When Gross began questioning him about the case, Cohen regained his composure, and invited him inside the Toad’s lair. As they sat inside the darkened office, “the Toad’s hand gripped my shoulder, his pockmarked face inches from mine,” as Gross wrote in Playboy. “Mi casa es su casa,” he told him in his Mexican accent. “Please don’t steal anything.” Cohen deftly explained how he had come to Tijuana. “I don’t live here,” he said, “I live in Europe. I’m normally in Europe. Tell Kremen you saw me. No, I’d appreciate it if you didn’t. I don’t want my whereabouts known to him. The days between Kremen and me are totally over. Kremen spends his life on this. I don’t have the time and energy.”
In October, Cohen lost a permanent injunction by Kremen, allowing Kremen to now seize all Cohen’s remaining assets in the United States, from his mail to his cars, his computers to his bank accounts, all eight of them. The list read like an inventory of Cohen’s heart, mind, and soul, a garage of his personal obsessions: 4 Spools of Belden Antenna Wire, 1 Lynx 35″ Propane Gas Grill, 2 Gabriel Electronics HE4 220-3 DNCA Antennas.
If that wasn’t enough to make Cohen’s head spin, Kremen even got all his domain names, more than seventy of them, banal and lascivious. He got Bajatel.com, Ezhotmail.com, nudistcamp.com, 4fuck.info, 4fuck.net. He had letsfuckandsuck.com, love2fuck.net, wantaeatpussy.com. Kremen even won the domains for his old businesses: his strip club, the Bolero—bolerotijuana.com, Boleromensclub.com—his loan company, MexicoLending.com, and every iteration of Earth Station 5—.com, .net, .org.
Not long ago, it seemed, he had everything: the French Connection, The Club, Sex.com, a wife and children, a mansion in the lemon groves. One by one they went away, and now Kremen was taking more. But he didn’t have everything. Cohen could still wake up in his penthouse and head to the Costco for a hot dog or two. No one could stop him from being a free man. When it was time to renew his residency work permit, which he was required to do since he was no longer married to Rosey, he didn’t think anything of taking care of it on his own—and save the $100 it would cost to hire a lawyer. And so, on October 27, 2005, Cohen headed over to the immigration office at the border to file the paperwork himself.
But when he arrived, there was someone there to greet him: U.S. marshal Don Vazquez. Cohen, after four years of living as a fugitive, was finally put under arrest. “I was at the border waiting for him,” as Vazquez admitted later. “He tried to talk his way out of it. He was trying very hard to figure out a way not to be expelled from the Republic of Mexico.” Vazquez said that his office had been tipped off by an anonymous source to be on the lookout for someone fitting Cohen’s description. But there was little doubt in Cohen’s mind about who, in fact, was the source of his downfall: Kremen.
* * *
Downward dog was the toughest. Head down, arms outstretched, butt in the air, legs back, blood rushing to his head like a dam release setting his dark hair on end. But Kremen was determined, as he did his morning yoga with his private instructor at Rancho Santa Fe. Then it was a quick swig of his green health shake, whipped up by his sister, Julie, and a round of weights with his personal trainer. The drugs were gone from his system. His mind was as clear as the sky shining down on the pool.
Showered, fresh and clean, he trimmed his goatee, slipped on his favorite jeans, his new brown shoes, a clean yellow T-shirt, and sat on the edge of the fountain by his pool, as a photographer shot him, head tilted, a soft smile. The photographer and writer were from the San Diego Jewish Journal, and were there to cover the town’s most famous internet antihero’s latest venture: offering a $25,000 reward for anyone who could set him up with a nice Jewish woman he could marry. And if one of the relationships lasted for ten dates, he’d donate $1,000 to a Jewish charity.
As he showed off the framed articles about Match.com in his wood-paneled office, he prided himself on his achievement. “I’d like to think I’ve made a great contribution to the planet, I’ve created more love than anybody else,” he said, but now he just wanted some love of his own. He’d had enough of the sex, drugs, and internet to know that it couldn’t substitute for the real human connection of a partner. Though he was now worth millions of dollars, and was making another half million dollars a month from Sex.com, it didn’t matter. As he told the reporter, Judd Handler, “I’m the perfect example of money not buying happiness.” The story was headlined “The Loneliest Millionaire.”
