Wow, this is a blast from the past. I know Godaddy got busted doing this years ago. I forget whether they were sued or just hounded with bad P.R. but I thought they promised to clean up their act. I wish I could find the article now, but Google only pulls up stuff from the last year or so.
It sounds like the culprits' big sin was pocketing the money instead of letting the company pocket the money.