John Steele: I'm Just A 'Business Development' Guy Who Has Nothing To Do With These Lawsuits

from the keep-digging dept

As I’ve said, John Steele reminds me of some folks I’ve met who think they’re smarter than everyone else and have outsmarted the whole system. They tend to believe they can talk their way out of anything. And while he pled the Fifth (or, had his lawyer say he was going to) when he had a chance to talk in court, he sure has been talking a lot since then to the press. The latest is a long interview done with Joe Mullin at Ars Technica, where Steele, once again, seems to think he can talk his way out of anything.

There’s so much ridiculousness in there. Let’s hit just a few of the high points, but then go read the full interview to find your own favorite moments.

He talks about “battle-stations”? That tells you something about where this judge is coming from. In the same sentence he talks about attorneys having “moral turpitude,” he uses Star Trek terms to describe it? It’s really beneath the dignity of the court.

John Steele is talking about something that’s “beneath the dignity of the court”? Really? Anyone who has followed his efforts would laugh at that line considering everything he’s done that’s way beneath the dignity of the court, which is why he’s now in the position he’s in with Judge Wright’s ruling.

As for the needs of the many outweighing the needs of the few [a Star Trek quote at the top of Judge Wright’s order]—that’s not [how the legal system works]. If the needs of the few didn’t matter, black people wouldn’t vote in most Southern states.

Yeah, that’s right, Steele, align your situation with American slavery. Your situation is so analogous to slaves picking cotton in the South. Judge Wright is just trying to keep you down, huh?

The deposition that [former partner] Paul Hansmeier gave wasn’t even certified. It shouldn’t have even been allowed to be used. There are hundreds of problems with this order in my view.

Note that he doesn’t claim that Hansmeier didn’t say everything that was said, which really helped show how screwed up the whole situation was. Just that it wasn’t certified… tap dance, tap dance.

I—and others involved—have been in front of hundreds of judges. This is the first judge that has ever sanctioned anybody involved with Steele Hansmeier, Prenda Law, or whatever.

Sanctioned, yes. But plenty of other judges have called out these practices as highly questionable for years. Sanctions are an extreme step, but plenty of judges have clearly questioned Steele’s practices. And, other judges have claimed that he was involved in fraud on the court. It’s just that they’re still investigating.

I think the judge knows we’re going to appeal. He wrote that the sanctions were designed to cost just less than [an effective appeal]. Look, you may hate me and the litigation that’s gone on in the past, but most people have to be a little nervous when a judge puts out a number and says that.

Uh, the whole point of that was to highlight the nature of Prenda’s trolling scheme. To turn that around and suggest that that’s a problem is hilarious. Steele seems to think that everyone in the world is a complete moron and he’s the only one with functioning brain cells.

Steele: Not until I received an order to show cause. I’ve spoken to some of the other people [involved], and they’re in a similar situation. I didn’t know about this until February of this year. Until March I hadn’t read a single pleading in this case. I, quite frankly, had never been involved in any case in California.

If there was evidence I was involved and [Prenda Law lawyer] Paul Duffy was involved in more than just the somewhat supervisory role of Brett Gibbs, then that evidence would have come out.

Ars: Brett Gibbs testified at the March hearing that you and Hansmeier were “senior partners” at Prenda Law. He says you were supervising. Were you?

Steele: No. Absolutely not. Where’s the evidence that we supervised Brett Gibbs? Where are the e-mails?

Ars: Gibbs testified that you were in control of these entities. You ran them. You initiated cases, you settled cases.

Steele: Where are the documents showing that I own any of these entities? I’ve never even heard of a couple of them.

This exchange is amazing on so many levels. Let me summarize it: “I knew nothing! There’s no evidence I knew anything!” “Um, there’s direct testimony from the person who knows you were involved.” “Where is the evidence on something entirely different?!” Nice one, Steele.

Steele really likes this “where is the evidence?” line to respond to actual testimony against him. He uses it multiple times, including about Alan Cooper’s signature, where again, he chooses his words carefully:

I’m well aware Mr. Cooper said he never signed those documents. He said it was a forgery—those were words the court used. I’m very comfortable with the facts, and everything in my possession leads me to believe that Mr. Cooper’s involvement with AF Holdings was different than what he led the court to believe. It will ultimately come down to a “he said, they said.” Nobody I’m aware of, including myself, has ever forged Alan Cooper’s signature. That is a pretty outrageous claim.

