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Prenda Law's Steele disbarred; six other IL lawyers also disbarred, nine suspended, IL Supreme Court says

By Jonathan Bilyk | May 19, 2017

Chicago suburbs view 4 night

John L. Steele, a Chicago lawyer already indicted for his role in the Prenda Law shakedown scheme targeting downloaders of online porn, has been disbarred.

On May 19, the Illinois Supreme Court announced its action against Steele, as well as six others who were disbarred by the court in attorney disciplinary orders handed down May 18. The court also suspended nine other attorneys and censured or reprimanded six more.

In March, Steele, 45, had pleaded guilty in Minnesota federal court to charges of conspiracy to commit mail and wire fraud and conspiracy to launder money. A release from the U.S. Department of Justice announcing Steele’s guilty plea, indicated Steele had most recently lived in Pennsylvania.

John L. Steele

Steele had been indicted in December 2016 along his former law partner Paul Hansmeier, of Minnesota.

The indictment came as Steele also faced professional disciplinary actions in Illinois. The criminal and professional actions against Steele arose out of his actions through the firms of Steele Hansmeier PLLC, Prenda Law and other associated business entities to use the courts to allegedly orchestrate “an elaborate scheme to fraudulently obtain millions of dollars in copyright lawsuit settlements by deceiving state and federal courts throughout the country,” according to federal prosecutors.

Steele and Hansmeier, with former law partner Paul Duffy, who is now deceased, launched their practice in 2011, centered on amassing relatively small settlements – typically amounting to a few thousand dollars per settlement – from an array of people around the country accused of illegally downloading copyrights online pornographic videos and movies, the rights to which the Prenda partners had acquired through several sham business entities incorporated in the West Indies.

According to court documents, Steele and his Prenda partners would use the courts’ subpoena power to learn the names of people who had downloaded the porn content, and then allegedly extort settlement money from them in exchange for dropping the suit and allowing the targets to avoid “enormous financial penalties and public embarrassment.”

In all, the Justice Department said Steele has admitted to using these tactics to extract settlements worth at least $6 million from those targeted through the Prenda lawsuits.

In announcing Steele’s disbarment, the Illinois Attorney Registration and Disciplinary Commission – the state body which oversees attorney discipline matters in Illinois – said Steele, who had been licensed in Illinois since 2007, was disbarred “on consent.”

Also on May 19, the Illinois Supreme Court announced it has disbarred Chicago lawyer Richard C. Moenning.

As the state ARDC launched disciplinary proceedings against him, Moenning also had been hit with an action from the Illinois Attorney General’s office, alleging he had failed to register a charitable trust with the Attorney General and failing to provide the state with annual reports, accounting for hundreds of thousands of dollars left by two elderly sisters after their deaths in 2008 and 2010. Moenning had served as trustee of the trust.

Moenning had been licensed to practice law since 1962.

The Illinois ARDC said Moenning had “paid himself over $360,000 in purported fees without performing sufficient services to justify the payment of the funds” and had either taken “years to notify or pay some of the trust beneficiaries” or had failed to pay some beneficiaries altogether.

He had been suspended since June 2016.

On May 18, the Illinois Supreme Court also disbarred attorney Alecia M. Schmuhl, of Warrenville. Schmul has pleaded guilty to partnering with her husband, attorney Andrew Schmuhl, to kidnap and torture a partner in her former law firm in Virginia, from which she had been fired. Andrew Schmuhl has also been suspended on an interim basis and until further order of the court, the ARDC said.

Others disbarred on May 18 included:

  • Francis J. Coyle Jr., of Rock Island, who the ARDC said had “intentionally misappropriated” $100,000 in a real estate deal;
  • Craig A. Goode, of Chicago, who the ARDC said had “misrepresented the status” of litigation pending in federal and state courts to a client, had “submitted charges for work he did not do” and then “continued to use the client’s credit card number” after the client fired him;
  • Laird J. Heal, of Sterling, Mass., who had also been disbarred in Massachusetts for “misusing over $13,000 of funds held in escrow in connection with a bankruptcy case;” and
  • Irina Pavchinskaya, of Glenview, who had pleaded guilty to felony theft for allegedly presenting a fraudulent check for $1,960 purportedly from her law firm employer, as well as for allegedly forging other checks from her employer.
In addition to the disbarments, the Illinois Supreme Court also announced it had suspended nine other attorneys.

In addition to Andrew Schmuhl, those suspended include:

  • William J. Meacham, of Edwardsville, suspended on an interim basis and until further order of the court, for allegedly misappropriating $32,000 of a client’s personal injury settlement funds, and then creating “false receipts falsely purporting to show that he had distributed most of the funds to the client;”
  • Baltazar Mendoza, of Chicago, interim basis and until further order of the court, for allegedly misappropriating more than $243,000 from several clients;
  • Debra J. Fickler, of Tonganoxie, Kan., 3 years, as reciprocal discipline after she had been similarly suspended from law practice in Kansas;
  • Diana M. Wilkins, of Chicago, 2 years and until further order of the court, for allegedly misappropriating nearly $22,000 in client funds and making false statements to the ARDC during the subsequent investigation;
  • Dennis B. Porick, of Joliet, 18 months for allegedly converting more than $10,000 from three separate clients who he represented in collection matters;
  • Jeffrey M. Isaacson, of  Deerfield, one year and until further order of the court, with suspension stayed after six months;
  • Jay L. Miller, of Barrington, one year and until further order of the court, for allegedly converting about $85,000 of client funds; and
  • Dalton Grief, of Addison, 9 months.
The Illinois Supreme Court also either censured or reprimanded six other attorneys, including: Mark E. Broadus, of Chicago; Dmitry N. Feofanov, of Lyndon; Walter L. Henderson, of Tucson, Ariz.; Karlo M. Karacic, of Chicago; George Krasnik, of Chicago; and Everett Walton, of Wailuku, Hawaii.

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Organizations in this Story

Illinois Supreme CourtPrenda LawIllinois Attorney Registration and Disciplinary CommissionRichard C. Moenning