By CYRUS FARIVAR From arsTECHNICA

Hansmeier’s lawyer calls plea deal a “fair resolution.”

Paul Hansmeier, the Minnesota lawyer who was head of the porn trolling operation known as Prenda Law, has finally pleaded guilty to fraud and money laundering charges.

As Ars previously reported, co-defendant and fellow attorney John Steele pled guilty in March 2017 to federal fraud and money laundering charges. Over the course of several years, Steele said he and a co-defendant, Hansmeier, made millions with “sham entities” that threatened Internet users with copyright lawsuits.

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Aurich / Getty

For more on this story go to: https://arstechnica.com/tech-policy/2018/08/prenda-laws-paul-hansmeier-finally-pleads-guilty-to-fraud-money-laundering/

Related:

It’s official: Prenda copyright trolls made their own porn, seeded on Pirate Bay

By NATE ANDERSON From arsTECHNICA

John Steele, now aiding the government.

Who’s behind Prenda Law?

One of the more incredible allegations about Prenda Law—the porn copyright-trolling operation that sued people for downloading movies online—was that the lawyers behind it might have created and uploaded some of the porn in question simply as a way to catch more offenders.

As a financial strategy, this made a certain amount of sense. After all, when suing on behalf of a client, you pass most of the settlement money on to them; sue on your own and you can keep it all.

But it’s not a great look in a court of law, especially when you go out of your way to purposely conceal the arrangement through a complex maze of shell companies and offshore entities. This is the sort of behavior that might lead to disbarment or even a prison cell. Not even obvious boundary pushers like Prenda’s John Steele and Paul Hansmeier would run this kind of a crazy risk… would they?

Shark attack

Rumors about Prenda’s possible shift from “legitimate if aggressive copyright law firm” to “porn producers” began to circulate in June 2013, fueled by Florida lawyer Graham Syfert. Syfert was defending a man in a Prenda lawsuit, and he hired a grad student from Oregon State to investigate Prenda’s BitTorrent practices. The grad student, Delvan Neville, raised questions about whether the “sharkmp4” account used to upload one of the films to the Pirate Bay might in fact belong to John Steele.

“Further inquiry would need to be made upon John Steele, and all those within his control, to identify if he is infringing the copyrights of Ingenuity 13, AF Holdings, and others through the Pirate Bay user ‘sharkmp4’,” Neville concluded.

At the time, John Steele told Ars, “I have never uploaded a torrent in my life, I have never instructed anyone to do so, and I am not aware of anyone I have worked with in any capacity whatsoever (other than pirates, of course). I am not sure how much more unequivocal about it I can be.”

This statement caught the attention of Pirate Bay operators. Later that week, the Pirate Bay released information claiming that some of the porn files Prenda had sued over were linked to an IP address “previously used by someone with access to John Steele’s GoDaddy account.”

Two months later, in a Georgia court case, Comcast confirmed that one of the IP addresses at issue in the case was linked to Steele and Hansmeier.

But the two attorneys continued to deny involvement—and not just to sites like Ars. In 2013, Hansmeier signed, under oath, a declaration saying, “I have never created a Pirate Bay account in my life and categorically deny ever uploading and/or downloading any BitTorrent files of any past client of mine, including AF Holdings.”

That’s a dangerous thing to assert, especially when facing a hostile judge (who eventually recommended that Steele and Hansmeier be investigated by the feds). Assuming that Hansmeier and Steele wanted to get rich, not go to jail, I continued to wonder what was really going on.

It’s all true

On Monday, we got our answer. In a total capitulation, Steele pled guilty in Minnesota to federal charges of “conspiracy to commit mail and wire fraud” and to money laundering. And guess what? In 2011, Team Prenda had in fact become porn producers. (They continued to have other “real” clients at that time as well.)

“On at least three separate occasions in Chicago, Miami, and Las Vegas, Steele and Hansmeier… contracted with adult film actresses and produced multiple short pornographic films,” says the plea deal.

The lawyers then registered copyrights on the films, listing the production company as “Ingenuity13 LLC” and the business location as an address on Government Road in Charlestown, Saint Kitts-Nevis. The Library of Congress recorded all nine of these titles, which have names like “18 Year Old Girls Play With Toys,” “Anything for Daddy,” and “Great Teen Sex, Worst Plot Ever.”

The lawyers “made no legitimate effort to publicly distribute or commercially release the movies they filmed,” says the plea agreement. Instead, they put them up on sites like Pirate Bay “in order to catch, and threaten to sue, people who attempted to download the movies.”

In an extremely narrow sense, some statements that Hansmeier and Steele made might have been true. Hansmeier did not personally upload the files, it appears. The plea deal states that “Hansmeier instructed P.H. to upload the movies to file-sharing websites such as the Pirate Bay” (P.H. may refer to one of Hansmeier’s family members, who was paid to do BitTorrent forensics for Team Prenda.)

But this is word-chopping hair-splittery at its finest. In the eyes of the feds, it was an obvious deception. Steele has now admitted as much. The whole scheme “concealed from the courts that the defendants—the lawyers behind the lawsuits—not only controlled the Plaintiff and therefore had a significant personal stake in the outcome of the litigation, but also had colluded to infringe their own copyrights by impliedly authorizing BitTorrent users to download the movies,” says the plea deal.

So there you go—it was all true, and just as dirty as the craziest conspiracy theories suggested. Lawyers were creating quick porn films to use as “bait,” uploading them to BitTorrent sharing sites, and then suing the downloaders and pressuring them into settlements. Hansmeier and Steele’s operation pulled in more than $6 million before it was shuttered.

Steele has now pled guilty and has agreed to help the government bring down others involved in the scheme, so more details about the whole sordid story will probably come out in the end. For now, Hansmeier maintains his innocence, though things are not exactly going well for him; he has filed for bankruptcy and had his Minnesota law license suspended.

For more on this story go to: https://arstechnica.com/tech-policy/2017/03/its-official-prenda-copyright-trolls-made-their-own-porn-seeded-on-pirate-bay/