Ex employee purchased our business domain names with our corporate credit card. Won't give back.

[familyiseverything]

Jurisdiction

New Jersey

Hello to all and thank you for your time in reading and answering my question.
Our ex employee, who happens to be my son, was in charge of buying and maintaining our business domain names, and building or having built our business web sites. All of these purchases were paid for on our corporate (C Corp) credit cards. Sadly we had to terminate our son from the business. He now refuses to transfer our domain names to us and is claiming them as his own. They are registered in his name, but were paid for (verifiable with credit card statements) by the corporation. These domain names and websites were used in the daily operations of our retail business. Our credit card paid for all of the fees associated with maintaining and running these domains and websites. The income generated from the websites have always been deposited into our business bank account directly from the web host shopping cart. These funds were used for the day to day operations including payroll, inventory and taxes.
A month after my son was terminated, he turned off our website and forwarded a new bank account number to the webhost, funneling one month's income to his own bank account. Further, my son built a competing business website, and is now pointing our domain names to his new website effectively stealing many of our lifelong customers.
I know that domain name law is a grey area, but my question is this: If my company has verifiable proof that it paid for the domain names, or really any tangible asset, shouldn't these items be considered corporate holdings and remanded back to the corporation?
We filed for an emergency injunction. They have answered that the domain names are registered in his name, therefor they belong to him.
We are in the middle of our legal argument back and I am looking for caselaw that would pertain to if an employee could keep assets purchased by his employer. If someone could point me to some sort of caselaw that could be cited in our rebuttal, that would be of tremendous help!
Their attorney is citing Crowe v. De Giola, 90 N.J. 126 in his answer. It doesn't seem like it's relevant as it pertains to a separated couple, and the unfulfilled agreement of support from the wealthy partner.
Thank very much for your time, The Family

 

[army judge]

We are in the middle of our legal argument back and I am looking for caselaw that would pertain to if an employee could keep assets purchased by his employer.

Common sense dictates that your son potentially committed some sort of fraudulent acts, perhaps embezzlement related.

Whether he took the money needed from a corporate card your entity issued him, or surreptitiously stole the money out of your pocket, your cash register where he worked, or cooked your entity's books, it is no secret that his activity was criminal.

Even though New Jersey does not have a separate embezzlement statute, this crime is included in NJ's general theft statute [i.e. N.J.S.A. 2C:20-3-11].

S1285

2024 New Jersey Revised Statutes :: Title 2C - The New Jersey Code of Criminal Justice :: Section 2C:20-3 - Theft by unlawful taking or disposition

Justia Free Databases of U.S. Laws, Codes & Statutes

law.justia.com

A conviction could lead to jail time, maybe prison time, a very steep fine, and a criminal record.
What is Embezzlement?

Embezzlement is the fraudulent conversion of the personal property of another by a person in lawful possession of that property. What makes embezzlement unique among other types of theft crimes is that the owner of the property temporarily gives you custody over the property.

In other words, you are entrusted with the property for a certain period of time. After that period of time elapses, you are required to give it back. Essentially, embezzlement occurs when you subsequently convert that property for your own use (i.e. you take it instead of giving it back). This crime is usually seen in the context of employer-employee relationships. For example, the person ringing up your groceries at the supermarket is entrusted with the responsibility of holding onto the money that you give him in a cash register. If that person decides to pocket some of the money at the end of his shift, this would be considered embezzlement. Remember, embezzlement requires the specific intent to defraud after lawfully taking possession of the property.

Additionally, what sets embezzlement apart from other theft crimes is your use of the property in a way that is inconsistent with the terms of the trust you were given. In our example above, pocketing the money from the register, instead of giving it to the manager, is utterly inconsistent with the terms of the trust given to him. Thus, embezzlement comes into play when you lawfully had possession of the property for a temporary period of time and subsequently decided to keep it.

You're wondering what you should do? That's entirely up to you, and others sitting in the upper echelons of your business entity.

If I were faced with your dilemma, I'd contact my son and tell him that if he didn't DO THE RIGHT THING WITHIN THE ENSUING 48 HOURS, I'd report the matter to the appropriate, law enforcement agency, whereupon the matter would no longer be in your hands. I'd suggest that he should also retain the counsel of a super criminal law defense attorney. Should he once more, once, do nothing but deny; severe, negative, enormous altering/interrupting/disruptive consequences were likely headed his way!

 

[familyiseverything]

Common sense dictates that your son potentially committed some sort of fraudulent acts, perhaps embezzlement related.

Whether he took the money needed from a corporate card your entity issued him, or surreptitiously stole the money out of your pocket, your cash register where he worked, or cooked your entity's books, it is no secret that his activity was criminal.

Even though New Jersey does not have a separate embezzlement statute, this crime is included in NJ's general theft statute [i.e. N.J.S.A. 2C:20-3-11].

