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Domains by Proxy IS Godaddy.
All it is is a company that uses "their" whois info in place of "yours". It protects the identity of the domain registrant, although through legal channels you could find out who it is as GoDaddy has the real information.
There is nothing illegal or wrong with what he did with is domain registration. If he did what you said he did to you and your lady friend, now that's wrong.
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