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  • In SnapNames Scandal, Conspiracy Theorists Were (Sort of) Right

    1. BY - Nov 04, 2009
    2. Expired Domains
    3. 23 Comments

    Conspiracy theorists were right about SnapNames bidder.

    Domain Name News has confirmed that the bidder at the center of the SnapNames employee bidding controversy used the handle “Halvarez”. Domainers have questioned Halvarez’s bidding patterns for years, as DNN discovered.

    Domainers are particularly adept at online research. But a lot of times they cook up bogus conspiracy theories. Like the guy who swore NameJet was shill bidding, until I quickly pointed out that the person who kept beating him at auction was Frank Schilling.

    But this time rampant speculation about Halvarez at SnapNames was actually warranted. Many people speculated that Halvarez was SnapNames, which was incorrect. But the connection was certainly there.

    On December 12, 2007, DNForum member Seraphim wrote:

    I believe halvarez is SnapNames, regardless of the fact that he/she bids on domains, or even wins auctions. A year ago, I could spot which domains in my drop list would not have competitive bidders, I would obviously delete these names from my account, and pick them up at reg fee once they dropped. However, for a solid 8 months now I cannot do this, as halvarez bids on every single domain that I enter into my SnapNames drop list. I could enter the shittiest name possible up for drops, and there is a 100% chance halvarez will be there. The kicker is however, if I don’t enter the name into my SnapNames auction list, you guessed it, it drops with no bids and I pick it up at reg fee. Anyone from SnapNames care to explain this phenomenon?

    Other forum members also speculated about some sort of connection, but some pointed out that what Halvarez was doing didn’t require inside access to SnapNames.

    Now the next question on everyone’s mind is, “shouldn’t SnapNames have discovered this earlier”?

    Perhaps. Keep in mind the problem began in 2005, before Oversee.net bought SnapNames. A lot of changes have happened since then. And over the summer, Craig Snyder took over management of SnapNames and Moniker. That meant a fresh pair of eyes was looking over the books. Surely the issue of who this prolific bidder was came up then if it hadn’t before.

    The SnapNames employee “stole” money from the company be refunding part of his purchases. I doubt senior management at SnapNames would let that happen. But I’m sure more will be dug up soon, so stay tuned.

23 Comments
  • In SnapNames Scandal, Conspiracy Theorists Were (Sort of) Right – http://tinyurl.com/yhqxgf9

  • great story…so will they go back and find all the times he/she cost us money and give a credit ;)

    Would be a nice Christmas gift

  • As a newcomer to the industry I haven’t experienced “The Halvarez Effect”, but a quick search on the forums shows quite a few 2-person bidding wars that escalated to many $x,xxx. These same auctions would have been quick $60 snaps if Halvarez was not bidding.

    Quite a few people are going to be getting some big cheques from SnapNames!

  • All I can think of or say is WOW! I am sure glad I no longer purchase domains at auction unless I am the only one bidder!

    Is this happening at “other” auction services (not only in the domain industry) and in different ways…. Likely!

  • Snap can make refunds. But they can’t make up for all the stolen research representing 100’s of hours of work.

  • I think the quote you site above proves what many ohter people figured out, that internal information was used by Nelson to backorder domains. I for example used to back order very obscure foriegn language domains that had no value to anyone except me and sure enough Neslon would always be in the auction as the second bidder. Many people noticed that if you ordered these domain at Pool and didn’t order t hem at Snap then you would get them without auction.

    Yes there is a hole in the backordering process that allows someone to backorder at the last minute and be the second bidder but this doesn’t explain how that person came up with the names in the first place. The only thing that explains that is inside info on what domains were backordered.

    BTW that hole still exists. Ironically I used to ask Neslon about how halverez did it. Nelso admitted there was a hole and that I could use it to. The only difference is he didn’t have to do any research.

  • Manoverboard – we are in the same boat.

    nelson used information from other people’s research and when there was no other bidder, he would bid on it. i found out too late and got very screwed over.

    i spent enough money to buy a house on snapnames auctions.

  • Snap has a lot of splain’n to do!

    What about all the times I came in 2nd to Halverez? Where are those domains that rightfully should have been mine??? I want them!!!