S1285

2024 New Jersey Revised Statutes :: Title 2C - The New Jersey Code of Criminal Justice :: Section 2C:20-3 - Theft by unlawful taking or disposition

Justia Free Databases of U.S. Laws, Codes & Statutes

law.justia.com

A conviction could lead to jail time, maybe prison time, a very steep fine, and a criminal record.
What is Embezzlement?

Embezzlement is the fraudulent conversion of the personal property of another by a person in lawful possession of that property. What makes embezzlement unique among other types of theft crimes is that the owner of the property temporarily gives you custody over the property.

In other words, you are entrusted with the property for a certain period of time. After that period of time elapses, you are required to give it back. Essentially, embezzlement occurs when you subsequently convert that property for your own use (i.e. you take it instead of giving it back). This crime is usually seen in the context of employer-employee relationships. For example, the person ringing up your groceries at the supermarket is entrusted with the responsibility of holding onto the money that you give him in a cash register. If that person decides to pocket some of the money at the end of his shift, this would be considered embezzlement. Remember, embezzlement requires the specific intent to defraud after lawfully taking possession of the property.

Additionally, what sets embezzlement apart from other theft crimes is your use of the property in a way that is inconsistent with the terms of the trust you were given. In our example above, pocketing the money from the register, instead of giving it to the manager, is utterly inconsistent with the terms of the trust given to him. Thus, embezzlement comes into play when you lawfully had possession of the property for a temporary period of time and subsequently decided to keep it.

You're wondering what you should do? That's entirely up to you, and others sitting in the upper echelons of your business entity.

If I were faced with your dilemma, I'd contact my son and tell him that if he didn't DO THE RIGHT THING WITHIN THE ENSUING 48 HOURS, I'd report the matter to the appropriate, law enforcement agency, whereupon the matter would no longer be in your hands. I'd suggest that he should also retain the counsel of a super criminal law defense attorney. Should he once more, once, do nothing but deny; severe, negative, enormous altering/interrupting/disruptive consequences were likely headed his way!

Hi, thank you for your fast reply. Your common sense is correct.
We contacted our city police. They put a detective on the case. He determined that he didn't have enough evidence to get a conviction. He helped us file a citizen's complaint that a judge would rule whether it was an indictable offense or not. The judge determined that it was not criminal! We were blown away. And she said our recourse is with a civil lawsuit. We filed with a local attorney to try and get injunctive relief. We really don't know what to do other than continue with the legal path we are on. At the very least he committed wire fraud by changing the bank account numbers and transferring our web proceeds to himself 30 days after he was terminated. And of course the theft of the domain names. I was told by the detective that the FBI would probably not take the case because the amount was so low> About 18K . Our local attorney is ok, but has no experience with this type of case. No firm around here does. We are heartbroken and lost.

 

[army judge]

Hi, thank you for your fast reply. Your common sense is correct

You're welcome.

You could make an appointment to discuss your concerns with your county district attorney, or public prosecutor.

Tell her/him your story, gently remind him of this:
Even though New Jersey does not have a separate embezzlement statute, this crime is included in NJ's general theft statute [i.e. N.J.S.A. 2C:20-3-11].

Get her/him interested in your nightmare, you just might obtain the justice you seek.

Finally, I'd bring proof of the thief's financial crimes to buttress your story.

 

[zddoodah]

I know that domain name law is a grey area

What? Not really.

If my company has verifiable proof that it paid for the domain names, or really any tangible asset, shouldn't these items be considered corporate holdings and remanded back to the corporation?

Yes.

Their attorney is citing....

What is the antecedent of "their"? Your son and who else?

More importantly, what does your attorney say about this?

Our local attorney is ok, but has no experience with this type of case. No firm around here does.

If you're in New Jersey, the only way this could be true is if your definition of "around here" is extremely narrow. There are, quite literally, thousands of firms in the geographic area of which New Jersey is a part who handle stuff like this. I suggest you seek one out.

 

[adjusterjack]

Our local attorney is ok, but has no experience with this type of case.

Then get on who does. You're throwing your money down the toilet on a lawyer with no experience with "this type of case."

No firm around here does.

Really?

New Jersey Intellectual Property Lawyers - Compare Top Intellectual Property Attorneys in New Jersey - Justia

Compare 406 intellectual property attorneys in New Jersey on Justia. Comprehensive lawyer profiles including fees, education, jurisdictions, awards, publications and social media.

www.justia.com

 

[Mark_A]

I would check out this website:

Who owns your domain names? | Thompson Coburn LLP

Stay informed with Thompson Coburn's latest insights. Explore articles, updates, and resources on legal trends and industry developments.

www.thompsoncoburn.com

 

[familyiseverything]

You're welcome.

You could make an appointment to discuss your concerns with your county district attorney, or public prosecutor.

Tell her/him your story, gently remind him of this:
Even though New Jersey does not have a separate embezzlement statute, this crime is included in NJ's general theft statute [i.e. N.J.S.A. 2C:20-3-11].

