Retroactive changes in the ratings of the largest domain deals are not uncommon. Money, as we know, loves silence, and therefore information about large purchases on the domain market can leak into the public domain in a roundabout way over many months and even years. But we are talking about adding new deals to the ratings. But retroactive removal from them is a very rare event. But Domain Name Wire reports exactly such an event - and this story looks like a ready-made scenario for an economic detective story.
In March 2008, the domain market was stunned by the news of the purchase of the Fund.com domain for $10 million. Some experts questioned the veracity of this information from the very beginning. However, they could not prove their point, and as a result, the purchase of Fund.com by a wide margin topped the rating of the largest domain deals of the year according to the authoritative DN Journal.
The domain was purchased by entrepreneur Jason Galanis to create a multi-profile financial service with the same name. But, as follows from the now available court documents, this service was nothing more than a large-scale fraudulent scheme. Part of the fraud was the fictitious purchase of a domain name for an incredible amount of money. In the language of stock market players, this is called the “pump and dump” strategy - artificially inflating the price of an obviously cheap asset and drawing attention to it in order to sell it for as much as possible. As it turned out, several fictitious transactions were used to demonstrate a payment of 10 million dollars.
But the “criminal history” of the Fund.com domain does not end there. In 2016, Galanis’ company - who, however, had long since left it by that time - found itself in a dire situation. Thomas Braziela, who had previously been an investor in Fund.com, was appointed as an external manager. Apparently, he understood that the purchase of the domain for $10 million was pure fiction, but the huge sum was only to his advantage. Braziela sold the domain for $1.5 million, and $8.5 million - the difference between the fictitious purchase and the real sale - was recorded as an operating loss in order to reduce the tax amount. In the end, time put everything in its place. In 2020, a New York court sentenced Jason Galanis to almost 16 years in prison for fraud. And about a month ago, a Delaware court ruled that Thomas Brazile will have to pay about $2 million for his machinations. The only thing left to do is wait until the purchase of Fund.com is excluded from the ranking of the largest deals of 2008.