    I agree that a lot of research goes into ordering a domain for backorder and when someone steals that proprietary research, that hurts.

    I think Nelson (aka halverez) should be criminally prosecuted to prevent any ideas from futher insiders.

    I also think I’m not gonna be bidding on any Moniker/TRAFFIC live auctions any more because this fiasco has really caused me to lose faith in the process.

    There needs to be a major shakeup in the domain auction process with more transparency. Too much cloak & dagger now.

  • Not Good, especially if Halvarez is VP Nelson !!

    Did anyone else notice that alot of their order history records at snapnames have been deleted a couple of months or so ago ?

    Mine only shows back to Nov-2007 instead of 2005 – did he delete them to try and cover up his tracks ???

  • No…snap just erased account history today. Very sneaky and dishonorable.

    I saw my history this a.m. but just went back to my account and earliest is Nov 07.

    Everyone should go to their snap accounts and print out history before it’s all gone.

    Snap is going to screw up their reputations and all those associated with them..Moniker/TRAFFIC, Oversee, etc.

  • I also had just checked my account Order history today and it’s all gone prior to Dec 2007, what a bunch of weasels…

  • Halverez…… wow….he’s been in SO many of my SN auctions… even beaten me on auctions where we were the only 2 involved, and definitely cost me money where we were the only 2 involved. It will be interesting to see where all this goes…

  • John Berryhill – where are you? This is a class action lawsuit ready to happen. You game?

    ICA – where are you? Because none of us small timers did not finance your lobby group for the domain kings, what are you going to do for use now?

    ICANN – you bunch of posers, what’s it gonna take to bitch slap this domain industry into a legitimate industry? Are you going to seize back the domains Domainqueue stole via fraud in auction.

    To all small time domainers – you need to unite. In numbers there is strength.

  • John Berryhill says:

    November 5, 2009 at 10:55 am

    “John Berryhill – where are you? This is a class action lawsuit ready to happen. You game?”

    As a solo, I would never be class qualified. Aside from which I am an intellectual property attorney, and this is a commercial dispute.

    Of course, this is an issue of concern to many. It seems that Snapnames has been upfront about what happened. It has taken them quite a while, though, to catch up with the allegations that have been floating around for some time. However, as VP of Engineering, Mr. Brady may have been able to derail internal investigations in the past.

    A good move for SnapNames at this time would be to engage an outside auditor, since it would be reasonable to suspect the results of their internal investigation.

  • JuniperPark says:

    November 5, 2009 at 9:54 pm

    “However, as VP of Engineering, Mr. Brady may have been able to derail internal investigations in the past.”

    Somebody want to explain to me how Mr. Brady convinced Kjel and everyone else at Snapnames that he lived in the Kentucky Fried Chicken restaurant that he was using as his registration address??

    SERIOUSLY — were they that stupid???

  • pitbullstew says:

    November 6, 2009 at 2:51 pm

    Its not like we didnt tell then there were iregularities?

    Ripoffreport.com-

    Report: Snapnames.com
    Category: Internet Services

    Snapnames.com ripoff Portland Oregon

    Rebuttal Box
    Respond to this report!
    What’s This?

    What’s This?
    Are you an owner, employee or ex-employee with either negative or positive information about the company or individual, or can you provide “insider information” on this company?

    Victim of this person/company?
    What’s This?

    What’s This?
    Are you also a victim of the same company or individual? Want Justice? File a Rip-off Report, help other consumers to be educated and don’t let them get away with it!

    Snapnames.com
    Phone: 800-385 4075
    Fax: 503-274 9749 115 NW 1st Ave, Suite 300
    Portland, Oregon 97209
    U.S.A.

    Submitted: Monday, July 24, 2006
    Posted: Monday, July 24, 2006
    venice, California

    Snapnames.com is a company that registers internet domain nmaes. In this example when I searched for a business their domain name had expired and snap names popped up instead with an offer to secure the domain in an auction. I thought I would be interested in that so I placed a bid and secured the domain several weeks later.