Get her/him interested in your nightmare, you just might obtain the justice you seek.

Finally, I'd bring proof of the thief's financial crimes to buttress your story.

We did contact our county prosecutor's office. They sent us to our local police department. We were told that if they decided that it couldn't handle the case, then they would forward it to the county prosecutor. They did take on the investigation, it took many months. Our local police department wouldn't bring criminal charges because they felt like they didn't have a 100% chance of a conviction. They don't want to throw a lot of resources into a case that isn't bulletproof. I don't know if we should continue to move with our civil suit or try to find another agency that sees how much of a criminal this guy and his wife really is.

 

[familyiseverything]

What? Not really.




Yes.




What is the antecedent of "their"? Your son and who else?

More importantly, what does your attorney say about this?




If you're in New Jersey, the only way this could be true is if your definition of "around here" is extremely narrow. There are, quite literally, thousands of firms in the geographic area of which New Jersey is a part who handle stuff like this. I suggest you seek

What? Not really.




Yes.




What is the antecedent of "their"? Your son and who else?

More importantly, what does your attorney say about this?




If you're in New Jersey, the only way this could be true is if your definition of "around here" is extremely narrow. There are, quite literally, thousands of firms in the geographic area of which New Jersey is a part who handle stuff like this. I suggest you seek one out.

The detective told us that he wouldn't be able to file theft against him for lack of case law on domain name ownership. He said that since it is registered in my son's name, there isn't anything that his agency could do about that.

Their references his wife. They are co defendants.

 

[familyiseverything]

I would check out this website:

Who owns your domain names? | Thompson Coburn LLP

Stay informed with Thompson Coburn's latest insights. Explore articles, updates, and resources on legal trends and industry developments.

www.thompsoncoburn.com

Thanks, but this is the grey area that I'm talking about. It's not a cut and dry type of scenario.

 

[familyiseverything]

Then get on who does. You're throwing your money down the toilet on a lawyer with no experience with "this type of case."



Really?

New Jersey Intellectual Property Lawyers - Compare Top Intellectual Property Attorneys in New Jersey - Justia

Compare 406 intellectual property attorneys in New Jersey on Justia. Comprehensive lawyer profiles including fees, education, jurisdictions, awards, publications and social media.

www.justia.com

You are absolutely right. I need to find someone who does. I have contacted some other firms (not Local to us) and they want so many fees and travel expenses. I gues we just need to pay the piper. I was hoping that criminal charges would be brought by law enforcement so we wouldn't need to spend all of this money on attorneys. Thanks for your reply.

 

[Mark_A]

Thanks, but this is the grey area that I'm talking about. It's not a cut and dry type of scenario.

I am confused about what you are saying. If you followed all the links contained in the link I provided you above, you would have seen this:

"Each domain registrar [like Godaddy, etc] has to adhere to the Uniform Dispute Resolution Procedure (UDRP), required as part of all domain name registration contracts since 1999, addressed cybersquatting, defined as the registration or use of a domain name in bad faith and for profit."

There are organizations that might be able to help you resolve this issue for a fee. It is sort of like an arbitration procedure that can be used in lieu of filing a legal suit. You will have to pay for the process, but apparently a one person panel is half the price of a three person panel assembled to resolve the dispute. I suspect this would less than the cost of having a lawyer file suit, and it appears that the Domain Name registrar is obligated to abide by their decision, and the registrar has the power to transfer the domain name to you.

Here are links to two companies that handle arbitration under the Uniform Domain Name Dispute Resolution Policy (UDRP):

FORUM

www.adrforum.com

WIPO - World Intellectual Property Organization

The world’s number one source for global intellectual property (patents, industrial designs, copyright, trademarks etc.) information, resources, and services.

www.wipo.int

So the first step would be to carefully read the link I provided, and all links contained therein (with additional embedded links as appropriate) and then probably contact the domain name registrar who controls your company's domain name (but registered under you son's name) about invoking the UDRP, or directly contract a service provider listed above who arbitrates these disputes for the domain name registrar.

 

[Red Kayak]

Focus less on getting you son arrested and more on business.

First step: using the search engine of your choice, type in something like, "stolen domain name" or "company domain name hijacked what should i do?"

Because your most immediate problem is the business loss.

Second step: review your security and termination procedures to help protect yourselves in the future.

Because frankly, the reason that your son was able to do this was because a) you trusted him, and b) whatever handover procedures you had didn't safeguard you enough.

Third step: Sue your son.

Note: there are 2 sides to every story. I would not be surprised if your son has his version somewhere on reddit AITA or Nuclear Revenge.

 

[welkin]

A month after my son was terminated, he turned off our website and forwarded a new bank account number to the webhost, funneling one month's income to his own bank account. Further, my son built a competing business website, and is now pointing our domain names to his new website effectively stealing many of our lifelong customers.

Does your business have a name and is your son in anyway using that name to promote his website?

If so, you may have tradename and trademark claims against him.