[LACNIC/Politicas] Host Sailor, Ltd.

[Ronald F. Guilmette]

Mr Rojas,

In your latest response to me on this list, you suggested that I have
misused this mailing list to discuss issues that are unrelated to
LACNIC policy.  I respectfully disagree, and I will make my case more
fully below.

I believe that you and your fellow staff members of LACNIC have made
and are making serious errors in your interpretation and application
of the true intent and spirit of existing LACNIC policies, and that
these errors in the interpretation of existing LACNIC policies are
materially harming not only LACNIC members, but the entire Internet
community worldwide.

If there is some better place to discuss the proper interpretation and
application of LACNIC policies and/or new policy proposals that would
correct these LACNIC staff misinterprerations of existing LACNIC policies,
then by all means, please do tell me where that better place might be,
and then I will go and post there instead of here.

Until then however, I wish to continue to present evidence here about
the absurd results of your misinterpretation of existing LACNIC policy,
results which apparently endorse and allow parties that have -zero-
actual footprint within the LACNIC region to hold onto sizable blocks
of IPv4 number resources.

I respond in detail to your various points below.

Before I do however, allow me to clarify *up front* that the real issue
I have attempted to raise here is *not* the possibility or probability
of either the customers of HostSailor or HostSailor itself enganging in
criminal acts.   The real issue I have attempted to raise here is whether
or not HostSailor has effectively defrauded LACNIC itself out of two
valuable and precious /22 blocks.  That is, quite obviously, the *only*
issue that LACNIC can do anything about, and it is an issue which, I
believe, LACNIC is morally, ethically, and legally obliged to do
something about, under a correct interpretation of existing LACNIC
policies.

In message <78f4435d-8861-bb11-9fcf-58b59fac0070 at lacnic.net>, you wrote:

>According to LACNIC policy (1.11),   The numbering resources under the 
>stewardship of LACNIC must be distributed among organizations legally 
>constituted within its service region and mainly serving networks and 
>services operating in this region. External clients connected directly 
>to main infrastructure located in the region are allowed.

That is, of course, an entirely appropriate LACNIC policy, as a general
matter.  But how does (or how should) that general policy be applied in
the specific case of this organization calling itself HostSailor?

As I noted in my prior message, simple traceroutes demonstrate convincingly
that this company has -zero- infrastructure within the LACNIC region.  In
fact, I believe that the facts will show that it -never- had any equipment
or infrastructure of any kind within the LACNIC region.  Given that fact,
will LACNIC now take back the 131.72.136/22 and 138.99.216/22 blocks,
since they are clearly -not- being used in accordance with LACNIC policy?

Doesn't LACNIC have legitimate members who actually *do* have actual and
real infrastructure within the LACNIC region who desperately need more
IPv4 addresses, and who could make good and legitimate use of the two
/22 block in question for their actual infrastructure within the region?

>As mentioned in our previous response, HostSailor provided legal 
>documentation demonstrating their legal presence in Belize, and 
>presented a plan detailing how they will use the resources in the 
>region, complying at that moment with the requirements established in 
>the policies developed by our community.

I will try to be clear about this.  It is my contention that HostSailor's
creation of a Belizian corporation was an outright *fraud* and that it was
done *only* for the purpose of obtaining some scarce and precious LACNIC
IPv4 address space... which is exactly what the company has done.

You only have to do a little research on the Belize mailing address that
HostSailor has been using in conjunction with their two LACNIC /22
address blocks in order to understand what this address really is.
Here is the address:

     16 Lauren Berges Crescent, Belama Phase-3 2, Belize City, BZ

If you simply google for that address, as I have done, then you will
quickly learn that this address is used by SEVERAL shady companies,
including even one named Green Road Corporation which is named in a
current *criminal* complaint, filed by the U.S. Securities and Exchange
Comission against a number of parties relating to a massive stock fraud
scheme:

     https://www.sec.gov/litigation/complaints/2016/comp23471.pdf
     (see page 2 for named defendant Green Road Corporation)

To be entirely clear, I am *not* saying that HostSailor has any specific
relationship to this Green Road Corporation that is currently the subject
of a U.S. SEC criminal action, other than the fact that they both have
used the same mailing address... an apartment in Belize City... as their
address for legal purposes, along with *several* other companies.

