By Kieren McCarthy for The Register
This article has been reproduced from The Register, with
permission.
Stephen Michael Cohen was arrested on an immigration violation
by Mexican authorities and turned over to the US border patrol
yesterday, the LA Times has reported. Cohen is being held
without bail at the Metropolitan Correctional Center in San Diego,
according to deputy marshal Tania Tyler of the US immigration
service.
Cohen is wanted in the US for failure to pay $65m in a court
judgement reached in April 2001. The judgement was the result of a
five-year court battle by the original owner of the domain, Gary
Kremen, which nearly bankrupted the entrepreneur and founder of the
net's biggest dating site, Match.com.
Kremen was awarded the sum in compensation after Cohen stole
Sex.com in October 1995 through an elaborate scam. Cohen then ran
the site at an estimated $100m profit until the domain was finally
handed back to Kremen by the court in November 2000.
As soon as he lost the case however, Cohen fled across the US
border to Tijuana and refused to return. He then began to illegally
siphon his money from US bank accounts to offshore tax havens
through a series of ingenious shell companies. In May 2001, Cohen
was officially made a fugitive from justice by the US
authorities.
It was in Tijuana, sat right on the US border and where Cohen
was reportedly living in a mansion, that he was arrested by the
Mexican authorities. Tijuana has been used by Cohen and his
associates as a base for his diverse business activities for a
decade, but he fled it soon after Gary Kremen posted an award for
Cohen's detention that attracted the attention of US bounty
hunters, back in June 2001.
Cohen claims a shoot-out at his house between bounty hunters and
Mexican police had put his life in danger. Kremen claims the event
never happened, but Cohen nonetheless bought himself a house in
Monte Carlo and has been living there on and off for the past five
years.
Kremen has never recouped any money from Cohen but did manage to
seize control of two of his houses - a shack perched on the US side
of the Mexican border, and a mansion in the exclusive Santa Fe
resort in San Diego.
A second court case brought by Kremen against the-then
administrator of all dotcoms, Network Solutions, resulted in
out-of-court settlement in April 2004 thought to be worth up to
$20m.
It is unclear whether that judgement will allow Kremen to chase
Cohen for the remainder of the $65m (now increased to $82m with
interest). Kremen told the LA Times he hopes to get more of Cohen's
assets. "I'm excited, and I'm happy to prepare for the next stage
of justice. Hopefully, I'll get to them before the IRS," he said,
referring to the US tax office.
During the long court case with Cohen, it was revealed that
Cohen had paid almost no tax on his multi-million-dollar annual
earnings over 20 years.
© The Register
2005
