SAN DIEGO – Four years after dodging a $65-million court judgment by fleeing the country, former online-porn mogul Stephen Michael Cohen was arrested by Mexican authorities in Tijuana and handed over Thursday to U.S. agents.
Cohen, a multiple felon and longtime con man, had been on the run since before 2001, when a judge ordered him to pay a San Francisco entrepreneur for hijacking the Internet address Sex.com. In 1995, Cohen forged a letter to Internet authorities to gain control of the address, which he transformed into a highly profitable site for pornography ads.
Cohen, who had been living in a Tijuana mansion, was arrested on an immigration violation by Mexican authorities and turned over to agents of the U.S. Border Patrol, Immigration and Customs Enforcement and the Marshals Service, according to Deputy Marshal Tania Tyler.
Cohen was being held without bail at the Metropolitan Correctional Center in San Diego.
His apprehension was the latest twist in one of the most bizarre and longest-running feuds of the dot-com explosion.
The dispute pitted Cohen against Gary Kremen [pictured], a San Francisco engineer and investor who had the foresight to register the Web address in 1994, when names were given out free to the first person who asked.
While Kremen was busy with other things, including the company that grew into online dating site Match.com, he did nothing with Sex.com. But Cohen, fresh off a federal prison term for fraud and forgery, saw the domain’s potential.
So in 1995, Cohen presented a forged letter to domain-name registrar Network Solutions, ostensibly from Kremen’s company, that said Kremen had been fired and that Cohen should get control of Sex.com. Network Solutions handed the name over.
When Kremen discovered what had happened, Network Solutions said it couldn’t help him and suggested that he sue Cohen directly. But Cohen was raking in what grew to be tens of millions of dollars by selling ads on Sex.com, and he and his lawyers put up a fight – so ferociously that the federal judge on the case ordered Cohen arrested for contempt of court.
But Cohen was unavailable. During the years of litigation, he had moved his millions overseas and then left the country himself, occasionally calling Kremen to taunt him.
Kremen got Sex.com back in late 2000 and the next year was awarded $65 million – an amount that has since grown to $82 million, with interest. Kremen has collected some property from Cohen but has yet to break even on his legal fees.
The question now is whether Kremen will be able to collect.
“I’m excited, and I’m happy to prepare for the next stage of justice,” Kremen said Thursday. Kremen said he hoped to claim more of Cohen’s assets: “Hopefully, I’ll get to them before the IRS.”
An attorney for Cohen did not respond to a message seeking comment.
Kremen has done well with other investments, which allowed him to pursue the case against Cohen. But he has earned nowhere near the profit from Sex.com that Cohen did.