    When snapnames advised me that the requirements were finished they refered me to the entity that will set up the web site. When I went to the site and entered the password, it would not allow me to log in. I waited severla days and like wise I could not log in.

    I called the 415 area code number listeed and you’ll never guess the call patched through to India with a person who I could not understand nor she me?
    Frustrated I called again and exactly the same experience. In the mean time I obtained no less than 7 pass words and none would get me past the error user not registered phase.

    When I called snapnames in Portland i spoke with a very nice and patient person and explained that I was not satisfied and wanted to cancel the purchase and she had a tech by the name of Roger get on the line asking me if I needed tech support?When I said no he hung up?!!

    Calling back I asked for an explanation and he said well you said you didnt want help so i hung up?
    I snet them two emails and they say they arnet formated correctly and that the emails were attched?
    What the heck kind of nonsense is this?
    When we as consumers bid and obtain a domain and are sent to the next step only to wind up over seas dealing with persons who refer you back to snapnames who says all sales are final?

    Well all sales are not final all sales using a credit card are subject to review by the card company and the actions of snapnames are subject to a review of the consumers affairs beaureau of Oregon or the city of Portland?

    And finally the court of consumer opinion.

    If snapnames wnats to dump consumers to overseas entities who cannot communicate effectively and are impotent to resolve the issue of not being able to log on, then who needs snapnames?
    I want to unite this deal and will see to it that it will be untied.

    Stewart
    venice, California
    U.S.A.
    Report Photos:
    Moniker.com / DomainSystems, Inc. / Oversee.net / SnapNames.com / Monte Cahn
    Phone: 954-984-8445
    Fax: 954-969-9155 20 S.W. 27th Ave., Suite 201
    Pompano Beach, Florida 33069
    U.S.A.

    Submitted: Thursday, July 31, 2008
    Last posting: Friday, August 01, 2008
    Aventura, Florida

    Moniker.com. These people run Domain Name Auctions, but they are not to be trusted as they are deceptive, do not abide by their own Terms and Conditions as publicly displayed on their website, and will not honor their Exclusive Right To Sell Agreements, and are bad faith actors. Their Escrow and Auctioning licenses should be suspended, or revoked, for deceptive trade practices and breach of fiduciary responsibility. ICANN should also investigate their practices and, as result, suspend or revoke their Registrar status.

    On May 23, 2008, through one of their auctions, representing themselves as the new owners of a domain they purchased from me for $16,500, $14,025 net to me, they had sixty (60) days to make payment and transfer the funds to me. Despite several Notices sent to them subsequent to the contract expiration, receipt which were acknowledged, to either extend in writing their Exclusive Right To Sell Agreement or make the required payment, as called for in the Agreement, they have refused to do so. They have hijacked my property! I have identified another transferee for the domain, but I am being financially damaged by their refusal to release my domain from their Escrow Account.

    Monte Cahn actually made the outrageous claim that there is no time limit on their process, contrary to our written Agreement, and what anyone would view as a violation of Federal, State, and Local Business Law Statutes.

    In good faith, as they had requested, I promptly transferred the domain to their Escrow Account, and they were supposed to also act in good faith and transfer the funds to my personal account. Although their website clearly states that the Seller is protected because they “guarantee” that the Buyer has the funds, this is a deliberate deceptive misrepresentation to lure Sellers into their scheme of hijacking domains, as what has happened to me.

    Additionally, they do not act or communicate in good faith or in a timely manner. In my opinion, they are bullshitters, plain and simple, and are forcing me to seek legal recourse in order to have payment made to me for damages, plus fees and costs for recovery.

    Do Not Do Business with these companies. Do Not Place Your Domain Names in their Auctions. You will be exposing yourself to unnecessary risks. They are not to be trusted, and, like me, you may very likely be RIPPED OFF!

    Elliot
    Aventura, Florida
    U.S.A.

    SnapNames.com, Inc.
    1600 SW 4th Ave., Suite 400
    Portland, Oregon 97201

    November 6, 2009

    Re: Rebate Offer

    Dear Customer:

    On November 4, 2009, SnapNames.com, Inc. (“SnapNames”) notified customers about an unfortunate incident involving an employee bidding under a false name in certain SnapNames auctions. As we said previously, this was a clear violation of our internal policy and we regret that it occurred. In order to avoid any appearance that SnapNames benefited from this unauthorized conduct and in recognition of the importance of fair auctions, SnapNames is offering a rebate to any customer that won an auction in which this employee’s bidding activity resulted in a higher price paid by the customer. This letter provides more details regarding this rebate offer.

