New Jersey Man Sued and Criminally Charged for Alleged Theft of Domain Name

As Illinois online trademark infringement attorneys, our interest was piqued when we saw an Aug. 4 article in the New Jersey Star-Ledger about civil and criminal charges against a man accused of outright stealing a domain name., LLC v. Goncalves et al, pending in New Jersey federal court, accuses Union, N.J. man Daniel Goncalves of hacking into an email account owned by Albert and Lesli Angel in order to illegally gain control of three of their domain names. These are, and, which are co-owned by investor Marc Ostrofsky. Goncalves, a 25-year-old who runs a Web hosting business, was arrested in late July for the same alleged actions, in what the newspaper said may be the first criminal case over the theft of a domain.

A domain name is the unique identifier for a Web site — for example, is the domain name for one of our own Web sites. Some investors buy domain names they believe will be in demand and therefore valuable someday. That was the case when the Angels and Ostrofsky bought for $160,000 from a Wisconsin company called Port 2 Print, believing they could resell it to a business related to peer-to-peer software. On the Internet, peer-to-peer software is frequently referred to as p2p. Similar thinking went into the purchases of and They paid to register and “lock” for ten years with registrar

But in 2006, the investors’ complaint alleges, Goncalves and possible others intentionally and knowingly gained illegal access to the Angels’ AOL email account, allowing them to transfer the domains from the Angels’ GoDaddy hosting account to another hosting account they controlled. They then allegedly re-registered the domains under false names and addresses and redirected traffic away from the sites. A few months later, the complaint says, the defendants put up for sale on auction Web site eBay, where NBA player Mark Madsen paid more than $111,000 for it. has also been resold. The complaint also accuses Goncalves of falsifying records showing that the Angels sold the domains to Goncalves. An attorney for Goncalves told the Star-Ledger that Goncalves bought for $1,500, through a third party he believed represented the Angels.

The lawsuit accuses Goncalves and others of breaking state and federal racketeering laws with their conspiracy to steal the domains; fraud; tortuous interference in the investors’ business opportunities and unauthorized access prohibited by the federal Computer Fraud and Abuse Act. More recently, the plaintiffs asked to add as a defendant for allegedly allowing Goncalves to transfer the domain. In addition to financial damages, the investors seek the return of all three domains and an order stopping the defendants from selling their domains. The new owners of the allegedly stolen domain names were named as defendants in the original suit, but according to news reports, Madsen claims to be a good faith buyer and the Star-Ledger said he has had civil discussions with the investors.

As Chicago online trademark infringement attorneys, we are very interested in the outcome of this case. As we noted, this may be the first case of criminal charges in a domain name theft. According to, it may also break new ground if it holds GoDaddy legally liable for allowing the theft. According to that article, the Angels claim GoDaddy stonewalled their attempts to investigate and blamed them for inadequate security — despite evidence implicating Goncalves in earlier domain name thefts. Registrars are generally not found liable for allowing domain name theft, though there are notable exceptions. The decision(s) in this case could change that, at least in cases with clear negligence.

Lubin Austermuehle is an experienced business litigation law firm with an active practice in online trademark infringement and product disparagement. Our Aurora, Northbrooo, Wilmette, Hinsdale, Lake Forest and Highland Park Ill., Internet trade libel attorneys and trial lawyers help businesses involved in lawsuits over unlawful online behavior including false negative claims about a competitor’s product; misleading and infringing use of competitors’ trademarks and other intellectual property and unfair competition claims. We have more than two decades of experience and a strong record of results in intellectual property and business claims. Based in Oak Brook and Chicago, we represent clients in all of Illinois, Wisconsin and Indiana.

If your business is under attack and you’re ready to fight back, Lubin Austermuehle can help. To tell us about your case and learn more about your options, please contact us online for a consultation or call 630-333-0333.

Contact Information