Prenda

Steele and Hansmeier have been finally indicted on fraud, money laundering charges

 

Sweet holiday gift. The masterminds of a porn extortion outfit Prenda — John Steele and Paul Hansmeier — are finally indicted (USA v. Hansmeier et al, MND 16-cr-00334). Congratulations to everyone who made it happen. Slow wheels of justice do grind.

Paul HansmeierPaul Hansmeier

Twin Cities’ Star Tribune was the first who broke the story:

Authorities arrested Paul Hansmeier, of Woodbury, and John L. Steele, an attorney in Illinois who was a former classmate of Hansmeier’s at the University of Minnesota, shortly before U.S. Attorney Andrew Luger announced charges Friday morning.

They were charged Wednesday in an 18-count indictment with orchestrating a multimillion-dollar extortion fraud. The charges, unsealed Friday, include conspiracy to commit fraud, conspiracy to perjure and conspiracy to launder money.

The indictment refers to other Prenda parties by initials:

  • P.H. = Peter Hansmeier, Paul’s brother: I believe that his role in the scheme is under reported. It may very well be that his participation as a racket mastermind was even bigger that his brother’s
  • M.L. = Mark Lutz, a paralegal, faux owner of fake corporations and trusts
  • P.D. = Paul Duffy. De mortuis nil nisi bonum
  • B.G. = Brett Gibbs

Although the indictment names only Steele and Hansmeier, the language used to describe the scheme can be easily applied to the ongoing extortion racket perpetuated by other outfits: Malibu Media, Voltage Pictures, CEG-TEK, Rightscorp. Today’s event resurrects my hopes that this judicial plague is curable.

John SteeleJohn Steele

Interestingly (according to Wall Street Journal’s story linked below), Steele is up in arms to all the Prenda watchers’ amusement:

An attorney for Mr. Steele said he plans to plead not guilty. “My client has known about this investigation for over a year and, with my assistance, has thoroughly cooperated with the federal government throughout,” attorney Mark Eiglarsh said. “He passionately maintains his innocence and intends to vigorously contest the charges.”

Paul Hansmeier retained attorney Joe Friedberg (it didn’t happen: see update).

Coverage

Updates and Documents

12/29/2016

When it rains, it pours. Star Tribune reported yesterday:

Paul Hansmeier, the Minnesota lawyer indicted this month for allegedly operating a fraudulent multimillion-dollar porn-trolling scheme, is also under investigation by the FBI in relation to his practice of filing scores of disability-access lawsuits, according to documents filed Wednesday in federal court.

An attorney representing Hansmeier’s former client Eric Wong, of Minneapolis, revealed the new allegations in a motion to oppose a legal settlement in a disability-access case. Wong, through his attorney, alleged that his fellow plaintiff and one-time finance director of the nonprofit Disability Support Alliance (DSA), Scott Smith, had cut him out of negotiations in a 2015 lawsuit that Smith had settled with CCRE, which runs Cedar Cliff Shopping Center in Eagan.

Disability Support Alliance is a Hansmeier’s brainchild – this organization was created exclusively to abuse ADA law in order to enrich parasites, so I can’t take seriously the claim that anyone who willingly participated in this racket is a victim. However, if this approach provides an easy way for the feds to throw another book at Hansmeier, so be it: I won’t complain.

Disability Support Alliance et al v. CCRE, LLC (MND 15-cv-03713).

1/4/2017

It turned out that Hansmeier wouldn’t retain Friedberg: instead, Paul will be represented by a public federal defendants, Andrew H. Mohring and Manvir K. Atwal:

1/5/2017

New documents were filed yesterday:

1/9/2017

New documents were filed today:

The trial is initially scheduled (“if no pretrial motions filed by Defendant,” which is unlikely) for March 13, 2017, at 9:30 a.m. before District Judge Joan N. Ericksen in Courtroom 12W, U.S. Courthouse, 300 South Fourth Street, Minneapolis, Minnesota

1/19/2017
1/30/2017

Two Government’s motions for discovery pursuant to F.R.C.P 16(b), 12.1, 12.2, 12.3 AND 26.2 (boilerplate):

2/2/2017

Steele is set to change his plea (text-only docket entry):

2/16/2016

Hansmeier requested to designate the case as “complex” for pretrial time exclusions pursuant to the Speedy Trial Act. He also asked to bifurcate pretrial motions – to challenge the legality of the indictment first. The judge agreed with the former, but not the latter. A new schedule was set:

  1. The government must make all disclosures required by Federal Rule of Criminal Procedure 16(a) by February 22, 2017.
  2. Defendant must make all disclosures required by Federal Rule of Criminal Procedure 16(b) by March 1, 2017.
  3. All motions in the above-entitled case must be filed and served consistent with Federal Rules of Criminal Procedure 12(b) and 47 on or before April 24, 2017.
  4. Counsel must electronically file a letter on or before April 24, 2017, if no motions will be filed and there is no need for hearing.
  5. All responses to motions must be filed on or before May 15, 2017.
  6. All replies to motions must be filed on or before May 30, 2017.
  7. Any Notice of Intent to Call Witnesses must be filed by May 15, 2017.
  8. Any Responsive Notice of Intent to Call Witnesses must be filed by May 22, 2017.
  9. A motions hearing will be held pursuant to Federal Rules of Criminal Procedure 12(c) where:
    • a. The government makes timely disclosures and Defendant identifies in the motions particularized matters for which an evidentiary hearing is necessary; or
    • b. Oral argument is requested by either party in its motion, objection or response pleadings.
  10. The motions hearing will be heard before Magistrate Judge Katherine Menendez on June 6, 2017, at 10:00 a.m., in Courtroom 8E, U.S. Courthouse, 300 South Fourth Street, Minneapolis, Minnesota.
  11. TRIAL:
    • a. All voir dire questions and jury instructions and trial related motions (including motions in limine) must be submitted to District Judge Joan N. Ericksen on or before September 1, 2017.
    • b. This case will commence trial on September 11, 2017, at 9:30 a.m. before District Judge Joan N. Ericksen in Courtroom
2/27/2017
  • 40. Order Modifying Conditions of Steele’s Release:

    Due to the fact that the above-named defendant has requested and moved to Pennsylvania,

    IT IS HEREBY ORDERED that the following be added to the defendant’s conditions of release:

    Abide by the following restrictions on personal association, place of abode, or travel: Travel shall be restricted to Minnesota and Pennsylvania unless approved by the supervising officer.

