RegisterFly was a New Jersey (U.S.) based internet hosting service and domain registrar that had their ICANN-accredited status terminated in March 2007.ICANN Blog FAQs for RegisterFly customers, April 3, 2007
History RegisterFly formerly acted as a reseller of the services of eNom, but became an accredited registrar in its own right in 2006 through the acquisition of "Top Class Names" sold to the company by Directi with Bhavin Turakhia completing the asset transfer.The Register, Burke Hansen. ICANN sued by irate RegisterFly customer, as class action rumble begins, March 28, 2007 By February 2007, the company was registrar for approximately 2,000,000 domain names held by about 900,000 customers.The Register, Burke Hansen. Registerfly on the fly, ICANN on the run, February 19, 2007 Notable clients of RegisterFly included the government of Thailand, the Easter Seals charity, and pop star Michael Jackson.Business Week, Steve Hamm, Allegations Fly at Registerfly, Claims of embezzlement and complaints from irate customers threaten to derail the small domain-name registrar, March 8, 2007 In 2007, ICANN launched an investigation of RegisterFly amid allegations of fraud. No lawsuits were initially filed between the governing domain body and the company; however, there was during this time a lawsuit between the company's two owners, CEO John Naruszewicz and Kevin Medina. RegisterFly's website went offline for a time, causing serious concern amongst registrant customers of RegisterFly.Netcraft news, RegisterFly Site Goes Offline, March 6, 2007 Hostsearch news, Netcraft Reports RegisterFly Site Offline, March 8, 2007
The incidents and lawsuit that then followed were the result of a feud between RegisterFly co-owners Kevin Medina and John Naruszewicz, who were at once both business and intimate partners. As problems at RegisterFly gained momentum, their ten-year-long business and romantic relationship abruptly came to an end.The Register, Burke Hansen; ICANN: we can help Registerfly mess, March 14, 2007 The lawsuit between the former partners alleged, among other matters, that Medina misappropriated corporate funds for personal use.The Register, Burke Hansen. Registerfly files suit against ousted CEO, February 22, 2007 However, the court ruled on March 8, 2007, in favor of Medina, stating that Naruszewicz had no ownership over RegisterFly. Medina resumed control over RegisterFly, but not before Naruszewicz published a public apology to customers on the company's web page.Business Week, Steve Hamm, et al. Judge Rules for Ousted Registerfly CEO, March 9, 2007
On March 28, 2007, U.S. District Court Judge William Osteen unsealed a class action lawsuit filed by Attorney E. Clarke Dummit against RegisterFly, eNom, and ICANN. The lawsuit alleges that RegisterFly systematically defrauded customers attempting to register or renew Internet domain names.
Due to the reported negligence of RegisterFly in protecting its customers, angry calls have arisen for oversight of the domain registrar industry.Business Week Online; "How Secure Is Your Domain?" Problems at RegisterFly.com shed light on loose oversight of Net addresses", March 26, 2007 On March 16, 2007, ICANN publicly announced that Registerfly will cease operating as an ICANN-Accredited Registrar on March 31, 2007.ICANN, Official ICANN announcement, March 16, 2007 ICANN officially removed Registerfly's accreditation on March 31, 2007 and ordered Registerfly to cease operation and remove the ICANN logo from Registerfly's website. However, Kevin Medina invoked the arbitration clause in the registrar's accreditation agreement which allows him to continue to operate as a domain name registrar through an arbitration process laid out in the contract.ICANN.org ICANN public participation site
On April 17, 2007, a federal judge granted a temporary restraining order to ICANN, compelling Registerfly to turn over all registration data within 48 hours and to update it every seven days.ICANN.org, ICANN announcement April 17, 2007 Medina failed to do so, and ICANN was granted a civil contempt order against Registerfly on May 9, 2007, compelling Registerfly to comply with the preliminary injunction. Because Kevin Medina failed to show up for the hearings, the judge issued a show cause why Medina should not be found personally in contempt of court on May 16, and ordered another hearing for May 25, 2007. Kevin Medina appeared in court on May 25, 2007, and was found personally in contempt for not complying with the previous orders. The temporary restraining order was made permanent. He was given 48 hours to post a notice on his website stating that Registerfly's accreditation had been terminated, and until June 1, 2007 to give ICANN all registrant data. Registerfly could be fined $5,000 USD a day for failure to do so. Registerfly initially posted the required ICANN notice in the help section of their website; however, the notice did not meet all of the order's requirements, especially as to placement on the top one-third of every page in a fourteen-point bold typeface.ICANN.org, ICANN vs. Registerfly preliminary injunction item 11 RegisterFly has since printed the required notice on its home page.RegisterFly.com, Home Page, retrieved 5 September 2007
Ownership lawsuit In February 2007 eNom formally severed ties with RegisterFly over continued consumer complaints.RegisterFly Reseller Termination F.A.Q. John Naruszewicz, a co-owner of RegisterFly, filed suit against his business partner, CEO Kevin Medina (they each were thought to have owned 50% of the company). Medina was fired by RegisterFly, reportedly over civil liabilities relating to allegations of funds mismanagementRegisterFly, RegisterFly Official Reseller Termination FAQ but Medina and Naruszewicz continued to dispute legal control over the company.Malaysia Sun, Brawling RegisterFly partners in fight to the death, February 24, 2007 The Register, Burke Hansen. ICANN rides to the rescue in Registerfly meltdown, February 23, 2007 Meanwhile, RegisterFly filed suit against Kevin Medina, alleging he had stolen company funds for a $27,000 male escort service, a $6,000 liposuction procedure, a $10,000/month penthouse apartment in Miami, Florida and a $6,000 chihuahua dog. This alleged misappropriation of funds, along with Medina's lavish spending, was said to have caused the company's woes.IT News Australia, Tom Sanders; ICANN pulls Registerfly's licence, March 20, 2007 Court documents claim over 75,000 customer domain names were forfeited by RegisterFly.com in one month alone because of the company's failure to pay registration fees. RegisterFly management also claimed that Medina deleted passwords and access to billing system information to prevent the issuing of customer refunds.Ars Technica, Jacqui Cheng Registerfly faces losing ICANN accreditation, February 27, 2007 However, Medina reportedly accused his ex-lover Naruzewicz of spending $60,000 in company funds on Moroccan furniture for the corporate office.
