Counsel used tough copyright laws in the US for $ 5 million fraud

His firm found loopholes in copyright law. For this, he received the nickname "pornotrol".

Фото: Depositphotos

14 June A Minneapolis federal court sentenced Paul Hansmeier to 14 years of imprisonment for creating and using a fraudulent scheme to extort money. As the judge noted, "it is impossible to assess" how much the actions of the American have hurt the US judicial system.

Hansmeiner became famous thanks to the law firm Prenda Law, which he opened in 2011 year. She bought copyright on porn movies, and sometimes took off her own, and uploaded them to file sharing and torrents. Anyone who downloaded the films was sued for copyright infringement and then offered to settle the case before the court for tens of thousands of dollars. For more than five years, the company has earned more than 5 million dollars.

Firm for "pornotrollinga"

Prenda Law is a law firm founded by three legal friends, Paul Hansmeyer, Paul Duffy and John L. Steele. The peak of legal activity fell on 2011-2013 years: they filed dozens of lawsuits against file sharing users and torrent trackers, each of which earned from 4 to 10 thousands of dollars. Hansmeier and Steele have registered at least four fake companies that sued on behalf of the rights holders against those who downloaded porn movies.

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All that Prenda Law did was it used outdated language in American copyright laws. She bought the rights to dozens of old or little-known porn films that she published on Pirate Bay and several sites. During the trial, it turned out that Hansmeier and Steele produced their own erotic pictures, which were also uploaded to the Internet.

When users downloaded porn, Prenda Law employees sent inquiries to their providers. According to court records, about XNUMX clients of AT&T and Comcast have received subpoenas for illegal downloading of pornographic films. Providers were forced to disclose customer information to dummy copyright holders. In the United States, there is a law according to which the court, at the request of the plaintiff, can transfer the data of users to the police.

Фото: Depositphotos

Most of the money Prenda Law earned it at this stage. Lawyers contacted clients and reported on the lawsuit, proposing a settlement in pretrial order. As a rule, users were threatened with public disclosure of preferences in porn and a lengthy litigation on copyright infringement. They were given a choice: either pay 5-10 thousands of dollars now, or probably get into big money in court later. Many agreed to the first option and handed money to scammers. The courts received notification of the pre-trial decision, checked the information and closed the case. Lawyers were looking for new clients.

Litigation

In 2013, Prenda Law faced difficulties: the courts increasingly began to refuse to register claims, because the frequency of such cases caused them to suspect. For example, one of the lawsuits was filed by Sunlust Pictures: when the documents were checked, it turned out that such a right holder does not exist, and the authors of the lawsuit were first accused of “an attempt at judicial fraud”.

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The police stumbled upon two companies that filed claims of copyright infringement - both were issued in the name of Alan Cooper. A person with such a name was contacted to verify documents, but he stated that he did not know anything about the companies where he was listed as CEO. The third fact to the beginning of the investigation was the speech of a resident of Minnesota. He said that Prenda Law forced him to enter his name in the list of users who violated copyright. This allowed lawyers to seek the issuance of personal information about clients from providers.

In the 18 months, starting in the 2012 year, Prenda Law filed hundreds of lawsuits, but none of them went to court. Judges across America began to suspect that the company was not interested in protecting their copyright.

At the end of 2013, the US District Judge opened a criminal case against Hansmeier and Steele along with the FBI and the Internal Revenue Service. Reading out the verdict, he recognized the intellectual approach of the creators of Prenda Law: "They managed to outwit the American judicial system." On the other hand, they were opposed by one of the clients who refused to pay the proposed three thousand dollars for pre-trial regulation. They allegedly demanded money on several occasions under various pretexts - this was an additional motivation for the judicial system to pay attention to the law office.

Фото: Depositphotos

The main sessions in the Prenda Law case were held in 2016. The creators of the company were arrested and offered them cooperation, but they refused, citing the right not to testify against themselves. Hansmeier and Steele did not recognize that they made porn films themselves, did not recognize that they received information about customers through providers, and did not recognize that they did it not with the purpose of protecting copyrights, but to cash in on trusting customers.

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The main charges against the creators of Prenda Law are fraud, personal information abuse and money laundering. In the 2018 year, both Hansmeier and Steele admitted their guilt: they said that they really earned illegal pornography copyright lawsuits - this brought them from 3 to 6 million dollars. Both agreed to cooperate with the authorities and disclosed a fraudulent scheme to them in detail. “I look forward to the moment when all this nonsense is left behind,” Hansmeier said at the trial.

Hansmeier received 14 years imprisonment and a fine of 1,5 million dollars. Steele is awaiting sentencing until July, but he faces no less time. Both had their attorney licenses taken away, as well as their bank accounts and property frozen. Paul Duffy, the third co-founder of Prenda Law, died before an investigation was launched against the company.

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