3/6/2016

Today John Lawrence Steele pleaded guilty to counts 1 (Conspiracy to Commit Mail Fraud and Wire Fraud) and 17 (Conspiracy to Commit Money Laundering) of the indictment.

Paul Hansmeier

Dr. Vandalia’s comment:

The most important sentence: “The parties are to keep the Court apprised of when sentencing may be suitable, given the Defendant’s anticipated cooperation in a related case.”

Translation: Hansmeier is screwed. There is a reason they call the Federal criminal justice system “first come, first served” justice.

Update: Note that the document linked above was quickly sealed (“entry restricted to case participants only”), and an amended version was filed instead. It is nearly identical, with one exception: the phrase

given the Defendant’s anticipated cooperation in a related case.

was removed.

16:44 Update: Dan Browning, who attended today’s hearing, reported (via the Star Tribune):

  • U of M law grad admits guilt in porn-troll scheme:

    Steele, a former Chicago lawyer who now lives in Pennsylvania, pleaded guilty to conspiracy to commit mail fraud and wire fraud, and conspiracy to launder money. He cut a deal that calls for him to cooperate in the prosecution of others involved, presumably his only co-defendant, Minneapolis lawyer Paul Hansmeier.

    Hansmeier, who is suspended from practicing law, has denied the charges and awaits trial in Minneapolis.

    In exchange for Steele’s plea, the government agreed that it will dismiss 16 other charges against him, including mail fraud, wire fraud and conspiracy to commit and suborn perjury. The agreement contemplates a sentence of 8 to 10 years in prison if approved by U.S. District Judge Joan Ericksen, though Steele could win a reduction by providing substantial help.

Here is the plea agreement:

Ken White (via a popular hacker’s blog Pope Hat):

  • Prenda Saga Update: John Steele Pleads Guilty, Admits Entire Scheme

    […] Steele and the government have stipulated to factors yielding an anticipated guideline range of 97-121 months of imprisonment. Yes, up to ten years in federal prison. This is not a highly favorable plea agreement — Steele isn’t getting any killer deal (yet) for pleading guilty. The feds made him plead to both mail fraud and money laundering — a “good deal” would drop the money laundering. In addition, the feds made Steele agree to just about every Guideline enhancement I can think of, rather than leaving those enhancements open to argue. Steele has truly hurled himself on the sword here.

Mike Masnick’s take (Techdirt):

  • Prenda’s John Steele Pleads Guilty, Admits To Basically Everything

    Of course, now this means that Hansmeier is in even deeper shit than Steele. The feds have no reason to cut a deal with him to roll over on Steele, and Steele has now agreed to testify against Hansmeier. They may still cut a deal, but it certainly appears that the final chapter concerning Prenda isn’t ending well for either Steele or Hansmeier. […]

And here is the official DOJ press release:

03/07/2017
  • 44. Hansmeier orders the transcript of Steele’s 3/6/17 change of plea hearing
03/20/2017

As Techdirt reports, there are indicators that Hansmeier is being pursued for bankruptcy fraud.

04/24/2017

Today was the deadline for Hansmeier’s pretrial motions deadline. So he filed 8 documents. The most jaw-dropping is a 64-page-long document #49, in which Hansmeier, via his lawyers, claims that the government case against him should be dismissed because

[…] In short, this prosecution is not just peculiar, but it is contrary to law, and presents a clear danger to this nation’s system of civil justice. […]

No less.

A good insight from the comment section below (DB):

He states his theory up front: “Prosecutors ought not be allowed to ground criminal fraud or analogous charges upon someone’s exercise of constitutionally protected civil litigation activities.”

To mis-quote Nixon, “If a lawyer does, that means it is not illegal”.

I think that this sums up his viewpoint and actions. Lawyers are above the law. They get to use the power of the court, but are never bound by the law. If they are clever enough, keep up motion practice, and appeal any loss, they can ultimately avoid repercussions for their actions.

4/25/2017

Techdirt about yesterday’s filing:

5/17/2017

On 5/12/2017 the government moved for extension of time to reply/respond.

Today the motion was granted via the following text-only order:

TEXT ONLY ENTRY: Oral ORDER in case as to Paul R Hansmeier. The Court has received and reviewed the government’s Motion for Extension of Time. ECF No. 55. After consulting with counsel for both the government and Mr. Hansmeier, the Court will reset the hearing and schedule as detailed in this order. Accordingly, the government’s motion is GRANTED. It is HEREBY ORDERED that: 1. The government’s response to Mr. Hansmeier’s pretrial motions is due on or before June 2, 2017. 2. Mr. Hansmeier’s reply brief is due on or before June 16, 2017. 3. Any notice of intent to call witnesses must be filed on or before June 2, 2017. 4. Any responsive notice of intent to call witnesses is due on or before June 16, 2017. 5. The motions hearing currently set for June 6, 2017 is CANCELED and RESCHEDULED for June 23, 2017 at 9:00 AM in Courtroom 8E (Mpls) before Magistrate Judge Katherine M. Menendez. Signed by Magistrate Judge Katherine M. Menendez on 5/17/17. (MG) (Entered: 05/17/2017)

In other news: Hansmeier’s adversarial bankruptcy case (MNB 16-04035) was stayed today after a hearing:

The defendant appeared pro se and Colin Kreuziger appeared on behalf of the plaintiff. Proceeding stayed until September 30, 2017. Trial to be set in November. No further continuances will be allowed.

