Carreon listened appreciatively as the porn guys paid homage to Kremen’s history with Match.com, and tried to feel out his intentions now. Was he really going to clean up the biggest online porn site? As a test of his mettle, they took him to the most expensive strip club in town. Carreon blanched, and spent the better part of the night talking with a dancer about her kid, while Kremen embarrassingly endured a few lap dances, as he made awkward conversation with the other guys. But the music was loud and Kremen’s body felt like it needed the respite of sleep, a break from the fast track he now felt himself on.
The fact was, he was also jonesing—for cocaine, for meth, for something to keep him up. The drugs had become part of his lifestyle now, a functional lifestyle, nonetheless. He didn’t have time to hate himself for letting this happen, he was too busy, too focused, and if anything the drugs were just fuel for the climb. It was only at night, when he collapsed on his bed, that his world would go dark and quiet, between fitful turns of sleep.
Next thing he knew, he was at a kinky Christmas party in Los Angeles, crowded with throngs of well-dressed guys and slinky women gathered around a dance floor as a shirtless young white guy beat conga drums in the middle. The man was one of the most successful veterans of online porn, Gregory Dumas, head of the company hosting this party, New Frontier. Dumas had cut his teeth launching Hustler.com for Larry Flynt, and had gone on to have one of the biggest sites, iGallery, which he sold to a public company for $36 million. Kremen considered him something of a peer in the domain business, since Dumas had gobbled up more than 1,500 sexually related domains. Plus Dumas was funneling content to the burgeoning porn channels in hotels and on cable TV.
But Kremen relished that he had the ultimate dot-com in Sex.com, and even Dumas—a multimillionaire playboy who liked to yacht and fish and party on the drums surrounded by beautiful women—wanted what he had. Kremen that night played it up like the life of the party he never was as a kid. “Where’s my escort?” he’d joke with Dumas’s crew. “Isn’t this a sex company? Aren’t we in L.A., ground zero for sex and money? Isn’t it Christmas? Don’t I own Sex.com? Where are my presents?” Kremen was kidding, but Dumas wasn’t—and offered him $24 million to buy Sex.com. But again Kremen said no. It was enough for him that they wanted what he had, but he wasn’t going to sell out, let alone become one of these guys—building an empire on hard-core sex.
In January 2001, their travels took them to the belly of the beast—Las Vegas. The occasion was Internext, the annual trade show held on the heels of the Consumer Electronics Show, for the purveyors of online porn. From the moment Kremen strolled past onion-domed minarets at the Sands Expo, he could see that, despite the dot-com crash still reverberating in Silicon Valley, business was thriving among the moguls here. The year before, the convention was still small enough to be held in a modest conference room with folding tables and chairs.
But with business thriving, they had moved to the largest hall available. Kremen walked in to find more than 170 companies there and some 5,000 people milling around the 150,000-square-foot venue. Booths teemed with scantily clad porn stars teetering in Manolo Blahnik heels; the names of the companies stretched on banners across the top: Hardcore Money, Silver Cash, Babe Net, and more. They were giving away T-shirts—“It’s all about blowjobs” and “I Heart Porn”—calendars, giant-size bottles of Astroglide lube from the gay site Outster, stickers from the Free Speech Coalition, and PAW (Protecting Adult Welfare), a social service agency for retired porn stars.
It wasn’t just porn moguls making the rounds, it was mainstream business executives looking for the next big thing in online technology. “Pornography is something that is an impulse buy. Technology is a way to help people fill their impulses,” Anthony Edmond, owner and CEO of adult internet company Flying Crocodile, told the Las Vegas Review-Journal. It was, in other words, a fulfillment of Maslow’s Hierarchy of Needs, just as Kremen had long believed. “CNN could not have cnn.com . . . with the old technology,” as Edmond went on. “They need our technology.”
One such innovation was in the booth for Voyeur Dorm, a reality porn site, filmed in Tampa, Florida, that kept twenty-four-hour cameras on a home of eight women. Sixty-five thousand members were paying $34 a month to watch the women hang out, smoke, shower, and have sex. The one-named owner, Hammil, compared it to emerging reality TV shows such as Real World, and he suggested that one day people would be used to watching people hanging around their homes like this. “We’ve always come up with the next best thing,” said Hammil.