    The account in question was named “halvarez.” Our records indicate that you won one or more auctions involving domain names in which halvarez also placed a bid. The attached Schedule I (link below) includes: (i) a list of each domain for which you were the winning bidder in a SnapNames auction in which halvarez placed a bid that affected the amount of the winning bid in the auction, (ii) the date on which the auctions for each domain closed, (iii) the winning bid price paid for such domains, (iv) the rebate amount for such domains, (v) the aggregate interest amount and (vi) the aggregate rebate amount.

    Although the employee that placed bids under the name halvarez appeared to have submitted genuine bids in many auctions in which another person won, SnapNames is offering a rebate in each and every instance where this employee’s bidding had an impact on the winning bid. SnapNames is doing so to avoid any appearance of a conflict of interest on the part of the company.

    How Affected Auctions Were Reviewed

    To determine the rebate offer amount, SnapNames hired FTI Consulting, an independent, international forensic accounting firm, to perform a thorough review of these auctions and calculate the rebate. FTI Consulting reviewed data regarding all of the bidders in an affected auction, including the bids each bidder placed in the auction and the maximum bids the bidders indicated they were willing to place in the auction, and determined from this data what the winning bid would have been had halvarez never placed a bid in the auction. This amount was then subtracted from the actual price paid for the domain name to determine the amount of the rebate for that auction.

    Calculation of Rebate Offer Amounts

    In situations where a customer competed in the auction against only halvarez, the rebate offered is the difference between the winning bid and the opening bid for the auction, plus interest. This calculation assumes that were it not for the bidding by halvarez, the client would have won the name with the opening bid. In situations where there were other bidders in addition to the winner and halvarez, FTI Consulting reviewed the bidding history for each auction, as well as any indications by other bidders regarding the maximum bid they were willing to submit in the auction, to determine what the winning price would have been had halvarez not participated in the auction. For example, if the winner paid $100 for the domain, halvarez had bid $90, a third person’s maximum bid was $80, and the minimum bid increment was $5, then FTI determined that the winner would have won the auction at $85 were it not for the bidding by halvarez. Thus, the rebate offered for this auction would be $15, i.e., $100 minus $85, plus interest.

    The Rebate Offer

    In your case, SnapNames has concluded that had halvarez not placed a bid on any of the auctions you won, you may have paid less for the domain names you purchased at auction. Therefore, SnapNames is offering you a rebate for this amount plus interest, calculated at the rate of 5.22%, compounded annually, which is the highest value of the 1 month constant maturity treasury rate during the applicable period. This rate is established by federal law.

    The rebate is available, at your option, in cash or as a credit to your SnapNames account. (Please note however that credit to your SnapNames account will be available only if the rebate amount, including interest, is $59 or higher. If the amount is less than $59, your rebate will be offered in cash.) Although we don’t currently anticipate doing so, we may impose other restrictions on the issuance of account credits, to satisfy legal or accounting requirements.

    This offer is dependent upon your executing and returning to Rust Consulting, Inc., a third party administrator that is assisting with the administration of this rebate offer, the accompanying Rebate Offer Acceptance Agreement (link below) which, among other things, waives any claims you may have against SnapNames and its affiliates relating to this matter. This offer is open for twelve months from today’s date. If the offer is not accepted within this time frame, then the rebate will no longer be available.

    If you have questions or concerns regarding the rebate calculation or other aspects of this offer, please contact Rust Consulting by telephone at 1-888-413-5338 or by e-mail at snapnamesrebate@rustconsulting.com. Please be prepared to provide detailed information and data regarding your bidding and purchase activity to the extent that it differs from the information we have provided to you.