But, in fact, it wasn’t just the lack of love that was leaving him forlorn. It was the lack of closure with Cohen. At night, he would go to a nearby Japanese restaurant that Cohen had frequented, the Samurai, and only be reminded of his epic chase. He’d spent millions on lawyers and private eyes, and for what? For this nagging feeling of being wronged and ripped off, living solemnly in a mansion like some porned-out Citizen Kane. When he celebrated his forty-first birthday on September 20, 2005, it seemed like his nearly decade long chase of Cohen had been for naught.
But then, just a few weeks later, he got a phone call from his lawyer telling him of Cohen’s arrest. Kremen couldn’t believe it, but it was true. Cohen had been detained at a Mexican immigration office, and, because of Judge Ware’s outstanding warrant for failing to pay Kremen his initial $25 million, deported to the United States—where he was being held without bail at the Metropolitan Correctional Center in San Diego. Kremen felt so dizzy it was like a standing downward dog. But it was real. Finally, he thought, I’m going to get my money.
But appearing in federal court the day after his arrest in a rumpled white prison jumpsuit, Cohen once again cried poverty. “I don’t have a lot of financial wherewithal,” Cohen told the judge, who begged to differ. “I think you’ll find some disagreement on that from some quarters,” the judge replied.
When Tim Dillon, Kremen’s attorney, spoke with Cohen shortly after his arrest, Cohen, who seemed to Dillon to be “heavily medicated and fairly relaxed,” again insisted he was too poor to pay anything near the estimated $82 million, including interest, which he owed Kremen. The best he could do, he told Dillon, was settle for $100,000. Dillon knew Kremen wouldn’t settle for less than a million, and told Court TV the offer was not only laughable but that, soon after, it had dropped even lower. “I understand his offer is now $75,000 and two pieces of property,” Dillon said. “I think it’s classic Steve. Here he is sitting in jail, and his offer is decreasing.” Even Cohen’s old allies couldn’t lend a hand. “Anything that is being hidden is being hidden by Steve for Steve,” Jack Brownfield told Court TV. “I don’t know anything about pornography. You want to know something about shrimp, come talk to me.”
But Cohen wouldn’t have the luxury of returning home in the meantime. On November 14, Cohen was brought before Judge Ware. Kremen eagerly showed up, eyeballing Cohen as he was led inside in his orange prison garb. Kremen could see the smirk on his face as they made eye contact. As Kremen listened, Cohen played the victim again, claiming that the reason he had not shown up at previous hearings was because he had been “physically detained” in Mexico and then went to Israel for heart surgery. “I had a duty to appear,” he confessed, “and I clearly did not appear.”
Cohen’s latest attorney, Roger Agajanian, offered to house Cohen himself, instead of keeping him behind bars. “I’ve known him for a long time,” Agajanian said. “He has a lot of good qualities.”
Ware was unmoved. As Kremen leaned forward in his seat, he listened as Ware ordered that Cohen remain behind bars until he provided a full accounting of his money so that Kremen, at last, could finally collect. It was an uncommon decision for the court to imprison a debtor, but necessary for a con man as slippery as Cohen. “Given the seriousness of the case, it’s the court’s intention to hold him in custody,” Judge Ware said.
At long last, Kremen thought. Ten years. Countless sleepless nights. The pills, the bills, the pain, the madness. But he was the cat who finally had cornered his mouse. As Cohen was led out, he got close enough to give him one dig. “I don’t think the Samurai delivers here
,” Kremen told him. Cohen just narrowed his eyes. “I would never give you the money,” Cohen told him, “because you stole Sex.com from me, Gary.”
* * *
Cohen popped the pills. He didn’t know the name. It was heart medication, prescribed from a pharmacy in Mexico. He had to have the pharmacist call the jail to get the prescription sent there. He met with a doctor in prison, who told him he’d be getting ACE inhibitors to try to shrink the size of his heart. Twice a day, he’d stand in line at pill call, inching forward until the prison employee handed him the pills in a small cup, and watch him closely as he swallowed them down.
