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Porn peddlar to loose control of domain after court fraud ruling

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An internet businessman has been stripped of ownership of porn portal sex.com following a ruling by a Californian court.

Ownership of the lucrative and lurid site, which gets as many as 25 million hits each day, was taken away from Stephen Cohen after a San Jose judge concluded he probably stole rights to the domain name from San Francisco entrepreneur Gary Kremen.

The ruling follows two years of legal argument about who was the rightful owner of sex.com, which links to hundreds of XXX-rated sites.

'Captain' Kremen successfully argued that Cohen had obtained the site through fraud five years ago, since when he has been milking profits from it and associated businesses, which were said in court to run into ten of millions of dollars. Lawyers said the site could be worth as much as $100 million.

Despite having the foresight to register sex.com in 1994, Kremen did little to develop the site which remained dormant until Cohen took it over.

The case hinged on a claim by Kremen that Cohen forged a transfer of ownership document for sex.com and sent it to domain registrar Network Solutions. Cohen, who has served time in prison on a bankruptcy fraud conviction, said he obtained the sex.com domain lawfully, after paying $1000 to a firm called Online Classifieds, which held the site registration.

Things looked bad for Kremen when US District Judge James Ware ruled that he had no claim against Network Solutions, and the charge against Cohen was reduced to one of fraud. But on this lesser charge Ware has ruled in favour of Kremen, opening the door to a multi-million dollar settlement but one that may still be subject to appeal.

The preliminary ruling, which involves an order requiring Cohen to pay $25 million into court, was made far more quickly than expected because it was believed money was been siphoning into offshore bank accounts.

Ware also ruled that Network Solutions, which registers domain names, must transfer ownership of sex.com to Kremen.

Kremen has previously said he will reposition sex.com if he wins control of the site - which is nice. ®

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