Woman who registered wines.com in 1994 believes an Atlanta company didn’t uphold its end of a deal to develop the domain.
An elderly California woman alleges that she was tricked into relinquishing Wines.com at a below-market price as part of a revenue share agreement, only to have the domain sold a year later without further upside.
Jacklyn Wilferd of California filed a lawsuit (pdf) in U.S. District Court in Georgia against Digital Equity, LLC and Khuram Dhanani, an Atlanta-area entrepreneur.
Wilferd acquired Wines.com in 1994. She says she was introduced to Dhanani in 2018 as a potential person to help further develop Wines.com as a business.
She alleges that, at various times, Dhanani told her verbally that he would invest $200,000-$300,000 of his own money developing the domain, that he already had an interested company
willing to pay $200,000 for advertising on the website, and that Wilferd would receive $100,000 within thirty days.
The parties signed two agreements: one in which Wilferd assigned the domain Wines.com to Dhanani’s company Digital Equity for $50,000, and a second profit-sharing agreement in which Wilferd would get 50% of net profits.
Wines.com did not end up being a success as a website. In the lawsuit, Wilferd claims that some of the content published on the site was explicit in nature and even included Wilferd’s name as the author.
She looked further into Dhanani’s background and alleges that “virtually everything about Dhanani was and is a fraud”.
In addition to several articles and blog posts about Dhanani’s success that Wilferd calls into question, she says that Dhanani’s appearance on the London Digital Podcast appears to be dubious in nature:
To be sure, this was not the first time that Dhanani had used either fictional or actual foreign contractors to create content for himself, as he did with the blogs at issue here. Upon information and belief, Dhanani created the YouTube.com video “Khuram Dhanani and Chelsea Banks on the London Digital Podcast,” available at https://www.youtube.com/watch?v=FGxPWAFvqN8, manufacturing a fictional female with a British accent, “Chelsea Banks,” whose voice in the video is simply a computer-generated voice that Dhanani created or used. The YouTube.com user “Chelsea Banks” has only one video, and has not conducted any interviews with any other person—only the one created by Dhanani. And throughout the purported “interview,” “Chelsea Banks” merely voices questions, with pauses where Dhanani’s name is obviously inserted.
More compelling, the image Dhanani used for “Chelsea Banks” is (if one simply takes a screen shot and conducts a Google image search) a stock photograph, available for purchase on GettyImages.com, which appears on literally hundreds of websites…
Hostgator Founder Brent Oxley bought Wines.com last year. (Oxley no longer owns the domain.)
According to Wilferd’s lawsuit, after selling the domain name, Dhanani’s Twitter feed showed him taking trips to Miami and Las Vegas, eating at expensive restaurants, and staying at expensive hotel suites, like The Diplomat Beach Resort Hollywood. He subsequently made his Twitter feed private.
Wilferd states that Dhanani told her the sale price for Wines.com was $200,000. The domain had been marketed for sale for $1.2 million.
Regardless of the sale price, Wilferd says she didn’t get any of the money from the sale.
In a motion to dismiss (pdf) the lawsuit, the defendants argue that the agreement didn’t state that Wilferd would receive proceeds from a sale of the domain name:
The “Profit Sharing Agreement” (“PS Agreement”) was an arrangement between Plaintiff and Digital that entitled Plaintiff to fifty percent of net profits after expenses generated by Digital on revenue derived from an enumerated list of seven specific items. (Id.) Significant for this case, the subsequent sale of the Domain Name is not one of the seven specific items.
The motion to dismiss also states that the contract’s merger clause (that the written agreement is the full agreement) would bar any claims made on the alleged oral agreements.
I reached out to Dhanani for a comment about the case. I received a statement from Dhanani’s lawyer, Paul R. Barsness, stating:
I represent Digital Equity. I heard that you were writing a story about the wines.com lawsuit. I am tied up, but wanted to make sure you were aware of the pending motion to dismiss. This is a completely frivolous case of seller’s remorse, filled with fictional stories and falsehoods, for the sole purpose of extracting more money from my client. The case has no merits whatsoever and we are highly confident it will be dismissed soon.
The court is currently considering the motion to dismiss.
Mike says
The date you have in the article is wrong. Should be 1994 ,not 2014
Andrew Allemann says
Last minute editing error. Thanks for pointing this out.
Mike says
I was thinking, how did I miss that hand reg in 2014 lol
Acro says
If the registrant remained the same from 1994-2018 then the $2.9 million sale in 2004 as reported by NameBio did not happen. https://namebio.com/wines.com
Andrew Allemann says
I don’t think that deal happened.