5/19/2017

John Steele has been disbarred.

6/2/2017

The Government responded to Hansmeier’s pre-trial motion today, including his apoplectic motion to dismiss (see the 4/24 update above):

Defendant Hansmeier moves the court to dismiss Counts 1-17 of the Indictment. Hansmeier argues the detailed allegations set forth in the Indictment do not state an offense, and asserts the charges brought by the government impermissibly infringe on his “constitutionally-protected” right to engage in frivolous civil litigation. Unfortunately for Hansmeier, no such right exists. There is no safe harbor for fraud simply because one of the tools of the fraud involved litigation. Moreover, Hansmeier and his co-defendant, John Steele, did not simply file dubious lawsuits. They constructed an elaborate ruse designed to deceive people—state and federal judges as well as numerous victims who paid settlement fees to them—and, for that reason, violated the mail and wire fraud statutes. Hansmeier’s attempt to confuse this issue, through a convoluted 64-page memorandum wherein he pretends to champion the rights of unethical litigators and thereby create a strawman to save himself, should be rejected.

6/9/2017

Techdirt on the government’s response (6/2 update above):

6/17/2017

Yesterday Hansmeier replied to the government’s response. Oh, boy. His public defendant’s aggressive defense is admirable, but arguing that if Hansmeier’s frauds were prosecuted, the government would be able to criminally charge any plaintiff and its lawyers in any civil action against it? Seriously?

The question becomes, if the government’s theory of prosecution in the present case is viable, what is to stop the DOJ-Criminal Division from bypassing the civil process entirely and just bring criminal charges against these civil plaintiffs and their lawyers? As in the case at hand, the government could merely say there exist a number of undisclosed defenses to the asserted civil claims, and thus the civil litigation activities amount to fraud or extortion or some other creatively-chosen criminal statute. That approach has many advantages over making arguments in civil courts: the civil-plaintiffs-turned-criminal-defendants would suddenly be at a great tactical disadvantage; and the prospect of criminal prosecution and imprisonment would chill many from challenging the government through the civil courts.

Raul adds:

Hansmeier’s attorney conveniently neglects to mention that there have been countless prosecutions against cabals of attorneys, physicians and claims adjusters who conspire to use the court system to pursue fraudulent personal injury lawsuits. Workers Compensation fraud also comes to mind. I’m sure the list goes on but the obvious point is that a judge, in the midst of a civil lawsuit, referred Hansmeier for criminal investigation. This is not selective prosecution.

6/19/2017

The transcript of the 3/6/2017 John Steele’s change of plea hearing is now available.

7/27/2017

A hearing on miscellaneous both sides’ motions was held on 6/23/2017, and yesterday the judge issued her order, denying Hansmeier’s motion for a Bill of Particulars and granting/partially granting the other motions. Defendant’s motion to dismiss (#49, the subject of the recent updates above) is still under advisement.

I was amused by the word “current” in the following paragraph (emphasis is mine):

The government indicated at the hearing that it has already provided discovery regarding two potential areas of Rule 404(b) evidence: allegations related to Mr. Hansmeier’s bankruptcy filings and evidence of claimed misconduct related to Mr. Hansmeier’s involvement in Americans with Disabilities Act litigation. However, counsel for the government has not yet decided whether or to what extent they will seek to introduce such evidence at Mr. Hansmeier’s trial on the current indictment. The thirty day notice requirement will give counsel for Mr. Hansmeier adequate time to prepare any necessary motions in limine to the District Court regarding the admissibility of such evidence.

7/25/2017

Yesterday Magistrate Katherine Menendez recommended denying Hansmeier’s motion to dismiss (#49, the subject of the 6/17 update above):

If the indictment against Mr. Hansmeier read as he described in his briefing—and did nothing more than attempt to criminalize an aggressive approach to civil litigation—the Court would recommend that his motion to dismiss be granted. However, the indictment alleges far more than creative lawyering on the part of Mr. Hansmeier and his co-defendant, John Steele. The indictment describes a fraudulent scheme that, if proven, would violate the law and Mr. Hansmeier’s arguments to the contrary do not persuade the Court that the indictment is fatally flawed. Therefore, the Court recommends denial of the motion to dismiss.

[…]

Mr. Hansmeier’s motion to dismiss purports to raise interesting questions about how far the government can go to criminalize aggressive civil litigation tactics. But the indictment against him alleges clearly fraudulent behavior that goes far beyond creative lawyering, so the novel questions he has raised need not be answered in this case at this stage. Ultimately, the indictment contains sufficient allegations to establish conspiracy to commit mail and wire fraud, mail fraud, wire fraud, and money laundering if those allegations are proven beyond a reasonable doubt at trial.

8/04/2017

On 8/2/2017 Hansmeier moved to postpone the trial till after 4/23/2018, arguing that

Counsel for Mr. Hansmeier needs additional time to investigate and prepare for trial. The discovery is voluminous and as such requires more time to review. Further, the government attorneys have upcoming trials […].

(Hansmeier’s statement.)

According to the motion, the government doesn’t oppose, so expect the motion to be granted. Looks like a prolific law abuser continues to game the system even in the criminal defendant capacity. It is not clear how this postponement affects the sentencing of John Steele, which was purportedly contingent on his trial testimony against Paul.

One of the two Hansmeier’s counsel – Andrew H. Mohring — is no longer with the Office of the Federal Defender for the District of Minnesota, only Manny K. Atwal remains on the record.

8/14/2017

No surprise: the judge granted the continuance, excluding the period from the date of the order through April 23, 2018 from the Speedy Trial Act computations.

Today Hansmeier objected to Magistrate Katherine Menendez’s Report & Recommendations (on 7/26 she recommended to deny defendant’s “civil litigation sky is falling” motion to dismiss).

Interestingly (or not), the document metadata shows Eric Reinsche, a Minnesota federal public defender who is not on this case, as an author.

