Tuesday, May 4, 2010
Oversee.net Sues Former Employee of SnapNames
Los Angeles-based Oversee.net said Tuesday afternoon that it has filed a lawsuit against a former employee of its SnapNames subsidiary, Nelson Brady, related to the shill bidding scandal at SnapNames. According to Oversee.net, it is seeking over $33 million in damages, including punitive damages, from Nelson Brady. Brady was formerly VP of Engineering at SnapNames. Oversee.net was rocked by a scandal in November, after the firm discovered that Brady had been automatically placing shill bids under the name "Hank Alvarez" to boost bidding action at SnapNames. Oversee said that it had also discovered that Brady had embezzled funds from Oversee, by fraudulently refunding himself a share of the purchase price for names he won. Oversee.net said the lawsuit came after efforts to settle privately with Brady to recover its losses--including the rebate fund the form was force to establish to refund buyers of domains on SnapNames--failed. Oversee said Brady had affected about 5 percent of the auctions on the site since 2005, affecting about 1 percent of SnapNames auction revenue. Oversee also said it had also reported Brady's conduct to the US Attorney's Office and to the Federal Trade Commission in November. In a statement, the firm said that "no amount of money" could "compensate the damage Brady has caused to SnapNames' and Oversee's reputation in the marketplace. "