Andrea says
“The parties signed two agreements: one in which Wilferd assigned the domain Wines.com to Dhanani’s company Digital Equity for $50,000, and a second profit-sharing agreement in which Wilferd would get 50% of net profits.”
How naive and gullible for accepting a deal like that … it has “scam” written all over it … Transferring a name like that for only 50k and a vague “profit sharing” is a huge mistake, to say the least …
Always do a comprehensive due diligence BEFORE closing a deal, also a “background check” on the people you are dealing with, using trusted lawyers and/or other professionals if you have no knowledge/experience in the matter.
Mr Dhanani is clearly a profiteer …
steve says
The Days of Wines,com and Roses.com and only the reg fees…sigh…and I was a kid living in brasil during these days, oblivious of domains and the internet opportunties
JZ says
So did she even get the 50k? It sounds like a good way to get a domain on the cheap. “buy” the domain for a low price promising to share revenue without any plans of there being any revenue and then selling the domain with the loophole of the sale of the actual domain not being part of the profit sharing. I guess should of had a lawyer look over those agreements before signing them.
Watch out says
There’s guys running this scam on “lease” arrangements too. I know a 7figure domain that has received maybe 10k in payments. Sellers beware of charlatans.
Derek says
Just don’t transfer the domain in lease arrangements, and risk reduced. It’s unbelievable to me that anyone would transfer a domain away on a lease agreement. I had a seven figure lease worked out, but refused to transfer. End result was they couldn’t honor arrangement, and deal terminated.
This lady was too trusting…
Cannabis Jobs says
Sounds like she did have a lawyer?
Mika says
What a horrible horrible thing to happen and sadly the guy who was handed the domain has the money to fight probably more than the original owner. I wonder if I pass on in an untimely manner if my friends/family will know how to avoid the scams or possibly just not think to renew my names…
Squarely says
As the saying goes, the crook will lie or file the UDRP to steal the domain. They will find a way to steal!
Lifesavings.Online says
Poor lady probably reads domaining blogs.
She was under the impression this domain would pay for itself in 6 months.
The article even says, “Wilferd would receive $100,000 within thirty days.”…
That should set off ALARM bells. But oh, domaining pushes such outlandish claims of insta-success themselves!
I can’t get over how the whole industry ‘ran’ the story that cbdoil.com was going to make the $500,000 investment back in 6 months. Everyone wrote about it as if it were gospel.
Well look at it, https://cbdoil.com 18 months later now – it’s down. If you looked last month you might have laughed harder. But oh, it suited ‘the narrative’ just fine!
Who’s to blame? Her for being naive? Or the industry that says making profit is SO EASY?! If it’s so easy, why don’t ‘domainers’ have 100 websites on their ‘premium’ domains? Oh I’m sure there’s a smart-a reason why…
The fact is, almost no domainer knows what’s involved in developing a domain for profit. And being involved in domaining gives almost NO insight into the difficulties of building website businesses.
Joseph Peterson says
Scammers target the elderly on a routine basis and in all sorts of ways. Generations that grew up without the internet are particularly vulnerable now that so much information is packaged in less familiar ways online.
Domain transfers? This was probably pitched as a necessary step to build a website, which is untrue. In that case, it would sound as if the recipient of the domain were merely helping with tricky IT. To many people, it’s not clear that a domain transfer means relinquishing ownership of the asset. It may seem more like granting access. That ambiguity in registrar communications is potentially dangerous.
Computer-generated voices conducting interviews? Once upon a time, if someone gave media interviews, it implied they had a reputation. Likewise if information got published, then it had been vetted by editors; so it could be relied upon as true. Those old assumptions linger in older generations, which makes them vulnerable to all sorts of misinformation and fraud.
Still, there are some basic strategies that would have saved her from this mistake:
1. Before entrusting something valuable to a stranger, seek a 2nd opinion from someone trustworthy, neutral, and knowledgeable.
2. Don’t rely on verbal agreements. Get it in writing. And if it’s important, then have someone else (ideally a lawyer) review the contract.
John says
So sad and disgusting. I hope she experiences some justice in this life. Sociopaths and psychopathic narcissists don’t think there will ever be consequences. Even if they prevail “legally,” they think that’s the end of it, the most they have to be concerned about if the aggrieved party is a decent person, and that they just get to laugh all the way to the bank and the grave. It’s especially perilous when God actually allows them to think that in this life.
Revelation 20:11-15
Andrea says
Interestingly, the domain is now in pendingTransfer status …
Nic says
68 years of age is not “elderly”.
Andrew Allemann says
A premise of her case is that a California elder law should apply. Don’t think it will fly in Georgia, but that’s why I chose that word.
Nic says
Fair enough. I appreciate your work.