Website split and court ruling In early March 2007 two competing and visually similar versions of the RegisterFly website were online. Naruszewicz had taken over control of RegisterFly.com; and RegisterFly.net was set up by and under Medina's management, each through separate service providers. On March 7, 2007, reports emerged that Registerfly.net was effectively a phishing site gathering credit card sales but not providing a product or service.RegisterFlies News; ACT NOW - Important News Release Customers were urged to avoid all business with RegisterFly.net, and immediately, to change their passwords via RegisterFly.com, since even though the websites were separate, Medina still had a duplicate of all account information.
On March 8, 2007, then-CEO John Naruszewicz made an official announcement that having regained control of the website, he would begin rectifying payment problems and recovering lost domains.RegisterFlies News; Official Registerfly Announcement Later the same day, United States district court Judge Peter Sheridan ordered that legal control of RegisterFly be returned to an official ownership state as of December 17, 2006, when, at this time it was discovered that Medina never correctly filed proper ownership agreements and they were being drawn up and discussed. This ruling essentially allowed Naruszewicz to forfeit any claim to Registerfly, with Medina being the sole owner and fully responsible for all company affairs. After the ruling, Medina said “This decision puts me back in the driver's seat. I believe I have built a lot of customers that will weather the storm.”Business Week, Steve Hamm and Megan Tucker; Judge Rules for Ousted Registerfly CEO, March 8, 2007 Without Naruszewicz at the helm, all Registerfly employees tendered their resignation on the same day as Medina's court victory. This was one of the final nails in the coffin for this company.
Naruszewicz said he would not appeal the judge's ruling and stated, “We lost and it's all over. The company will implode in days and 1 million domain names are going to be lost. It's a damned shame.”Netcraft News, Rich Miller; Two RegisterFly Sites Online as Ousted CEO Returns, March 12, 2007
ICANN and customer complaints
ICANN had received many customer complaints about RegisterFly. There were allegations of fraud dating back to 2004, including reports RegisterFly had suspended customer accounts and domain names in retaliation for complaints about overcharging. Kevin Medina also reportedly used the fake alias of "Tim Shor". eNom and ICANN also accused RegisterFly of inappropriately altering clients' WHOIS data. Complaints about RegisterFly were issued by other ICANN-accredited registrars, ICANN board members and the United States Department of Commerce.
On February 22, 2007 ICANN notified RegisterFly they would lose their accreditation as a domain registrar if certain issues were not corrected.ICANN, Kurt J. Pritz, Senior Vice President, Services, Notice of Breach of ICANN Registrar Accreditation Agreement, February 21, 2007 News sources reported that as of February 19, 2007 RegisterFly had suspended all business contact including e-mail, telephone and fax communications.Malaysia Sun, Alarm bells ringing over domain registrar, RegisterFly.com, February 19, 2007 Meanwhile, ICANN was also the subject of criticism over their handling of RegisterFly's problems, with allegations of a “laissez faire attitude toward customer allegations of fraud”.The Register, Burke Hansen Of ICANN and the Registerfly meltdown, March 3, 2007
ICANN lawsuit and domain restrictions On March 4, 2007 (a Sunday) ICANN announced it would file suit against RegisterFly in United States federal court the following March 6 for failing to comply with an audit as required by their Registrar Accreditation Agreement (RAA).The Register, Burke Hansen, Stiffening at last, ICANN threatens Registerfly with legal action, March 4, 2007 However, ICANN deferred the suit after RegisterFly provided ICANN with minimum registrant information. ICANN also convinced several top-level domain registries who administer the .com, .net, .biz and .info namespaces, including VeriSign, NeuStar and Afilias to restrict pending-expiration Registerfly domains into a so-called “Server-Delete-Prohibited” status. ICANN stated, “This will prevent them from being deleted from the registry and becoming available for re-registration by others.”
.be domains