It is actually not all that surprising that HostSailor and many other
companies (including the crininal stock manipulators of Green Road
Corporation) are all using the exact same Belize mailing address.  I
have seen this type of thing many times before.

The reason several companies give the exact same mailing address...
usually just a post office box, but in this case a small apartment in
Belize City... is because there is a company at that address which is
in the business of creating so-called "offshore" paper-only companies
for other parties.  And in the case of HostSailor's alleged "16 Lauren
Berges Crescent" address it is simple to find that incorporation company.
We only have to googling for the address to find it.  Here is the
"offshore" incorporation company in question:

	https://www.belize-offshore.info/

(Note that this company is not even run by a Belizian citizen.  As the
WHOIS record for the domain shows, this incorporation company is itself
actually run by a Russian gentleman named Konstantin Titov, most probably
from Moscow.)

That fact that HostSailor created a fictitious paper-only company in
Belize only so that it could get its hands on some nice valuable
chunks of LACNIC IPv4 real estate should really not be all that
surprising to anyone given these additional known facts about HostSailor,
which speak to the general character (or lack thereof) of the owner
of the company:

    (1) HostSailor has previously done the exact same thing also in the
        "offshore" jurisdiction of the United Arab Emirates, where it
        also created a secretive and untracable paper-only company that
        also did not allow anyone to find out who the actual "beneficial
        owners" of the company are.  (This is a unique feature of both
        Belize and UAE companies.  They are both totally untracable and
        anonymous, which explains why international criminals like them
        so much.)

    (2) As TrendMicro, Brian Krebs, and myself have all now pointed out
        in public postings, this company, HostSailor, is not exactly a
        shining model of honesty and/or integrity.  It has allowed various
        hacker criminals to use its IP address space repeatedly and
        continually since the company's formation, barely three years
        ago.  And in fact, the HostSailor was created by the same man
        who had owned the norotious "bulletproof" hosting company called
        Santrex, before it was effectively forced off the Internet in 2013.

To be clear, I *do not* expect or ask that LACNIC respond in any way to the
various criminal activities taking place within Hostsailor's allocated IP
address space.  That is the job of law enforcement.  Everyone, including
myself, agrees on that.  I have only tried to provide some background
information about Santrex/HostSailor so that you, Mr. Rojas, and everyone
within the LACNIC community will fully appreciate that the owner of this
company has no morality and no ethics.  Now that everyone can see that,
it now should also be much easier for everyone to understand and appreciate
that the owner of HostSailor certainly would not hesitate to use dirty
tricks, fraud, and paper-only companies as a means to fradulently obtain
IPv4 blocks from LACNIC, even if he has no legitimate right to such blocks,
at least under a *correct* interpretation of the well-established LACNIC
rules and policies.

>We appreciate the information you have provided about the utilization of 
>these resources outside the Latin America and Caribbean region and we 
>are going to further investigate the matter and follow our policies in 
>that process.

Thank you Mr. Rojas.  I am looking forward to the correct application of
the existing LACNIC policies in this case.

I want to be clear however.  The simplest way I can put this so that
everyone will immediately understand my point is for me to say, with
respect to the LACNIC policies, "There is a bug in your system."
HostSailor has now found this bug, and has exploited it for its own
sinister and corrupt ends.

The "bug" in this case is just this:  LACNIC has sometimes allocated
scarce IPv4 address space to fradulent "paper only" companies that have
been created, in particular, within the secretive and criminal-friendly
"offshore" jursidiction of Belize.  It appears that LACNIC staff have
issued such allocations because doing so *seems* to be "required" by
the existing LACNIC policies which oblige LACNIC to give IP address
blocks to *any* company that appears to be "legally constituted" anywhere
within the LACNIC region.

However, as we see in this specific case (HostSailor) -and others-,
*any party* that actually resides *anywhere in the world* can simply purchase
a "Belize" corporation, anonymously, and over the Internet, and that
party can then use that fiction of a company to obtain and/or maintain
allocations of scarce IPv4 address blocks from LACNIC.  As indicated at
the URL given above, any party can do this for as little as $400 USD,
quickly, easily, inexpensively, and in a single afternoon.