8/28/2017

Today the government responded to Hansmeier’s objections. Sweet and short.

The defendant’s objections alternately ignore and mischaracterize the Magistrate’s report and recommendation. To be clear, Judge Menendez did not “prune,” “cabin,” “strip away,” or “boil down” the allegations comprising the charged scheme to defraud. Quite the opposite, she unequivocally held that each of the allegations in the Indictment form an integral part of the scheme, and specifically rejected the reductive approach the defendant once again attempts to foist upon the court […]

[…]

In his objections, the defendant also attempts to relitigate the question of whether there exists a categorical bar to prosecutions arising from civil litigation. For the reasons set forth in the Magistrate Judge’s report and recommendation, as well as the government’s response to the defendant’s motion to dismiss, no such bar exists. The defendant presents no new arguments, and the government therefore relies on its previous response.

9/10/2017

On 9/8/2017 Judge Ericksen thoroughly rejected each and every Hansmeier’s argument and adopted magistrate’s Report and Recommendation, i.e.denied defendant’s motion for summary judgment. See you at trial, Paul. I’ll do my best to travel to Minnesota – to personally witness a long awaited moment when the jury announces the guilty verdict.

2/13/2018

On 1/16/2018 John Steele was allowed to move to Arizona:

The defendant was initially placed on courtesy pretrial supervision in the Southern District of Florida. The defendant complied with the conditions of release. On February 13, 2017, U.S. Magistrate Judge Kate M. Menendez approved of the defendant’s move to Bradford, Pennsylvania, to be closer to his ex-wife and their minor child. The defendant was hoping to reconcile with his exwife; however, the relationship has not improved. At this time, the defendant is requesting permission to relocate to Glendale, Arizona, to reside with his sister, Jayme Steele. Ms. Steele is aware of the instant offense and remains supportive of the defendant. Additionally, Ms. Steele is in the process of renovating her residence and the defendant intends to help with the renovations. According to the defendant’s supervising officer in Erie, Pennsylvania, he has remained compliant with all conditions of release.

As for Paul Hansmeier, Today Judge Eriksen set the trial date:

  • Trial briefs, voir dire questions, proposed jury instructions, and trial-related motions (including motions in limine) must be submitted by 5:00 p.m. on Friday, March 2, 2018.
  • Responses to trial-related motions (including motions in limine) must be submitted by 5:00 p.m. on Thursday, March 8, 2018.
  • A status conference: March 12, 2018, at 2:00 p.m. in Courtroom 12W (MPLS), before Judge Joan N. Ericksen. The government must submit its lists of prospective witnesses and prospective exhibits at this conference.
  • Trial: Monday, March 19, 2018, at 9:30 a.m. in Courtroom 12W (MPLS) before Judge Joan N. Ericksen.
3/3/2018

As expected, the delay game continued. On 2/20/208 the judge granted Hansmeier’s motion to postpone the trial till September 4, 2018:

[…] ORDERED that the trial scheduled for Monday, March 19, 2018, is CANCELLED and will now commence on Tuesday, September 4, 2018, at 9:30 a.m. in Courtroom 12W, Minneapolis, Minnesota.

A status conference will be held on August 27, 2018, at 9:30 a.m. in Courtroom 12W (MPLS), before Judge Joan N. Ericksen. The government must submit its lists of prospective witnesses and prospective exhibits at this conference.

Trial briefs, voir dire questions, proposed jury instructions, and trial-related motions (including motions in limine) must be submitted to Judge Ericksen’s chambers by 5:00 p.m. on Friday, August 10, 2018. Responses to trial-related motions (including motions in limine) must be submitted by 5:00 p.m. on Friday, August 17, 2018.

7/20/2018

Hold on: the plea change may not take place on Wednesday. Will update when more info is available.

The original update:

Looks like the feds finally cracked Paul: he is set to change plea (read: plea guilty) on 7/25/2018:

(Text-only) NOTICE OF SETTING CHANGE OF PLEA as to Paul R Hansmeier. Change of Plea Hearing set for 7/25/2018 at 09:30 AM in Courtroom 12W (MPLS) before Judge Joan N. Ericksen. (CBC) Modified text on 7/20/2018 (LEG). (Entered: 07/20/2018)

We should expect that the sentencing date for John Steele is to be set soon after.

8/17/2018

Today Paul Hansmeier pleaded guilty.

This is a conditional plea agreement, contingent on the outcome of Hansmeier’s appeal to the 8th Circuit:

His plea agreement allows him to withdraw the plea if he is successful in appealing the district court’s denial of his earlier motion to dismiss the case.

The chance that the appeal is successful is low, IMO. Hence, the next stop is sentencing. Buckle up, John. Buckle up, Paul.

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Discussion

101 responses to ‘Steele and Hansmeier have been finally indicted on fraud, money laundering charges’

  2. Love the timing. So I suppose all the feds snooping around these websites actually amounted to something. I can’t wait to see the actual indictment. Dan Browning’s article said that it has been unsealed, so hopefully we will have it soon.

    Now for the fun part. Federal prosecutions are usually called “first come, first served” justice. So who breaks first and takes the deal to testify against the other? My guess is that the attorneys for both are sprinting to the US Attorney’s office right now..

    Reply

    • Over the last couple of months I observed pagehits to Prenda stories from the DOJ IP addresses — almost daily. They could send me the complaint as a small “thank you.” 🙂

      Reply

    • Seems heavily implied in the indictment that Mark Lutz already broke. As the designated fall guy he was going to go down hard if he didn’t. I just hope he’s got a safe place to hole up in until the trial of Team Prenda.

      Reply

      • Also note that the initials B.G. appears as well, and I am sure that Brent Gibbs is B.G. and keeps would also have an acute knowledge of how the scheme worked, and remember Steele tried to throw Gibbs under the bus and muscle him into taking the wrap and Gibbs trotted out the Prenda finances we first saw details on, you can bet that Gibbs was more than happy to help and save his ass

        Reply

  3. A few real quick thoughts :

    1) How does bail/bond work if you are in bankruptcy? The federal magistrate is probably sorting that out right about now. I wonder where federal inmates are held in Minneapolis?

