PhotoFederal indictments charge two attorneys with running a scheme that victimized consumers who had supposedly downloaded pornographic movies from file-sharing websites, using extortion tactics to get payments of $4,000 in most cases. 

The indictment charges that Paul R. Hansmeier, 35, of St. Paul, Minnesota, and John L. Steele, 45, of Florida, collected more than $6 million in the scheme. 

The two allegedly set up sham companies that claimed to own the copyrights to pornographic films. They then filed bogus copyright infringement lawsuits to obtain the identities of consumers associated with the IP addresses used to download the films. 

The indictment alleges the defendants used extortionate letters and phone calls to threaten victims with enormous financial penalties and public embarrassment unless they agreed to pay the $4,000 "settlement" fee.  To distance themselves from the specious lawsuits, they created Prenda Law, among other firms, to pursue their claims.  

As courts began to uncover the defendant’s unscrupulous litigation tactics, judges began denying the defendants’ requests to subpoena ISPs, dismissing lawsuits, accusing the defendants of deceptive and fraudulent behavior, and imposing sanctions against the defendants and their associates.

18 counts

“Abusing one’s 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,” said Assistant Attorney General Leslie R. Caldwell. “The Department of Justice’s action today demonstrates that we 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.”

The two are charged in an 18-count indictment with conspiracy to commit wire fraud and mail fraud, substantive wire fraud and mail fraud, concealment money laundering, and conspiracy to commit and suborn perjury.  


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