee to open that account or who know what other dirty trick.

What's your thought ? It was really hard to suspect a fraud considering he was auctioning one of his domain at Flippa without being apparently in a rush to sell ...

But now I've other concerns regarding our future purchases too: let's say we find a domain listed with a fixed BIN of $200k on a public marketplace and we close a deal then few weeks later a court order force our registrar to move the domain back to his original registrant. How may we avoid similar frauds to happen again ? What should we do to prevent them ? Things are not so easier as in the past when all public details where listed in whois so it was easy querying whois history, calling the person who owned it till few months before (in case of a recent registrant change) and checking nobody stolen his name.

In the past we risked to be victims of a similar fraud but some lucky circumstances made as suspicious so we avoided it at the last second.

In that case, the hacker didn't change whois info (so there was no recent update to the whols record) because he gained control over the registrant email so it was very hard suspecting something was wrong there ...

 

[Silentptnr]

GoDaddy continues to be a platform that harbors stolen domains. This is probably the 4th or 5th case very recently where someone buys a domain, then shortly after purchase, GoDaddy takes the domain.

Why is GoDaddy right there to repossess a domain as soon as it is sold and pushed?

What's going on there? Something is just not right.

Something is going on at GoDaddy. They are repossessing names left and right.

After a similar thing happened to me with GoDaddy, I will never buy another aftermarket domain housed at GoDaddy without calling them in person and verifying that there is no chance of repossession.

Just doesn't make sense that as soon as a domain is pushed, GoDaddy comes in and repossesses it.

They never give proof of anything. Sorry you are another victim of GoDaddy's poor service.

 

[Keith]

That is probably how he established a trust relationship, who would suspect someone of fraud when they are asking or proposing escrow.

I would like to use escrow, but we can use anything you like.

OK so he mentions the trusted and secure and then steers to a more insecure way to pay.

Crooks can be master manipulators.

I believe that the onus falls on the platform who ensures a secure transaction. If Flippa, Sedo, godaddy... decide to take a listing and facilitate the transaction, they are 100% on the hook if it goes south.

That’s my opinion. Selling stolen property is a crime...

 

[MapleDots]

Sorry to hear about this, that is terrible.

It's definitely a strong case for crypto transactions.

Actually, quite the opposite, in a crypto transaction the funds are untraceable, the op is much better off having the funds go directly into the perpetrator bank account (through sedo in this case) because there will be a trail. Even if the bank account was phony the funds would have to be removed and transferred again, there is a trail of sorts to follow. With crypto that would not be an option and in the OP's situation that is probably his only hope of recovering the funds.

 

[Lox]

The auctioner approached me privately and proposed to close a deal out**** so we reached an agreement on a fair price and used Sedo.com for the private transaction (we had some credit there so we decided to use it despite the fact we paid a bit higher fee than on Escrow)....

Me, in short, when buying above $10k:

1. Agreement (recorded conversation)
1a. Pre-contract (identity, rec. transcript, acknowledgment)
1b. Due diligence (usually cost $1k+)
2. Contract (lawyer, i’m using online SignNow service or face to face, lawyer = lawyer)
3. Bank transfer only ( call gaining bank to confirm the account (record conversation) , no online escrow or 3rd party involved).
...
Ask your lawyer how to make it right.
Regards

 

[MapleDots]

In that case, the hacker didn't change whois info (so there was no recent update to the whols record) because he gained control over the registrant email so it was very hard suspecting something was wrong there ...

That was the unfortunate part, even with due diligence ie. sending an email to the registered owner, you would have had trouble avoiding fraud.

The only thing I would have done different is I would have done the deal direct and bypassed Sedo. I would have his bank account information and if possible have matched that to the whois data.

Nonetheless, I fell your loss and I think this topic may be a lesson for all on namepros.

I would post as much info as you have here in topic, maybe somehow some of our sleuths can piece some clues together.

I wish you all the best and sincerely hope you get your hard earned funds back.

Good luck.

