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RegisterFly.com is a New Jersey based internet hosting and domain name "registrar" that lost its ICANN-accredited status on March 16th 2007 as a direct result of this lawsuit. The company formerly acted as a reseller of the services of eNom, but had become its own accredited registrar in 2006. In February 2007, the company was registrar for approximately 2,000,000 domain names held by about 900,000 customers.
In spite of a multitude of complaints and a history of problems, ICANN refused to act to enforce the terms of the Registration Agreement even amid allegations of fraud and RegisterFly's violations of its contract to be accredited as a registrar by ICANN. On October 10th 2006, ICANN notified RegisterFly that it had an outstanding balance of $131,422.86 in fees immediately due to ICANN, of which $44,985.16 was over 90 days past due. This is a direct breach of the RAA that ICANN failed to enforce.
A month later, on November 10th 2006, ICANN had not received any response from RegisterFly. Mike Zupke of ICANN called Glenn Stansbury (at RegisterFly) to inquire as to why RegisterFly was not paying its invoices to ICANN. Mr. Stansbury claimed that he was unaware of this issue.
Kevin Medina, founder of RegisterFly, then called Mr. Zupke and claimed to be unaware of the issue but promised to wire $49,000 to ICANN that week and another $44,000 at the beginning of the next week. During that conversation, Mr. Zupke of ICANN warned Mr. Medina that failure to pay ICANN invoices is a breach of RegisterFly's RAA that is could result in proceedings to terminate RegisterFly's accreditation, but Mr. Zupke and ICANN elected not to enforce that provision, but instead continued to ignore the ongoing problems and continued to breach ICANN's duty to enforce the rules and regulations.
On December 4th 2006, ICANN received a wire transfer from RegisterFly in the amount of $70,000. ICANN received an additional $59,999 the next day. On both December 11th and December 19th 2006, ICANN requested Mr. Medina pay RegisterFly's remaining balance, but it was not forthcoming. Once again, ICANN did not act to enforce the RAA nor to protect the public.
Mr. Medina promised that payment would be made on December 22nd 2006, but no payment was received, but now instead of doing nothing, as was the habit of ICANN, this time they officially agreed to extend time and ignore the violation with another empty promise.
RegisterFly's failure to cure this breach of its RAA within 15 working days and its non-payment of ICANN fees provided independent grounds for ICANN to proceed to termination of RegisterFly's accreditation, yet ICANN refused to protect the public even four months after notifying RegisterFly of the breach.
No lawsuits were filed between ICANN and RegisterFly, although there was a lawsuit brewing between the company's two owners, CEO John Naruszewicz and founder Kevin Medina.
The complaint filed February 12th 2007 in Federal Court in New Jersey regarding the feud between RegisterFly co-owners Kevin Medina and John Naruszewicz was especially ugly due to the romantic relationship; the two alledged in their lawsuit that they were boyfriends at one point. Their ten year long business and romantic relationship came to an end, and Medina claimed that Naruszewicz became "unstable and hostile" after their personal relationship broke up, culminating in a purported business takeover attempt. The lawsuit included allegations that Medina misappropriated corporate funds for personal use.
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