A lawyer who made his own pornography, offered the salacious material on an illegal website, and then threatened to sue the people who downloaded the material, pled guilty in federal court Monday to fraud and money laundering.
John Steele, along with co-defendant Paul Hansmeier, are both attorneys and allegedly made more than $6 million through the blackmailing scheme.
“Steele admitted that he and Hansmeier created a series of sham entities to obtain copyrights to pornographic movies – some of which they filmed themselves – and then uploaded those movies to file-sharing websites like ‘The Pirate Bay’ in order to lure people to download the movies,” according to an official Department of Justice (DOJ) press release.
Steele and Hansmeier subpoenaed internet service providers (ISPs) to get the personal information of the people who downloaded their porn.
“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 stake in the outcome of the litigation,” the official legal document reads.
Steele and Hansmeier would allegedly pressure “victims with enormous financial penalties and public embarrassment unless the agreed to pay a $3,000 settlement fee,” according to the DOJ.
“When these individuals did fight back, the defendants dismissed the lawsuits rather than risk their scheme being unearthed,” the document continues.
They were eventually caught after courts began to become suspicious of the number of requests to subpoena ISPs and the frequency of lawsuit dismissals. A judge for the U.S. District Court of the Central District of California sanctioned the defendants in 2013, leading to further law enforcement investigations.
Steele agreed to plead guilty to conspiracy to commit mail fraud, conspiracy to commit money laundering, and wire fraud before U.S. District Judge Joan N. Ericksen of the District of Minnesota. His sentencing has not yet been scheduled.
Hansmeier was also arrested and charged, but his case has yet to be resolved.
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