    2) They are facing some nasty charges. Remember how they got Al Capone on tax evasion? Conspiracy and Wire Fraud are the modern equivalents. The track record of those facing federal conspiracy counts is not good if you are the defendant. The natural instinct would be to blame Duffy for everything since he is dead. But with conspiracy charges, that will not matter. The only possible legal hole I see is the assertion that their actions effectively gave those who downloaded the videos permission. They might be able to attack that, and it might be enough to knock down a couple of the other counts, but they will still be stuck with the wire fraud and conspiracy counts.

    3) 99% (or close to that) of federal cases end up in a plea bargain. I don’t know what the potential sentence is with all the charges, but it would be getting close to life. As I said nasty charges. Their defense attorney is probably telling them right now that their only action is to be the first one to plead guilty. If one of them goes to trial, particularly if the other one is testifying against them, he is sunk. But given their track record, I don’t know if they are smart enough to take that advice.

    4) The interesting thing is to see how Hansmeier’s release (if any) is handled. It will be interesting to see who they get as defense counsel. Again with Hansmeier in bankruptcy, he might end up with a federal public defender. I expect we will get a statement by Steele’s attorney by the end of the day saying all of this is junk.

    5) If Dan Browning is reading this, I would love to know how federal detainees are handled in Minneapolis. That should be the next news wrt Hansmeier. My guess would be the Hennepin County Jail. But the feds sometimes contract with suburban counties (a good source of income), or the other four federal facilities in Minnesota may also hold pre-trial detainees.

    Reply

    • I doubt that Hansmeier will request a public defender.

      If nothing else, his wife and his father (both lawyers) will coordinate his defense. She can at least barter for an experienced lawyer to spend a few hours reviewing the strategy and filings. His father is an, uhmm, legal ethics specialist. He no doubt knows a criminal defense attorney that specializes in defending “formerly wealthy” people accused of financial fraud. (Their clients don’t have any money to pay, but somehow the firm manages to do quite well.)

      I expect that there is actually some money, somewhere, that can be tapped. We now have a number, $6M, that the feds can confirm was the revenue. If the $3M was split equally between Steele and Hansmeier, it seems that there is likely still some money stashed away. Remember, these guys were experts at utilizing obscure foreign trusts. It would be remarkable if they didn’t use a handful to set up “rainy day” and “ark building” accounts.

      Reply

    • Hans is out of jail and has a lawyer:

      Courtesy of Tom Lyden from FOX9 in MN

      Paul Hansmeier to be released this afternoon. No bail. Currently represented by Atty Joe Friedberg.

      Reply

      • Popehat tweeted what appears to be a cut-out from the docket screenshot (I still don’t see anything on PACER), which states that there was a bail, albeit small:

        Edit: “signature bond” does not require any cash deposit, so everyone is correct here.

        Reply

        • That is an incredibly light bond. As mentioned, he only has to pay the cash amount if he does not show up, there is no “cash down” or need to go through a bail bond company. I did a bit of asking around and it could mean one of two things: First, he is cooperating and that is the immediate reward. Second, it is the carrot to get him to cooperate.

          In theory, bond shouldn’t be determined by anything more than the likelihood you will flee. In reality, it is often based on how cooperative you are.

          Reply

  4. Any chance of uploading to something other than scribd? Don’t need another membership in order to print/download. If not, no worries.

    Reply

    • I’m not a fan of scribd either, yet currently it seems that this is the only way Wordpess.com allows to embed documents. Hope it will change. However, I always locally upload and link Scribd-embedded documents: click at the bold word “indicted” above.

      Reply

      • I don’t seem a problem with using scribd as an embed if you *also* include a direct link to the file itself for those who want to skip scribd. I wish more people
        would do as you do and include that link.

        Reply

  6. They deserve everything they ave coming to them. This is just the start of thing to come. I would not be suprised to see the Feds through in a RICO charge as this case meets and exceeds in my opinion the requirements for RICO.

    The USDOJ has added RICO to cases after the initial inducements were brought forth before in previous cases, So I wouldn’t be surprised to see that happen here.

    And I am sure the IRS Criminal Division is lurking around combing thru things and diligently wonder where all that cash went to and why a lot of it wasnt declared and sent offshore.

    If I were some folks in Germany, California, and Florida I wouldnt be sleeping so well, while there may be real clients involved unlike the shams made by the Prenda gang all the hallmarks of Prenda tactics are there and I am sure the FBI will be looking at other trolls very very carefully as will the IRS

    Reply

    • Doesn’t look like it – seems that some of them are adamant that Steele and Hansmeier were fighting the good fight, and are convinced that they will walk away from it. A lot of it sounds like the apologism by Q. Boyer that SJD posted in 2014.

      Reply

  8. Well I know John likes to visit FCT and read all about himself, so john here is that picture collage you put on YouTube of your wedding night so you and Hans can remember the good times before you both go to the pen

    P.S. if you stop the video at 24 seconds you will see Hans smiling away, cant miss that chin by a mile

    Reply

    • No comment!

      And look at the glee in the reporter who has been following Hansy’s scam, you can see how much he’s enjoying the wheels of justice grinding on.

      Reply

  11. From WSJ:

    An attorney for Mr. Steele said he plans to plead not guilty. “My client has known about this investigation for over a year and, with my assistance, has thoroughly cooperated with the federal government throughout,” attorney Mark Eiglarsh said. “He passionately maintains his innocence and intends to vigorously contest the charges.”

    Reply

    • > “He passionately maintains his innocence and intends to vigorously contest the charges.”

      Yay! For a moment I was worried that Shithead was going to cut a deal and get some light or even no jail time.