Trying to fit in as best they could, Kremen and Carreon navigated the late-night parties. A sing-along in a suite hosted by gay porn director Chi Chi LaRue; male strippers in G-strings and free sausages as hors d’oeuvres. In a ballroom, Ice-T and George Clinton performing onstage as attendees writhed on the floor. Before long, he and Carreon were summoned to the palatial suite of Ron “Fantasy Man” Levi, the godfather of online porn. Fantasy Man, dressed in Johnny Cash black and chain-smoking Marlboro Lights, sketched out an offer he hoped Kremen wouldn’t refuse: $400,000 a month to license the Sex.com name, along with 40 percent of the earnings. Kremen said he’d have to think about it.
As Kremen made his way back out, he felt dizzy. Dizzy from hearing the pitches, posing with the porn stars, and inside he began to feel sick. Sick from withdrawal, sick from the attention, sick from the sycophants pulling at his sleeves. He and Carreon stopped at a bar with porn stars in silk pajamas, beers being served out of silicone sex dolls’ orifices. But Kremen stealthily slipped away. By the time Carreon made his way back to their suite, he found Kremen sleeping inside, wheezing and sweaty. Standing there looking at Kremen, Carreon got an ominous feeling—that their days together were numbered.
He was right. Before long, their relationship deteriorated into arguments and accusations. Carreon accused Kremen of stiffing him on the 15 percent he said he’d give him of the Sex.com profits, and Kremen pushed back alleging that Carreon had to share in the millions of dollars it took to win the lawsuit. Kremen had no time or patience for Carreon anymore. He was too consumed by Cohen to care about Carreon. The last four words he said to Carreon were “See you in court!”
* * *
One day in February 2001, Rosey Cohen, Stephen’s wife, was at home in Rancho Santa Fe when her phone rang. It was her husband. In Spanish, he told her to grab the kids and their belongings, it was time to move out. Rosey was used to never asking questions about his business, but knew something was afoot. She had no time to react. In a blur, a group of Cohen’s workers from Mexico came to the house, ripping out the seats of the movie theater Cohen had built, and taking them along with the home theater system back to their boss in Mexico. And then Jack Brownfield, Cohen’s right hand man, showed up, with compassionate eyes, to help her and the girls move back across the border. And as for Kremen, Cohen wasn’t going to pay the $25 million or provide the accounting of Sex.com. He could go fuck himself. Cohen was staying put in Tijuana, he resolved, just let him come and find me.
When he got an order to come up to San Jose for a hearing at the end of the month, he wasn’t going to make that either. Instead, his lawyers delivered a message to the court. Cohen would be unable to make the hearing, because he was under house arrest in Mexico for unspecified charges. Judge Ware, however, called the claim “unsubstantiated” and disregarded it.
Instead, he ordered “a warrant directing the United States Marshal’s Service to arrest Stephen Michael Cohen and hold him in custody until either the conclusion of the trial of this action or until he performs the following acts: return to the United States and deposit with the Court $25,000,000 or such lesser sum as he shows is warranted by his economic circumstances, return to the United States all revenue generated from Sex.com, provide a full accounting of the Sex.com domain name operation, and effect the turnover of $1.1 million in bank funds to foreign accounts after being ordered by this Court not to transfer any such funds.”
When asked about the warrant, C
ohen’s attorney, Bob Dorband, struck a philosophical note. “It’s a very strange case,” he told CNN. “It has some unusual characters, who really are more alike than they are different. I think if they had met each other in some different forum they would actually be friends.” As the trial date approached, the big question was whether Cohen would show. “I don’t know if he will,” Kremen told a reporter for Wired. “I’m curious.” But it wasn’t just Cohen who was a wild card, it turned out, it was Kremen’s former friend and attorney, Carreon. On the morning of March 8, Carreon filed charges against Kremen, claiming he had breached their contract by failing to give him his 15 percent stake in the Sex.com profits.
