{"id":28481,"date":"2016-12-19T20:27:37","date_gmt":"2016-12-20T04:27:37","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=28481"},"modified":"2016-12-19T20:27:37","modified_gmt":"2016-12-20T04:27:37","slug":"feds-indict-two-men-alleged-6-million-porno-trolling-extortion-scheme","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=28481","title":{"rendered":"Feds indict two men in alleged $6 million \u2018porno-trolling\u2019 extortion scheme"},"content":{"rendered":"
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By Derek Hawkins<\/a><\/span> <\/strong><\/div>\n
December 19, 2016<\/span><\/strong><\/div>\n
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Attorney Paul R. Hansmeier<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n
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More than three years have passed since a federal judge in California sanctioned attorneys Paul R. Hansmeier and John L. Steele for using deceptive\u00a0legal maneuvers\u00a0to win\u00a0settlements from people they accused of illegally downloading pornography.<\/span><\/p>\n

Their tactics were complicated but effective.\u00a0The attorneys, who ran a firm called Prenda Law, would use shell companies to buy up copyrights for pornographic movies, then upload those movies to file-sharing websites such as Pirate Bay, where they would monitor who downloaded them. In many cases, the attorneys would send threatening cease-and-desist letters to users who downloaded the films, accusing them of copyright infringement and offering to settle cases for about $4,000, according to court documents.<\/span><\/p>\n

When the operation came to light in 2013, U.S. District Judge Otis Wright said the attorneys had \u201cdefrauded\u201d the court and called Prenda a \u201cporno-trolling collective.\u201d<\/span><\/p>\n

\u201cCopyright laws originally designed to compensate starving artists allow starving attorneys in this electronic-media era to plunder the citizenry,\u201d Wright said in an order imposing sanctions on Hansmeier and Steele.<\/span><\/p>\n

Now, those sanctions have given way to a criminal case.<\/span><\/p>\n

On Friday, federal prosecutors unsealed an 18-count indictment charging Hansmeier and Steele with conspiracy to commit mail and wire fraud, conspiracy to commit and suborn perjury, and other charges.<\/span><\/p>\n

Prosecutors allege the men netted some $6 million between 2011 and 2014 by threatening fraudulent copyright lawsuits against hundreds of unwitting victims. Hansmeier and Steele even victimized the court system itself, prosecutors said.<\/span><\/p>\n

\u201cAbusing one\u2019s position as a licensed attorney and using the courts and legal process to file false and abusive copyright claims that threaten individuals and encourage fraudulent settlements is wrong and will not be tolerated,\u201d Assistant U.S. Attorney General Caldwell said in a statement. \u201cWe will act to protect the integrity of judicial proceedings against attorneys and others who would seek to use them as a mechanism for their own illegal gains.\u201d<\/span><\/p>\n

An attorney for Hansmeier said he could not comment on the case because he had only made a limited court appearance on the defendant\u2019s behalf.\u00a0It was not immediately clear whether Steele had hired a defense attorney.<\/span><\/p>\n

According to the indictment, Hansmeier, 35, and Steele, 45, used a network of \u201csham\u201d companies to buy the rights to pornographic films with titles that included \u201cSexual Obsession,\u201d \u201cBusty Beauty in Red Lingerie,\u201d and other names too risque to publish here. They then allegedly had their firm\u2019s employees upload the movies to BitTorrent sites. The attorneys would track down the IP addresses of people who downloaded the films by filing fraudulent copyright claims and securing subpoenas against Internet service providers, the indictment says.<\/span><\/p>\n

After receiving user information, prosecutors allege, Hansmeier and Steele would\u00a0call and send letters to people who allegedly downloaded the movies, threatening to expose them publicly and hit them with hundreds of thousands of dollars in penalties if they did not settle copyright infringement claims. In essence, the indictment says, the defendants \u201ccolluded to infringe their own copyrights.\u201d Settlements were typically about $4,000, according to prosecutors.<\/span><\/p>\n

\u201cWhen these individuals did fight back, the defendants dismissed the lawsuits rather than risk their scheme being unearthed,\u201d\u00a0prosecutors said in the indictment. \u201cMany of the individuals who received the defendants\u2019 letters and phone calls agreed to pay the settlement rather than incur the expense of defending the lawsuit \u2014 which would undoubtedly exceed the settlement amount \u2014 or risk being publicly shamed for allegedly downloading pornographic movies.\u201d<\/span><\/p>\n

On at least three occasions, prosecutors allege, Hansmeier and Steele made movies themselves. According to the indictment, the attorneys attended pornographic conventions in Chicago, Las Vegas and Miami, where they hired actors and \u201cproduced multiple short pornographic films.\u201d The movies were not distributed, the indictment says, but uploaded directly to websites such as Pirate Bay \u201cin order to catch, and threaten to sue, people who attempted to download the movies.\u201d<\/span><\/p>\n

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\u00a0The defendants filed their claims in courts throughout the country. After a while, judges started to catch on, among them Wright, from the U.S. District Court for the Central District of California. First, judges started\u00a0limiting their ability to sue multiple defendants in the same suit. Later, they began denying requests for subpoenas and dismissing suits outright. Eventually, the attorneys were sanctioned.<\/span>\u201cPlaintiffs do have a right to assert their intellectual-property rights, so long as they do it right,\u201d Wright said in his 2013 order. \u201cBut Plaintiffs\u2019 filing of cases using the same boilerplate complaint against dozens of defendants raised the Court\u2019s alert. It was when the Court realized Plaintiffs engaged their cloak of shell companies and fraud that the Court went to battle stations.\u201d<\/span><\/p>\n

Hansmeier filed for bankruptcy last year, and in September 2016, the Minnesota Supreme Court suspended his law license over ethics violations related to the alleged scheme,\u00a0the Minneapolis Star Tribune reported<\/a>.<\/span><\/p>\n

Mitch Stoltz, senior staff attorney at the Electronic Frontier Foundation, told the Star Tribune that copyright-trolling lawsuits filed by attorneys like\u00a0Steele and Hansmeier in 2013 represented\u00a0a third of the nation\u2019s copyright infringement litigation that year.<\/span><\/p>\n

\u201cFor a time,\u201d Stoltz said, \u201cMr. Steele and Mr. Hansmeier and their counterparts were the most prolific group that were abusing the judicial system with completely false or poorly justified suits to make a quick buck.\u201d<\/span><\/p>\n

 <\/p>\n<\/div>\n<\/article>\n","protected":false},"excerpt":{"rendered":"

By Derek Hawkins December 19, 2016 More than three years have passed since a federal judge in California sanctioned attorneys Paul R. Hansmeier and John L. Steele for using deceptive\u00a0legal maneuvers\u00a0to win\u00a0settlements…<\/p>\n","protected":false},"author":1,"featured_media":23527,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3],"tags":[],"class_list":["post-28481","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-main-slider","category-u-s-department-of-justice"],"yoast_head":"\nFeds indict two men in alleged $6 million \u2018porno-trolling\u2019 extortion scheme<\/title>\n<meta name=\"description\" content=\"More than three years have passed since a federal judge in California sanctioned attorneys Paul R. Hansmeier and John L. 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