‘The Sex.Com Chronicles: A White-Hat Lawyer’s Journey to the Dark Side of the Internet’ by Charles Carreon

We talk by phone March 25, 2009.

Luke: "Charles, why did you write this book?"

Charles: "I’ve always wanted to be a writer. It was the first thing that happened to me that I thought a large number of people would be interested in hearing about."

Luke: "Tell me about the journey to writing this."

Charles: "The whole time Kremen vs. Cohen was happening, I was well aware it was not an ordinary event. There were just too many weird things happening. In the first place, there was no reason why I would end up representing a person with a case as important as sex.com except that no other lawyer wanted to work on it.

"Fate chose me to work with Gary on recovering the domain.

"As a lawyer, you are usually billing as you go along… You end up with detailed notes on all the events…

"I ended up writing the book as a result of my partnership with Gary [Kremen] not working out and I found myself fired about two months after I had won the case. I ended up litigating with Gary and every time I worked on my case, I had to think about him. It wasn’t particularly pleasant.

"After I had written up a few chapters, I decided to seek an agent and ended up with Theron Raines, who had represented Bruno Bettelheim, Winston Broom (author of Forest Gump), James Dickey (Deliverance)… I was thrilled. I wrote what turned out to be the first 36 chapters to see if Theron could get me a book contract, which he was pretty optimistic about. He sent it around. He got a nice stack of great rejection letters and he called it the best book he couldn’t sell.

"I laid off it for a while. Two years elapsed.

"It took three years to resolve the case with Gary. We settled. I had more time on my hands. I had money in my bank account and I had this huge experience I needed to process. I went back to it. The end of the book was much harder to write than the beginning. It was like doing surgery on myself."

"I wanted to show how a lawsuit to recover stolen assets works."

Luke: "I’m thinking back to my involvement with this story."

Charles laughs. "No kidding."

Luke: "I met Stephen Michael Cohen in January 1999. He gave me his business card which read sex.com. I said, how long have you had sex.com? He said since 1979. I said, have domain names been around that long? He gave me some smooth information that left me befuddled. I interviewed him in May of 1999 and got his unbelievable story. Then I interviewed Ron Levi (most powerful man in online porn). Then [Carreon’s assistant attorney] Sue Whatley came my way. We became best friends… Sue was the pipeline to what was going on."

Charles: "I never spoke with you until after the case happened…after the whole debacle with Gary."

"Sue found her metier. For a person born in Sweetholm, Oregon, and who weighed about 130 pounds more than your average sex kitten, she did a pretty good job of working the industry for all it was worth. She definitely gave us the line on what was going on.

"I read everything you wrote about it and commented on it in the book."

Luke: "We’ve been acquainted for a decade but only met in person twice and spoken on the phone a handful of times."

"I can’t believe you and Gary gave sex.com to this guy [Yishai Habari] who was mobbed up."

Charles: "I was the classic case of the guy who lands a fish so big that it sinks his boat. I had no idea what I was doing. I was simply focused on it from a technical point of view, to wrest the domain away from the man who stole it. I left it to Gary and Sue to figure out what we would do with it. I had not the first idea about what the industry had as its first profit model. When we finally had control of the domain, the power shifted entirely to people who had knowledge such as Gary. He said, let’s just have Yishai Habari do it.

"According to Steve Cohen, he was already in business with Yishai. To stay with Steve Cohen’s partner… Yishai was instantly making 15%. That was my share. I had to work for 20 months and take a big flyer on the whole thing."

"After a day spent with Yishai and his partners, I felt terrible. And it did not let up. There was something I couldn’t get over and I just went into an obsessive spiral about getting out of business Yishai Habari."

Luke: "I was writing this on my website at the time that this guy is mobbed up. I wasn’t just whispering it to people."

Charles: "I actually was not informed about it. I did not find out until two years later when his partner Richard Martino was convicted of looting that phone company in the Midwest. It was not until then that I had hard knowledge about the mob connections of the people we had just been in bed with."

"After Gary and I settled our case, I was walking around with him at his new facility in the Castro district [of San Francisco], and I said, ‘Gary, did you know that Yishai was working with the Mafia? If you did, you could’ve told me. It might have made a big difference in our relationship.’ And he just looked at me with gentle disdain… If you don’t know something that important, you’ve violated Yogi Berra’s rule of not getting involved in a game where you don’t know the rules.

"It became clear to me that he knew a heckuva lot more about what was going on with Yishai and Richard Martino and Crescent Communications than I ever had.

"I just had an instinct to get out and I haven’t regretted it.

"A lot of time I’ve thought, all you had to do was keep your mouth shut, go to Tahiti, collected your $50,000 a month, and just stop. I couldn’t do it. I did not want that role in life. I did not want to be harvesting money in that way.

"I’ve kept working for people in the industry but over time entirely with people I like and respect. I work for BrandiLove.com. She’s a really decent person. They have the whole swinger lifestyle. I’m not a swinger but I totally respect it. I’ve seen many other models for generating money in Adult that I can’t respect. Those operators know that about me and so I never get any work from them."

Luke: "You represented Steve Sweet. You were with him visiting Max Hardcore when Steve got a call that made him turn pale. His whole operation had been raided.

"And then it says [in the book] that you got out of Adult. What happened?"

Charles: "When it came to the criminal matter, I was in no position to help him. He needed a Canadian lawyer. He got one who eventually got him a complete acquittal."

"To be there agenting a deal between Steve and Paul F. Little [Max Hardcore] was something that gave me pause. I asked myself, ‘Can money be this important?’ The answer just hung in the air. No, it isn’t. Steve’s phone rang and it was clear that my 15 minutes of shame was about to come to an end."

