The US 8th Circuit Court of Appeals has ruled today that Paul Hansmeier must indeed pay back more than $1.5M in restitution for his Prenda law activities. The former lawyer who filed his appeal in late 2019 while serving his 14 year prison sentence, did not convince the court that his scheme was not criminal, or that the amount he had to pay back was too much.
In copyright litigation, there are few stories that have such a roller-coaster tale to them as what’s become known as the Prenda Law saga. A tale of two lawyers, battling hard in the fight to make those that infringe copyright pay, might be a great tagline for a movie, but the reality was quite different.
Between 2010 and 2015, the duo of Paul Hansmeier and John Steele boasted that they were finally making pirates pay, banking millions as they litigated against hundreds of thousands of people across the US.
Then it all started falling apart when people began to fight back, and before long they’d aroused the suspicions (and in some cases, the ire) of certain judges, resulting in a countersuit which eventually exposed the lawyers as being the original uploaders, exposing the duo to charges for mail and wire fraud, money laundering, and perjury.
The duo pled guilty in the end, but Hansmeier reserved the right to appeal in his guilty plea on two of the charges, which he exercised in the autumn of 2019, claiming that a motion to dismiss 17 of the 18 charges (all but the perjury charge) he faced was dismissed in error, and that the $1,541,527.37 restitution amount was too high.
The appeals court has now released it’s opinion on the appeal, and it’s not good for the former lawyer. On the restitution figure, it notes that while it was clear that during the time they operated their scheme, they received over $6 Million from those they targeted, the $1.5M figure was calculated by the FBI based on settlements received after April 2011 – when they started using their own original movie “Sexual Obsession” that they themselves put on torrent sites – and only includes payments that they could specifically link to people “suggesting that his [FBI Agent Jared Kary, who performed the restitution calculation] estimate might in fact have been under-inclusive of the total amount Hansmeier and Steele received from their fraud scheme.” So the court lets it stand.
As far as not dismissing the case as he wanted, the appeals court is quick, thorough and brutal. In 5 scant pages it goes through a brief overview of the scheme, noting that the actions of Hansmeier were specifically designed to hide the criminal activities, and so the claims it should have been dismissed are a complete non-starter.
If you want to know how judges feel about his actions, this description of Hans’ actions by the now-late Judge Harry Pregerson from 2015 should tell you everything.
It’s a blow to Hansmeier, but can hardly be an unexpected one. It’s also going to have negative implications for his latest venture, another copyright honeypot scheme, which he looked to start up at the end of last year. That looks increasingly unlikely now.
A copy of the court’s verdict is available here (pdf)