Defendant Pleads Guilty in Porn Troll Case

PornOne of the lawyers behind a "porn trolling" scheme has pleaded guilty to federal charges of fraud and money laundering.

As reported by Ars Technica, which has been following the case for years, attorney John Steele admitted that he and his co-defendant, attorney Paul Hansmeier, made more than $6 million by threatening people with copyright infringement lawsuits (and public humiliation) for downloading online pornography.

According to the US government's 26-page Plea Agreement and Sentencing Stipulation, beginning in about 2011 and continuing until about 2014, Steele and Hansmeier used sham entities that they controlled to obtain copyrights to pornographic movies — some of which they filmed themselves.

Pirate Bait

The defendants uploaded the movies to file-sharing websites, such as Pirate Bay, as "bait." 

As the government described it,

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. Thus, defendants knowingly caused their clients' movies to be shared and distributed on BitTorrent websites, and thereby purposely allowed and authorized the BitTorrent users to obtain their clients' movies.

When someone downloaded one of the movies, the lawyers filed what the government called "false and deceptive copyright infringement lawsuits that concealed their role in distributing the movie."

At least 200 such lawsuits were filed by the lawyers.

Subpoena Power

The lawyers also fraudulency induced courts to give them the power to subpoena internet service providers to get information on the true identities of people who had downloaded the movies.

The defendants used what the government called "extortionate tactics" to collect quick settlements of the legal claims.

When the downloaders did fight back, the attorneys dismissed the cases against them rather than risking exposure.

Statutory Damages

Copyright law allows statutory damages of up to $150,000 per infringement. The lawyers tried to settle their cases for a relatively modest $2,900.

Many of the people who got the demand letters paid rather than deal with the expense and potential embarrassment of defending the lawsuit.

The lawyers started hiring adult film actresses and filming their own pornographic movies starting in 2012.  they made no legitimate effort to publicly distribute these short films, but only uploaded them to file-sharing sites.

Hacking

Eventually, the lawyers changed tactics and began claiming that computers belonging to their sham clients had been hacked.  They even enlisted some of the people caught downloading their movies to participate in the scheme.  They used these claims as the basis to get more information about downloaders.

If the lawyers had been working on behalf of real clients, and if they hadn't enticed people to download by uploading the material to pirate sites themselves, bringing copyright lawsuits would have been legitimate. Pornography, like other "works of authorship" is protected by copyright law.

The government recommended that Steele be sentenced to 8-10 years in prison and pay a fine from $30,000 to $300,000 as well as making restitution to the people who paid settlements.

According to NBC News, Steele is now "working for Team USA" and "will be available to testify" against Hansmeier. 

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