FORT LAUDERDALE, Fla. — Former Prenda Law attorneys John Steele and Paul Hansmeier have been arrested and charged in an 18-count indictment over the law firm's porn piracy program.
U.S. Attorney Andrew Luger announced charges this morning. Hansmeier was arrested in the Minneapolis; Steele was arrested in Fort Lauderdale, Fla.
The charges, unsealed today, include conspiracy to commit fraud, conspiracy to perjure and conspiracy to launder money over a three-year period.
“In order to carry out the scheme, the defendants used sham entities to obtain copyrights to pornographic movies — some of which they filmed themselves — and then uploaded those movies to file-sharing websites in order to lure people to download the movies,” the indictment said.
Judges nationwide criticized the firm's tactics, including a federal judge in Los Angeles who ordered stiff monetary sanctions against them at the defunct Chicago law firm, Prenda Law, in 2013.
Steele and Hansmeier collected at least $6 million from legal settlements in infringement claims they had filed against people who allegedly downloaded copyrighted adult films online, the indictment said. The pair had allegedly purchased copyrights and seeded the internet with the movies.
In 2015, U.S. District Judge Otis Wright in Los Angeles found that Prenda Law set up shell companies that bought copyrights to pornographic movies and made them available on online file-sharing websites like BitTorrent.
Wright awarded attorneys fees, bonds and a punitive multiplier against the law firm and its principals.
Prenda Law, or affiliated local attorneys it hired, would then file claims against John Does via IP addresses captured during the downloads of the porn films. They later sought to subpoena the ISPs for the identity of the users through court approval.
Later, they sent cease-and-desist letters to subscribers and offered to “settle” the suits if the Does would pay them settlements averaging about $4,000.
The 9th U.S. Circuit Court of Appeals upheld Wright’s sanction order in June, writing that it was not an abuse of discretion for Wright to identify Steele, Hansmeier and the late Paul Duffy as responsible for the abusive litigation, and that they possibly committed identity theft and fraud on the court system.
