Giganews, one of the most well-known, longest-running and most used Usenet providers in the world, is suing adult entertainment company Perfect 10 for fraud. The case dates back to 2014 when Perfect 10 was ordered to pay Giganews $5.6 million over a copyright infringement that it lost in all superior courts. However, until this day the Usenet company still hasn’t received any money and claims that Perfect 10 has continued to act fraudulently since then, as a result inciting a new lawsuit from Giganews who is now demanding 20 million dollars for punitive and exemplary damages against the company.
Perfect 10’s business for years was posting high resolution photos of women on the internet, but everything changed when the company found a shortcut to big money rewards. Perfect 10’s owner, Norman Zada, acquired the copyright for these images so that it could use it in lawsuits, where the company started taking on several big corporations such as Google, Amazon, Megaupload, MasterCard, Visa and many more. More than 20 of these ended up in big cash settlements in favor of the company for copyright infringemet and, bolstered by its successes, the company took aim at Giganews back in 2011 – a fact that has not been quite as successful for Perfect 10. In this lawsuit, the adult entertainment company claimed that Giganews was responsible for its users uploading images belonging to Perfect 10 to some of Usenet’s newsgroups.
Three years later in November 2014 the case was then finalized, where it was decided that Giganews was not liable for the actions of its users and, as a result it was not infringing on any copyright owned by Perfect 10. A large part of this was Perfect 10’s inability to provide any proof of what the suit had termed “indirect infringement”. Considering the company’s efforts was mostly focused around forcing payments from companies rather than actually fighting any legal battles it’s perhaps no surprise to learn that Perfect 10 hadn’t even supplied any real documentation to backup its claims, which ultimately led to it losing its legal battle against Giganews and being ordered to pay $5.6 million in attorney fees and costs.
Fraud Confessions and Assets Misconceptions
This brings us to the central point: Perfect 10 still hasn’t paid Giganews any amount of its ordered fees. The adult entertainment company has failed to combat the ruling in the Court of Appeals and even confirmed the original judgment in January 2017, but since no payments have been sent it has now come to Giganews to file a new lawsuit. This suit accuses Norman Zada and his company of depriving the Usenet service provider of the money it has the right to receive, according to the legal ruling of the courts.
Even more than this, however, it also accuses Perfect 10 of illegally transferring its funds and assets to Zada – which allegedly count at least $1.75 million in cash and falsely valued assets such as computer servers, furniture and even a car – in an “unlawful conspiracy with him” to “intentionally avoid satisfaction of the judgment”. This, says Giganews, is demonstrated by the $850,000 transfer from Perfect 10 to Zada’s personal account, six days after the court’s decision in favor of the Usenet company back in November 2014. In turn, not only has Zada denied that such assets ever moved location, but he also said that he was “entitled to that money”, explaining that the transfer was made because of the “summary judgment orders” – a fact that Giganews claims is nothing short of a confession of fraud.
As a result the Usenet provider is now claiming $20 million in addition to the $5.6 million that has not been paid, and it also asked the court to prevent any more cash or assets from being transferred from Perfect 10 to Zada or anyone acting on his behalf.
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