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Domain Names
$2.48 Civil Penalty

State of Oregon delivers 'bill' to Web entrepreneur for allegedly
selling stock in an Internet based company for selling stock related to
domain names without the proper license.

The local news agency that brought the story is "The Columbian" found
online at /

Temporary article link is


Previously: Vancouver resident Hans Wayne Schnauber formed Internet
company, which promised family-friendly Web surfing.

What's new: The state of Oregon alleges Schnauber owes $2.48 million
for selling interest in the company without a proper license.

What's next: Schnauber intends to fight the allegations.

Local Web Entrepreneur in Hot Water

Oregon alleges shares of were sold without proper license
Columbian staff writer

Hans Wayne Schnauber, or the "Butterfly Guy" as he was once known,
allegedly owes the state of Oregon $2.48 million for selling shares of
a failed Internet company he formerly owned.

The "bill" arrived at Schnauber's Vancouver home Saturday, leaving the
46-year-old curious as to why Oregon, five years after revoking his
corporation's license, is now taking action.

It's another chapter in a peculiar trip that links Schnauber to the
late '90s heyday of the craze. He has alternately been
described as a champion of butterflies and a cybersquatter, someone who
holds hostage domain names that are similar to legitimate Web addresses
for large corporations.

Schnauber denies all allegations. He understood that he was licensed to
sell interest in his Internet company,, and said the
cybersquatter label is inaccurate because he never tried to sell domain
names back to companies.

"I'd give them their name back for free," he said.

The Oregon Department of Consumer and Business services sent Schnauber
an order that demands he and two business associates stop selling
securities in Oregon. The state also demands Schnauber pay $2.48
million in civil penalties.

The order alleges the Schnauber sold stock or "licenses" of
to 500 people, most of whom live in Oregon and Washington. Schnauber
told investors Zipee owned more than 2,000 Internet domain names that
took legitimate site names and replaced the "com" suffix with "org," a
designation normally used for nonprofit groups.

Schnauber told investors the companies would pay to get the names back,
the order said.

The practice of cybersquatting made headlines in the 1990s as
legitimate sounding domain names like often took
unsuspecting Web surfers to sites filled with pornographic content.

Others registered domain names similar to a corporation's correct
address and offered to give up the site for exorbitant fees.

A 1999 federal law that linked cybersquatting with trademark
infringement and increased vigilance by companies have dramatically
reduced such aggressive takeovers.

Back when Schnauber was snapping up names like or, the founder of the International Federation of Butterfly
Enthusiasts said he was merely trying to highlight how companies are
helping or hurting the plight of butterflies.

He also said he was demonstrating that such Internet locations are

The Wall Street Journal and trade publications appeared amused with his
tactic. Time Warner executives saw little humor in the action and
demanded Schnauber release the names.

Schnauber denies he ever owned the names, just that he registered them.

He plans to fight Oregon and says if he loses, he doesn't have $2.48
million sitting in a bank.

"I'm a strange kind of person," Schnauber said. "I'm not weird, but my
brain works differently."

Domain Names
$2.48 Civil Penalty

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