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Second banana in porn troll case gets five years

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John Steele, left, and his attorney Mark Eiglarsh
John Steele, left, and his attorney Mark Eiglarsh on Tuesday. Steele was sentenced to five years in prison for a scam in which he and a co-conspirator threatened people with bogus copyright lawsuits for allegedly downloading pornographic videos.
Martin Moylan | MPR News

A federal judge in Minneapolis handed down a five-year prison sentence for a former attorney John Steele, who extorted money from people who were accused of downloading video porn as part of the scam.  

"The crime you committed was extremely serious," U.S. District Court Judge Joan Ericksen told Steele. "You abused the court system."

But she said she appreciated Steele's cooperation in prosecuting a co-conspirator in the fraud case and said that Steele seems to be a person who can change for the better.

Between 2011 and 2014, Steele and fellow lawyer Paul Hansmeier, obtained copyrights on pornographic movies and then uploaded them to file-sharing websites. Then the two lawyers waited for people to download the porn.  

Hansmeier and Steele would subpoena internet service providers for the identity of subscribers that they suspected of transferring the porn to their computers.  

The attorneys threatened those subscribers with sham copyright infringement lawsuits, saying they would face huge financial penalties and public embarrassment unless they paid a $3,000 settlement fee.  

The 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 $3 million in settlement payments. Previously, the government has said the two men garnered $6 million.

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.

Assistant U.S. Attorney Ben Langner said Steele's cooperation was crucial to getting Hansmeier to plead guilty and that Steele  deserved a much shorter sentence that the 14 years Hansmeier got for the fraud. 

Steele told judge Ericksen that he wanted to apologize for the "illegal and stupid things I did. There was no rationale for my actions." He added, "The first stupid decision was going to law school without a sense of mission."

Steele's attorney, Mark Eiglarsh, said he was glad the judge decided Steele deserved a lighter sentence because of his help in prosecuting Hansmeier.

"My client's sentence was justified based upon how my client treated this case," he said. "His acceptance of responsibility, his cooperation was vastly different than the way the co-defendant handled things."

Both Steele and Hansmeier have been ordered to pay $1.5 million in restitution.

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 accused a few thousand people if downloading 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 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.