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12 Mar 2001
Funny Business: Sex, Sleaze and Money
United Press International

Several offshore banks have been asked to turn over bank records in the hunt for $25 million in alleged ill-gotten gains earned by a hard-core pornography Web site at

Letters to banks went out last month after a federal judge in California placed the assets of convicted felon Stephen Michael Cohen into receivership on Feb. 2, 2001. Cohen is believed to have earned at least $25 million in subscription and advertising revenue from after allegedly forging documents to get the Internet domain name transferred to him from founder Gary Kremen in 1995.

Judge James Ware ordered the receivership last week, after ruling last fall that the domain name be transferred back to Kremen.

The battle for what is arguably one of the world's most valuable domain names and the search for Cohen's hidden assets is a bizarre tale of sex, sleaze and money. Its origins go back to October, 1995 when Cohen persuaded Internet domain name registration firm Network Solutions Inc. to transfer the ownership of '' from Kremen to him shortly after Cohen came out of prison after serving a 46-month prison sentence for bankruptcy fraud.

According to a civil lawsuit filed by Kremen in the U.S. District Court for the Northern District of California on July 10, 1998, Cohen forged documents to create the appearance that Kremen had agreed to the transfer.

Kremen, an Internet pioneer who once earned $50 million by selling an on-line match-making business at, originally registered '' on May 9, 1994 when it was still available for anyone to register.

"Registrations for domain names on May 9, 1994 were, and still are, subjected to an availability check and delegated on a first-come, first-served basis," states the lawsuit. "Kremen was the first person to request the registration of the '' domain name."

Defendants in Kremen's suit are Cohen, Ocean Fund International Ltd. of the British Virgin Islands (which is reported to be owned by Cohen); Ynata Ltd., of the BVI; Sand Man International Limited S. A. de CV, of Mexico; and Network Solutions Inc., of Delaware. The case against Network Solutions, which had refused to transfer the domain name back to Kremen without a court order, was thrown out by the court and is being appealed by Kremen.

Kremen believes that Cohen had an unusually close relationship with VP Bank (BVI). Among other items of evidence, Kremen said he has a copy of Network Solutions' records listing Keuls as having an e-mail address of Cohen "owned" the '' name.

Kremen, however, dropped the bank and its Deputy General Manager, Andrew K. Keuls, as defendants from his civil complaint on Sept. 12, 2000.

Keuls has denied that he ever had such an e-mail address and said that his bank severed all ties with Cohen in or around January of 1998. "When we became aware that our name had been abused, we severed all relationships with Cohen," he said. "We have been quite careful across our group not to have any more dealings with him. To the best of our knowledge, we do not have $1 of Cohen's assets." Even before the Cohen account was terminated, it only had a "miniscule" balance of "never more than $650", we were told.

Apart from the name of VP Bank, Cohen also has been accused of abusing the name of Sir William Douglas, a former Chief Justice of Barbados and ex-Barbadian High Commissioner to London.

Douglas also was a defendant in Kremen's lawsuit until six months ago on the basis that he had been described as chairman of Ocean Fund International Ltd. in a bizarre press release in 1999 in which OFIL, purported to put in a $3.6 billion bid for the Las Vegas-based Caesar's Palace casino group. The release, which purported to quote Douglas, was apparently little more than a publicity stunt to promote '' (which was owned by OFIL) and Caesar's Palace claimed never to have received an offer.

Douglas has publicly stated that he never had any association with OFIL, let alone acting as the company's chairman. Nor did he ever know Cohen or any related entities.

How much Cohen really earned from the '' domain name remains to be seen. He has previously claimed that the site had 8.5 million subscribers paying $24.95 per month and had a long waiting list for advertisers. In one press release, OFIL claimed that it received a net income of $85.5 million from the '' web-site for the quarter ended June 30, 1998.

When a preliminary injunction against the remaining defendants in the lawsuit was issued Nov. 27, 2000, however, the judge limited the amount to $25 million.

Financial institutions which received letters for assistance from Kremen's attorneys on Feb. 12 were the Bank of N. T. Butterfield of Bermuda; ATU General Trust (BVI) Ltd. of the BVI; VP Bank (BVI) Ltd., VP Bank Gruppe of Liechtenstein; Liechtensteinische Landesbank Aktiengesellschaft of Liechtenstein; Allegemeines Treuunternehmen of Liechtenstein; ABN Amro Bank of the Netherlands; Banco International S. A. of Mexico; Banco Nacional de Mexico S. A. of California; Banque Internationale a Luxembourg S. A. of Belgium; Rabobank International/Rabobank Utrecht of New York; and Rabo Robeco Bank (Luxembourg) S. A. of Luxembourg.

The VP Bank Group, which was formed in 1956 and whose initial 'VP' stands for Verwaltungs-und Privat-Bank, is based in Liechtenstein and also operates banks from the BVI, Zurich and Luxembourg. Additionally, the group has a Cayman Islands-registered company called VPB Inhouse Portfolio Ltd.

David Marchant is publisher of OffshoreAlert, His column, Funny Business, is published bi-weekly by United Press International.



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