      Fight you miserable troll fuck! Spend more time and money lying and scamming and trying to evade justice. When the hammer comes down on you and your loathsome partners in crime it will be that much harder.

      Put his head on a spike as a warning to all the other trolls; this is your eventual fate.

      Reply

      • “Yay! For a moment I was worried that Shithead was going to cut a deal and get some light or even no jail time.”

        Saying you are going to fight can also be a negotiating position to try to get a better plea. So, no way to be sure what Steele will do. On the other hand, the smug arrogant crook acts in ways that seem consistent with sociopathy, so I would be totally unsurprising if he thinks he can talk his way out of this in criminal court. I hope he tries and fails miserably.

        Reply

  14. With the amount of detail in the indictment, I don’t think Steele is going to be able to talk himself out of jail time. I do see him talking his way out of a trial, however, as the indictment says the feds know exactly what he did and when he did it, and they are able to bury it under a small mountain of evidence and witnesses.

    Unless…unless…he turns on the german masterminds, Guardaley/Acache, who supplied all the pieces to make “smarter than the average bear” a millionaire.

    I think Brett Gibbs turned states evidence long ago, part of keeping his law license.

    Reply

    • I believe Prenda was one of the few trolls who didn’t use the Germans. They had their own firm ran my Peter Hansmeier. I’ve never heard anyone say it was just another front for the Guardaley group. I think the software they used was just a slightly modified BT client.

      Reply

  15. Looks like Steele’s new “home” is more befitting his current status. The address is a trailer park disclosed in court minutes document Page 12 of 16 in the receipt scan showing he paid $10,000 of the $100,000 bond by check. Older Google maps shows mainly empty empty, but satellite view shows many are filled now, including the one at Steele’s supposed address.

    Reply

  16. Every time I see a pic of Steele I get so angry. He just looks like a d-bag lawyer. I just know if you met the guy in person your skin would crawl and you’d say to yourself “This guy’s fucking crooked.”

    Reply

  17. The other amazing thing, Anonymous, is who Steele got to be surety for his $100,000 bond: Kerry Steele, his ex-wife. I wonder how that conversation went.

    “Uh, can you do me a favor, hun? Drive down to the courthouse and agree to be on the hook for a hundred huge, please. Love ya! “

    Reply

  19. According to the case docket, Hansmeier is now being represented by a Federal “public defender.” So what is going on?

    1) The thing that comes immediately to mind is when his bankruptcy attorney fired him after concluding that she would not be able to represent him without violating the rules of professional conduct and/or the law. So did Joe Friedberg fire him after reaching the same conclusion?

    2) The hits keep coming for Hansmeier. Sanctions, bankruptcy, suspension, this criminal case, and now likely another criminal case related to his ADA work and surely a related civil suit. It is one thing to invest (or have your relations invest) in an attorney to get the best deal if that is the only thing you are facing. It is quite another to know that even if you do that you are still facing another stream of charges.

    3) So was it the other way around and Hansmeier fired Friedberg after getting some frank advice? One of the best things a criminal defense attorney can do for this client is be perfectly honest. If things work like they are supposed to, then it is likely that Friedberg advised Hansmeier that there was no chance of him winning the case and all that was left was to do the plea agreement.

    4) So, if you have made the decision to plead guilty, is it worthwhile to pay a high power defense attorney north of $300/hr to do the negotiations? In the federal system, I would say no. If it is a state charge, then the answer would be very different.

    The federal system is generally the top of the heap of the justice system. Federal judges are generally of a higher caliber than their state counterparts, the same is true from prosecutors to prison guards. The resources are far better, the pay better, the workload better and the cases usually a bit more interesting.

    Federal “public defenders” continue that trend. They are generally better qualified, have more resources, and have a caseload that is merely “overwhelming” as opposed to “unimaginably overwhelming.” If there is a question of factual or legal innocence that needs to be litigated, I would go with a private attorney, but if you have already made the decision to plead guilty, a federal public defender is probably going to negotiate as good a deal as you are going to get. Or at least $50K is an awful lot to pay for a 3 month shorter sentence.

    It is possible that Hansmeier is being represented by the “Federal Defender” as a stop-gap measure until he finds another private attorney. There basically always has to be an attorney on record for a criminal defendant, so this appointment could be a formality.

    Or it could mean that plea negotiations for Hansmeier are pretty advanced. If I was Steele I would be nervous…

    Reply

    • A reporter told me that he reached out to Joe Friedberg, who declined to comment; Friedberg said that he is not sure Hansmeier has enough money to hire him. That took place right after the indictment, before the ADA news.

      Reply

    • Is it also possible that the bankruptcy trustee said that there is no way he can use any of his assets for hiring an attorney.

      Reply

  22. Doc 22 is from today is the wrong doc, a dismissal and not an appearance of counsel…though I admit it seems like a humorously freudian slip!

    Reply

  23. Of course he’s from Woodbury.

    If you know live here, you know. aka the shit-stain of I694 and 94. this dude has a HUGE traffic violations list which shows he thought he was above the law since 96.

    May fav is in the mn court records he has both a felony level drug charge *over 10 grams of weed*, multiple DWIs, and was CONVICTED of assault domestic. Don’t believe me? look it up yourself mncourt access is up!

    BTW I work for MNcourt system, and proud to say, I’m reasonable for SSL as of 2017! Woot!

    btw, don’t feel bad for this asshat. He put away a few ppl working as an associate for petty drug crimes (before legalization in MN). Irony, is he got his FELONY down to a petty level 5 (lowest possible drug charge here).

    LOL WUT?

    If interested, a .torrent of ALL his legal cases is going to go public.. soon 🙂 again, MNcourts prior to 2016 was using PLAINTEXT LOLOLOLOLOL no mD5, no noth’n and especially no https, no 2-factor, 128 out of date, etc. 4096? lol wut?

    he’s probably gonna get it down to “time served” but the damage to his legal career is done. I’m looking forward to seeing him work at the Woodbury Best Buy, assuming he can pass a piss test.

