The US Government has asked the Court of Appeals for the Eighth Circuit to affirm the conviction of Paul Hansmeier, one of the lead attorneys behind the controversial Prenda law firm. The lawyer appealed his conviction and 14-year prison sentence but according to the federal prosecutors handling the case, it’s clear that he lied to the courts to extract settlements from alleged pirates.
Last summer, a U.S. District Court in Minnesota sentenced Paul Hansmeier to 14 years in prison, to be followed by two years of supervised release.
Hansmeier was a key player in the Prenda Law firm, which pursued cases against people who were suspected of downloading pirated porn videos via BitTorrent.
Hansmeier and fellow attorney John Steele went a step further though. Among other things they lied to the courts, committed identity theft, and concocted a scheme to upload their own torrents to The Pirate Bay, creating a honeypot for the people they later sued over pirated downloads.
Both attorneys pleaded guilty but Hansmeier reserved the right to appeal, which he did at the United States Court of Appeals for the Eighth Circuit.
In his brief, submitted last fall, Hansmeier admits that he abused legal discovery processes. However, he maintains that many of the accused subscribers were pirates. As such, the settlements with these people were legitimate and not fraudulent.
There’s no dispute that there was foul play involved, but these matters should be addressed by civil and regulatory systems of justice and not by criminal law, Hansmeier’s lawyer argued.
This week, U.S. Attorney Erica MacDonald and Assistant U.S. Attorney Lisa Kirkpatrick responded to these arguments. According to the US, Hansmeier built a career suing thousands of people across the country, accusing them of pirating content he and his co-conspirators uploaded as bait.
That some victims may have indeed shared infringing material is beside the point. According to the federal prosecutors, Hansmeier’s appeal is premised on a misunderstanding of the indictment’s claims.
“Contrary to his claims, the indictment does not charge that the only lies in this case were made to courts. Far from it. Instead, Hansmeier’s lawsuits were fraudulent from the start,” the prosecution writes.
“His scheme entailed lying to courts and using the courts to execute his scheme to defraud victims and making explicit misrepresentations and material omissions to those victims in order to exact quick settlement payments.”
Thus, even though some victims may have broken the law, they were caught by someone who broke the law to catch them, and committed crimes in the process. Or as the prosecution puts it;
“Even if theoretically those victims could be sued for copyright infringement, Hansmeier still misrepresented the nature of his lawsuits in order to exact payments. It was part of his scheme to use litigation to create the illusion of a legitimate civil action environment when, in reality, the entirety of the litigation was a scam and was intended to facilitate his shakedown.”
In addition to the attempt to undo the conviction by framing his offenses as a civil matter, Hansmeier also disputed the court’s order to award roughly $1.5 million in restitution to the victims. This is in part based on the same logic. Since some victims did break the law, Hansmeier argues that the settlements were legitimate.
The prosecution doesn’t agree with this either. While some may have broken the law, they are victims because Hansmeier’s lied and defrauded the court in order to get these settlements.
On top of that, the former Prenda attorney signed a plea agreement where he specifically admitted to receiving more than $3 million in fraudulent proceeds from the lawsuits he was involved in.
“Thus, he agreed that the people who paid him as a result of his copyright infringement lawsuits were fraud victims by acknowledging that the amounts they paid him were ‘fraudulent proceeds.’ He cannot now say that they were not,” the federal prosecutors write.
Based on the above and various other arguments, the US Government asks the United States Court of Appeals for the Eighth Circuit to affirm the district court’s judgment.
A copy of the full response from U.S. Attorney Erica MacDonald and Assistant U.S. Attorney Lisa Kirkpatrick is available here (pdf).