It begins with an email to an info email address from an international ISP located in Shanghai, China. The message implores its reader to forward the content to the company owner. The content states the sender is a network service company who is a domain name registration center. The message claims to have received an application from Huabao Holdings Ltd requesting your URL as their keyword and imposing a China (cn) domain name appended to your existing URL domain. The message states further after checking, there is a name conflict with your company name or trademark. Finally there is a direct request for confirmation that Huabao Holdings Ltd is associated with the target company receiving the message as a distributor or business partner in China.
The situation escalates with a message to the same info email address from a gmail account that insists the target URL will be assumed, used as a keyword and the ‘cn’ appended to the dot com address. A subsequent message from the originator states the problem can be resolved by sending $350.00USD to purchase a ‘cn’ domain.
This is a tip-of-the-iceberg problem experienced by macro, large, medium, and small businesses across the United States. A Google search for Huabao Holdings Ltd uncovers the Huabao International Holdings Ltd, a holding company engaged in production, distribution and export of food and tobacco flavors, fragrances and reconstituted tobacco leaves. Yet using quotes around Huabao Holdings Ltd not only uncovers the scam but also reveals a larger more sinister challenge to American Businesses. The story cites the email chain. In a similar incident with wider implications the website mentions a Washington, DC law firm, Wiley Rein, as filing a federal lawsuit in the U.S. District Court for the Eastern District of Virginia in 2014.
Here the complexity of the international scam defines in detail how the scam usurps more than a domain name, a URL and $350.00USD from the website owner. The complaint identifies an Florida based ecommerce company generating domestic revenue as the victim of this scam and fraud under the Computer Fraud and Abuse Act including the Anticybersqatting Consumer Protection Act.
The complaint identifies a breach of the company’s domain name registration and a subsequent unauthorized transfer of the owned and registered domain names to a registrar in China. The Florida client on whose behalf the complaint is filed is considered a medium to large sized company with diversified goods and services sold within the United States generating an estimated $250 million in net revenue.
The legal brief cites how deeply this breach will impact American commercial trade. The nature of the lawsuit cites a Chinese national named, John Doe, living in China, as accessing the registrar data, transferring domain ownership and all commerce to the Chinese mainland. This alone impacts U.S. industries in real estate, travel retail shopping, lifestyle, retail services, video, and protein coding.
The Florida Company applied for and won trademarks for their domain names as well as the required marks in use that depict their ownership and rights under trademark ownership awarded by the U.S.P.T.O. The case as defined in the lawsuit demonstrates computer hacking, theft of intellectual property by “persons based in China” and poses a significant problem for American Businesses, according to the complaint.
In an October 5, 2014 interview with CBS the director of the FBI states “Chinese hackers  target the intellectual property of U.S. companies on a daily basis costing the U.S. economy billions of dollars each year.” The FBI recently issued a “flash” alert to a wide range of U.S. businesses warning of the actions of a “group of Chinese Government affiliated cyber actors who routinely steal high-value information from U.S. commercial and government networks through cyber espionage.”
Finally, the Huffington Post recently reported that the FBI received 26 separate reports of domain name theft over the last year even through a majority of such thefts go unreported, according to the lawsuit.
The most any business can do is to report incidents immediately and seek legal guidance on next steps.