Two lawyers were indicted yesterday on charges of fraudulently targeting internet users who illegally downloaded porn with copyright violation notices and extorting about $6 million dollars in phony settlement fees.
Paul R. Hansmeier and John L. Steele are accused of running a complex scam that took advantage of the copyright system. The two allegedly acquired the copyright to various pornographic videos through shell companies and then uploaded the videos to file-sharing sites like The Pirate Bay. The federal indictment claims that they would then pursue copyright infringement suits against downloaders of the videos in order to obtain their names. With that personal information in hand, the duo would pressure the downloaders to settle with them for an average cost of $4,000—as opposed to the $150,000 judgment that could come from a court case. “When these individuals did fight back, the defendants dismissed the lawsuits rather than risk their scheme being unearthed,” the indictment reads.
Although the copyright infringements were often legitimate, Hansmeier and Steele reportedly concealed their involvement in the uploading process. They allegedly even produced their own original pornography for uploading as well.
According to the prosecution, “The defendants used extortionate tactics to garner quick settlements from individuals who were unaware of the defendants’ role in uploading the movie, and often were either too embarrassed or could not afford to defend themselves.”
The two face 18 charges “for conspiracy to commit wire fraud and mail fraud, substantive wire fraud and mail fraud, concealment money laundering and conspiracy to commit and suborn perjury.”