Confiscated by federal authorities, The Income Store’s more than 3,300 websites are set to be auctioned Thursday in a bid to recover at least some of the more than $77 million that investors lost in an alleged Ponzi scheme.
The court-ordered online auction includes 200 operating websites and thousands of dormant domain names, ranging from The Income Store’s former website to the never-developed DonaldTrumpCollectables.com.
The websites will be sold in a single lot, with the opening bid starting at $2.5 million.
“The goal of this auction is to raise as much money as possible to pay back to all the shareholders that got the short end of the stick here,” said Monte Cahn, founder and president of RightOfTheDot, a Florida-based digital assets auction company. “I don’t think we can cover all the losses, but at least it pays back something instead of having complete losses for everybody.”
More than 480 investors filed claims against The Income Store, a website development business that was shut down amid allegations of securities fraud in December 2019.
The Income Store was launched in 2017 by Kenneth Courtright, 51, who operated the business out of his Minooka home. He is facing civil and criminal charges tied to allegations that investors were lured with annual returns of up to 20% if they paid a six-figure “upfront fee” used to build and operate websites.
The returns were funded by paying early investors with money raised from later investors until the Ponzi scheme became “unsustainable,” according to a civil complaint filed in December 2019 by the Securities and Exchange Commission against Courtright and Today’s Growth Consultants, better known as The Income Store.
In February 2020, Courtright was arrested on criminal fraud charges after the FBI launched a separate investigation into The Income Store. That case is set for an April 2022 trial in Chicago federal court.
Courtright did not respond to a request for comment Thursday.
While Courtright’s assets have been frozen pending the outcome of his criminal case, court-appointed receiver Melanie Damian has been operating The Income Store’s websites with a skeletal staff since January 2020. The business generated about $1.2 million in revenue and turned a small profit last year.
“Enough to maintain the assets,” Damian said Thursday.
The Income Store took in $144 million from investors over three years before it was shut down by federal authorities, but paid out no more than $40 million, Damian said. Courtright allegedly spent some of the funds to pay his mortgage and school tuition for a family member. As of March 31, the receiver had recovered about $104,000 in cash from The Income Store’s business operations, according to court filings.
A Chicago federal judge approved a two-tiered distribution settlement enabling investors to claim the websites assigned to them by The Income Store in lieu of cash. Of the 481 claims from investors, 30 elected that option, taking possession of 82 websites and eliminating nearly $7 million in potential monetary claims against the estate.
The other 451 investors, who are still out a collective $70.5 million, will divide up the proceeds of the auction — minus commission fees that range from 15% to 25%, Cahn said.
Cahn is confident that at least one bidder will offer the minimum $2.5 million needed to buy the entire lot. But if no buyer steps up, the websites will be broken up by category or sold individually, he said.
The Income Store created and operated a plethora of mostly obscure websites for investors, ranging from KeepingCarsClean.com, a waterless car-washing e-commerce site, to HoneyBeeStings.com, an ad-supported site for beekeepers. Three domain names alone were secured for selling Donald Trump memorabilia. All the Trump sites are inactive.
“None of the domain names are super premium domain names, but there’s a lot of really good domain names in there,” Cahn said. “And obviously, they’ve proven to be generating traffic and revenue without hardly anybody touching them over the last couple of years.”
Cahn said 39 potential bidders have already signed up to participate.
Cahn said that despite being set up under a Ponzi scheme, The Income Store websites have a market value of between $10 million and $15 million, based on the number of domain names and the revenue trajectory of the 200 operating sites.
Even The Income Store’s own former website at incomestore.com retains some value despite the fraud allegations against the business, Cahn said.
“That’s part of the portfolio that goes with the whole asset,” Cahn said. “That’s actually a very good domain name too.”
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