$65 million judgment awaiting jailed man

A former Rancho Santa Fe man jailed on contempt charges involving the theft of a pornographic Web site was ordered transferred to Northern California yesterday, where a $65 million judgment against him awaits.

Stephen Michael Cohen, 57, was arrested Thursday in Tijuana and appeared in San Diego federal court yesterday, where he admitted he was the man named in a 2001 arrest warrant signed by a San Jose federal judge.

"I don't have a lot of financial wherewithal," Cohen said, noting the large judgment against him and asking for a court-appointed lawyer.

A defense lawyer made the same argument earlier in the brief hearing.

"I think you'll find some disagreement on that from some quarters," Judge Leo S. Papas had said in response.

Cohen used a forged letter to gain control of sex.com, which he used to create a pornography Web site that took in more than $40 million, the San Jose judge found.

The judge found Cohen in civil contempt after he failed to appear in court, moved money overseas and moved to Mexico.

Gary Kremen, the rightful owner of sex.com, spent $4.5 million in legal fees searching for Cohen and his assets after winning the $65 million judgment.

He was able to seize Cohen's Rancho Santa Fe home and money in some bank accounts, but says Cohen still owes him, with interest, about $82 million.

Cohen remained elusive, if not silent.

Kremen said in an interview this year that he frequently got calls from Cohen from Mexico.

In Tijuana, Cohen lived in a penthouse apartment in the upscale Chapultepec neighborhood near the city's center, but often ate hot dogs at the Tijuana Costco.

"He was very cheap," said Alejandro Osuna, a Tijuana lawyer hired by Kremen to track down Cohen.

In court papers, Kremen says Cohen used some of the money he made from the online pornography business to buy a Tijuana strip club in his daughter Jhuliana's name.

Jhuliana Cohen, 21, is scheduled to be sentenced Monday in San Diego federal court after pleading guilty in August to trying to smuggle marijuana across the San Ysidro border crossing June 22.

Her lawyers say she made a youthful mistake by agreeing to transport the drugs for a man she met in a bar and will pay for it by never being able to visit the United States again.

A longtime resident of both sides of the border, she has long been in the sights of investigators looking for her father. Three years ago, a deputy U.S. marshal hoping to arrest Stephen Cohen attended her graduation from Torrey Pines High School.

Cohen divorced Jhuliana's mother years ago and married a Mexican woman.

But it was his divorce last year from that woman, Rosa Cohen, that was his undoing, said Tim Dillon, another of Kremen's lawyers.

Once the marriage ended, Cohen lost his right to remain in Mexico as her husband, and he had to renew a residency work permit.

He could have paid $100 to have a lawyer go down to the immigration office Thursday, but instead appeared personally, Osuna said.

Mexican and U.S. agents, tipped off by Kremen's lawyers and investigators, were waiting for him.

After the Mexican officials arrested Cohen, he was whisked off to the San Ysidro border crossing, where he was turned over to U.S. authorities.

In court yesterday, a disheveled Cohen, dressed in a white jail-issue jumpsuit, said he was hoping to quickly resolve his situation.

After the judge denied him bail, he asked the judge for a few days in San Diego's federal jail before being sent to San Jose.

"I have an attorney that's trying to negotiate a settlement in this case," he said.

The judge wouldn't grant him the extra time, but said it's possible the marshals wouldn't move very quickly to get him north.

No civil lawyer appeared in court on Cohen's behalf, and a private investigator who said he was working for Cohen's family said he didn't know the name of anybody who could speak on his behalf.