But as Kremen took the elevator with his lawyers to the fourth-floor courtroom of U.S. District Court in San Jose, he had other matters on his mind: what, if anything, he’d walk away with this day. As he anticipated, his rival, Cohen, was a no-show. “Mr. Cohen in Oct. 1995 fraudulently induced the Internet Registrar, Network Solutions, to change the registration of the domain name to his own name, and that since that time he has made millions from the operation of the websites,” said Tim Fox, a spokesman for Jim Wagstaffe’s law firm, which was representing Kremen. “We are asking the court, which has already given us back in November the right to the domain name, to also give us all the profit that Mr. Cohen has wrongfully obtained over the last five years.” The amount they wanted: $43 million.
The next month, the final judgment came. Cohen was ordered to pay Kremen $65 million, including a $40 million judgment and $25 million in punitive damages and the house in Rancho Santa Fe. It was, as the Los Angeles Times put it, “a record verdict” for the internet and the value of property online. For Wagstaffe, the verdict marked a significant turning point in the evolution of the new world online. “The substantial size of this damage award sends a message that the Internet is not a lawless wasteland,” he said.
As for Kremen, the $65 million verdict felt weirdly bittersweet. On one hand, it was a tremendous victory, of course, further validation that he had been right all along, and that Cohen had swindled him. And, yes, the dollar amount was truly staggering—more than he could even conceive—enough to let him live the life of his wildest dreams, and leave plenty for his friends, his family, and any charities he wanted to support.
But within milliseconds, as he was wont, any sense of triumph turned to skepticism. It was one thing to win the judgment, and another altogether to collect it. If there was any way he was going to see a penny of the $65 million owed to him by Cohen—now a fugitive, with an outstanding warrant, hiding in Mexico—it would be the fight of his life. But that was just what he was prepared to do. “I expect to get my hands on nothing,” he told the Los Angeles Times, but “this isn’t about business anymore. It’s the principle.”
CHAPTER 11
THE PLAYERS BALL
They called him El Sapo, the Toad. Gustavo Cortez Carbajal was a fifty-three-year-old Mexican attorney with dark hair and thin black mustache, and a passing resemblance to his amphibious namesake. He’d been practicing law for more than twenty years and worked out of a darkened office with faded furniture in Tijuana. And that’s where he’d sit across from his most demanding client, Stephen Cohen.
With Kremen closing in on him, Cohen was doing everything, and anything, he could to keep his money safe and hidden. There were the offshore accounts, the shrimp farm, the home in Tijuana. And now the Toad had another investment for Cohen—one that was right up his alley. They spoke in Spanish to each other, a language Cohen had mastered. “El Bolero,” the Toad told him. “Vámonos.”
They went down to the commercial center of TJ, past the sex bars, farmacias, the street vendors selling grilled corn and tortillas. They came to Señor Frog’s, a raucous bar, popular with the locals, and then there it was, right next to it: the Bolero, the premier strip club in town. It was a small orange building with a red tile roof on a busy street in the town’s red-light district. This was no run-down shack offering donkey shows, as Cohen could see. Los Angeles magazine described it as “the Taj Mahal of Tijuana clubs,” popular with Hollywood agents, Silicon Valley moguls, and other moneyed tourists looking for sin and business across the border.
There were Ferraris out front, not pickups. As they passed through the doors, the air was filled with the thick smoke of Cuban cigars. Mexican disco pounded from the speakers. Two long bars ran down the middle, peopled by men in suits more interested in making deals than taking any of the dozens of voluptuous dancers on the large, mirrored main stage. Others, however, couldn’t resist the temptation, reaching up to take the slender hand of a raven-haired dancer in lingerie, and following her behind a velvet curtain for a $40 single-song private dance, or perhaps more. “Hundreds can disappear in short order,” as Los Angeles put it.
Cohen liked what he saw: the women, the cigars, the money. What exactly did the Toad have in mind? Una inversión, an investment to become a part-owner of the Bolero. A club, Cohen thought, a bit like The Club, his old swingers club in Orange County. To be the man again, the king of a scene like this, greeted by strippers with open arms and open legs. Por qué no?
Cohen met with Héctor Manuel Huerta Garza, one of the owners, to strike a deal. Huerta eyed the doughy balding American skeptically, as Cohen began boasting about his fortune. “He told me he was the richest man in Tijuana,” Huerta later recalled, “that he had more than a hundred million dollars.” He bragged about his internet company in Europe, his home on Playas de Tijuana, the way he’d lend money at a rate of 3 to 1, that he owned his penthouse on Sonora Street, his $2 million shrimp farm.