Cohen had been imprisoned enough times throughout his life to know how to be the samurai he was inside. He’d behave, make friends, play chess or cards, watch TV. There was no law library at the prison, so he’d request legal materials, which would come in by the pile for his research. One by one, he’d read the pages, brushing up on his case, preparing for his deposition with Kremen’s attorneys, determined to keep their paws far from his pockets.
On the morning of December 5, 2005, he slipped on his prison orange with the words “Santa Clara Department of Corrections Main Unit” printed in black, combed what was left of his gray hair smoothly across forehead. When he was led into the room for his deposition, he sat at the side of the table, so that his hands could be handcuffed before him. He could see Kremen staring at him, hoping for a break in his armor. But he wasn’t about to show any weakness. As he was being sworn in, he kept his shit-eating grin on his face and shimmied his shoulders like a little boy in detention who wasn’t going to be punished. As Cohen raised his hand to begin his deposition, Kremen could see the handcuff dangling from his wrist. His thinning gray hair was swept over his forehead, and he was grinning. “Do you solemnly swear the testimony you’re about to give today shall be the truth, the whole truth, and nothing but the truth?”
“Yes,” he said, with a smirk, “I do.”
But extracting the truth from Cohen about the location of his money felt like battling a true samurai. The more any of Kremen’s attorneys pressed, the more Cohen would slip away. He called their assessment of how much he’d made at Sex.com “voodoo accounting,” estimating that maybe he made $12 million at most. When they cited his advertising revenues, as much as $1.5 million a month, Cohen demurred. “You know, I bullshit,” he said. “Excuse me. I BS’d a lot of people because—because the more BS you gave, the higher you were able to charge for advertising . . . which is the standard norms for most internet-related business.”
And of those earnings, the money was long gone. He had blown $4 million on the house in Rancho Santa Fe, and claimed employees at his internet company, Pacnet, stole untold more. He told stories of run-ins with “goons” in Mexico who’d been sent to his office to steal his equipment, mobsters who were coming after him because they alleged he had incriminating sex tapes he was going to use for blackmail. “I had hacienda problems up the yin yang,” he said, referring to his Rancho estate. As for the location of his funds, what assets were under his family members’ names, again and again he said, “I don’t recall.”
The song and dance continued for hours, spilling over into another deposition a few weeks later. After claiming he had been spending the last year making his living by writing and selling software, he refused to indicate how much he had earned. “As you sit here today, you can’t give me an estimate of how much total you believe you collected in 2005 for the sale of your software packages?” Kremen’s attorney asked, dubiously.
“Without looking at the records. Unless you want me to engage in a lie.”
“An estimate is a lie?”
“An estimate without a basis—without records in front of me, would be a lie. And I’m not willing to do that. I’m here to tell the truth. And I’m willing to do that, but I’m not going to play the guessing game of—just to satisfy you. You know, there are records. I will make those records available to you. But I’m not going to play the guessing game and then have you come back and say this man lied because he’s—you know, $50 off from what he should be. I’m not going to do that. I’ll provide you the records. I don’t know what the records show.”
“Do you understand the difference between an estimate and a guess, Mr. Cohen?”
“With you, no.”
“Okay. Well, let me explain.”
“With anybody else, yes. I mean, there’s—I mean, there’s so much disingenuous conduct on your part; it’s just like these subpoenas that I just learned about for the first time 20 minutes ago of which we have never received copies of them. You violate the rules of court and then you play these games where you want me to—definitive answers, and I’m willing to give you the truth. I’m willing to tell you what I know, but I am not going to lie to you. And I’m not going to play the game of guessing.”
“So if I understand what you said, you don’t understand my version or definition of the difference between a guess and an estimate. So I’d like to give you an example and see if you can understand that. Okay?”
“Okay.”
“As you sit here today, if I asked you what the length of this table is, you can assume from your experiences in the past, you can look down at the end of the table, you can look to where you are, and you can make an estimate of about how many feet long this table is; correct?”
“Possibly.”
“Do you believe you can look down and make an estimate?”