    I’m going to sit in the front row! WOOT! MN NICE 😀

    Reply

  25. Its pretty much the knowledge in Minnesota that Woodbury is only second to the douche capital of Minnesota. The first is Augsburg College. OL TARGET CORP, BESTBUY and TCIF J3WZ CAN SUCK MY BALLZ

    Reply

      • you forgot the tacanite mining fanboiz

        FUCK IRON MINING ASSHOLEZ FUCK CANADIAN PACIFIC RAIL ROAD FUCK DULUTH MINING CORP

        AND MOST IMPORTANTLY GO FUCK “CLEAN ETHANOL”

        FUCK HOLIDAY SUPER STORES, GO FUCK YOURSELF T-PAW

        lol Gasoline under Obummer under 2$. LOL GOES UP to 2.75 AS THESE IDIOTS BUY 60k + SILVERADOS… DURRRR CREDIT’S CHEEEEEPPPP GAS GONNA STAY CHEEEP FOREVAR

        durrr political correctness limits my ability to drink and live in my loveless marriage

        durrrr Trump 2016 durrrrrrr Gas is CHEEEEP (yes cheap spelled this way intentionally)

        durrrrrr

        sums up Minneosta about right

        GO FUCK YOURSELF MIDWESTERN SCUM

        keep your stick on the ice 😀

        Reply

  26. 71-TX-96-005014
    SC 070604
    SC 070604
    SC 070604
    SC 070604
    SC 070604
    SC 070604

    HANSMEIER, PAUL ROLAND
    01/12/1980

    06/19/1996
    Sherburne

    Driving Intoxicated
    Converted Closed

    DUI A
    Dismissed
    DUI D
    Guilty
    DUI E
    Dismissed
    OPEN BOTTLE
    Dismissed
    MINOR CONSUMPTION
    Dismissed
    MINOR POSSESSION
    Dismissed
    71-T1-99-000816
    SC 099540

    HANSMEIER, PAUL ROLAND
    01/12/1980

    01/29/1999
    Sherburne

    Non- Traffic Misdemeanor
    Converted Closed

    MINOR
    Guilty
    05-K3-99-000545
    HANSMEIER, PAUL ROLAND
    01/12/1980

    05/12/1999
    Benton
    Hoolihan, James W.

    Misdemeanor
    Converted Closed

    MSD 5TH DEG CONT SUB (Aid/Abet – GOC)
    Convicted
    71-T1-05-009588
    SC 153935

    HANSMEIER, PAUL ROLAND
    01/12/1980

    10/20/2005
    Sherburne

    Speeding-Petty Misd
    Converted Closed

    64/55
    Guilty
    49-T1-05-003599
    SK 001941

    HANSMEIER, PAUL ROLAND
    01/12/1980

    12/16/2005
    Morrison

    Moving – Petty Misd
    Converted Closed

    FAIL TO YIELD ONCOMING TR
    Guilty
    86-CR-06-1946
    wc 284202
    wc 284202

    HANSMEIER, PAUL ROLAND
    01/12/1980

    04/26/2006
    Wright

    Crim/Traf Mandatory
    Closed

    Traffic Regulation – Vehicle Owner Who Is Not Driver-Fail to Produce Proof of Insurance
    Dismissed
    Traffic Regulation – Vehicle Registration – License Plate Violation
    Convicted
    73-T0-06-020934
    T006020934

    HANSMEIER, PAUL ROLAND
    01/12/1980

    10/26/2006
    Stearns
    Grunke, Frederick L.

    Non- Traffic Misdemeanor
    Closed

    Contempt of Court – Willful Disobedience to Court Mandate
    Convicted
    Level Of Sentence Unavailable/ Sentenced
    73-T0-06-022134
    T006022134

    HANSMEIER, PAUL ROLAND
    01/12/1980

    11/09/2006
    Stearns
    Grunke, Frederick L.

    Domestic Assault – TRF
    Closed

    Domestic Assault-Misdemeanor-Intentionally Inflicts/Attempts to Inflict Bodily Harm
    Convicted
    Convicted of a Misdemeanor
    05-CR-07-872
    HANSMEIER, PAUL ROLAND
    01/12/1980

    04/09/2007
    Benton
    Jesse, Michael S.

    Crim/Traf Mandatory
    Closed

    Drugs – 5th Degree – Possess Schedule 1,2,3,4 – Not Small Amount Marijuana
    Convicted
    Conviction deemed a Gross Misdemeanor pursuant to M.S. 609.13
    71-VB-07-4371
    SC165964

    HANSMEIER, PAUL ROLAND
    01/12/1980

    07/19/2007
    Sherburne

    Crim/Traf Non-Mand
    Closed

    Traffic – Speeding – Exceed Limit
    Convicted
    05-VB-09-499
    S09 39562

    HANSMEIER, PAUL RONALD
    01/12/1980

    05/29/2009
    Benton

    Crim/Traf Non-Mand
    Closed-Physical File Destroyed

    Traffic Regulations-Failure to stop for traffic control signal
    Convicted
    Convicted of a Petty Misdemeanor
    28-CR-12-872
    Hansmeier, Paul Francis
    05/08/1987

    09/12/2012
    Houston

    Crim/Traf Mandatory
    Closed

    Traffic – DWI – Operate Motor Vehicle Under Influence of Alcohol
    Dismissed
    Traffic – DWI – Operate Motor Vehicle – Alcohol Concentration 0.08 Within 2 Hours
    Dismissed
    Traffic – DWI – Operate Motor Vehicle – Alcohol Concentration 0.08 Within 2 Hours
    Convicted
    Convicted of a Misdemeanor
    73-VB-13-3925
    730413000830

    HANSMEIER, PAUL ROLAND
    01/12/1980

    04/15/2013
    Stearns

    Crim/Traf Non-Mand
    Closed

    EQUIPMENT – IMPROPERLY WORN SEATBELT
    Convicted
    Convicted of a Petty Misdemeanor
    71-VB-13-6595
    710013003557

