Paul Hansmeier, one of the lead attorneys behind the controversial law firm Prenda, has pleaded guilty to mail, wire fraud, and money laundering. Magnetic Torrent peer to peer website Pirate Bay provided important evidence in the case, where Hansmeier and his colleague were found creating and uploading porn movies to file-sharing sites to extract settlements from alleged pirates.
Over the past several years, so-called copyright trolls have been accused of various dubious schemes and actions, with one group as the frontrunner. The now-defunct Prenda Law grabbed dozens of headlines, mostly surrounding negative court rulings over identity theft, misrepresentation and even deception.
Most controversial was the shocking revelation that Prenda uploaded their own torrents to The Pirate Bay, creating a honeypot for the people they later sued over pirated downloads. The accusation was first published on TorrentFreak. While some disregarded it as a wild conspiracy theory, the US Department of Justice took it rather seriously. These and other allegations ultimately resulted in a criminal indictment, which was filed in 2016.
The US Government accused two of the leading Prenda lawyers of various crimes, including money laundering, perjury, mail and wire fraud. This week one of the defendants, Paul Hansmeier, pleaded guilty to two of the counts.
Hansmeier signed a plea agreement admitting that he is guilty of conspiracy to commit mail fraud and wire fraud, as well as conspiracy to commit money laundering.
The plea agreement comes with a statement of facts which includes a description of the Pirate Bay honeypot scheme. In addition, it describes how Hansmeier and his colleague John Steele generated millions of dollars by threatening BitTorrent users who allegedly downloaded pirated porn videos.
“Beginning no later than in or about April 2011, HANSMEIER and Steele caused P.H. to upload their clients’ pornographic movies to BitTorrent file-sharing websites, including a website named the Pirate Bay in order to entice people to download the movies and make it easier to catch those who attempted to obtain the movies.
“As defendants knew, the BitTorrent websites to which they uploaded their clients’ movies were specifically designed to aid copyright infringement by allowing users to share files, including movies, without paying any fees to the copyright holders,” the agreement reads. From the plea agreement After extracting IP-addresses of account holders who allegedly shared the files Prenda created and uploaded, they asked courts for subpoenas to obtain the personal info of their targets from ISPs. This contact information was then used to coerce victims to pay settlements of thousands of dollars.
Prenda Law went to great lengths to hide its direct involvement in the uploading of the material as well as its personal stake in the lawsuits and settlements, according to the plea agreement. Both attorneys obscured their involvement by creating several companies, which were then used to file lawsuits against alleged pirates. In addition to running a honeypot, Prenda also began creating their own porn movies, which were then shared on file-sharing sites as bait.
“Shortly after filming the movies, HANSMEIER instructed P.H. to upload the movies to file-sharing websites’such as the Pirate Bay in order to catch, and filed lawsuits against, people who attempted to download the movies,” the plea agreement reads.
Hansmeiers’ guilty plea applies to a count of wire fraud and mail fraud, as well as a count of money laundering. Both come with a potential jail sentence of 20 years as well as hundreds of thousands of criminal fines.
Previously, the Prenda attorney filed a motion to dismiss, which was denied. This decision is currently under appeal and the present plea agreement is conditional, meaning that Hansmeier has the right to withdraw it if he wins that.
This please agreement comes after fellow Prenda attorney John Steele agreed to a similar deal last year.
It’s rather unique that information provided by The Pirate Bay team is being used to help build a criminal case in the US. And with both lawyers having personally signed a statement of facts that confirm the honeypot scheme, there can be little doubt that Pirate Bay’s allegations were indeed true.
Finally, there is also some good news for the victims of the Prenda copyright-trolling scheme. The plea agreement specifically states that those who were hurt by the scheme are entitled to get the maximum restitution possible.
“Defendant understands and agrees that the Mandatory Restitution Act […] applies and that the Court is required to order the defendant to pay the maximum restitution to the victims of his crimes as provided by law,” it reads.
A copy of Hansmeier’s plea agreement is available here (pdf).
is a Lawyer and Corporate Governance Professional with a Masters degree in Data Protection, Intellectual property and Finance