 

[Lord Voldo]

Have you asked GoDaddy what were the court order details ? From whom the domain was stolen ,how and when ?
Because even if its a well planned duping , inquiry must be done as to how so many accounts (email, dynadot,sedo) were hacked.
What surprises me is that none of them had 2FA enabled.

 

[Keith]

Have the domains been mentioned? No need to hide this aspect.

 

[equity78]

This is so unfortunate @DomainEmpire.com. Many people have offered good suggestions for us all to learn from the experience.

I have a couple of questions. This auctioneer who reached out, was someone from Flippa, or do you mean the person who was selling the domain name?

So when a service like Sedo, DAN, Epik, or Escrow handle a transaction, do they have any liability? That is legally is it that they are processing a transaction, or is it like they are reselling the domain essentially. If the latter, I would have thought they are responsible for the loss as they handled a transaction for a stolen good.

What was the date on the court order, or was it provided to you, or did GoDaddy simply say they had one. Are court orders matters of public record? If so, they must provide at least a summary of the sequence of loss of the domain name, which might help trace the fraudster.

I really hope somehow some amount gets recovered. Thanks for sharing the warning through this thread.

Bob

Bob I have been working on a big post on this for awhile, Sedo and GoDaddy's position they are not responsible and they will not reimburse you. @Reza did reimburse someone who got scammed at GoDaddy because they were involved somewhere in the chain.

 

[offthehandle]

Sorry to hear that you were defrauded. Why didn’t you contact Godaddy before completing it? Or did you? If it was under suspicion, you would have thought the court order was in process already if it happened that fast. With all the godaddy emails, it seems they would have known they better fix the 60 day lock on whois changes or disclose such ahead of time. They have access to lots of behind the scenes data and their whois that works, and can track even if under privacy Privacy it seems to be the route of so much fraud, and even to allow fake sales data to be hidden on high value names too being passed around and price discovery games.

You’ve been around a long time, so curious why you didnt login once and awhile here at NP and keep up. You can thank the EU and their brilliance of forcing this GPRP down the throats of the world. Worse yet all Registrars complying with it too.

Let me guess it was a too good to be true bargain price and undervalued?

Seller also didn’t provide KYC information required with a picture ID, simultaneous of him in the camera next to his Govt ID. You could have asked the seller to do a skype call, recorded it with his ID right there on screen, like Escrow too. That procedure has many here object to with Escrow since they don’t want to pay taxes and somehow believe their ID will be stolen. I imagine SEDO to comply with EU privacy does not vet like that, but I don’t know.

Read CQD thread, you are not even safe in background checks, it seems unless you use Escrow Concierge. Due diligence is buyers responsibility, and even the high end seller got duped in CQD. Suggest you use the Escrow concierge service too. I did not want scammers to read this, but there other tricks you can do to vett this better on your own.

https://www.namepros.com/threads/resolved-domainer-loses-26k-on-a-stolen-domain.1068888/

Just imagine even the owner of a registry took bitcoin and got scammed.

https://www.namepros.com/threads/deadbeat-megathread.1155446/#post-7407764

One more thing, you could also require funds be wired, based on your invoice for say a down payment or 50% up front to confirm who you are dealing with and their banking info.

 

[biggie]

I saw a domain auctioned at Flippa

i don't go there, but that's where I would start recovery and id efforts

sorry bout what happened to you and hope you get some positive results.

imo....

 

[wwwweb]

Another suspicious thing happened here: we got both names on 09/05/2019 by transferring them from Dynadot to GoDaddy (the hacker supplied the codes and called the registrar to speed up the transfer).
The court order reached GoDaddy which moved both names to another account on 09/26 ... Multiple things happened too quickly here, it's really the case to investigate a bit more because I'm starting to suspect we might not have bought from the hacker but from another victim ... Just a possibility.

What are the odds of that, like a few hours would have saved this whole headache, the paperwork was probably sitting on a desk waiting to be locked down. When it is to good to be true, it usually is. All mid level 5 figure wholesale deals need long inspection periods if you have no reputation of the seller confirmed.

