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Domain name investor sentenced to jail for tax fraud

Australian man was active on domain name forums.

A domain name investor who was active on various domain name forums has been sentenced to jail for defrauding Australian tax authorities.

Michael Purse spent tens of thousands of dollars buying expired domain names, District Court Judge Steven Millsteed said. The judge said Purse got $130,134 in illegal refunds for several businesses he set up to buy the domains, reports PerthNow.

According to the publication, the judge said:

Purse had developed an algorithm which alerted him when the licences of popular domain names were about to expire — allowing him to buy potentially profitable names as soon as they came on the market.

…Judge Millsteed said Purse, who was described as a man of above average intelligence by a psychologist report tendered to the court, had made $25-35,000 from this process but he became greedy and wanted more.

Purse was apparently active on domain name forums prior to being caught. He was an active seller on DNForum and had a profile at NamePros. He also sold domain names through his site F5Domains.

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    • Joseph Peterson

      I agree with you. The substance and tone of that article are bound to have a pernicious effect.

      After reading it, I was still unclear about the nature of his crime. Some sort of tax refund abuse? But the mechanism isn’t described whatsoever.

      Far more verbiage was devoted to talking about the guy’s nefarious domain buying, which sounds here like some kind of cyber crime. They even quote a judge out of context to say that the guy was driven by “greed not need”. Surely the judge would have been referring to the tax fraud, but the reporter makes it seem like the judge has issued a condemnation of the very practice of buying expired domains!

      They went out of their way further to describe his living “beyond his means” and his gambling problems. Other law-abiding people would be painted with that same broad brush. So why can’t the story be the crime itself?

      I’m sure the author bent the facts to serve the story’s “shock value”. Discussing tax fraud isn’t entertaining enough to sell to advertisers, I guess.

  1. Jolene Smith

    This doesn’t exactly seem news worthy … just another kick to the ribs to the domaining industry … the problem is he didn’t pay his taxes properly … why is domaining being given a bad wrap here?

  2. Nic

    Every business in Australia, like other places in the world, are tax collectors for the Government. It is called a Goods and Services Tax (GST) in Australia. Also known as a “consumption tax”. If a business buys a product or service that is necessarily used in the performance of earning income, then that business can claim a refund of that tax, which is 10%. In the US you have state taxes which are added to the purchases price. That kind of thing. What some fraudsters do is create fictitious invoices for goods purchased so they can claim a refund, or the expenditure relates to purchases for goods that did not include GST, eg say for purchases outside the Commonwealth of Australia.

    Yes, the journalist was either lazy or perhaps a sub-editor cannibalised the story such that the net result makes no sense. Sounds like it had nothing whatsoever to do with domains and was simply permeable in the court judgment.

    • Mans

      That’s exactly right Nic. Claiming you paid more GST then you received to get a refund . Very juvenile to think that you would get away with that. Not much “above average intelligence” going on with that particular decision.

  3. John

    I’ve developed an algorithm that not only tells you when a domain name is about to expire, but also gives me first choice at acquiring them at least 10 mins before anybody else gets a chance.

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