    HANSMEIER, PAUL ROLAND
    01/12/1980

    12/16/2013
    Sherburne

    Crim/Traf Non-Mand
    Closed

    PMisd-Speeding – Exceed Limit 65/55
    Convicted
    Convicted of a Petty Misdemeanor
    73-VB-15-4446
    730000015376
    730000015376

    HANSMEIER, PAUL ROLAND
    01/12/1980

    04/27/2015
    Stearns

    Crim/Traf Non-Mand
    Closed

    Traffic Regulations – Failure to obey traffic control device
    Dismissed
    Traffic – Speeding – Exceed Limit 50/35
    Convicted
    Convicted of a Petty Misdemeanor

    LOL IDIOTS

    Reply

  27. Drugs – 5th Degree – Possess Schedule 1,2,3,4 – Not Small Amount Marijuana
    Convicted

    Conviction deemed a Gross Misdemeanor pursuant to M.S. 609.13
    71-VB-07-4371
    SC165964

    HANSMEIER, PAUL ROLAND
    01/12/1980

    Must be nice to be from the upper middle class

    Reply

      • That’s… a bit of a downer, if it means Steele getting any penalties reduced.

        IANAL, but how much lighter would Steele’s potential punishments be?

        Reply

        • Steele has managed to weasel out of stuff for decades. This time does not surprise me at all, but hoping he finally gets some prison time just the same or he will just continue his history of cons. At least in pleading to 1 and &17 counts it admits he knowingly scammed and collected money for it. There is no way I would believe it was Hans idea – Steele held the purse strings and has history of ripping people off since before he became a lawyer. I do think he’s saving his own butt and throwing Hans and anyone else under the bus to do it.

          Reply

  30. The most important sentence: “The parties are to keep the Court apprised of when sentencing may be suitable, given the Defendant’s anticipated cooperation in a related case.”

    Translation: Hansmeier is screwed. There is a reason they call the Federal criminal justice system “first come, first served” justice.

    Reply

  31. I wonder if the real clients they had, where they uploaded the clients film to Pirate Bay, etc. and then charged the client for filing lawsuits ,have just cause for suits against them as individuals? Neither of them should get away without prison terms. They not only ripped off individual does, clients and our court system, but did it as officers of the court playing the system. The time for consequences is at hand. JUST think of the valuable path many of you provided in your conjecture, sleuthing and willingness to state the facts as you saw them to the DOJ, FBI, etc to bring these con men down, Peter and Mark should also pay a price. Let’s hope the IRS is waiting for all in the wings since this plea.
    Steele and Hans – WELCOME TO THE REALLY BIG LEAGUES – time to GOVERN YOURSELF ACCORDINGLY while wiping that egg and crow off your faces.

    THANKS SJD for being the voice that finally was heard by those who could stop these cons.

    Reply

  32. I am looking forward to the episode of American Greed in the future. I wonder if there will be consequences for the Lightspeed Greedia guy.

    Reply

  33. Illinois, ITS TIME TO ACT! The bar compliant was in August 2015 I believe and they still have not disbarred STEELE. What are they waiting for?

    Steele’s scam with the porn is really only a continuation of what his whole career has been.

    STEELE, HANSMEIER, DUFFY and crew being brought down was kind of IT TAKES A VILLAGE. Many Does & non DOES, worked diligently to gather evidence and pass it on to the blogs; Fight Copyright Trolls, Die Troll Die, Popehat, etc. so they could post. Without EVERYONE pulling together and the blogs, the DOES would not have had a way to know anything about the scams. Attorney’s representing the DOES would not have had the information that could help them defend. The prosecutors had a good place to start for their investigation with all the information available on the blogs including docs. SJD and DTD did a superb job investigating, reporting and sharing the information. Kudos.

    MY SINCERE THANK YOU to ALL of the many people who participated in the long fight (years) to bring justice into the light.

    Reply

  34. JUST CHECKED ARDC on Steele and an AMENDED SECOND COMPLIANT was filed on January 31, 2017 that includes some charges and actions through 2016. Its long or I would have copied and posted. Perhaps SJD can grab it and post. It’s a full fledged list of the stuff they pulled. Illinois needs to get with the program now that Steele has plead out on the Federal charges. I did note something in the compliant that made me wonder if Steele sold out Hansmeier because Steele wound up being responsible for paying the debt of the three attorneys as he was last man standing.

    “Steele, as the last man standing, felt aggrieved at the possibility of being held responsible for all of Smith’s costs. He feels he should not have to pick up the bill for Duffy and Hansmeier. But, the attorneys acted in concert to mislead this court. Steele and Hansmeier fraudulently alleged insolvency. Steele and Duffy then obstructed discovery in an effort to conceal Steele and Hansmeier’s misrepresentations and to avoid paying the fine. The attorneys are jointly and severally liable for the misconduct. Finally the Court believes it has authority to impose additional costs on Steele to compensate the taxpayers for the time the Court has spent resolving matter pertaining to the attorneys misconduct.”

    Also in the record was the information regarding the Cooper lawsuit. Cooper was awarded 2$255,000.00

    This Amended complaint is worth the read.

    Reply

  35. He states his theory up front: “Prosecutors ought not be allowed to ground criminal fraud or analogous charges upon someone’s exercise of constitutionally protected civil litigation activities.”

    To mis-quote Nixon, “If a lawyer does, that means it is not illegal”.

    I think that this sums up his viewpoint and actions. Lawyers are above the law. They get to use the power of the court, but are never bound by the law. If they are clever enough, keep up motion practice, and appeal any loss, they can ultimately avoid repercussions for their actions.

    Reply

  36. It’s nice to know that John can’t hide behind the twists and turns of the law, but disbarring hardly sounds like much of a comeuppance, to be honest.

    Reply

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