How an SEO Battle Landed a Jewelry E-tailer in a Lot of Trouble

Last month, JCK reported on a case involving Michael Arnstein, CEO of Natural Sapphire Co. In September, Arnstein pled guilty to one count of forging a judge’s signature.

After that story ran, Arnstein sent me an email saying he wanted to tell his side of the story. It’s quite a tale.

Arnstein doesn’t deny he made a terrible mistake in trying to protect his business, one that could send him to jail for over a year. But he says he was in a crazy situation—and that situation could happen to any retailer.

In 2011, he fired his India-based computer software company and web designer. According to court documents filed in this and a related case, the head of the company allegedly started a cyber-campaign against Natural Sapphire Co., attacking it online and holding on to a related website.

In one email Arnstein submitted as evidence, the company head allegedly wrote, “I will ensure that not a single sale happens through your website. We are working extra time to kill your SEO.”

Arnstein hired a lawyer, both here and in India. When he couldn’t subpoena the programmer, he enlisted a private investigator in India to track him down. He even appealed to members of Congress and the FBI; the latter said its hands were tied since the programmer was based offshore.

Eventually, he filed suit in New York federal court charging defamation and cyber-squatting. In 2012, the court issued a default judgment against the software company. A subsequent court order told Google to de-index (i.e., remove from search results) the defamatory sites.

But between the legal costs—which totaled over $100,000—and the resources this drained from the company, Arnstein was now in serious financial trouble. He is the father of three young children, and his house was being foreclosed on.

Eventually, he came to a settlement agreement with his former website consultant. However, Google never took down some of the sites in the original court order—which rankles Arnstein, given his case is all about respect for the law. Furthermore, new sites and negative reviews kept popping up. His lawyer told him that in order to get them taken down, they’d have to commence the court case all over again.

So he went to a now-defunct cyber-brand-management company. According to Arnstein, its legal department told him that his lawyer had wasted his money. It said that because the court order said it was “not limited to” the specified URLs, he could add new sites to it. Which, with the help of Photoshop, he did. He then submitted the doctored court orders to Google’s removal tool. (The idea originated from the brand management company, he stresses: “I would have never come up with that idea on my own.” He also insists that his request for removals only targeted fake reviews with clearly defamatory content.)

When the search giant discovered the documents were obvious fakes, it reported them to the government. An investigation ensued, and Arnstein was indicted in March.

Looking back, while Arnstein knows he did something wrong, he feels there is not much he could have done differently to stop the cyber onslaught, except perhaps reach a settlement with his ex-consultant faster—something he still has mixed feelings about.

“The legal system couldn’t help us,” he says. “Google wouldn’t help us at all. There is nothing you can do. You are just a sitting duck. The internet really is the Wild West.”

As a result of his guilty plea, Arnstein faces five years in prison. Acting Manhattan U.S. Attorney Joon H. Kim is asking he serve 12 to 18 months, an absurdly cruel sentence for a crime that, while clearly a violation of the law, basically hurt no one.

Arnstein’s sentencing is set for January. He’s hoping the judge will show decency and mercy.

Google could not be reached for comment. In a statement on LinkedIn, the head of the software company with which Arnstein originally had the dispute said he hasn’t had any connection with Arnstein since the 2012 settlement and that Arnstein’s criminal case has nothing to do with him. His full comment can be seen here.

(Photo: Getty Images)

JCK News Director