Answers to three commonly asked questions about the ‘halvarez’ scandal.
The topic commonly known as ‘halvarez’ — the insider bidding scandal at SnapNames — wasn’t a major topic at DOMAINfest. I didn’t expect it to be, either. Within days of the scandal breaking I talked to several big SnapNames customers. They were disappointed about what happened, but also understanding. Most had accepted SnapNames’ compensation offer and moved on.
But a number of people still have questions. So I took advantage of a media breakfast with Oversee.net CEO Jeff Kupietzky last week to get some answers to some of these commonly asked questions.
If ‘halvarez’ did what Oversee.net alleges, why hasn’t a lawsuit been filed against him?
This is the questions I hear most frequently. Kupietzky described it as an “ongoing legal matter”. This makes sense. Contrary to what some people believe, the first reaction when someone allegedly does something wrong isn’t to file a lawsuit. There are other ways to get restitution or compensation.
Has it always been against SnapNames’ policy for employees to bid on auctions?
The exact date that employees were notified they may not bid in auctions isn’t known. However, the employee’s alleged behavior of bidding to increase customer’s costs has clearly been against the rules and norms.
How much compensation has been paid out to customers?
SnapNames isn’t releasing the actual dollar amount. But of the compensation pool it set aside, about 55% has been claimed.
My personal knowledge from talking to some of SnapNames’ biggest customers is that most customers weren’t owed nearly as much as you might read about on some forums and blogs. Some of the biggest customers were owed low-to-mid five figure sums. This depends, of course, on what types of domains they were bidding on. But as I mentioned before, most big customers I’ve talked to took the compensation offer and continue to bid at SnapNames. (Hat tip to Kieren McCarthy for asking the last question.)
Musashi says
No one is asking the question whether “halverez” provided lists of names people were sitting on to other bidders on the snapnames system. I think the scandal is alot larger but no one is mentioning this or even asking the question.
Andrew Allemann says
@ Musashi – why would you think that happened? I guess there are million things that could conceivably happen on an auction system, but I haven’t seen anything to suggest they happened here.
Musashi says
I used to have 3-6 same bidders on names I would be on when I would be the only bidder on NameJet.com for the pending delete (I add names 5 seconds before their addition window closes). Now I get the names outright without any of these bidders being on these names starting the day after “halverez” was outted.
This was only question, obviously “halverez” didn’t bid on every name he was on. Must have been making money on the side with these lists. SnapNames will not address this issue and I have asked about it. Sweep it under the rug, get people to quickly sign and avoid a really massive scandal. Just thowing out the possibility. Did anyone else notice any difference in how many bidders or particular bidders missing on typical names they were bidding on after halverez was outed?
Mark says
To understand what happend you have to understand that Nelson/Halverez was mostly bidding on typo domains. Generics bought at snap have something like a 30 year ROI and flipping is labor intensive. Since he had 3 days of stats he could pick the best typo/rev domains for himself.
He did not bid up auctions to make Snapnames more money. He was trying to put together a revenue portfolio for himself. Hence people who mostly bid on generics weren’t effected much.
He did snipe on generics but would not get into a bidding war for one.
Anyone who had regular contact with Nelson, as I did, knows he was fantastic with customer service. He was above suspicion in many ways including the way he looked (nerdy). Not only did he fool cusotmers, he fooled the poeple co-workers. For these reasons and because of the amount of time the scam went on, we can safely say that Nelson has a criminal mind. This was not a one-off spur of the momenet thing. It was planned and complicated.
After analyizing my records, I have identified another bidding Alias that Nelson was assosiated with. I think it was most likely a friend of Nelson’s outside of Snap who he fed info to.
I used to question Nelson on how halverez could be the second bidder on all my auctions. Sometimes I would order pure junk and sure enough halverez would be there as the second bidder. Nelson claimed there is a hole in the system that allowed halverez to place himself as the second bidder and indeed there is a hole and other domainers know about it. But he hole doesn’t explain everything e.g. why halverez would backorder the exact junky domains I backorderd. Nelson claimed Halverez did a lot research 🙂
The identity of halverez should have been a topic at Snap long before he was caught. Why did Snap turn a blind eye for so long?
Where are Nelson’s domains now?
How could Snap NOT notice Nelson refunding himself for domains?
What compensation will I get for all the domains I lost?
Has Oversee tried to indentify other bidding alias’s?
If Oversee recovers domains from Nelson, will they be offerd to me at the correct bid price?
Andrew Allemann says
@ Mark – I don’t know all the answers to your questions. But Oversee has responded to a couple of them elsewhere:
Why investigations of Halvarez didn’t turn up anything earlier:
http://www.chefpatrick.com/five-previously-unanswered-halvarez-questions/
How Snap didn’t realize domains were being refunded:
“A. As part of our ongoing efforts to improve internal controls, our finance group noticed un-authorized refunds which led to an internal inquiry and then an external inquiry that surfaced the issues.”
http://www.chefpatrick.com/five-previously-unanswered-halvarez-questions/
rob sequin says
Mr. Kupietzky,
Current Snapnames GM Craig Snyder was CEO of iReit while iReit was buying domains directly from Halvarez. That is a fact I can prove with examples if you like.
Did Mr. Snyder know that his company was buying domains from Nelson Brady?
Who did iReit send funds to? Did anyone at iReit know that Nelson Brady was an executive at Snapnames?
How about those questions? No? No big deal?
Only Once says
Not only iReit = halvarez. Everyone knew about this including all workers of SN except you guys.
You got creamed. Yeah babe. lol hehehe