The fact that anybody, anywhere in the world can so easly defraud LACNIC
out of valuable IPv4 address space is a "bug" in the LACNIC system, and
one that has been, and that *is being* exploited.  That bug, that loophole,
should be fixed, and immediately.  It is unfair and unjust to deny IPv4
addresses to legitimate companies that really are within the LACNIC
region, even as other companies that are not really within the region
are allowed to obtain or... in the case of HostSailor... maintain
allocations which were obtained by means of simple and obvious fraud.
 
>Regarding your allegations of illegal activities by HostSailor, even if 
>they are effectively accurate, we do not have established any 
>procedures, policy nor contractual right to proceed...

See above.  Mr. Rojas, I agree with you completely.  It is clearly not
the job of LACNIC to act as "The Internet Police", and LACNIC cannot
and should not be in the business of either investigating cybercrime
in general, or in reacting to it.

However it is *not* cybercrime "in general" that caused me to write to
this mailing list.  Rather, I have written to this mailinmg list in
order to report what appears to be a clear-cut case where LACNIC itself
has been defrauded, and to request that LACNIC now respond to that fraud,
and take appropriate corrective action to reverse and nullify the negative
effects of this fraud against LACNIC itself, as it can, should, and must
do, in accordance with a correct and reasonable interpretation of existing
LACNIC policies.

As I understand it, existing LACNIC policies do not allow legal entities
that have -zero- actual infrastructure within the region to either
obtain or maintain LACNIC-allocated number resources.  I believe that
all available evidence will show that HostSailor has -zero- actual
infrastructure within the region.  It has no servers, no routers, no
connections to other providers within the region, no offices, no desks,
no phones, no FAX machines, no offices, no secretaries, no technicians,
no employees, and no equipment or installations of any kind within the
LACNIC region.  All it does have is a canceled check for $400 USD and
a thin piece of paper that says that the company maintains a "legal"
mailing address within a small apartment in Belize City... the exact
same apartment where *several* other fictitious companies... including
one currently being criminally prosecuted by the United States Securities
and Exchange Commission... are also allegedly domiciled.

Now that LACNIC has been informed about all of these irregularities
related to HostSailor, if LACNIC continues to allow this legal fiction
called HostSailor to maintain the IPv4 address allocations that it
obtained from LACNIC, then this will represent a travesty of justice
as well as representing LACNIC's willingness to look the other way,
even as LACNIC itself is being defrauded via a simple and obvious
"legal" scheme.  I believe that all of the legitimate LACNIC members
deserve better, and I hope to see this unfortunate fraud being reversed
and corrected as soon as it is practical to do so.

Again, I am *not* asking LACNIC to act in the capacity of law enforcement.
That would be wrong.  I am only asking LACNIC to do its job... to do exactly
what it was formed to do, i.e. to act as a "good steward" of the number
resources which have been placed into its care.  LACNIC will have failed
in that responsibility if it continues to allow itself to be defrauded
by this company, HostSailor, only because the company has found and
exploited a clever "legal" ruse to obtain IPv4 space that it would
otherwise not be at all entitled to.

>As explained in the previous paragraph we are following our role the 
>community has defined in the policies for the assignment of internet 
>addresses,

I'm sorry, but I must disagree Mr. Rojas.  If you indeed plan to contine
to allow HostSailor to enjoy the benefits of the two LACNIC /22 blocks
that it has obtained by means of its clever legalistic fraud, then in
that case you may perhaps use the excuse that you are following the
"letter" of the LACNIC policy (which requires LACNIC to give IP space
to any legal entity within the region) but you cannot with a straight
face say that you are following the "spirit" or the true intent of the
existing LACNIC policies.  The spirit and intent of LACNIC policy is
clear: To serve the needs of the Internet community that is -actually-
located within the Latin American and Caribbean geographical area.

HostSailor is -not- within the LACNIC region in any real sense.

