Having a day to reflect on the revelation about the Snapnames bidding scandal, I put together a list of the 5 most surprising things we learned yesterday:
1. Who It Was:
The most surprising part of the story was the identity of the person involved in shill bidding, Nelson Brady.
Not only was Nelson an employee of Oversee, but he was a former officer (VP) and a shareholder of the company that sold Snapnames.com to Oversee.
Oversee paid reported $25M or more for Snapnames.com and since he was a shareholder, Mr. Brady should have had a rather large payday when Oversee bought it. So its even more surprising that he would “risk it all” and continue to engage in this activity long after getting paid on the purchase.
2. The Company Came Clean.
In the corporate culture that exists, especially in the US, its extremely rare that we see a company stand up, come forward first with an admission of a problem and offering a solution at the same time.
This is a culture where we all have become used to seeing corporations burying the truth, paying people off to keep quite, deny any wrongdoing, errors or problems and almost always forcing people to spend years and tons of money to seek any compensation and usually years of appeals after that.
We have seen our corporate culture in action over the years in many ways; During the financial meltdown where companies leveraged assets well beyond any acceptable risk levels their investors we willing to accept; we have seen tobacco companies going decades withholding information that their products could kill their customers; car manufactures continued to produce cars they knew had defects, for many years after they knew that such defects could cause severe injury or death to their customers; insurance companies ordered employees to simply deny every claim, valid or not, to save money.
Unfortunately we now expect this type of conduct from corporate America and every “big” and rich company in America.
How refreshing was it to see a company stand up and say “We have a problem, and we are going to make it right, as best as we can.
I know their are those out there that believe there was a “reason” the company came forward, other than what it seems on its face, trying to do the right thing.
At some point we may get information that indicates otherwise, but for now, until and unless we find out differently, I’m satisfied that Oversee is trying to do the right thing to their credit.
3. The shear numbers of it.
You have to admit the numbers were simply astounding.
1,000,000 auctions held by SnapNames over the years.
50,000 auctions in which Mr. Brady allegedly was involved in.
If everyone of the auctions Mr. Brady was involved in sold just for the minimum of $60, that would be $3 million dollars.
However we know that was not the case.
If the average selling price of an auction on Snapnames Mr. Brady was involved in was $300your talking about $15,000,000.
If the average was $500 the number becomes $25 Million.
If the average was $1,000 your looking at $50 Million.
That a lot of money.
Huge numbers all around.
4. The arrogance of NameJet.com
Yesterday’s announcement by NameJet.com, which I’m sure was sent out to assure its customers that there was no shill bidding taking place on their system, came across to me as a reaffirmation of the mentality that caused SnapNames.com to fail to find this problem for years.
When a company thinks that their own employees can’t get around the checks and double checks they have in place, even when they know those same employees created the checks and double checks, its troubling.
I would have rather seen a statement worded to the effect that NameJet.com monitors every transaction and constantly on alert for shill bidding or other improprieties, be it from employees, customers, networks of bidders, etc., rather than to say simply it “can’t happen here”.
5. SnapNames gave refunds?
Who Knew?
Over the years I have made plenty of mistakes; bid and won domains that were not spelled correctly (if you don’t know yet, I’m a horrible speller) or otherwise domains I did not really want to own.
I never thought for a second of asking for a refund.
If I made a mistake I just ate it.
I sure never knew bidders had an option of undoing an auction on Snapnames and getting a credit back.
The least surprising thing that came out of the Scandal?
That’s easy, its the same as the most surprising;
Who is was.
Forums for years have been discussing the bidder “Halvarez”
People have complained to SnapNames.
SnapNames was therefore alerted by its own customers as to the questionable bidding patterns and history of this bidder.
As shocking at it was to find out that Mr. Brady was the former employee alleged engaged in this shill bidding, logically he could have been the only employee who could have done it.
Why?
Mr. Brady probably knew the backend of the SnapNames.com bidding system better than anyone on earth.
Any check, double check or triple check that was built into the system, he either built or was involved in building.
Therefore he was probably the only employee who knew enough about the system to use it for his personal benefit, how to cover his tracks, how not to set off any of the “alarms” built into the system.
It really couldn’t have been anyone else.
All that lying and hiding and bidding on so many auctions for so many years and he acted alone?
Pretty hard to believe.
The CFO never questioned anything?
Developers never helped him or found discrepancies?
I’m not a conspiracy theorist and I like Snapnames but even with his position and knowledge and motivation, I don’t see how NO ONE in Snapnames could not know this was going on.
