Law Firm Trolls Indicted In Nationwide Copyright Scheme

I 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 (above) 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.

23 thoughts on “Law Firm Trolls Indicted In Nationwide Copyright Scheme”

  1. Attorneys Paul Hansmeier and John Steele are “bottom-feeders?” And this charge is coming from Jon Turley who vigorously defended Islamic Jihad terrorist group founder and leader Sami Al-Arian, purportedly pro bono. Talk about the pot calling the kettle black.

    1. People who represent terrorists and polygamists are in it for the free publicity. Hansmeier and Steele were in it for the money.

  2. We moved to the Twin Cities area last month. This story is causing agita w/ the Minnesota folks. There is a term, “Minnesota Nice.” And, it is spot on. This is the 8th state I’ve lived and I’ve been to 48 states So, unless people in Hawaii or Oregon, the 2 states I’ve not visited, are nicer; well Gophers are the nicest folks in this country. They deserve better than these pond scum.

    1. I miss Minneapplesauce, but only in temperate months. 34 below mornings I don’t miss.

  3. It is clever, I will give them that. I especially like that they started making their own porn to save money, They think exactly like Elon Musk, without the cars, rockets and solar panels. Evidently, their practice is a little slow and this was a way to juice up the profits.

  4. The actions of Intellectual Property trolls go beyond my experience. However, I’m somewhat familiar with the sort of statutes being utilised as well as the mentality behind these sort of cases. If you want to start addressing the problems with the legal profession you need to go places Turkey Turley has throughout his career refused to venture, the closing and/or elimination of scores of American law schools.

    The gentlemen identified in this article went to a very reputable and quality law school. But if you delve into the world of IP trolls you will find that most lawyers do not share this distinction. The legal profession has for several decades been inundated every year by many thousands of law school grads from a world where the sentence, “I wanted to go to law school but couldn’t get in” no longer exists. Today virtually ANYONE graduating college with a mediocre record and achieving mediocre LSAT’s can find admission into a law school and after three years obtain a seat taking a state bar exam.

    The United States has about 250 law schools. About a hundred are so bad they are not even “ranked”. I don’t know how many lawyers we need from the, e.g., “144th ranked law school in America”, and I certainly don’t know how many we need from law schools that can’t even earn a ranking in the top 150. But suggesting we get around 20,000 new J.D.’s every year from law schools unranked, unaccredited, or accredited only in California is a conservative estimate.

    We don’t need 250 law schools. We probably don’t even need 150, but at least most of the schools in the top 150 are relatively credible. Turley has refused to address the greatest issue in the legal profession, the rotting of the profession from the inside due to the accumulation every single year of tens of thousands of alleged lawyers and potential lawyers out of law schools doing business in an age when anyone can get into some law school somewhere- at a hefty price!

    P.S. This same rot has been developing in the world of medicine in the guise of the growing number of Osteopathic medical schools.

    1. P.S. This same rot has been developing in the world of medicine in the guise of the growing number of Osteopathic medical schools.

      About 2/3 of the osteopathic colleges in business have been founded since 1970, which is interesting inasmuch as osteopathy as a distinct medical subdiscipline hardly exists anymore. They now account for about 20% of all medical degrees awarded. The thing is, medical schools and osteopathic colleges award 21,000 degrees a year nowadays. You have 642,000 practicing physicians in this country. The ratio of stock to inflow (642,000 / 21,000) suggests careers a mean of 30.4 years in length. A similar ratio for attorneys (625,000 / 49,000) suggests a mean career of 12 years in length. Prorating periods of part-time and seasonal labor (and deducting interstitial unemployment), the average American is employed f/t year round for just north of 31 years during the course of their life. Annual production of M.D. and D.O degree holders is somewhere in the zone of where it should be, whereas there is tremendous over-production of JD and LLB degrees.

    2. The best way to control the gross overadundance of law schools in the U.S. is to take the ABA out of the accreditation picture. The ABA is responsible for accrediting highly dubious law schools and even for-profit law schools. This leads to tens of thousands of unemployable lawyers who will resort to ambulance chasing and bogus products liability actions, driving up the cost of business. There was a similar scheme in CA where a ring of graduates from one of CA’s fifth rate law schools sent shake-down letters to mom-and-pop dry cleaners, threatening to sue them for violating a state air quality law, but offering to let them off the hook for several thousand dollars. I hope that Congress enacts legislation to deny federal student loans to anyone attending a law school not approved by the U.S. Dept of Education, which should limit approval to the top 150 ranked law schools in the U.S. Turley is not going to criticize his friends at the ABA, but perhaps a Trump administration will recognize the societal costs of having every third person a lawyer. Frankly, if 50% of the law schools turned into business or engineering colleges, we would be producing, not suing, and would become a far more competitive world economy.

      1. TIN – what is the difference between the school rated 150 and the one rated 151? What is the ranking criteria? The grading of law schools is subjective, not objective. When the ratings are objective, I might partially agree with you.

        1. Paul – I can’t imagine there would be much difference between schools no. 150 and 151. But the fact that standards are difficult to apply doesn’t mean we shouldn’t have any at all. If it takes 200 points to pass the medical licensing exam or the CPA exam, for example, yes, it would suck for the guy who scored 199, but public protection requires that minimal standards of professional competency be enforced. We have way too many lawyers filing nuisance and bogus lawsuits in order to make a living because there aren’t enough legitimate jobs for them. I work for a federal agency in D.C. and regularly review law school resumes. It’s shocking how many exceptionally well qualified attorneys from Ivy League schools are applying for government jobs with paltry wages (GS 11), which means a shared apt in DC and not enough to pay back student loans. I feel for these people. They have invested three years and hundreds of thousands of dollars in a pipe dream. The ABA is completely irresponsible in accrediting far more law schools than there is any possible need for. The time is long past for that function to be removed from the ABA.

          1. TIN – the accreditation of schools is a money generating racket for the organization. You will get not argument from me. However, rating schools by US News and World Report is always somewhat subjective.

  5. Reading your email about these two attorneys’s actvities it brings to my mind what we went through with the two party system that reign in our government. Lies, distortion of facts, manipulation and lies again. Sorry, but I could not help doing the association.

  6. So complain to Congress already. Surely the Republicant majority wants truth and righteousness…

  7. If convicted and imprisoned they could find work as “actors” for Bubba and Lester.

    1. ////////Amen! And he didn’t do his usual “While I firmly support [fill in the blank with the subject issue]” intro.

      (The introductory /// are the contribution of Scamp, the foster Tom Kitten, who I already fed a bottle of kitten milk to, but he is half pig, so he hopped up and scampered across the laptop.)

      Squeeky Fromm
      Girl Reporter

  8. If, God forbid, someone shot several large caliber bullets into critical areas of these two parasite’s bodies, one wonders how any arrest could be made, considering the hundreds or thousands of persons who’d consider it the best news they’d heard in a long time.

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