A scheme using pornography and copyright law for extortion earned two lawyers $3 million and federal prison time.
Of course, there’s a Miami connection.
That connection isn’t through John L. Steele, 48, though the Justice Department identified him as “Florida attorney” in announcing his five-year sentence for conspiracy to commit mail fraud and wire fraud and conspiracy to commit money laundering. Steele, disbarred in Illinois over this scheme, doesn’t turn up anywhere among the Florida Bar’s current or disbarred attorneys. Online searches link him to a couple of Bayshore Drive addresses in Miami.
Steele’s partner in law and crime, Paul Hansmeier, got 14 years on the same charges. Like Steele, he also owes $1,541.527.37 in restitution.
They started working the copyright lawsuit scam in April 2011, as described in the plea agreement:
“The defendants used sham entities they controlled to obtain copyrights to pornographic movies, some of which they filmed themselves.”
That’s where Miami comes in — Steele and Hansmeier shot their self-produced movies in Miami, Chicago and Las Vegas.
“The defendants then uploaded the movies to file-sharing websites (such as “Pirate Bay”) hoping to lure people into downloading their movies,” the admission continues. “When Steele and Hansmeier ensnared someone in their trap, they filed false and deceptive copyright infringement lawsuits that concealed their role in distributing the movies, as well as their significant personal stack in the outcome of litigation.”
When they were able to track down the IP address through which the movie got downloaded, they extorted folks who were too embarrassed, socially or financially, to mount a defense. If they met resistance from the person they sued, they dropped the lawsuit.
Later, they filed lawsuits for their company, Guava LLC, and other firms that claimed the companies’ computer systems had been hacked. Except no such systems existed. Sometimes, even the defendants in the lawsuits were straw defendants paid by Steele and Hansmeier.
These lawsuits were just another way to use a lawsuit’s discovery phase to get IP address subscriber information for people who downloaded their pornographic flicks through file-sharing sites.
Courts began to catch on to the scheme in 2013. A federal court in California awarded attorney’s fees to the defendant Steele and Hansmeier sued, told their state supreme courts about the scheme and made sure all the judges handling their pending copyright cases knew the duo’s scam.
To limit the damage, Steele and Hansmeier recruited people to go into hearings and commit perjury by acting as “corporate representative of Sunlust Pictures” or “Vice President in charge of legal matters for Guava.”