Porn copyright troll attorney pleads guilty, faces 10 years
Technology for Lawyers
Published: April 14, 2017
The co-founder of one of the country’s most notorious patent troll law firms in the country has pleaded guilty to conning upwards of $6 million from people who downloaded pornography that, in some cases, the firm actually filmed.
The firm, Prenda Law, was headquartered in Chicago. Co-founder John Steele has pleaded guilty to wire fraud and money laundering. His codefendant, Paul Hansmeier, awaits trial, and is in bankruptcy. Both were arrested in December.
For those who don’t remember, a copyright patent troll firm works with entities who buy up patents or copyrights for the sole purpose of litigating infringement cases. Legally ambiguous, these firms verge into unlawful territory when either the firm itself owns the patents, or when, in this case, they engage in outright blackmail.
Although many patent trolls are generalists, Prenda Law had a particular market niche. They bought copyrights on pornography, using fake companies they owned. Then, under false pretenses, they got courts to issue subpoenas to pornography providers for their customer lists, and sued anyone who downloaded the porn they owned.
Later, they actually produced some, and even filmed some, of their own porn.
According to the plea summary:
“…the defendants used extortionate tactics to garner quick settlements from individuals who were unaware of the defendants' role in uploading the movie, and often were either too embarrassed or could not afford to defend themselves. When these individuals did fight back, the defendants dismissed the lawsuits rather than risk their scheme being unearthed.”
Blackmail amounts were $3-4,000 per victim.
Over time, as defendants and the courts slowed them down, they adopted various other fraudulent tactics-- which is pretty typical of con men (you all watch American Greed, right?).
The firm also, apparently was involved in “ADA trolling,” in which they search around for small businesses that may have small violations of the Americans with Disabilities Act, find a fake plaintiff, and threaten lawsuits. One report said that Hansmeier’s wife may still be engaged in that activity.
At any rate, Steele agreed to roll over on Hansmeier, and is facing sentencing in federal court in Minneapolis, where he is looking at up to 10 years in prison—and where he will no doubt try to con the judge at his hearing. Good luck, John!