Internet porn extortionist pleads guilty
An attorney who extorted money from people who had downloaded pornography from the internet has pleaded guilty to federal money laundering and fraud charges.
In a plea deal with federal prosecutors, John Steele admitted that he and another lawyer, Paul Hansmeier, uploaded porn to the internet. They then filed false and deceptive copyright infringement lawsuits against people who transferred the material to their computers.
The two University of Minnesota law school graduates were among the internet's most reviled "porn copyright trolls." Prosecutors say that between 2010 and 2014 Steele and Hansmeier received more than $6 million in settlement payments. Some victims fought. But many were embarrassed by the accusations or could not afford a legal fight. So, they would settle for a few thousand dollars.
Steele will be ordered to pay restitution and could be sentenced to decades in prison.
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"My client is extremely remorseful and has fully accepted responsibility for what he did," said Steele's attorney, Mark Eiglarsh. "He's cooperating with the government and hopes he can put this behind him.
Steele may receive a break in sentencing for helping with the prosecution of his former partner, Hansmeier, who has pleaded not guilty.
Steele has said he got the idea to pursue illegal porn downloads when he was in law school.
"Me and my partner were the first ones to ever really do it, " he said in a 2013 interview with MPR News.
In the interview, Steele said he had gone after a few thousand people for downloading allegedly pirated porn, and total collections from them were in the seven figures. Most, he said, choose to settle out of court. At the time, Steele insisted that the cases were legitimate efforts to defend clients' rights to be paid for their property.
"I'm an attorney," he said. "I would say strenuously that we follow the law when we pursue these people."
But in May of 2013, a federal judge in California disagreed, concluding that Steele and some associates were the de facto owners of some companies formed for the sole purpose of pursuing copyright infringement cases. The judge said the firms' only assets were the copyrights on some pornographic movies.