Internet Fraud – Why Must The Few Spoil It For The many?

Such a shame – internet fraud and its victims I mean!
There are so many genuine folk around trying to make that extra dollar, or a living, on the internet and along comes a rogue seller to spoil things making more people insecure about purchasing on the internet via auction sites, websites and general internet shopping outlets.

I am one such victim lately, among approximately 40 others – though it could be many more as a rogue seller set up auctions on 4 auction sites. One of them being the largest site in the world, the second is a young Australian auction site trying to be the best it can – this type of action can only cause damage to these sites along with financial loss for the victims. Those victims also become wary of further purchases from anyone!

This rogue seller “sold” many products using multiple site ID’s, multiple names and multiple bank account numbers – dreadful! How can they get away with this???
Answer – well, because they are not verified! The process of address and personal verification need not be so difficult and to improve the public’s feelings toward security and safety of purchasing on the internet – surely this process is now a must!
I feel, only then will we see a substantial and sustainable rise in internet consumers.

The insecurity people feel was brought home to me when I visited our local police last week to ask advise, the response I received was “internet fraud, another one!” In this day and age that is dreadful! The internet is such as useful tool and opened up the opportunity for so many people to create a small business with relatively little cost compared to bricks and mortar shops. Many operate from home, many on these auction sites are stay at home mothers and single parent families doing their best to help and support themselves and their families – this opportunity should not be denied or ruined for them by such outrageous criminal practices!

The law needs to be tightened up too, rogue sellers, whether on auction sites or independent websites need to be stopped. When will proper country and international laws be set to do this?

No longer should these actions be tolerated or simply brushed off!!!

Premium Dot Com Domain Names on the Internet Are Harder to Find For Small Business

The reason these top domains are so valuable are numerous. Sometimes domain names are called internet real estate. And rightly so. Just like real estate some buyers use their domain names for websites, while others sit on their investment. Most people think of prospective real estate investors as using their money for a smart, worthy cause.

Well, domain investors who resell domain names are doing the same thing. Of course, there are the occasional dishonest domain investors but they are far and few between. There are laws in internet commerce to prevent unscrupulous dealings just like there are in real estate.

Dot Com Domain Names

Were the first popular tld or top level domain to be offered to the public. They are without a doubt the most valuable and treasured of all. Dot coms are also very hard to come by in virtually every sport, industry or subject matter you can name. Now I am talking about names like realestate.com, food.com, restaurant.com, golf.com so on and so on. Very few of these type of names are for sale by their owners.

The better the domain name for sale the more likely a website has already been developed for the name – but not always. In these domain sales proven revenue figures may be available for the new buyer to look at. You have heard the saying, “anything is for sale for a price”. Well, many domain names not listed for sale are for sale, if the price is right.

Toys.com did come up For Sale in 2009 and Sold for over Five Million Dollars

BabyBoomers.tv sold for $1,000.00 and MajorHealthPlans.com sold for only $300.00, which was a good buy. With real estate there are comps to compare properties with so you can surmise an approximate value of a property. With domain names it is all over the board.

An individual or small business can actually purchase most domain names for less than twenty dollars per year, if no one has ever owned the name before. Here is where the problem lies. Like investors gobble up premium low price real estate, investors in domains have done the exact same thing. There is still the occasional great buy. Other top level domains are generally easier to come by then dot coms. I say generally because even dot net,.org,.info and other tld’s can not be found in certain fields.

So what do you do when you need a good name?

Thankfully there are other options. Sometimes a two or three word domain name is available in the same field you are looking for. I wanted a good real estate name and found RealEstateOnline.tv and iRealEstate.ws. I was also delighted to find TravelTime.tv, VacationTravel.ws, Holein1.org and 18Holes.org.

Many domain names are resold on the internet from websites specifically set up to handle the transactions. Several of these sites use a secure escrow company like Escrow.com. They actually hold the buyers funds in escrow and will not release them until the seller transfers ownership of the domain name to the buyer. This totally protects both parties involved in the transaction. Escrow.com has done business internationally and is audited by the government.

People get perplexed at how the Domain Name Business Works and Why they can be so Valuable

When a website with targeted traffic comes with the name it is often much more valuable. Some sites have thousands of customers every month or every day already coming to the website. Some other names are still very valuable without a website to certain prospective investors. They may want to develop their own website.

There are several forms of revenue that can be had from well targeted traffic. The merchandise list is endless just like in regular merchandise stores. Jewelry, fashion, computers, food, cars, cameras, furniture, toys, paper products, camping equipment, golf supplies, candy, flowers, tickets, etc.

There are also other avenues of advertising opportunities. And having a premium dot com domain name – just makes it easier in most cases.

Anatomy of an International Debt Collection Case

Introduction

In late June of 2003, I received an e-mail from Daniel Harris, who introduced himself as maritime lawyer from Seattle. He had found me through the internet and was asking me whether I was interested in helping arrest transshipped cargo in Dalian. I was excited about the task and I surfed Dan’s website [http://www.harrismoure.com] and learned Dan owns a small international law firm in Seattle, called Harris & Moure. I replied to him immediately and sent him some relevant provisions concerning cargo arrests under China legal system. He was very happy with my prompt and helpful reply and we soon were working together on the case. He later told me he was so impressed with my responses that he had picked me over numerous other lawyers throughout China.

