Law Firm Trolls Indicted In Nationwide Copyright Scheme

psteelelarge_paulduffyI have long been critical of our professions bottom-feeders: firms that do little but sue citizens over copyright or trademarks violations and collect small settlements through threatening letters.  In what is remarkably good news, lawyers Paul Hansmeier (right) and John Steele (left) are facing criminal charges over their abusive scheme to acquire millions from copyright claims over porn movies as well as fraudulent disability litigation.  Two more worthy felons would be hard to find in the country.  A third attorney Paul Duffy (right) died at age 55 during the investigation into these activities.

Hansmeier had trouble getting an attorney to even represent him through proceedings.

Hansmeier and Steele are both graduates of the University of Minnesota.  They quickly became notorious for their unethical and legally dubious practices.   Hansmeier filed hundreds of porn copyright lawsuits and disability litigation has been indicted alongside a longtime partner in a multimillion-fraud and extortion conspiracy that counted as its victims hundreds of people nationwide and the federal court system itself.  Here is how the Minnesota Supreme Court described Hansmeier who proved to be an utter disgrace to this profession:

Hansmeier committed misconduct in the first matter by bringing a lawsuit for the sole purpose of conducting discovery to find the identity of others against whom claims could be made, making misrepresentations to the tribunal, filing articles of termination for a corporation that contained false statements. failing to comply with discovery requests, failing to pay attorney fees assessed against him, and transferring funds out of his law firm in order to avoid paying sanctions. In a second matter, Hansmeier committed misconduct by participating in the initiation of a lawsuit without a basis in law and fact, making false and misleading statements to the court, failing to pay attorney fees assessed against him by the court, and submitting to the court a financial statement that was false, misleading, and deceptive. In a third matter, Hansmeier committed misconduct by bringing a frivolous action for an improper purpose. And in a fourth matter, Hansmeier committed misconduct by testifying falsely during a deposition, bringing a frivolous claim, and perpetrating a fraud upon the court.

Now police have arrested Paul Hansmeier and John L. Steele, an attorney in Illinois and a former classmate of Hansmeier’s at the University of Minnesota.  Both were charged in an 18-count indictment with orchestrating a multimillion-dollar extortion fraud scheme between 2011 and 2014. The charges, unsealed Friday, include conspiracy to commit fraud, conspiracy to perjure and conspiracy to launder money.  They would obtain copyrights to pornographic movies, including some of which they filmed themselves. They would nto upload those movies to file-sharing websites to lure people to download the movies.  That is when they would swoop in and hit people with demands for payments.  At the heart of this conspiracy was the now defunct Chicago law firm, Prenda Law.  They were able to effectively extort millions in settlements.  

As disgusting as these lawyers may have been, they are only the most obnoxious standouts in an area of tremendous abuse due to copyright and trademark laws. We have been discussing a disturbing trend in copyright and trademark claims over things occurring in public or common phrases or terms. (For a prior column, click here). We have often discussed the abusive expansion of copyright and trademark laws. This includes common phrases, symbols, and images being claimed as private property. (here and here and here and here and here and here and here and here and here and here and here). This included a New York artist claiming that he holds the trademark to symbol π. We are seeing these claims multiply because Congress has repeatedly caved into a powerful lobby in Washington expanding these protections and has done nothing to rein in their copyright and trademarks firms. We have previously discussed how President Obama has repeatedly yielded to the “copyright hawks” who have steadily increased the penalties for copyright and trademark violations, including criminal penalties. Despite the abuse of average citizens by thuggish law firms and prosecutors, the Obama Administration continues to support draconian measures against citizens. The result is that firms may routinely send out these thuggish threats and claim ownership to such things as the skyline of New York city. It is small business and average people who are being victimized because they do not have any comparable lobby in Congress.

These lawyers are brutish thugs who showed as little human decency as they did legal ethics. However, do not fool yourself. There are firms around the country who are feeding off average Americans forced under their heel by laws passed by Congress.


Law Firm Trolls Indicted In Nationwide Copyright Scheme