Chapter 1: A Big Guy
"I'm just a small guy," the 38-year-old Gary Kremen told reporters waiting outside the San Jose courthouse. "I'm just a small guy and this is a huge guy who has built an empire based on fraud and deceit."
He was half right. Stephen Michael Cohen is a huge guy. A guy who counts some of America's smartest criminals among his closest friends; a guy who sits on top of a vast and sprawling web of companies, businesses and offshore bank accounts; a guy who in just two years pushed, kicked and threatened his way to the top of the multi-billion-dollar adult sex industry and has since moved into hotels, casinos and international stock scams; a guy who has talked his way out of almost as many jails as he has into people's bank accounts. This is a huge guy.
But then so is the unassuming geek-turned-businessman – and now pornographer – talking to the media on the corner of East San Carlos Street and South 1st Street.
Gary Kremen had chased down one of the greatest conmen of all time and won. Not only that but he had done it through the prohibitively expensive and complex US legal system, in an entirely new area of law, and against a man who had very deep pockets, an army of lawyers, and a lifetime of screwing people behind him. Kremen's only weapons had been raw determination, coupled with and fed by moral outrage.
Moments earlier, Judge James Ware of the Northern District Court of California ended years of furious fighting when he ordered the defendants Stephen Michael Cohen, Ocean Fund International, Ynata and Sand Man Internacional – who were, in fact, all the same person – to jointly pay Kremen a total of $65 million.
Forty million dollars was "by way of restitution and disgorgement for the profits generated through use of the sex.com domain name", and the remaining $25 million was punitive damages for having stolen Kremen's property. A huge fine for a huge guy.
On one Tuesday afternoon in 2001, the entire legal landscape of the Internet had changed. But the impact on Gary Kremen was far greater. Having spent five years living in the shadow of bankruptcy and having battled through a crippling addiction to crystal meth (methamphetamine), he was now the owner of the Internet's most valuable real estate – the almost mythical sex.com.
Even better, Kremen was due a mind-blowing $65 million from the very man that had done everything in his power to ruin him. A reporter asked Gary Kremen how he felt. "I feel pretty good about it," he replied.
But the reality was that this was not the end of the case, and Kremen knew it. It wasn't even the beginning of the end. It was, as Winston Churchill put it, just the end of the beginning.
Contained in the same judgment that had awarded Kremen his historic win, came the following announcement: "The warrant of arrest issued on March 2, 2001 shall remain outstanding until defendant Stephen M. Cohen surrenders the property of each defendant to this Court."
Having tackled and beaten every obstacle put in his way, chased and menaced powerful men and companies into a corner, sold everything he had to keep the legal fight going, and finally having triumphed, Kremen wasn't to get the ultimate satisfaction of seeing his nemesis beaten.
Honorable defeat is not in Cohen's dictionary – the very idea of it is distasteful, something for weak and foolish people. Stephen Michael Cohen, you see, is a con man – a very, very good con man. Having separated people from their cars, their cash, their computers, even their homes, he knew that the solution to every problem was to keep fighting, never stop, never admit defeat, and never, ever, play by their rules. If you fight harder, for longer, you will eventually win.
So while Kremen stood on the courtroom steps in San Jose answering questions about his remarkable legal victory, Cohen was hard at work 400 miles away and just across the Mexican border emptying every last cent from his US bank accounts and liquidating his assets so Kremen couldn't get his hands on them.
The next stage in the brutal battle for sex.com had begun.