Luke: "One thing I love about the book is that you display zero agenda in it beyond telling the story. This is not a book to exculpate Charles Carreon from any mistakes he’s made. It’s not a book to praise or damn [anyone]."

Charles: "The hardest part was not to come out the victor. See, I can’t even say, ‘The Loser!’ And I won’t. The experience was, ‘I am a loser.’ That’s what it felt like. Like, damn, I’ve just ruined the whole book. Why couldn’t I have just sat on top and grinned? Then the book could be all positive and end on a high note.

"And then as I worked on it, I realized, there are no good books like that. Those are bad books. Those are crumby Hollywood movies. Real life involves getting too full of yourself and making an ass of yourself, scraping your knee, and then getting up and saying, well, that’s my knee. I’m fine.

"I used my viewpoint but tried not to impose my prejudices.

"One of my favorite times is when I write about how I am in Vancouver and Ben Pipkin (from Wired Solutions) is blazing on E! and he’s raving about how he’s going to testify.

"I’m standing there and I’m sober enough to realize that this does not bode well for me. When your best friend is a rave drug addict swearing eternal loyalty, you’ve got problems.

"Going through a dark patch in your life, you say, ‘How did I end up here?’ And the answer was, I thought money was the answer to everything. I thought that if you had enough gold, you would have no problems.

"And the universe was kind enough to take me to a place where I could meet people who have plenty of money and if money was going to give security, they should feel secure, but they just had a whole new set of problems. One of the biggest problems they had was that nobody was really honest with them… You’re not going to tell yourself the truth. That is not in the nature of human beings. We need other people to tell us the unpleasant truths about ourselves. As it happened, the world came and it told me."

Luke: "Where is Stephen Michael Cohen today?"

Charles: "To the best of my knowledge, the last email I got from Steve, and it was very pleasant, he’s always very pleasant, he said he was in Mazatlan. That he still owned his place down the street from President Fox.

"I absolutely do not know if anything Stephen has ever told me was true."

Luke: "Did Gary recover any money from Cohen aside from his house in San Diego?"

Charles: "Not to my knowledge. I like to be idealistic, but that stops at doing useless things. There are a couple of things I’ve never seen in my career. I’ve never had somebody come up to me and say, ‘I got a great libel verdict.’ And I’ve never had anybody come up to me and say, ‘I’m rich, man. I got my recovery from the bank in Lichtenstein.’ Or, ‘I found the accounts in the Isle of Mann and they’re stuffed and they’re all coming my way.’

"It just doesn’t happen. These offshore scams really work. Right now the United States government is armwrestling with UBS in Switzerland.

"Steve Cohen sat in prison for about 18 months. He had the keys to get out. The person who is in prison for contempt always has the keys for the jail cell. All they have to do is say, ‘I’m ready to talk.’ He never once said, ‘I’m ready to talk.’

"How many people have managed to jail their adversary for well over a year and have the person sit there and say, ‘Screw you!’

"That is one tough dude."

"Cohen was partners with Yishai. When we got sex.com, Ron Levi was buying at least $50,000 a month in traffic from sex.com through a strawman, it seemed highly likely to me that Cohen, being the clever guy he is, said to Ron Levi and Seth Warshavsky (no paragon of virtue), ‘Let’s show this Kremen guy how we screw people over. You go and promise you will hire lawyers for him. You hire lawyers who will throw the fight. I will give you all the traffic you need to pay the legal fees you pay to those lawyers.’

"That’s my theory for why Ron paid for Gary’s representation. As I said in the book, I have never seen anyone give up a case who didn’t have a drug problem like Katie Diemer was doing. It was at that point that I stepped into the case. There was a motion to dismiss pending. If you don’t file an opposition to a motion to dismiss, you lose.

"Katie Diemer appeared to be a rational, intelligent, capable lawyer. I did not understand why she was throwing the fight.

"Ron was amazingly accommodating. The story had always been that he had put $150,000 into the defense and if Gary won, he was going to come around and try to collect. In no way did he do so. Gary was always afraid of it but it didn’t happen.

"Ron put a great deal on the table, not the best deal available, but $450,000 a month and 40% of the additional revenue to be generated."

Luke: "And the great thing about Ron Levi is if he offers you that deal, he’s a man of his word."

Charles: "Yeah. He had it all written up in a three-page contract and handed it to us. It all looked fine to me.

"There wasn’t any hope of doing it. Sex.com exerted a fascination like the one ring in The Lord of the Rings.

"There’s a deep deep myth about a word that will make you incalculably wealthy. That’s what captured me and Gary.

"When we started out, I thought Gary shared my ideal that w would get hold of the word and we would transform its energy and make it into something decent. I thought there was more money in it. I was disappointed when Gary showed no interest in pursuing that avenue of commerce."

"We could’ve had an appointment with anyone we wanted to in the world of publishing. We had an appointment with Benedikt Taschen. There’s a guy who made a fortune who has a real passion for erotic art. I felt that avenue of decent reasonable erotic expression had a lot of potential.

"What did Ron Levi have? They called him Fantasy Man. He may not be a man of tremendous style, but he did know how to weave that out. His sites took advantage of the visual power of the medium. During Gary’s tenure at sex.com, it was possibly one of the least interesting adult sites on the web."

About Luke Ford

I've written five books (see Amazon.com). My work has been followed by the New York Times, the Los Angeles Times, and 60 Minutes. I teach Alexander Technique in Beverly Hills (Alexander90210.com).
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