Attorney Arrested in Porn Copyright Infringement Scheme

Paul Hansmeier was arrested last week, along with his college buddy, James Steele. Both men were indicted in a porn fraud scheme that netted them more than $6 million dollars from their victims.

Here’s how their little scheme worked – 

Hansmeier and Steele gobbled up a bunch of copyrights for porn films and videos using fraudulent companies. Some of these companies were set up by faking signatures of real associates of the attorneys and naming those individuals as officers of the fake companies. In effect, committing identity theft.

Once the two lawyers had obtained the copyrights to the films, they then uploaded them on popular porn streaming sites. Unsuspecting victims then downloaded the video files, and that’s when the attorneys made their move.

They would file a discovery motion with the court seeking the websites’ member lists. They would then identify the IP addresses of those members who downloaded the targeted videos and obtain their personal information.

The victims received cease and desist letters stating they were in violation of copyright laws and were being sued. However, the attorneys were willing to settle out of court. For out-of-state areas, Prenda Law, Hansmeier’s firm, would hire attorneys through Craigslist to file suits and motions with the courts.

If the victims seemed like they might put up a fight, the attorneys would then threaten to publicly expose their pornography habits. More often than not, the people paid up.

Hansmeier and Steele also produced their own pornographic films for use in the scam. They would hire porn actors and actresses at industry conventions they attended, to take part in the films.

Both men are facing an 18-count indictment. The charges include mail and wire fraud, a host of conspiracy charges and perjury charges (state statute 628.24).

Minnesota statute 609.281, states that anyone convicted of a wire fraud crime can be sentenced to up to 20 years in jail and face fines that can total as much as $100,000. Because wire fraud charges involve transactions that take place across state lines, in most cases, the charges are levied as federal crimes.

The crimes are especially heinous because not only did these men set up this operation to intentionally trap people and defraud them out of their money, but they used the court to do their dirty work and were officers of the court themselves.

A judge got suspicious of the amount of lawsuits Prenda Law was initiating and made authorities aware of his concern that something was not right. An investigation was started and the elaborate porn scheme was exposed.

After the extortion scam was hampered by wary courts, who now were limiting the discovery motions, Hansmeier moved on to other prey.

He began targeted small business owners and would threaten suit over supposed violations of the Americans with Disabilities Act. Most of the companies paid to settle out of court because the cost of fighting the lawsuit was more costly than most of them could afford.

If owners decided to fight Hansmeier in court, he would drop the suit entirely. Hansmeier had his law license suspended a few months ago and after that, his wife took up some of his lawsuits with the intent to move forward with them.

Hansmeier attempted to file for bankruptcy, but the trustee overseeing the case put a stop to it. He believed it was an attempt by Paul Hansmeier to avoid being ordered to pay restitution to his victims. The court instead chose to order an involuntary liquidation of all his holdings and assets.

We pride ourselves on being one of the leading criminal defense attorney firms in Minnesota. Our lawyers are experienced with all manner of crimes; sexual, white collar, assaults, DWI, and kidnapping. We also defend clients against white collar crimes, like the case noted above.

Please reach out to us for a free consultation to discuss your case, and find out how we can assist you.