Former Illinois attorney sentenced to five years in prison for porn troll scheme

A federal judge in Minneapolis sentenced former attorney John Steele Tuesday to five years in prison for playing a key role in a multimillion-dollar porn trolling scheme, just weeks after sentencing his former law partner to 14 years in prison.

After the two were indicted in December 2016 on fraud, money laundering and perjury charges, Steele promptly offered his full cooperation, shocking federal prosecutors with his candor, which they said likely proved key in getting Paul Hansmeier, the mastermind of the scheme, to reluctantly plead guilty to fraud and money laundering conspiracy charges.

U.S. District Judge Joan Ericksen said the federal sentencing guidelines recommended a sentence of slightly more than 10 years to 12½ years for what she called a "vile scheme" to enlist the courts to extort legal settlements from people suspected of downloading pornography that the defendants themselves had uploaded to file-sharing sites on the internet.

She then gave Steele a chance to speak.

Steele, 48, noted the irony that it was 11 years ago to the day that he was admitted to the Illinois bar association to practice law. After a career selling homes and teaching computer classes in Florida, Steele said, he made three "stupid decisions" that led him to Tuesday's sentencing.

First, he said, he enrolled at the University of Minnesota Law School at the age of 37 without any sense of mission other than making money. It was there that he met and befriended Hansmeier, which led to a second poor decision in April 2010.

"I'll never forget that day," Steele said, choking up. "I received a call from Paul Hansmeier about an idea he had about seeding pornography content online."

The third bad decision came when federal judges around the country began questioning Hansmeier's and Steele's methods of filing hundreds of lawsuits to identify the owners of computers that were used to download pornography so that they could pressure them to settle to avoid public humiliation.

Steele said he could have told the judges the truth but opted to blame others and hide behind offshore companies that had technical ownership of the copyrights on the movies.

But after he was charged, he said he told his attorney that he wanted to come clean even before he learned what evidence the authorities had against them.

He said he went back to building and rehabbing homes and began studying stoicism. He said for the past couple of years he has been working for one of his sisters in Phoenix.

"I'm trying to live a life of virtue," Steele said. "All I can control is obviously the thoughts and actions now and in the future. I think it's important that I stand here today and look at you and apologize."

Assistant U.S. Attorney Benjamin Langner noted the stark difference between Steele's reaction to being charged and Hansmeier's. He said Steele's decision to plead guilty was the most significant factor in getting Hansmeier to issue a conditional guilty plea, in which he held out the possibility of challenging the basis of the charges.

Langner said Steele's cooperation was extraordinary, particularly for an intelligent defendant charged in white collar crimes.

Langner recommended a sentence of five years in prison.

Steele's attorney, Mark Eiglarsh, said he agreed that his client's actions were stupid.

"Several other words come to mind, like reprehensible, abhorrent and criminal," Eiglarsh said. "I wish I did not like John as much as I do."

He explained that Steele offered to cooperate immediately after he was indicted.

"It was almost like he wanted to go to confession," Eiglarsh said. "He jumped in headfirst."

That cooperation made it impossible for Hansmeier to claim he was acting in good faith in filing the porn trolling lawsuits, he said.

Judge Ericksen told Steele that his crime was extremely serious.

"You abused the court system, as you say, for your personal ends," she said, adding that the courts "are not a tool in the box for anybody's hustle."

Even so, Ericksen agreed with prosecutors that given Steele's cooperation and efforts to turn his life around, five years in prison was "eminently fair." She also made him jointly and severally liable, together with Hansmeier, for restitution of $1,541,527.37, and placed him on supervised release for two years after his release.

"I condemn the actions that you took in committing this crime. I congratulate you, however, on the actions you took" in responding to the charges, Ericksen said.

Dan Browning • 612-673-4493