Why was he still bidding in auctions as recently as March 2009?
50,000 auctions?
Five years?
All the complaints from Snapnames customers and no one in the company had any idea?
C’mon. Really Snap? I’m supposed to believe Nelson Brady did all this by himself?
I’ll wait for the details but I have to wonder.
Can happen. Jerome Kerviel, Yashuo Hamanaka, Brian Hunter.
I agree that it’s extremely rare though.
Rob
If the guy who programmed your system, designed your software, put in your fail safes and knows the back end better than anyone on earth decides to screw you, your in trouble.
Wish I could see my bidding history as I know for a fact that I was involved with many auctions with “Halvarez” by my side. But I guess I will have to take Snap’s word on which auctions they were since bidding history has been dwindling out of my account for years now. I always thought to screenshot those auctions, but I was to busy working my ars off to pay off the previous domain auction I won.
BUT This goes much deeper for me. I was thinking about collecting what I call small gems (worth at that time a couple of hundred) and picking them up for reg cost after it fell from snap. But I said to myself, every time I find one of these small gems that another bidder was involved in my auction,”“Halvarez.” So if Halvarez was also finding my gems, and I worked my arssssss on finding them using worktracker when OVT was the way to go, I said, well ohh well “Halvarez” is buying them up and I sure cant afford 60/70 per domain x 10 domains a day. So I guess my dream of owning thousands of generic gems at 8 bucks was just a dream. If I only knew then what I knownow, my portfolio could of been as big as MostWantedDomains.com 🙂
Michael before you champion them for “coming clean” Its Oversee making this known, most likely to get the $25 Million back. They are doing this out of self interest IMO not to be an example of great corporate responsibility.
You think they knew about this Michael before they reduced the affiliate program commission to 5% from 20% ?
Shane
Just for the record we were subject to Mr. Brady fraud and shill bidding as much anyone else.
Everything
I don’t know what the relationship between Brady’s shill bidding and the lowered commission.
Do I think Oversee knew this was coming down the pike when they lowered their commission?
Yes I do
Do I think that Oversee lowered the commission because they knew they were going to have to shell out millions to compensate bidders?
I don’t know.
Your guess is as good as mine.
Would this every had come out had Oversee not brought it out?
Right now I would say yes.
Oh by the way off topic congrats on the sales on Dn Journal nice to see you apart of the sales report.
Everything
Thanks
MHB – I hear ya.
I said “BUT This goes much deeper for me” cause when I had only one bidder it was usually halvarez..but duh…I’m sure I wasnt the only one who ran into just Halvarez over and over as the program saw everyone who bid on snap.
I new something was up when I would bid at the last minute, forgot the time…think it was 2 something est and sure enough.
Sucks for all of us….
I find it strange that he used the same alias all those years.
On a side note, Did anyone ever find out who Vaxis was?
Maybe the next poll Mike ( I am not telling you how to run your blog, just an idea)
Could be if people will still use Snapnames and Moniker, I started a poll at Namepros and DNF followed up on that too.
Actually on Namepros I did not include Moniker so started a separate one. Seems people are worried about Moniker with all of the snapnames talk.
Shane
To the best of my knowledge “Vaxis” is Vertical Axis, the Ham Brothers
Everything
Was going to do that but Andrew at DomainNameWire.com asked this poll question today and I don’t want to look like I’m copying him
Oh ok cool.
Michael can I ask you a question about Namejet ? Do they have a special relationship with Buy Domains ?
I own a lot of and usually pick up any LLtv.net or LLtv.org usually all 676 are regged at all times. Once in awhile a few drop. I picked up a couple on namejet for min bid Satv.net and Bntv.net for example.
Now there was one that was not the greatest letters and there were no bidders up til the time to bid. So I thought oh I will wait let it drop and get for $7.
Name never dropped and BuyDomains owned it. Months later watched same thing another LLtv.net and same exact thing happened. Never dropped BuyDomains owned it.
Be ready for big surprises. There will be more people involved in this scandal, including companies themselves (iReit and NetworkSolutions), and other employees of SnapNames.
Secondly, I also wanted to point out the stupidity of NameJet. There is a saying, “never say never”. So far we had this issue on NameJet, TDNam, and Pool, and the last of the major 4 is NameJet, and they think they have no problems. Chances are they have something similar going on – that’s what history is telling us so far.
I also wonder Michael as all this gets public, another interested party will be Cadna to look at what names people got refunded on, a lot of TM’s at Snapnames I think ADDIDAS.com sold for over $40,000. This will get interesting from a lot of areas and some no one was even thinking about.
