Sometimes, suspects behind vicious fraud schemes come from those that nobody would expect – much less from a professional lawyer. American lawyer, Paul Hansmeier, started an online fraud scheme in which he would share copies of pornographic films, before suing people who downloaded them for copyright infringement.
Victims were demanded to pay a $3,000 (£2, 383) “settlement fee” to avoid further legal action. This wicked scheme is believed to have made $3 million for Hansmeier, along with this accomplice, John Steele, over a period of three years.
“It is almost incalculable how much your abuse of trust has harmed the administration of justice,” the judge said at Hansmeier’s hearing.The major harm here is what happens when a lawyer acts as a wrecking ball,”
Numerous firms have been employed by music and movie creators to sue copyright offenders. Hansmeier, however, using a shell company called Prenda Law to run the scam, owned the rights to the pornographic films.
Prenda Law would upload the films to the pirate sites and sharing networks, to ensure they would be pirated. The scheme was revealed when some victims would refuse the settlement and chose to appeal against the copyright claim in court.
This prompted an investigation into Prenda Law, resulting in both Hansmeier and Steele being charged with fraud in 2016.
Steele, who has not been sentenced yet, pleaded guilty to seven charges in early 2017. These charges included mail and wire fraud. He also agreed to help prosecutors investigating the case.
“When challenged by judges around the country, Hansmeier blamed other lawyers who were hired to file lawsuits on his behalf, lied to the courts about his own involvement, and ordered the destruction of evidence.” The Minneapolis Star reported on the case.
Paul Hansmeier originally appealed against the charges, but eventually accepted a plea deal in August last year that allows him to reserve the right to appeal an earlier ruling. Under this deal, he pleaded guilty to charges of wire fraud and money laundering.
He was also ordered to repay $1.5 million to 704 of the victims in the online scam. After being sentenced, Hansmeier told The Minneapolis Star that he was “looking forward at long last to put this whole mess behind me”.
Due to his right to appeal an earlier ruling, Hansmeier’s case isn’t quite over yet. Steele is due to appear in court for sentencing next month. However, he is expected to get a smaller sentence for his cooperation with the authorities.
Story by Emily Clark
Featured Photo Credit: ArsTechnica