One of the two living Prenda lawyers behind a scheme to use lawsuit threats to allegedly shakedown downloaders of online porn has been sentenced to 14 years in prison.
On June 14, a Minnesota federal judge delivered the sentence to Paul Hansmeier, who had pleaded guilty to charges of conspiracy to commit mail and wire fraud and conspiracy to commit money laundering.
Hansmeier, 37, of Woodbury, Minn., was also ordered to pay more than $1.5 million in restitution.
Prenda Law partners John Steele, Paul Hansmeier, Paul Duffy
“Today’s sentence for Paul Hansmeier is the just result for an attorney who abused his license to practice law and disgraced himself and the bar in so many ways,” said Jill Sanborn, special agent in charge at the Minneapolis FBI office, in a statement released June 14. “Hansmeier’s role in this salacious fraud scheme exploited victims by misusing his position of trust as an officer of the court.”
Hansmeier’s former partner, John L. Steele, formerly of Chicago, is scheduled to be sentenced in July for his roles in the alleged scheme.
Hansmeier and Steele had been indicted more than two years ago by a grand jury in Minneapolis.
Steele has since been disbarred in Illinois, as well.
The indictments and disciplinary actions arose out of the partners’ alleged actions through their various firms, most notably Prenda Law, to use the courts to allegedly orchestrate what federal prosecutors described as “an elaborate scheme to fraudulently obtain millions of dollars in copyright lawsuit settlements by deceiving state and federal courts throughout the country.”
According to court documents, Hansmeier and Steele, along with former law partner Paul Duffy, now deceased, launched a practice, centered on amassing relatively small settlements, amounting to a few thousand dollars per settlement, from an array of people around the country accused of illegally downloading copyrighted online pornographic videos.
Prosecutors said from 2011-2014, the Prenda partners created fictitious business entities to lay claim to the rights to the porn videos, while also creating and posting some of the content themselves to entrap those who later downloaded it from file-sharing sites.
The lawyers allegedly filed “bogus copyright lawsuits” to use the courts’ authority to learn the identities of those to whom they could send letters and other communications threatening “enormous financial penalties and public embarrassment” unless they agreed to pay off the Prenda lawyers.
Prosecutors said the Prenda lawyers also staged data breaches and recruited “ruse defendants” who would appear to settle quickly to sidestep courts’ attempts to shut down their suspect subpoena powers.
Prosecutors said Steele and Hansmeier collected about $3 million in settlements through the scheme.
Minnesota federal prosecutors had recommended Hansmeier receive 150 months in prison for his role. U.S. District Judge Joan N. Erickson, however, added 18 months above prosecutors’ recommendation.
“In summary, Hansmeier was greedy, arrogant, devious, mendacious, and consistently positioned other people to be damaged by his conduct, even as he enjoyed the proceeds of the scheme he orchestrated,” prosecutors wrote in their sentencing recommendation, filed March 25. “Even now Hansmeier continues to accept responsibility only in conditional terms, hoping to convince the appeals court that his shocking abuse of his position of trust as a Minnesota attorney, and an officer of its courts, was somehow legal.”
Steele and Hansmeier both pleaded guilty.
Hansmeier is scheduled to begin serving his sentence on July 9.
“Paul Hansmeier abandoned his sworn oath to uphold the law and chose instead to use coercion and lies to exploit victims and deceive judges,” Minnesota U.S. Attorney Erica MacDonald said in the June 14 statement. “The sentence he received today is a just consequence for his actions.”