Federal prosecutors invite victims to claim restitution from scorned lawyer's porn troll scheme

Federal prosecutors say the disgraced Minneapolis lawyer Paul Hansmeier should spend more than a dozen years in prison for concocting an elaborate scheme to seed the internet with pornography so that he and his partners could sue those who downloaded it.

Now, U.S. Attorney Erica H. MacDonald wants anyone who paid Hansmeier and company to settle what she calls these "sham pornography film copyright infringement" cases to file claims for restitution.

That could add up to several million dollars.

Hansmeier and his onetime law partner, John Steele, are scheduled for sentencing June 4 before U.S. District Judge Joan Ericksen.

The two men were convicted of running a multimillion dollar fraud scheme from 2011 to 2014 in which they extracted settlements from hundreds of people who feared being exposed as pornography consumers.

The settlements were set low enough that it would typically cost defendants more to fight the cases than to make the payments.

When federal judges grew suspicious of the scheme, Hansmeier lied to them and coerced others to mislead them as well, federal prosecutors wrote in pre-sentencing documents.

"While John Steele assumed an equal partnership in the settlement mill, Steele primarily handled the business side of operations — interacting with clients, organizing business entities, collecting payments, producing [pornographic] movies, and paying bills. Steele was the brash frontman whose false bravado and half-truths drew the ire of defense attorneys and judges, but witnesses repeatedly identified Hansmeier as the Machiavellian presence behind the scenes directing the creation and dissemination of false statements to courts," wrote Assistant U.S. Attorneys Benjamin Langner and David MacLaughlin.

Steele pleaded guilty a few months after he was indicted in December 2016 and cooperated fully in the investigation, prosecutors say.

Although he faces up to 10 years in federal prison under the advisory sentencing guidelines, prosecutors plan to file a letter with the court outlining his cooperation and making a recommendation for a reduced sentences.

Hansmeier pleaded guilty in August 2018, but prosecutors argue that his successive legal maneuvers, money laundering and use of proxies and sham companies to conceal his culpability warrants a prison sentence of 12½ years — well within the guidelines range of 11 to 14 years.

"In summary, Hansmeier was greedy, arrogant, devious, mendacious, and consistently positioned other people to be damaged by his conduct, even as he enjoyed the proceeds of the scheme he orchestrated.

Even now, Hansmeier continues to accept responsibility only in conditional terms, hoping to convince the appeals court that his shocking abuse of his position of trust as a Minnesota attorney, and an officer of its courts, was somehow legal," prosecutors wrote.

The U.S. Attorney's office recently issued an statement soliciting victims of the scheme to step forward and claim compensation.

Victims of the scheme who paid money to the following entities including but not limited to Steele Hansmeier Law, Prenda Law, Alpha Law, Anti-Piracy Group, AF Holdings, Ingenuity 13, Guava LLC, Livewire and LW Systems should visit hansmeier.usaocrimevictims.org to obtain information about how to make a claim for restitution in this case."

Victim information will not be publicly disclosed.

Dan Browning • 612-673-4493