Judge Orders Cohen to be Held Indefinitely

Steve Javors
SAN JOSE — The saga between Sex.com former owner Gary Kremen and Stephen Cohen, the man who stole the domain name from its rightful owner by submitting a forged document to Network Solutions, is still engaged in a protracted legal battle that is just beginning.

Piling onto his current legal woes, not to mention the $85 million (plus interest) judgment against him for stealing Sex.com from Kremen, Cohen was ordered held in jail indefinitely by Judge James Ware, during which time the court will seek to determine Cohen’s assets. Cohen was found to have lied under oath about his ownership of two foreign accounts, Ware ruled.

According to court transcripts obtained by XBIZ, Cohen allegedly transferred 3.4 million euros between banks shortly before he was arrested in November in Tijuana, Mexico. Cohen denies ownership of these accounts.

Kremen told XBIZ his private investigators discovered the accounts, one believed to originate in Lithuania, the other from Deutsche Bank.

“I think this is clearly the most glaring example with these transfers so apparent three weeks before his arrest, but there are a couple other banks we’ve also identified for the court in this paperwork, too, that Cohen neglected to include in either his declarations or either of his two depositions,” Kremen’s lawyer, Tim Dillon, said.

In 2001, Judge Ware ordered Cohen to place $25 million in the court’s control and not transfer any money between his accounts. Cohen has allegedly violated the judge’s ruling with the transfer.

“In six months time when he comes back before the court, it would then be my position to have plaintiff give me further status report with respect to its investigation of this account,” Ware said. "I’m exercising my discretion to hold [Cohen] in custody until that period of time.”

While many incorrectly assume that Cohen has been formally found guilty and sentenced to prison, Kremen is quick to point out that is not the case. In 2001, there was a formal finding of fact that Cohen had forged the document awarding him Sex.com. Thus far, Cohen has not been officially charged with domain name theft, tax evasion or other charges.

“I really don’t wish Cohen any harm,” Kremen said. “I feel sorry him. It seems like he’s in a very tough prison. Most people think this case is over, but it’s really just beginning. Today he filed a motion with the 9th Circuit Court claiming he has 9 cents to his name. It was handwritten in his prison cell. He must think he’s a great jailhouse lawyer.”