FORT LAUDERDALE, Fla. – Federal authorities arrested two attorneys, who once had an office in Miami Beach, on suspicion of running a $6 million scheme targeting victims with "settlements" of copyright infringement lawsuits. Their victims, prosecutors allege, were under threat of public exposure over downloaded porn.
John L. Steele, 45, from Illinois, was arrested Friday in Fort Lauderdale. His co-conspirator, Paul Hansmeier, 35, from Minnesota, was arrested in the Minneapolis-St. Paul area. Hansmeier's father, Gordon Hansmeier, chairs the Seventh District Bar Association's Ethics Committee, according to the Star Tribune.
Recommended Videos
The two allegedly met at the University of Minnesota law school and are accused of running the scheme from 2011 to 2014. They were sending letters from an office at 1111 Lincoln Road in 2011. Their former Chicago-based Prena Law firm partner, Paul Duffy, died in 2015 when they were under investigation.
For years, they developed a reputation for a business model that is now known as "copyright trolling."
Two of their alleged victims wrote on a forum that they were relieved that federal prosecutors had finally charged them on Wednesday. They faced charges of conspiracy to commit mail and wire fraud, conspiracy to commit and suborn perjury, and conspiracy to launder money, according to an 18-count indictment.
Steele and Hansmeier "used sham entities to obtain copyrights to pornographic movies -- some of which they filmed themselves -- and then uploaded those movies to file-sharing websites in order to lure people to download the movies" illegally, according to the indictment.
They allegedly ran a web of shell companies to manage the porn and used dark web file sharing services to net their victims. To identify their anonymous downloaders, investigators say Steele and Hansmeier filed the lawsuits to use the discovery process to get a list of IP addresses.
The attorneys have a history of disciplinary sanctions from federal judges in the 7th and 9th Circuits. Prena Law fought the sanctions in appellate court.
The Miami New Times and several legal and hackers' blogs, including the Fight Copyright Trolls, the Pope Hat, Above the Law and Anons of Liberty covered their alleged scheme before prosecutors had enough evidence to charge them.