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Summary:

An Internet security firm called KnujOn has released a report on illegal uses of the domain registration system that accuses Demand Media subsidiary eNom, one of the world’s largest domain registrars, of knowingly profiting from the sale of domain names to distributors of illegal pharmaceuticals.

Updated: An Internet security firm has accused eNom — a subsidiary of Demand Media and one of the world’s largest domain registrars — of knowingly profiting from the sale of domain names to distributors of illegal pharmaceuticals. KnujOn (whose name spells “no junk” backwards) today released an Internet security report which the company says tracked illegal behavior involving domain registration around the world. According to the firm, eNom “may be knowingly facilitating the illicit traffic of rogue pharmaceuticals” by issuing domains to criminal networks and other entities that distribute fraudulent medication. We have contacted both Demand Media and eNom with a request for comment, and will update this post when we get a response.

According to KnujOn’s report (the full text of which is embedded below), eNom is known to be “sponsoring fraudulent pharmacy networks and are in violation [of the] standards set by the National Association of Boards of Pharmacy. One network in particular is the GlavMed network, a criminal group that uses spam to advertise illicit sites.” The firm also said that domain registrars such as eNom “supply critical backbone services to illicit pharmacies, the back-end payment processing and network services required to keep the operations continuous and nearly undetectable.”

Should domain registrars be held liable for fraud or criminal activity that occurs through domains that they license? Some would argue that they should not, but the ICANN registration system does place certain responsibilities on registrars to verify that they are dealing with legitimate companies (although some argue the agency doesn’t do enough). KnujOn also says that the company has been notified multiple times by pharmaceutical industry regulators but has done nothing to remove domains that are based on fraudulent or criminal activity. The firm alleges that eNom has “transitioned from being a passive service provider to become an active facilitator of illicit criminal traffic, and possibly a knowing accessory.” The report states:

eNom did receive instructions from the National Association of Boards of Pharmacy (NABP) on December 23, 2009 requesting they cooperate with LegitScript and respond to consumer complaints about rogue Internet pharmacies sponsored by eNom. The letter clearly indicated what constitutes a rogue Internet pharmacy and summarized eNom’s involvement in this activity.

Registrars should not be expected to monitor every website, KnujOn says, but “it is also well-established that third parties cannot turn a blind eye to their own facilitation of criminal activity by others.” The report notes that more than 4,000 “rogue Internet pharmacies” use eNom’s registration services, which the firm says is seven times as many as use any other registrar. According to KnujOn, “eNom has become an accessory to violation of the criminal statutes listed above, by virtue of knowingly continuing to permit registration of these sites, and refusing to suspend the domains once being put on notice.” In other words, the firm says, “eNom has become an arm of illicit international drug traffic.”

According to an earlier report by KnujOn founder Garth Bruen, eNom has continued to deal with one of “the world’s largest online criminal pharmacy networks,” known as EvaPharmacy, which KnujOn claims is run from Russia and “uses multiple layers of fraud to mask its illegitimacy.” The security firm says that this has been clearly documented by another security agency called LegitScript, as well as by drug industry regulators in Manitoba, Minnesota, Ontario and Quebec, all of whom issued letters to domain registrars notifying them of the activity. According to KnujOn, most registrars shut the networks down, but “five others, including eNom, still sponsor these sites.”

Update: Quinn Daly, a spokesman for Demand Media, responded to our request for a comment with the following statement: “eNom is the largest domain name wholesaler and we take this responsibility very seriously. We cooperate with multiple law enforcement agencies, as this is our policy and meets ICANN requirements. Customers suspected of using eNom products and services for illegal purposes are investigated and appropriate action is taken. In this case, LegitScript and KnujOn do not represent law enforcement. LegitScript is a pharmacy trade organization, and KnujOn is an individual whose research has been called into question in the past. We can confirm that we received the complaint issued by LegitScript and KnujOn, and the complaint is currently under review.”

KnujOn is an independent Internet policy and security research group located in Boston and Vermont, run by programmer Garth Bruen and his father Dr. Robert Bruen.

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By Mathew Ingram

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  1. Yawn, garbage article.
    “Enom enables illegal drugs sales!”

    “Internet enables illegal drug sales, cheating on spouses, piracy, pornography addiction, reading bullshit articles like this one.”

    Sorry Matthew, but this is just plain garbage.

    1. I’m not sure why you say that, David — shouldn’t eNom be aware of whether it is selling domain names to known criminal organizations that traffic in illegal drugs?

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  3. Jim Lippard Tuesday, July 6, 2010

    There’s definitely a real issue here, made clear in the KnujOn report–not only has eNom been negligent in dealing with criminal pharmaceutical domains registrations, it has been negligent in its relationships with fraudulent resellers apparently being operated by criminals.

  4. Jim Lippard Tuesday, July 6, 2010

    Now that I’ve read the full report, I think it’s worse than I just said. The report documents that one of the registrars being used to resell eNom domains is a Nevada-based corporation, Acquire This Name, that has deleted its corporate officers so that their names are no longer on public records. KnujOn identified those deleted officer names as well as a third name associated with Acquire This Name from a previous WIPO proceeding. All three of those names are currently associated with Demand Media and eNom–as eNom’s general counsel, SVP of Sales, and Director of Domain Sales.

    The report’s discussion of eNom unverifiable business entities starting on p. 41 is also quite interesting, as is its discussion of eNom’s domain recommendation tool on p. 74, the case study that begins on p. 78, and the information about five registrars having more than half of all registrar accreditations (with eNom #1, at 138). Why is eNom paying $500K/year to operate 138 different registrars?

    And why is there still a .su ccTLD, and who is operating it, with what authority?

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  6. Spencer Malthouse Friday, November 12, 2010

    Hello Mr. Ingram,

    I’m writing a research report on the subject of illicit online pharmacies for McGill University featuring a case study on eNom and the events this summer. I was wondering if you could send me any information or sources related to this topic. The paper will be submitted Nov. 19 so please send me any information before then.

    Thanks very much,

    Spencer

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