Everything
I’m not privy to what relationships Namejet.com has and with whom, however I can tell you that they have been allowing owned domains to be sold on their system for most of this year. So if Buydomains or any other major domainer was willing to put up domains at no reserve they could strike a deal with NameJet.com to put them in the drop cycle and auction them off although they are owned domains.
Hope that helps
Thank you Michael.
Matt
I’m not ruling out any new information or big surprises that may come from any auction house.
I’m just choosing at this point, without any facts out there to the contrary, to believe what Oversee is saying and think that they could have kept this all quite if they chose to.
Ham Brothers, deep pockets…thanks..
Congrats on Domainer of the Year!
Everything
I’m not sure that CADNA would have legal standing to get that information from SnapNames.
They were not a bidder, a buyer, or a seller.
Shilling has been going on since auctions were invented. But you would wonder why he would have only one account. You set up 100 accounts he is using bots. Spread it out no one is going to be on to that. One account ? Domainers are strong in spotting trends he underestimated the wrong group.
Oh I agree Michael I meant if this turns into a class action, that info becomes public right ?
Everything
Maybe
A court could order that all details of the case remain confidential only available to the parties in the suit and not made public
Shane
Thanks
Great conversing with you at 1 am we are in same timezone. Sorry if I monopolized one post.
One thing that has yet to be discussed (as far as I know)
What happens to all the domains NOW?
I assume if “Halvarez” bid on 50,000 names and won most
he has a very large portfolio. What next?
Treating customers like fools, Brady is better than Registerfly’s Kevin. Such a shame to say that RegFly is still in business.
WeBuyThe.com
My understanding of this situation is he kept like 1% of the 5% he bid on.
A blog call dotsnews.com is reporting that Brady sold some of the domains owned to ireit back in 2006
http://dotsnews.com/domain-name-news/620
@ shane
Vaxis was K.Ham – 100% sure of it as I used to check whois records after the auctions sometimes.
I find it very hard to beleive that Halvarez was Nelsons only fake bidding name. In fact, I don’t beleive it although I don’t have any proof.
Very good point. And actually the most logical next question for anyone who ever bid at Snapnames.
Call Craig Snyder, President of Snapnames and demand your money back.
Let’s not heap on the praise to Oversee too thick just yet….
1. Before they “announced” this (won’t say “come clean” because it is not all out yet) they secured the services of RUST, who is not an “independent auditor” but a major damage control/PR firm. Get real, they knew this was coming out. Something got dug up and this was going to be exposed. Hence, the hiring of RUST to spin it in a favorable light. Follow the Money.
2. Thinking that Brady acted alone is naive. Follow the money. How many other Snap employees defended “Halvarez” as being a real client? Why, he got refunds? Follow the money.
I’m not convinced that we have enough information yet to be making decisions/judgments, so I’m waiting for more to be revealed. Because there is a Hell of a lot more to this and only a fool would think otherwise. Last I checked, this industry was not rampant with fools….
@ Mark – don’t blame Craig Snyder for this. He just started there a few months ago. And from everything I’ve heard about him, there’s no way he’d sweep something like this under the rug.
I have seen some strange things happen at auctions of .cm domain names on namejet, the price of some good domains go up and up and up and up, I have asked a refund because of a lot strange things I have found.
To receive the refund I have to threaten them because at first they don’t want to give me a refund.
Also it is strange that if you search for the address of namejet you only see a school on Google Maps Street View.
Do you know that enom is from namejet.
Cartoonz
We are all waiting to see how it will play out
I can only deal with the fact that are known at this point.
You think other domain auction platform have been run 100% clean with no game playing, shill bidding or other nonsense.
Of course not.
But so far Snapnames is the only one that has admitted to it, released the news on its own and is offering a solution.
So in my book I have to give then credit for this.
Now if we find out that Oversee came forward because the release of the info was coming from another source, then my opinion will change
Marl
I agree with Andrew
Craig just came aboard and some blogs are crediting him with finding and bringing to light the Brady Problem as Craig formerly worked at ireit which the story goes bought domains from Brady in years past
One other surprising thing that nobody seems to mention….
When a company is ticking along nicely management seldom have the urge to do a root up evaluation of all their systems and employees. However, when a company undergoes a merger or is sold, everything is gone through with a fine-tooth comb.
Here’s the questions I asked on my blog: If oversee.com bought snapnames a couple of years ago ($25 million is what I think they paid) didn’t they do even the most basic of due diligence? I mean, threads about Halvarez have been around since 2006. There’s been a HUGE amount of suspicion surrounding his account. It would have come up in DD.
