Notorious copyright trolls Paul R. Hansmeier and John L. Steele were indicted by the feds back in December on multiple charges of fraud. The two were accused of running a complicated scheme in which they preyed on people who illegally downloaded porn. Yesterday, one of them admitted his guilt in a plea bargain.
Photo: Getty
[referenced url=”https://gizmodo.com.au/2016/12/lawyers-accused-of-extorting-6-million-from-porn-pirates-in-elaborate-scam/” thumb=”https://i.kinja-img.com/gawker-media/image/upload/t_ku-large/fk89uwnqo7xgo2dc3ngh.jpg” title=”Lawyers Accused Of Extorting $6 Million From Porn Pirates In Elaborate Scam” excerpt=”Two lawyers in the US were indicted yesterday on charges of fraudulently targeting internet users who illegally downloaded porn with copyright violation notices and extorting about $US6 ($8) million dollars in phoney settlement fees.”]
The details of the case are worth paying attention to, just in case you ever find yourself the victim of this kind of plot. Steele pleaded guilty to charges of conspiracy to commit mail fraud and wire fraud and conspiracy to commit money laundering. The scam that Steele confessed to involved buying up the copyrights for pornographic videos in the name of various shell companies. Steele claims that he and his accomplice would then upload the videos to internet piracy sites. The pair also allegedly made videos themselves that they would subsequently upload.
Once the files had been downloaded, Steele says that he and Hansmeier would file bogus copyright claims against the “pirates”. Courts were then fraudulently induced to handover personal information about the downloaders so that legal suits could be pursued. But taking people to court was never the intention. According to Steele, threatening phone calls would be made and letters would be sent informing the victims that they could face up to $US150,000 ($197,813) in fines or they could just pay up $US3000 ($3956) and this would all go away. Not wanting to deal with such a harsh judgement and the legal fees that come along with it, many complied.
Courts started to realise something was amiss and judges barred the pair from suing multiple defendants under the same copyright lawsuit. So, according to Steele, they started claiming that they were hacked. Then they would recruit their victims to testify against “co-conspirators” in exchange for waiving “settlement fees”. All in all, more than $US6 million ($7.8 million) worth of bogus settlements were collected under the umbrella of companies like Prenda Law.
Now that Steele has admitted guilt and implicated his partner, it will be tough for Hansmeier to continue to maintain his innocence. But even if he manages to prove that it was all Steele, he’s still under investigation for pulling a similar scam in which he targeted people for minor violations of the American Disabilities Act.