Feds charge lawyers in major fraud, extortion case

MINNEAPOLIS (KMSP) - A controversial Twin Cities lawyer and his partner have been indicted in a multimillion-fraud and extortion conspiracy scheme.

On Friday, U.S. Attorney Andy Luger announced a federal indictment charging Paul Hansmeier and John Steele with conspiring to fraudulently obtain millions of dollars by deceiving federal and state courts.  

According to the indictment, between 2011 and 2014, the defendants orchestrated an elaborate scheme to steal millions of dollars by threatening copyright lawsuits against individuals who supposedly downloaded pornographic movies from file-sharing websites. The defendants created and used 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.

Hansmeier and Steele made approximately $6 million by the fraudulent copyright lawsuits they filed.

“The charges announced today describe a fraud scheme perpetrated by lawyers and officers of the court who abused their positions of trust for personal enrichment,” said Special Agent in Charge of the FBI Minneapolis Division Richard T. Thornton. “The FBI remains committed to uncovering fraud such as this to protect the integrity of our civil justice system.”

The Minnesota Supreme Court suspended Hansmeier’s law license back in September due to ethics violations.

Earlier this month, Hansmeier’s wife, Padraigin Browne, started to run her husband’s business under a new name.