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Registrar Abacus America is in Corporate Delinquency

Garth Bruen

KnujOn has retrieved a document indicating that the ICANN-Accredited Registrar Abacus America is in Corporate Delinquency in the state of Kansas. Kansas defines a company as Delinquent if "The business entity has not filed its annual report and fee by the due date." As a corporation, Abacus America must disclose its finances publicly and "The business entity will remain in Delinquent status until it files its annual report, or until the business entity forfeits for failure to timely file the annual report and fee." Abacus America has until the end of July 15 to correct this, after which they will be in Forfeiture and lose their corporate status.

This situation may put the Registrar in material breach of sections 5.3.2 and 5.3.7. Registrars may lose their accreditation if they become "bankrupt or insolvent" which could be a likely reason why a company would not post its statements.

This incident is significant because Abacus America was cited by LegitScript and KnujOn for sponsoring an unlicensed pharmacy selling Schedule 3 substances (http://www.justice.gov/dea/pubs/scheduling.html) without prescriptions and shipping them into the U.S. from Turkey and Thailand. The Abacus America sponsored illicit pharmacy was discussed in a major underground steroids report in 2008. Abacus America never responded to the report and the site (MULTIHGROUP.COM) is still active and registered through Abacus America. The site sells substances like Durabolin, Primobolan, and Anapolon, all illicit steroids. The site describes itself as,

a mail-order company which has more than 10 years of experience on supplying, packaging (very discreetly) and sending anabolics and other pharmaceuticals overseas.

This supports our contention that poor oversight and a lack of due diligence within the Internet architecture creates an atmosphere of permissiveness that allows illicit activity, like online drug-dealing, to continue with impunity. All of these issues have been reported to ICANN.

This report is just the beginning an ongoing series of disclosures that link compliance failures to illicit online traffic. The full report will be published in late June.

By Garth Bruen, Internet Fraud Analyst and Policy Developer. More blog posts from Garth Bruen can also be read here.

Related topics: Cybercrime, Domain Names, ICANN, Internet Governance, Law, Policy & Regulation, Security

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Comments

Brilliant Work John Berryhill  –  Jun 02, 2010 10:58 AM PDT

http://www.icann.org/en/tlds/report/biz1.html

Abacus America is a California corporation which has been in business since 1992.

http://kepler.sos.ca.gov/cbs.aspx

Entity Name:  ABACUS AMERICA, INC.
Entity Number:  C1808935
Date Filed:  07/01/1992
Status:  ACTIVE
Jurisdiction:  CALIFORNIA
Entity Address:  7500 W. 110TH STREET, SUITE 400
Entity City, State, Zip:  OVERLAND PARK KS 66210

-----

Is this really representative of the diligence of your work?

Brilliant Work - Thanks! Garth Bruen  –  Jun 02, 2010 11:24 AM PDT

Is this really representative of the diligence of your work?

No, it would be a misrepresentation on your part. We know Abacus also has an incorporation in California and that they also claim location in Florida. None of this changes the situation in Kansas that you have also noted in your cut-and-paste, the address cited in the CA record is a Kansas address. This also changes nothing in reference to their sponsorship of an illicit pharmacy, and knowingly doing so for two years.
The point is, Garth John Berryhill  –  Jun 02, 2010 11:51 AM PDT

A company may operate several corporate entities and, yes, a California corporation may have a Kansas address.  Whether they are simply late paying the franchise fee for a KS entity, or whether they no longer have need for the KS entity, does not alter the fact that the Kansas record itself is a foreign (out-of-state) correspondent entity of a CA corporation in good standing.

Surely, you noticed this in the Kansas SOS record:

http://www.accesskansas.org/srv-corporations/getRecord.do?number=4103479

Business Entity Type: FOREIGN FOR PROFIT
Date of Formation in Kansas: 08/07/2007
State of Organization: CA

The Kansas record states it is a California corporation.  Moreover, since the KS registration was initiated in 2007, and AA has been a registrar much longer than that, it should also have clued you into the fact that the KS entity is not the registrar.

You "received a document"?  No, you did a corporate record lookup and failed to understand what the data elements were telling you.

So, the upshot is that you consumed ICANN staff time to alert them to the irrelevant fact that a KS registration of a CA corporation will expire in July.  That has no bearing on AA's compliance with the RAA - because they are not a Kansas corporation in the first place.

It would be also interesting to understand the basis for your statement, "As a corporation, Abacus America must disclose its finances publicly".  No, they must file an annual franchise tax statement with their state of incorporation.  Where do you get this notion that a privately-held corporation "must disclose its finances publicly"?

Incidentally... John Berryhill  –  Jun 02, 2010 12:02 PM PDT

The entirety of the "annual report" required by Kansas is this form:

http://www.kssos.org/forms/business_services/AR.pdf

Where do you get "must disclose its finances publicly" out of that?

So how does this change anything? Bob Bruen  –  Jun 02, 2010 1:10 PM PDT

Hi John,

How are you? Glad to see you jumping in here.

So, how does this "new" information change anything? They are still delinquent in Kansas. Being delinquent is still a problem with the RAA. The red herring of different addresses means nothing. It's like if I drove my car to a different state. If I had a problem in my state, it would not go away just because I drove somewhere else.

The real problem is the assistance they provide to illicit pharmacy domains. That does not change either. The end is coming for registrars who knowingly provide assistance like this. The good registrars are meeting their responsibilities and a few are not.

You can complain all you want, but you are coming down on the wrong side in this case. 

--bob

I am not "coming down" on any John Berryhill  –  Jun 02, 2010 1:34 PM PDT

I am not "coming down" on any "side" of any "case".  I haven't a clue who runs AA and have no dog in any fight.

It is a simple question of factual and legal accuracy.

Your commentary on the impending lapse of the KS registration, and your statement about financial disclosure indicate that you do not understand corporate law.  It calls into question what other laws you do not understand.

If you can do math, you can tell that the 2007 KS foreign registration of the CA corporation does not cause an RAA issue, because the signatory to the accreditation agreement with ICANN was the CA corporation, which remains in good standing.  It had to be the CA corporation, because the KS registration did not even exist when this CA corporation was accredited as a registrar.

If the "real issue" is the pharmacy thing, nobody would guess from the headline, from your profound misunderstanding of what that KS registration means, or the public financial disclosure requirements in the book of "Garth's Imaginary Laws".

But, of course, being accurate and making up law is all beside the point.

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