Brief of the case

OOO Bolshoretskoe is a Russian fishing company that sold 400 Tons of pollock worth around US$700,000 to Alimex Seafood A/S, a Danish company. The pollock was scheduled to be transshipped from Dalian to Europe. Alimex had not yet paid Bolshoretskoe for the product. Bolshoretskoe owed Daxin Petroleum Pte, Ltd., a Singapore fuel supply company, around US$400,000 for fuel. M/V IVAN POLZUNOV, the vessel carrying the pollock, was scheduled to call on Dalian on 4 July, 2003. Our task was to seize the pollock for Daxin to get Bolshoretskoe to pay its debt.

Bolshoretskoe’s debt to Daxin arose in July and December, 2002, when Daxin supplied bunker products for two Russian fishing vessels, TOSNO and PHOENIX. To secure these fuelings, Bolshoretskoe signed a guarantee letter to Daxin in which “Bolshoretskoe assigns all receivables resulting from production, deliveries and selling of Salmon or Pollock on/from board of F/T PHOENIX in favor of Daxin for the amount of the bunker supply. In addition, Bolshoretskoe agrees that property title to salmon or pollock products covering the amount of the bunker shall pass to Daxin immediately upon processing and/or storage of the products on board of PHOENIX.

Daxin was not paid on its two fuel deliveries, and Bolshoretskoe was refusing to pay. It is estimated the TOSNO and PHOENIX owed a combined total of around $20 million in unpaid debt to various creditors.

Intensive and orderly preparation for cargo arrest

After studying the relevant documents and analyzing the entire history of the case, we determined that either Bolshoretskoe or Alimex would pay Daxin if we arrested the cargo in China. So we set about to do just that.

First, we prepared all necessary legal documents pursuant to Chinese law. Due to the various different legal systems and languages involved (China, Russia, Singapore and the United States), our preparations were extremely time consuming. As we were preparing our documentation and firming up our strategies, Dan was also preparing to come to Dalian.

However, the day before Dan was to leave the United States, he learned that the pollock’s transport vessel, the IVAN POLZUNOV, had secretly changed its plans in an effort to avoid arrest. It would not be calling Dalian on July 4, 2003; it would be calling Qingdao on July 8, 2003. Because all legal documents had been prepared for the Dalian Maritime Court, Bolshoretskoe’s change in plans necessitated we completely change our plans also. With time so much of the essence, we asked Sunfanlong, who works in Qingdao Wincon law firm, to work with us and we transferred all legal documents to him.

Successful Arrest of the cargo

On July 7, 2003, Dan arrived in Qingdao. The IVAN POLZUNOV arrived in Qingdao the next day and began to discharge 15 containers of pollock for transshipment to Europe. When the judge, Wincon’s lawyer and Dan saw that the containers were being offloaded on trailers for transport to the container terminal, they went straight to the terminal to deliver the arrest papers on all 15 containers. However, after waiting nearly five hours at the terminal and waiting well into the night, only three containers had arrived and been arrested. Nobody seemed to know what had happened to the other twelve containers. We were concerned Bolshoretskoe and/or Alimex had learned of our arrest warrant and had hidden the other twelve containers. Adding to our worries was that we had by now learned that Alimex was to ship all 15 containers to Europe the very next day. We checked everywhere for the missing twelve containers. We checked with various trucking companies. We checked all around the terminal. Nothing. Eventually, we learned that the twelve containers had been in the terminal all along, but had been issued separate bills of lading from the first three and placed in a somewhat separate area. We had succeeded in arresting all fifteen containers.

After our having engaged in twelve days of intensive e-mail and telephone communication together, Dan showed up at Dalian’s airport. His high praise of our work conveyed his satisfaction of our efficient job. Dalian and Qingdao’s picturesque scenery and modern city construction impressed Dan deeply and changed his previous imagination regarding this part of China. He loved the food and our culture and talked about returning some day with his family on holiday.

Hard success to acquire guaranty and lift the arrest

Now that we had the pollock under arrest, we would need to maintain it in its frozen condition at the terminal. Pollock is a valuable fish and the costs and risks during the arrest period were high. The sooner we could resolve the dispute, the sooner the fish would be on its way, and the better it would be for all parties.

The day after we arrested the cargo, we received a letter from Alimex’s lawyers in Denmark, claiming Alimex owned the arrested cargo, not Bolshoretskoe, and threatening Daxin with criminal action. Alimex’s lawyers copied this letter to the court and to Daxin. Though confident that it was in the right, this threat of criminal action did not sit well with Daxin. We replied to Alimex’s lawyers by lecturing them on Chinese and international law and by declaring that Alimex would suffer even more losses if it insisted on pursuing litigation in China instead of cooperation. The reaction from Alimex’s lawyers was overwhelming. They wrote me a letter filled with furious and derogatory words and stated they would never communicate directly with us again. The case had fallen into deadlock.