    Under certain circumstances we may be required to report the interest paid to you to the U.S. Internal Revenue Service (“IRS”). To permit us to satisfy any reporting obligations, your receipt of payment or credit from SnapNames pursuant to this offer may be conditioned on your providing us with a properly completed and executed IRS Form W-9 (or, for non-U.S. persons, an IRS Form W‑8BEN or other appropriate version of Form W-8), or such other materials that may be required to enable us to comply with applicable tax laws. If so, we will provide you with further information. You are urged to consult your tax advisor regarding the U.S. federal income and other tax consequences to you that may result from this offer.

    Processing Your Rebate Offer

    In order to process your rebate, please execute and return the Rebate Offer Acceptance Agreement and send it to the following:

    SnapNames Rebate Administrator
    P.O. Box 98
    Minneapolis, MN 55440-0098

    If you so elect, you may contact Rust Consulting to print and mail you a copy of these forms, along with a self-addressed stamped envelope. Rust Consulting can be reached by telephone at 1-888-413-5338 or by e-mail at snapnamesrebate@rustconsulting.com Please provide your current mailing address with your request. Upon receipt of your Rebate Offer Acceptance Agreement and after verification of your eligibility, Rust Consulting will provide your rebate check (or confirm application of account credit) by mail.

    Again, SnapNames regrets that its policies were not followed and that any of its customers may have been inconvenienced by this matter. SnapNames thanks you once again for your continued business.

    Sincerely,

    Jeff Kupietzky Craig Snyder
    President and CEO General Manager, SnapNames.com

  • 1. Drafting
    http://web.vertismail.com/smartcast/sites/snapnamesrebate/Rebate_Offer_Acceptance_Agreement.pdf

    Para 4 of the Snap release agreement at the hyperlink above, is a 288 word sentence. What ridiculous and unnecessarily archaic legal drafting. Cross out “NOW, THEREFORE,” at para 3 and ask yourself if the para before says anything different.

    2. Opportunity cost
    Have I missed the discussion, or do I appear to be the only person in the industry who has noticed that no recompense is being offered for the opportunity lost, e.g. what about the names that the underbidders lost, that were then sold by Halevrez for a capital profit, or the ad revenue that Halvarez earned that would he been earned by the underbidder? What about the names themselves? No mention of that in the offer. No apology either. Think about that when you read 4 below.

    3. Commendation
    Andrew, whilst I empathise with their plight, and I agree that the issue is being handled professionally, I fail to understand, in the nicest and friendliest possible way, why you have formed the view that these guys should be “commended” (your post Wednesday, November 4th). All they are doing is what they should do, at a minimum.

    4. Release
    As I note at the blog comment above, the “offer” comes with strings attached. I have to spend my time reading, considering, seeking legal advice with respect to the offer, in order to get the refund.

  • Can you spell class action suit?
    Michael J. Aschenbrener | KamberEdelson LLC
    350 N. LaSalle St., Suite 1300
    Chicago, IL 60654
    1.312.589.6379 (direct) | 1.312.589.6370 (firm) | 1.312.589.6378 (fax)
    maschenbrener@kamberedelson.com | http://www.kamberedelson.com

  • keep moving keep moving nothing to see here folks, thats right keep m> Our File Number: FF++++-09
    > Complaint About: Snapnames.com Inc.
    >
    >
    > Thank you for the information that you sent us. Although there does not now appear to be a need for an investigation or legal action, we will keep your information on file as part of the public record.
    >
    > Our primary goal is to identify and eliminate the most serious marketplace violations, and many factors are considered in determining what cases we should pursue.
    >
    > We appreciate the time that you took to alert us to a possible problem in the marketplace. Your information may prove to be valuable in a future enforcement action.
    >
    > If you need to contact us about your complaint, please write to me and note your file number: FF++++-09, or contact me by phone at 503-934-4400 or e-mail at mailto:heather.j.mcfarlanemartinez@state.or.us
    >
    > Heather McFarlane-Martinez
    > Enforcement Officer
    > Financial Fraud/Consumer Protection Section
    > Oregon Department of Justiceoving-

  • […] He was a prolific bidder in SnapNames auctions and the subject of much discussion. Early on, some suspected that there was more to halvarez than met the eye. Take, for instance, the comments in this thread, […]

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