Minnesota Lawyer
Before sentencing Paul Hansmeier to 14 years in federal prison on Friday, U.S. District Court Judge Joan Ericksen had a few nice words to say about the disgraced (and likely soon-to-be disbarred) lawyer.
“You have a lot of potential. You have a lot of support. You’ve got a great education. You’re smarter than all get out,” Ericksen told Hansmeier, 37, of Woodbury, in a Minneapolis courtroom that was packed to capacity with his friends, relatives and curious on-lookers. Because of the limited space, a large contingent of spectators from the U.S. Attorney’s office had to be seated in the jury box.
But following those perfunctory compliments, Ericksen proceeded to pillory Hansmeier –the mastermind behind the notorious copyright trolling operation, the now-defunct Prenda Law – for the “incalculable” harm he caused to the public’s trust in the justice system.
“All these people who made [settlement] payments are going to be left with a very bad taste in their mouth about lawyers and the court system,” said Ericksen.
Dressed in a suit and tie, Hansmeier remained stone-faced through most of the hour and a half long proceeding.
The 168-month sentence, the maximum recommended under federal guidelines, was 18 months greater than the prosecution requested. Ericksen said she had given “serious consideration” to an upward departure. “Anything less [than 168 months] would be an under-representation of the criminal conduct here,” she added.
Earlier, Hansmeier’s lawyer, federal defender Manny Atwal, urged the judge to impose an 87-month sentence, with three years of supervised release.
“This is Mr. Hansmeier’s first and only offense. He’s never been in trouble with the law,” said Atwal, who referred to her client “a hard worker” and “go-getter.”
“The court knows this was a very, very bad idea on his part and he recognizes some of the mistakes he’s made,” Atwal said. She added that Hansmeier, without prompting, had “sought extra help to deal with some of the issues he was dealing with mentally.”
In determining an appropriate sentence, Atwal urged Ericksen to consider Hansmeier and John Steele, his former partner and co-defendant, equally culpable. Steele, who flipped on Hansmeier, is awaiting sentencing.
In a memorandum, Assistant United States Attorney Benjamin Langner characterized Hansmeier as “the Machiavellian presence behind the scenes directing the creation and dissemination of false statements to courts,” while Steele was “the brash frontman whose false bravado and half-truths drew the ire of defense attorneys and judges.”
In court, Langner told Ericksen that Hansmeier had violated “every moral and ethical obligation” he had as a member of the bar.
“The way he abused the court system to line his own pockets is, frankly, outrageous,” said Langner.
In addition to the prison term, Ericksen ordered Hansmeier to make $1.54 million in restitution payments to his victims, although it remains unclear just how many of those victims will ultimately come forward.
According to FBI Special Agent Jared Kary, the government has received 20 requests for restitution since the agency set up a dedicated web page about two months ago. He said the agency had identified 704 people who paid settlements but “a lot of people didn’t want to be involved or talk to us at all.”
According to authorities, Hansmeier and Steele, both University of Minnesota Law School alumni, raked in approximately $6 million in settlements between 2010 and 2013 from defendants whom they accused of illegally downloading copyright-protected porn movies.
Many of those lawsuits were ultimately deemed fraudulent because Steele and Hansmeier concealed their ownership stake in the movies, some of which, it turned out, they produced themselves. More deviously, they laid a trap by uploading the movies to illicit peer-to-peer file sharing websites – a practice referred to as “honeypotting” or “seeding.”
Using special tracking software to identify the internet addresses of the alleged infringers, they would then ask judges to issue subpoenas to internet service providers so they could obtain the identity of the subscribers. Faced with the prospect of expensive litigation and public embarrassment, many subscribers opted to settle on the cheap, typically for sums between $2,500 and $4,000.
While the sham lawsuits were lucrative, Ericksen said “the dollar amount doesn’t really capture the problem.” She said was focused on “what happens when a lawyer acts like a wrecking ball to the trust and confidence people have in the administration of justice.”
Ericksen noted that Hansmeier had exploited uncertain and evolving areas of the laws that govern computers and privacy.
“By lying to courts and submitting false documentation, you influence the way the American justice system handles these very important, cutting edge issues,” she said.
The sentence came more than six years after a federal judge in California, Otis Wright, first referred Hansmeier and Steele to federal authorities for criminal prosecution.
In a memorable characterization of the duo’s business model, Wright wrote that Hansmeier and Steele had “discovered the nexus of antiquated copyright laws, paralyzing social stigma and unaffordable defense costs.”
In his remarks to the court, Hansmeier, who earlier pleaded guilty to one count of conspiracy to commit mail fraud and one count of conspiracy to commit money laundering, was brief. He did not offer an explicit apology for his conduct.
“Your honor, all I would say is that I’m looking forward to putting this whole mess behind me,” he said.
Ericksen denied a motion to permit Hansmeier to remain free while he appeals the legal basis for his conviction – a right he preserved as a condition of his guilty plea.
However, the judge agreed to recommend to the Bureau of Prisons that Hansmeier be allowed to serve his sentence in Minnesota so he can be near his wife, attorney Paidraigin Browne, and their two young children. The judge said she would also suggest that Hansmeier receive drug treatment while in prison.
With no objections from prosecutors, Ericksen gave Hansmeier until July 9 to get his affairs in order and begin serving his sentence.
“You aren’t going to run away, are you?” the judge asked.
“No,” Hansmeier responded flatly.
The case against Hansmeier was prosecuted by Langner, Assistant U.S. Attorney David J. MacLaughlin of the District of Minnesota, and Senior Trial Counsel Brian Levine of the Criminal Division’s Computer Crime and Intellectual Property Section.