Despite the initially tough attitude of Alimex’s lawyers, we knew we could not abandon our efforts to achieve a settlement, particularly since we knew settlement made sense for all parties. We proposed a three way agreement between Daxin, Alimex and Bolshoretskoe, whereby Alimex would keep its purchase price funds and not pay any party for the fish until the dispute between Daxin and Bolshoretskoe had been resolved through arbitration in Canada. Alimex would then pay the winner of the arbitration up to the purchase price of the fish. Alimex would also agree not to pursue any claims against Daxin for wrongful arrest. Upon the signing of this agreement, Daxin would release its arrest of the cargo. Daxin secured oral agreements from both Bolshoretskoe and Alimex to go forward with such an agreement.

For the fish to go out on the next liner to Europe, Dan and I had to work overtime in drafting the appropriate agreements. This time, the multitude of languages and time zones (China, Russia, Singapore, Seattle, and Denmark) worked to slow us down, and by the time Bolshoretskoe received its Russian language copy of the agreement, only a few hours remained before the pollock needed to be loaded on the liner to Europe. But, at the last minute, Bolshoretskoe changed its mind and decided it would not sign. All our hard work had been for naught. We were all exhausted.

The next liner to Europe was leaving in six days. During the weekend, we stopped talking with opposing parties and communicated with only Dan and Daxin. We went back over the case history and analyzed each party’s positions and risks. We concluded that Bolshoretskoe was Daxin’s real adversary. It was Bolshoretskoe that owed the money and it was Bolshoretskoe that had avoided payment for so long. It also was Bolshoretskoe that had backed out of its oral agreement. There had been no prior conflicts between Daxin and Alimex. Though Alimex was listed as the consignee of the pollock on the Bill of lading, it had yet to actually pay for the fish. Above all else, Alimex wanted the pollock sent to Europe so it could fulfill its commitments with its European buyers.

If we could persuade Alimex to provide a deposit or the purchase price to the Qingdao Maritime Court, we would lift our cargo arrest. If, on the other hand, Alimex insisted on paying the purchase price directly to Bolshoretskoe, the arrest would remain in place, and Alimex would be unable to fulfill its supply contracts with its European buyers. Daxin would be left fighting a two front war against Alimex and Bolshoretskoe in the Chinese courts.

We told Alimex that if it did not immediately settle, we would move the court to require Alimex pay the Pollock purchase price to the court and seeking the immediate sale of the pollock at auction. Within hours, we received contact from a Chinese lawyer retained by Alimex, who would, he informed us, be going to court to have our “illegal” arrest thrown out. The court ignored him.

The next liner for Europe was coming to Qingdao the next day and it finally began dawning on Alimex that if it wanted to get the pollock to Europe and to its customers, it would need to settle with us. Intensive settlement talks began anew and another oral agreement was reached. Alimex would guarantee to pay up to the amount of the pollock purchase price to whomever prevailed between Daxin and Bolshoretskoe. Alimex also agreed not to pursue any claims against Daxin arising from Daxin’s allegedly wrongful arrest of the cargo. A settlement was drafted and signed and the parties worked diligently to get the arrest lifted in time for the product to make it on that day’s liner to Europe.

Daxin had a Guarantee Agreement from an established and well funded Danish company and we had achieved a smashing victory on this exciting arrest of cross-border transshipping cargo.

Somewhat smooth sailing in recovering Daxin’s award.

We then filed Daxin’s case against Bolshoretskoe in the Qingdao Maritime Court. Bolshoretskoe consistently failed to attend any court hearings and we eventually secured a default judgment against it.

Alimex then paid Daxin all but US$15,000 of the amount it had guaranteed, but claimed entitlement to withhold US$15,000 for itself to help pay for the costs it had incurred in China defending against Daxin’s arrest. One e-mail from Dan threatening arbitration in London (pursuant to the Guarantee Agreement) for the $15,000, plus all fees and costs, convinced Alimex it had no case on this either. Alimex paid the remaining US$15,000 to Daxin and the case was over.

After six months, close cooperation and flexibility by lawyers on both sides of the Pacific had given us full and total victory.

Epilogue

A few months after I closed the case, Dan sent me an e-mail telling me he had heard from one of his Danish clients that Alimex’s Danish lawyers had told them of our great job on this case. Dan and I have since worked on a couple additional cases together, but it will be this first one that I will always remember. In thinking of this case, I know I will never forget the sleepless nights I spent communicating with lawyers and parties in four times zones. But I also know that the pride I feel from knowing how much we achieved, despite having to work through the laws of so many countries under such tight deadlines, is what will always stand out.

Our wisdom, our legal knowledge and our strenuous diligence had garnered us high praise not only from our foreign colleague and from our client, but also admiration from the opposing party. I share this honor with Harris & Moure, with our Fada Law Firm and with Qingdao’s Wincon Law Firm, and with our Chinese Lawyers.