Would-be Caesars owner loses Sex.com domain name

Thursday, April 5, 2001 | 10:47 a.m.

SUN STAFF AND WIRE REPORTS

SAN FRANCISCO -- A fugitive cyberporn czar who once offered to buy Caesars Palace must pay a record $65 million and relinquish all assets of Sex.com because he stole the coveted Internet domain name, a federal judge ruled Tuesday.

U.S. District Judge James Ware ordered Stephen Michael Cohen to transfer all Sex.com-related assets to Gary Kremen, a Silicon Valley executive who first registered the domain name in May 1994.

Cohen also owes Kremen $40 million in compensatory damages and $25 million in punitive damages, the judge said.

The ruling is the largest for damages in a domain-name dispute, Kremen's lawyers say.

"I'm gratified the judge saw what Cohen did, but I'm afraid this is far from over," Kremen said in a phone interview. "And I doubt I get a penny."

That's because Cohen, who his attorneys say is holed up in Mexico, has many of his assets, which some speculate could have reached $250 million, tied up in offshore ventures.

"This case has it all: bankruptcy fraud, pornography, forgery, offshore holdings, deep pockets, dirty tricks, depositions in foreign cities and a bitter dispute over rights to a multimillion-dollar domain name," says Ellen Rony, co-author of "The Domain Name Handbook."

Cohen's attorney, Bob Dorband, says he will appeal the ruling, the latest in the three-year-old case.

An arrest warrant for Cohen is in effect until he surrenders his property to the court.

Last November, Ware ruled Cohen fraudulently obtained the Sex.com name from Kremen.

A Cohen company, Ocean Fund International, in 1999 said it was offering to buy Caesars World and its hotel-casinos including Caesars Palace in Las Vegas for $3.6 billion.

Caesars executives and Wall Street analysts disregarded the offer, which experts called laughable -- largely because gaming regulators likely wouldn't license Cohen, who in the offer called his company an "Internet porn giant."

The Caesars assets later were acquired by Park Place Entertainment Corp. of Las Vegas.