“No. I don’t believe—I have no concept of what the footage of this table is, and I’m not in the business of doing that. I’m not going to play a guessing game with you, sir. You know, I will tell you the straightforward truth. The answers that I know to the best of my ability. I’m not going to exaggerate. I’m not going to guess. Where I don’t have records currently available to me, but they do exist, I will make them available to you. If I’m let out one week, two weeks, two years from now, I’ll still make them available to you. Nothing is changed.”
But as Cohen ducked the queries like a prizefighter, whenever it was intimated that he had stolen Sex.com, he punched back. “I never stole it,” he said, glancing at Kremen. “He stole it. I had—let’s get this real clear. I had Sex.com since 1979 on a BBS. . . . And if I had had my day in court, I could have presented enough evidence to prove this without—without a doubt. And the name Sex.com has always been mine. . . . I take great offense that you are under the belief in all good consciousness that Sex.com was ever stolen. . . . I take offense to the fact you believe I stole Sex.com. I never stole Sex.com. I am the true owner of Sex.com.”
And, as it was becoming abundantly clear, no amount of hours questioning him, not even while he was chained to a table, would break him. Cohen spit back, saying they had no right to keep him confined—and if they really wanted their money, then the only solution was to let him go. “There is nothing I can do sitting in jail,” he said. “I got an attorney in Mexico that keeps telling me he is coming. And yet let’s be very realistic, he has not come and he probably never will. And if I were to wait for him to come, I could be 95 years old and he still wouldn’t come.”
Ultimately, he conceded, none of them would have been having to deal with this at all if only he and Kremen had found some way, long ago, to get along. “A lot of this could have been prevented if Mr. Kremen and I had sat down and worked out some kind of an agreement,” he said, “but at that time, because of our stubbornness between him and I, there was no agreement to be worked out. And that was the problem.”
* * *
Anyone would crack in jail, Kremen figured, but not Cohen. And apparently Cohen was making something of a business for himself already behind bars. Kremen got a call from a guy claiming to be Cohen’s cellmate, and offering information. He told Kremen that Cohen was hiring himself out for legal services behind bars, helping inmates with the paperwork for their appeals.
With the prospects dimming of Cohen turning over the location of his money, Kremen decided that it was time for him to start expan
ding his business options too. And this was the time. Five years after the dot-com bubble burst, it was, as Kremen put, “frothy” again. Investors were riding a wave of bullishness since Google had gone public in the summer of 2004, and seen its stock triple. The new social network Facebook was garnering legions of members, eager to share their lives online. Established tech titans such as Amazon, Yahoo!, and eBay were also rallying back. With billions in cash and a leash on the outlandish spending before the crash, Silicon Valley, it seemed, was finally growing up. As Tom Taulli, cofounder of Current Offerings, an independent research firm, told CNN, “from the wreckage of the bust we now have some fundamentally good companies.”
There was one guy enjoying the bubble bath who wanted to help Kremen cash in with Sex.com once and for all: Mike “Zappy” Zapolin, an ebullient Deadhead and entrepreneur known as the domain-name guru. Zappy had been one of the youngest vice presidents at Bear Stearns and an infomercial magnate before seeing gold in flipping domains. He made his name purchasing Beer.com for $80,000 and Diamond.com for $300,000, selling each for more than $7 million. His company, the Internet Real Estate Group, had become the most aggressive investors in online properties—with multimillion-dollar deals for sites including Shop.com, Telephone.com, and Computer.com. And now he wanted to help Kremen flip the most valuable domain online. “Let me sell it for you,” he told Kremen.
Kremen considered his options. The boom was on. Sex was still selling, but changes were afoot. The so-called tube sites—free porn video sites such as YouPorn and PornTube that allowed surfers to watch small clips for free—were cannibalizing the online adult business. He’d cleaned up, and was tired of dealing with what he called the “kooks” of the industry. Still a Stanford MBA at heart, he was feeling the entrepreneurial itch again, eager to invest in other start-ups that could do for him in 2006 what sex and dating had done a decade before, putting him on the cusp of the next wave of technology and innovation. “Fine,” Kremen told Zappy, “but I need to see eight digits.”
The Players Ball Page 21