Cohen told him he had enough to buy all of Pueblo Amigo, the area where the Bolero and other clubs were located. Huerta’s eyelids felt heavy the more the gringo spoke. The man struck him as a “scoundrel,” as Huerta later put it, but the gringo had money. Their deal was $800,000 in exchange for 40 percent of the Bolero. Cohen said the money would be coming from outside Mexico and the United States. There was one other condition, Cohen added: this deal had to be done on the down-low. Huerta, as far as the outside world was concerned, would be seen as the one and only owner. With the money soon in his account, Huerta agreed.
A week later, however, Huerta began hearing around town how this gringo, Cohen, was telling everyone that he was not only an owner of the Bolero, but the only owner of the Bolero. Apparently the temptation to be the king of a club was too much to resist. Soon after, Cohen brought Brownfield down to show him his new investment. And for added cover, to make sure Kremen couldn’t get his dirty hands on it, Cohen put the ownership under the name of his wife’s daughter Jhuliana.
Brownfield, as usual, listened to Cohen skeptically, particularly when Cohen started bragging about how he’d already made $20,000—just in one month. “Steve,” Brownfield told him, “don’t talk to me about 20 grand that you made until you’ve got your $800,000 back. “These guys are going to screw you because they don’t own that building. They’re leasing the building.”
But Cohen wasn’t worried about them. He was too busy trying not to get screwed by Kremen: he seemed obsessed with him. Brownfield could hear him, at all hours of the day and night, calling Kremen to trash-talk him and see what he could find. “You could see in his demeanor that he was upset or he was angry,” Brownfield later recalled. “He didn’t want to lose that business.” And Cohen told Kremen as much, when Brownfield heard him goad him on the phone about Sex.com. “You want to be in the sex business,” he heard Cohen tell Kremen one day, “but you don’t know anything about it.”
Dear Adult Industry, I am writing to inform you about recent changes to the Sex.com web site. As you might know, the legal battle with Stephen Michael Cohen over the Sex.com web site ended with Cohen ordered to pay me $65 million. Additionally, the judge in the case has kept the arrest warrant open on Cohen. . . . Now that we are up and running with our new site, I wish to thank each and every member of the adult community for their support. . . . If you have any questions, give me an email
at [email protected].
It was April 2001, and as Kremen sat at his computer writing this email to the adult industry, he had reason to be grateful. After spending six long years and $2 million in legal fees chasing Cohen, he had finally won back Sex.com, the most valuable domain online. Even if he did nothing, he’d be pocketing around $5 million a year in ad sales and subscriptions, a number that, with more and more people coming online, was sure to grow. It felt like the ultimate payback, not only for refusing to give up in his pursuit of Cohen, but for having the foresight to register Sex.com years before when everyone thought he was crazy to think that property online could even exist, let alone make money. So why then wasn’t he more thankful? Because until he had gotten every penny Cohen owed him, he would never rest.
His obsession with Cohen had taken over his life, especially here in the Dogpatch. While he was out chasing Cohen down south, and jetting around porn conventions, his home on 3rd Street looked more like a crack house bordello. The problem started with Crab, his local drug dealer who had essentially moved in. Ostensibly, Crab had volunteered himself to help Kremen renovate the old industrial building from a warehouse to a livable space. But a DIY carpenter high on meth isn’t necessarily the right guy for the job. Walls were half demolished, paint spilled on the floor. Dust covered everything, the furniture, the steps, the bed, and Crab’s burgeoning entourage of degenerates were now making Kremen’s home their flophouse.
Of course, as Kremen knew, the only reason Crab had taken over was because he depended on him—for drugs. What had started with “why not?” had transformed into “where’s more?” And the thing he wanted more and more of was crystal meth. In sober moments, what few there were, he couldn’t believe that he had become so addicted. He felt ashamed, embarrassed, how could the son of Harriett and Norman, the Stanford MBA, the founder of online dating, become as sick as this. But then, no sooner did the thought come then it would burn away in the heat and smoke of a hit that gave him power and energy and focus, on Cohen, again.
The Players Ball Page 16