Despite the purchased and manufactured fiction of HostSailor's location
within Belize, all actual evidence relating to all of HostSailor's
actual assets and infrastructure indicate that it has no real presence
whatsoever within the LACNIC region, and never has had any.  Thus, if
you and LACNIC are now going to claim... as you seem to be doing...
that HostSailor should be permitted to keep the two /22 blocks that
were given to it (under false pretenses) by LACNIC, only because it
has purchased one flimsey piece of paper that proves nothing, then
you are -not- in fact "following the role the community has defined
in the policies".  Rather, you are, in effect, -defending- the
clever legal trickery that HostSailor has used to defraud LACNIC
and to obtain number resources... number resources which the clear
intent and spirit of the LACNIC policies would not permit it to have.

Are you really going to defend the idea that LACNIC will give out /21
sized blocks to anyone who presents LACNIC with a single piece of
paper that anybody anywhere in the world can purchase in an afternoon
for a mere $400??

If so, then I would like to propose a new LACNIC policy, on this mailing
list, that would prohibit all LACNIC staff from allowing any legal
entity to either obtain or maintain LACNIC-allocated number resources
purely and only on the basis of legal fictions that are manufactured,
upon request, in particular within Belize or any other country within
the LACNIC region that allows companies to be formed in the total
absence of any information about the actual "beneficial ownership" of
these companies.

(Note that this exact type of reform has already been accomplished within
the financial sector, and it is nowadays much more difficult than it was
in past years to launder money through places like the Cayman Islands,
the British Virgin Islands, and other such traditional corporate secrecy
havens.  If this sort of accountability and transparency can be achieved
within the sphere of financial transactions, there is no reason why there
should not likewise exist some minimal amount of accountability and
transparency with respect to valuable IPv4 real estate.)

>so we kindly request to keep this mailing list for the 
>purposes it was established (update or propose a new one).

You are suggesting that I have been discussing matters here, on this
mailing list, that do not relate gto LACNIC policies.  Once again, I
must respectfully disagree Mr. Rojas.

What could possibly be more relevant to this exact mailing list than a
discussion of the correct interpretation of, and the correct application
of existing LACNIC policies?

Indeed, in the posting to which I am responding now, you defended the
LACNIC allocations that were made... and that still exist... to HostSailor
on the basis of one possible interpretation of the existing LACNIC
policies relating to IPv4 block allocations.  For all the reasons noted
above, I assert that any interpretation of LACNIC policies that allows
this crooked company... which doesn't have -any- assets within the LACNIC
region...to keeep its current LACNIC allocations is just plain wrong.

So you see, we -are- quite clearly debating serious LACNIC policy
questions.  Isn't this the LACNIC "Policy" mailing list?  If it is,
then I fail to see how or why this discussion is somehow off-topic for
this list.

>Finally, the fact that the person who responds to your questions is 
>listed at the bottom of an alphabetically ordered list, doesn't make me 
>less authorized to answer you, if that is what you implied by your tone 
>in your message. I'm in charge of analyzing IP requests in LACNIC and 
>have the authority to answer you. I request you to communicate with 
>respect to me or anyone in this list if you want to keep this dialogue.

Mr. Rojas, it is my sincere hope that we can both show respect for each
other.  That goes both ways.

I feel that you were too quick to be dismissive of the important issues
I have raised with respect to this case (HostSailor), and that you have
not treated either me or the issues I have raised here with any real
respect whatsoever.

As I have noted at length above, there are, I think, clear reasons why
(a) HostSailor's LACNIC IPv4 allocations should be immediately revoked
and (b) that this can be done and indeed must be done under existing
LACNIC policy and that (c) if in fact LACNIC staff is asserting that
HostSailor is actually entitled, under current policy, to the LACNIC-
issued IPv4 block allocations that it currently has, then either LACNIC
staff is wrong, or the policy is wrong, or perhaps both.

These are all substantive *Policy* issues, and yet you dismissed my
original posting as if I was just some schoolboy who had wandered by
mistake into the wrong classroom.

In future, I will endeavor to strike a tone which is in all ways utterly
respectful towards you and all other LACNIC staff.  My hope is that you
will likewise and similarly accord me and the valid policy issues I have
raised with appropriate respect.


Regards,
rfg