Sorry, for your loss, in most cases you are chasing a ghost here, the lawyers will just eat you into 5 figures with all this chasing, and doors closing. Everyone got paid except you.

 

[namemarket]

....Strange to believe but the hacker proposed to use Escrow.....

That is incredibly strange the hacker wanted to use escrow.com the one place where it's much more difficult to scam than elsewhere. Makes me think there's more to the story.

 

[MapleDots]

That is incredibly strange the hacker wanted to use escrow.com the one place where it's much more difficult to scam than elsewhere. Makes me think there's more to the story.

That is probably how he established a trust relationship, who would suspect someone of fraud when they are asking or proposing escrow.

I would like to use escrow, but we can use anything you like.

OK so he mentions the trusted and secure and then steers to a more insecure way to pay.

Crooks can be master manipulators.

 

[DomainRecap]

Everyone seems like assuming there is only one scammer with limited resources.

Agreed, and in some 3rd-world countries there are entire districts filled with buildings full of scammers calling companies all day long, and social engineering trick to try and gain access to user accounts, bank data, personal info, etc.

A lot of these "hacker hives" are in places cops won't even go, or are paid enough not to go there.

 

[DNGear]

is there any chance the real owner took the money as a seller and claimed it was a stolen property?

 

[Keith]

is there any chance the real owner took the money as a seller and claimed it was a stolen property?

This...this is a real scam. But if the selling platforms aren’t held accountable it will continue.

 

[offthehandle]

Hardly

https://domainnamewire.com/2018/04/05/gdpr-will-make-domain-name-transfers-more-difficult/

Someones comment, not mine but that says it all.

“I’m still at a huge loss as to why the world is changing whois based on some European law. Couldn’t registries based anywhere else get around the law since…well they aren’t in their jurisdiction? Just put in the TOS that people from countries with this law must use whois privacy or don’t allow these people to be customers at all..Seems absurd that the world is being punished because of this.”

Without a persons name, phone or address just an email enables the above OP’s scenario. Sure those things could be old or faked also, but picking up the phone or skype ID check in video realtime, as I suggested is pretty simple solution that is not 100%, but better than an email only.

https://domainnamewire.com/2018/12/27/year-in-review-gdpr/

I think if you read all the the comments there and here and study further, many of us outside the EU have no inclination to care anything about EU laws as they apply only to EU entities. The knee jerk reaction and popups on US news websites too is highly annoying. Same with US banking laws being forced on non-US banks, and transactions requiring compliance with KYC, many non US people disagree with them, rightly so but unlike GDRP, KYC actually are relevant to protect from financial fraud.

And what true benefit is GDRP to anyone including the EU?

This thread too.

https://www.namepros.com/blog/whois-display.1107830/

 

[MapleDots]

“I’m still at a huge loss as to why the world is changing whois based on some European law. Couldn’t registries based anywhere else get around the law since…well they aren’t in their jurisdiction? Just put in the TOS that people from countries with this law must use whois privacy or don’t allow these people to be customers at all..Seems absurd that the world is being punished because of this.”

I think you hit it right on, for those of us in North America this whole whois privacy is lunacy. They should go back to the old system and let the Europeans fight their own privacy wars. So basically when we deal within our own borders we don't have to worry about this lunacy.

Won't help us when dealing with someone from Europe but in all my years of business I have rarely done business in Europe so a North American WHOIS system would benefit me greatly.

Next France or some country will say we are not allowed to look at dns servers and instantly the whole world panics. We should just change it for the countries that are mandating it and when they see the troubles it causes they can change back if they want to.

 

[Jurgen Wolf]

we used Sedo to close this deal and anything worked fine till Thursday when GoDaddy removed both names from our account by following an US court order.

This court order is published somewhere?
Have you seen/read it?

 

[poweredbyme]

Same with US banking laws being forced on non-US banks, and transactions requiring compliance with KYC, many non US people disagree with them, rightly so but unlike GDRP, KYC actually are relevant to protect from financial fraud.