C’mon, oversee, fess up. Did you or didn’t you do the DD? And if you did, why didn’t you act on this sooner?
“as Craig formerly worked at ireit which the story goes bought domains from Brady in years past”
So maybe Craig bought domains from Brady???
How long has Craig known Brady?
Fair questions then.
Rob
Not sure, fair questions.
Not sure Craig was the person at ireit that did the buying.
Here is the blog post I’m referring to:
http://dotsnews.com/domain-name-news/620
http://dotsnews.com/domain-name-news/611
The plot thickens. What a mess.
I wonder what is going to happen with all the Halvarez domains.
What if he beat me and won the domain? Will I get the domain?
Did you get your Rebate report from Snap yet?
I got mine and have money coming my way.
Maybe start a thread to let people post the amount of their rebate checks?
Rob
I got a rebate offer, not sure what I’m going to do yet
Its a substantial amount of money, yet I want to see all the auctions I was involved with Brady and that info as you know is not accessible yet but is coming back.
Interesting idea on the thread.
Repeat after me — ATTORNEY GENERAL
and — IRS…
Dishonesty / Greed — Deserves the BIG GUNS…
Wonder how many will jump ship to not be tarnished
by association — for what’s to come…
Doesn’t matter how much I liked a company
and some of the folks within… My relationships
will remain strong… but my use of any company
so tarnished – will be halted – till my confidence
with them comes back up (if ever)…
Now if only I could finish 2009 finding some
good INDIVIDUAL Brokers that really are
capable of DOING what they say they can do…
and have the connections they CLAIM to have…
such a disappointing bunch of “broker wannabees”
out there (so far) … can you tell I am venting…
We are into the weekend folks…
Have a good one…
Hugs from BELL …
~Patricia – DomainBELL
~Patricia
It is great that they came clean, but also sounds part self interest until they return all the money, show the extent of damage done to clients, and sue that one share holder for damages. Then Snapnames.com, would be back on track to lead the pack …
I just sent this in to Snap:
I would like to formally request a list of ALL the domains that Halvarez won where I was also listed as a bidder.
I believe I have a right to see that and potentially recover those domains for which he outbid me.
As you are offering refunds for money spent due to his actions, Snapnames should also be offering domains lost to Halvarez to the under bidder. Both actions are justified compensation.
Rob
I agree with you 100%
I think Snapnames should furnish every bidder this information.
Each domainer should get the detailed bidding information, for each auction they had a bid, even if it was just an opening bid, that Halvarez was in.
I want to see all of these as well.
I also agree there is more to be compensated that snapnames.com is offering
Jason
Oversee did a horrible job at due diligence in acquiring SnapNames.com.
Remember this is the same Oversee that paid at least $25 M for SnapNames.com not realizing that there top registrar Network Solutions had an out in their contract with SnapNames.com that they used as soon as it was sold to Oversee to pull out of that contract.
If Oversee missed that one, they sure could have missed shill bidding.
# 6
snapnames isnt so special after all?
Attention –
Present and former customers of
RegisterFly.com
Class Action Lawsuit Against RegisterFly, ICANN, and ENOM
Have you been denied or are you being denied access to your domain names that you have registered at RegisterFly.com?
Have you lost domain names despite attempting to renew them through RegisterFly.com or transfer them elsewhere?
Have you been charged for services that were not delivered by RegisterFly.com?
Was the domain contact and/or ownership information changed without your permission to either RegisterFly.com or someone else entirely?
It’s time to PROTECT YOUR RIGHTS >>
#7
> Our File Number: FF++++-09
> Complaint About: Snapnames.com Inc.
>
>
> Thank you for the information that you sent us. Although there does not now appear to be a need for an investigation or legal action, we will keep your information on file as part of the public record.
>
> Our primary goal is to identify and eliminate the most serious marketplace violations, and many factors are considered in determining what cases we should pursue.
>
> We appreciate the time that you took to alert us to a possible problem in the marketplace. Your information may prove to be valuable in a future enforcement action.
>
> If you need to contact us about your complaint, please write to me and note your file number: FF++++-09, or contact me by phone at 503-934-4400 or e-mail at mailto:heather.j.mcfarlanemartinez@state.or.us
>
> Heather McFarlane-Martinez
> Enforcement Officer
> Financial Fraud/Consumer Protection Section
> Oregon Department of Justice
So I can get a refund for the $245.77 I paid for whowantstoknowwhatididlastsummer.com
; )