In a statement just released buy Oversee.net, they have filed suit against after Nelson Brady, otherwise known as Hank Alvarez, seeking damages in excess of $33 million dollars.
Here is the official statement from Oversee:
“SnapNames, and its parent company, Oversee.net, have filed suit against Nelson Brady in federal court in Oregon.”
“Brady is a former employee who, under the false name “Hank Alvarez,” improperly bid in certain SnapNames auctions. In some cases, Brady also embezzled funds from Oversee by fraudulently refunding himself a share of the purchase price for names he won.
“For several months, the company has in good faith attempted to settle privately with Brady to recover its losses, including the rebate fund established by Oversee to address Brady’s activities and the funds he embezzled from Oversee. Those settlement efforts have been unsuccessful.
“The suit seeks over $33 million in damages, including punitive damages.
In October 2009, Oversee discovered an employee, Nelson Brady, using an account under the false name “Hank Alvarez,” engaged in improper bidding activities in domain name auctions on the SnapNames platform.
Oversee and SnapNames disclosed the situation to its customers and employees in November 2009.
Oversee made available to affected customers a cash rebate in the amount of overpayment, plus 5.22% interest (the highest applicable federal rate during the affected time period), of any amounts paid exceeding what the auction price would have been without employee bidding.
Since that time, more than 60% of the aggregate rebate amount has been claimed.
Impact of Brady’s actions on auctions:
Brady’s conduct affected:
5% of auctions since 2005
75% of total impacted auctions were between 2005 and 2007
Less than 1% of SnapNames auctions during this period were won by the employee
The remaining 4% were won by SnapNames clients.
Brady’s bidding affected approximately 1% of SnapNames’ auction revenue during the full period.
Impact of Brady’s actions on SnapNames and Oversee
Oversee will be demanding millions of dollars from Brady for the damage he caused to Oversee and SnapNames. No amount of money, however, could compensate the damage Brady has caused to SnapNames’ and Oversee’s reputation in the marketplace.
Law enforcement”
In November 2009, Oversee voluntarily disclosed Brady’s conduct to both the US Attorney’s Office and to the Federal Trade Commission. Oversee will not publicly discuss anything relating to law enforcement matters.”
End of Statement”
Nice to see
Finally
At the time that Oversee made the disclosure, I was one of the only bloggers who stood up and commended Oversee for the way they came forward, disclosed the problem and provided a solution.
I believed at the time and still believe had Oversee not come forward voluntarily and disclosed the fraud, it would never had come to light. Sure there were a lot of rumors and accusations for year made by some in the domain community, but if Oversee didn’t come correct and make reparations, we would all still be sitting here just speculating .
Yet I was not in the first group of domainers that grabbed the offer of reimbursement.
First I had to satisfy myself that Brady was the only one involved in the bidding scandal, that he acted alone, without the knowledge or assistance of others in the company and that Halvarez was the only bidder account used to perpetuate the fraud.
I did a study of my own SnapNames account which I published a detailed analysis of my findings shortly after the scandal broke.
After being satisfied that Brady acted alone, only using that one account to bid on, I accepted my mid-five figure settlement in January from Snap in the form of a credit.
Now it’s clear that Oversee is going to try to recoup its loses from the person who created the problem in the first place, hopefully ending all conspiracy theories floating around in the domain community.
Good for Oversee.
Good for the domain community.
To the other 40% who have not grabbed the cash, you might want to re-think your position.
Yikes.
My head is spinning!
1) Latonas and David Clements go their separate ways.
2) Network Solutions and Go Daddy hosting WordPress and non-Wordpress sites were hacked twice within a week of eachother, and the damage and mitigation is ongoing, with reluctant admission and alerts from these two major Registrars, except Go Daddy put out a notice after the first attach, which reads:
Measures are in place to protect the overall security of the shared hosting server on which your website resides. The compromise of your account is outside of the scope of security that we provide for you. Virus scans are performed on the content that is hosted, but they may not pick up everything, largely due to the fact that hackers tend to upload custom scripts which are not picked up by traditional malware scanners. However, if a virus is detected, you will be notified. The overall security of your password and the content within your account is your responsibility, as password compromises and compromises due to scripting can only be prevented by you.
ticking off countless customers!
3) SanDiego.com going to auction.
4) Bido closing tomorrow.
4) Oversee suing Halvarez.
Thought the domain industry is like a santuary of happy, nice, successful people, but the drama rivals Housewives!
Finally the much needed announcement is here, Good to see they are going after him in the courts.
Good luck Oversee/Snapnames
(Great coverage of the whole issue MHB !)
Louise
Welcome to the world of domaining.
They say things move at Internet for a reason
Gazzip
Thanks
It’s nice to be right once in a while
fascinating double standard here where by the court ruled that the amount at less than 15 million dollars was required before the class action could go on…and it did mot because the scam was estimated at 2 million.
“It’s nice to be right once in a while”
once in a while?….seems like you’re right at least 99% of the time from what I can tell…but that other 1% ain’t ever gonna happen 🙂
Mike, thanks for breaking the news. As the owner of HankAlvarez.com this is great publicity 😀
Hello Mike,
The beauty of the webesphere is its openess, and inclusive nature. The web universe is the catalyst for human creation. Therein lies its beauty and treachery. For the human mind is powerful enough to create heaven and hell. So if you thrive in this universe you have to take the good with the bad. Funny thing is its all good ! That is what creation is all about.
Gratefully,
Jeff
“fascinating double standard here”
Probably because you are comparing two different things. The class action suit was about the aggregate value of the customer’s claims against Oversee. This suit is about the damage done by Brady to Oversee.
shifting sands of accounting none the less, I am so sure Oversee is going to share the 30 million with all the little people…uh-huh.
Gazzip
Tell me wife that
“I am so sure Oversee is going to share the 30 million with all the little people…uh-huh.”
They already have. First of all, if you think Oversee is actually going to recover that amount, then you are beyond naive. Secondly, among the amounts claimed are the payments they have already made to customers.
But I love it. Oversee was eeeeevil because they weren’t going after Brady, now they are eeeeevil because they are.
Among other things Brady seriously damaged their reputation, but you think oversee owes you money for continuing to do so? Lol
“beyond naive”
LOL
Love JB’s dictionary – politically correct yet completely distinctive
From the commercial:
Cost of civil suit: $33 Million
Cost of lost reputation: TBD
Cost of criminal prosecution: Priceless
I wonder if the US Attorney’s Office and Federal Trade Commission will act…
Do criminal defense attorneys take MasterCard?
JOKE: Halvarez has a new job in Computer Forensics. The upside to getting sued for $33?