KYC is to prevent tax evasion only has nothing to protect people from illegals, terrorists, drug dealers, scammers, etc. That's why KYC is widely popular. It means more $$ to all governments. People know all transactions are recorded and reported to tax authorities so they are afraid of getting caught if they report income less. If you think illegal money would use financial system if KYC was removed, you are naive. Which illegal would enter to a bank branch with cash in hands? Those locations are full of voice and visual recording devices and probably connected to face recognition systems. If you were an illegal would go to such places? ID is not a big problem for illegals. In fact governments usually know their ID correctly but they can't catch as their locations are unknown, not their ID.

GDRP is protecting citizens, KYC is protecting governments. This is their real difference. It doesn't mean I support GDRP at least in its current form. But I am against to KYC in shopping. Domains are a shopping activity only. Money is already tracked if someone sells and buys something including domain. Online companies, unless they provide banking/financial services, wouldn't be requiring ID if governments do their job correctly. If governments doesn't stop this stupidity, even creating a forum account will require ID.

 

[namemarket]

This court order is published somewhere?
Have you seen/read it?

I am fairly certain court cases of this type and decisions are always public information so Godaddy can be asked for the court location and the case can be found from the local court system.

 

[Jurgen Wolf]

Without the detailed US court order/decision - nothing to discuss here...
Further work is for lawyers and appeals court...

 

[poweredbyme]

Hmm, I thought once you paid by bitcoin there was no way to trace the transaction, is that not why a lot of scammers use it?

Bitcoin transactions are recorded to blockchain permanently. It's visible to everyone for unlimited time.
Transaction data include
- date of the transaction
- amount of bitcoin
- receiver and seller btc addresses. I display my btc address below as my signature. So it's a meaningless machine code.
- transaction fee in bitcoin

There is no name of sender and receiver. So it's not traceable back to a particular person or entity. I can send bitcoin to my other btc addresses. An observer may think I have spent all my btc. There is no limit on btc addresses. Transactions allow multiple sender and receiver btc address. You can send btc from 1,000 btc addresses to 1,000 btc addresses. How can you trace it back to a person? It's impossible as you can't know how many different persons involved this transaction. In fact it's not very necessary. Bitcoin can not be seized by any authority. If a person wants to hide it nobody can find or know you own bitcoin, or can hide most of it. Governments are unable to make it illegal. It would be meaningless to make something illegal that's very difficult to prove its existence or absence.

 

[poweredbyme]

Where is your wallet?
On your local machine? You play with blockchain directly on your hardware?

For their wallet - most people use various cryptoexchange platforms which follow KYC.

I keep my btc on my hardware since the beginning. I have read too much about it before getting started. If you don't own private key, it's not your coin. My concern is related to security of my btc rather than avoiding kyc.

For those who is avoiding kyc strictly, it's possible to avoid kyc for small amounts only that nobody would be interested, like purchasing some small things online. But, if you live off btc or make large transactions in btc, kyc is inevitable. Buying cars or properties will end up with kyc. I believe it's more related to government rather than btc. Some governments may ask source of cash if you buy a little bit expensive furniture for your home, some governments may not ask if you deposit high amounts cash regularly to your bank account. Btc does not play very big role in avoiding kyc, even in frauds and illegal things. Because illegals use cash more than crypto. We don't see the full picture and we are focused on only digital things.

Btc helps mostly unbanked people and people from poor countries who they can't have bank account or can't even go to the nearest ATM to withdraw money from rural locations. In some countries women may not be to allowed to open bank account under their own name. Some people may avoid kyc for innocent reasons like journalists and opponents in oppressive regimes or people who live in similar difficult situations. I think btc has started as a global social project. Banks didn't like it as it's an alternative to credit cards, and of course governments as they might tax banks less. So currently they defame btc and its users. In fact the usage capacity of btc in illegal things or tax evasion capacity of btc are less than cash that changes hands offline with literally no trace at all.