And for the love of God, where is the evidence [of forgery]? If someone had found something, it would be on the front page of Ars Technica and half a dozen other sites within minutes. There’s no way any of that evidence could exist. Because it’s not true.

Notice that he’s speaking very specifically about the forgery aspect, and not about the misrepresentation part of it. Hmm… Also, Steele doesn’t seem to understand that testimony is evidence. So, yes, there is evidence. It’s called the testimony in the court by Alan Cooper.

And then we find out what Steele is now claiming his real role is in all of this:

I work part-time with Livewire Holdings, one of the entities that Lutz owns. My role is on the business side. I acquire other adult content companies and deal with expanding the holding company. The main goal is to handle a lot of content and websites and to be involved in the adult space. For that, I’m paid a flat fee. I won’t say how much, but it’s a modest flat sum.

Right. And that’s why you showed up in court in some of these cases and Gibbs said you gave him specific directions on the legal issues. Because you’re in “business development.”

Steele: I think they’ve done a few cases. I’m not involved with that litigation. I don’t file anything. You know, what pirates oftentimes don’t get is that this is not a huge moneymaker. I know from past experience at Steele Hansmeier that over half the clients we got never made any money off suing pirates.

Ars: Well, how much money have you made? Last year a Forbes reporter suggested you could have collected $15 million in settlements, and you responded by saying the actual figure was “more than a few million.” Have you made millions of dollars suing people?

Steele: I wish I had. At the time my wife made some joke wanting to know where I hid the other $14.5 million. There are a lot of costs associated with litigation.

Again note how he tries to answer a different question. He already told Forbes the $15 million number was too high. Mullin is asking him about the “more than a few million” he already told another publication was the correct amount. And he responds by talking about the $15 million. This is not how you honestly answer questions. It’s how you (very weakly) try to avoid responding to questions that you don’t want to answer.

Ars: If you and Paul Hansmeier don’t run AF Holdings, why would Hansmeier be the person who was sent to be deposed about AF Holdings?

Steele: I believe he went out as a favor. They needed a corporate representative, and he was authorized to provide that, for AF Holdings, for Mr. Lutz. You want to have a strong corporate representative to get up and deal with Mr. Pietz for seven hours. There’s not a whole lot of people in a typical adult content company that can answer a lot of the questions that were asked.

Heh. No one goes to be a corporate representative in a big legal dispute “as a favor.” And nice gratuitous attempt to attack Pietz thrown in for fun. Also, I wonder which of the questions “not a lot of people in a typical adult content company can answer” he is talking about. What about the one of who actually owns the company you represent? That one?

Ars: And so what is Paul Hansmeier up to? I called him to talk about the order, and he referred me to you.

Steele: I believe he deals with some class action type of litigation. He also helps me when I’m looking for acquisitions, he’s got experience in that area. So he works essentially part-time for Livewire. It’s on a project basis.

Funny stuff. Of course, Hansmeier has been called out for very questionable class action objections which appear to involve objecting at the last minute to try to upset a settlement that’s about to go through and then seeking cash to go away. In fact, there’s a letter where Hansmeier directly promises to go away for $30,000.

Anyway, as mentioned there’s even more in there that we didn’t get to. I hope Steele keeps talking though. I imagine bits and pieces of his various statements are likely to show up in various court cases going forward as well.

Filed Under: , , , ,
Companies: af holdings, livewire, prenda, prenda law

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Comments on “John Steele: I'm Just A 'Business Development' Guy Who Has Nothing To Do With These Lawsuits”

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Anonymous Coward says:

“You know, what pirates often times don’t get is that this is not a huge moneymaker.”

— John Steele, during Ars Technica interview with Joe Mullin, May 10, 2013

“[We’ve made] more than a few million dollars.”

— John Steele, during Forbes magazine interview with Kashmir Hill, October 15, 2012

Does anyone else see a conflict between these two interviews? I think most people would argue that several million dollars qualifies as a ‘huge moneymaker’.

John Brass says:


I enjoy the lines about how porn videos aren’t profitable anymore because of piracy.

How about market saturation?
Free alternatives?
The price points of these movies?

I also can’t help but think of a concept that was in Warren Ellis’ ‘Croooked Little Vein.’

One of the concepts in the book was that straight-up male/female porn used to be, for lack of a better term at the moment, fringe. But then everyone got used to it. So they had to create new fringe-worthy things. They had to do more extreme, taboo, extravagant things to get views.

But then these things also became main streamed and people lost interest. Which led to the groups that watched Godzilla porn.

All I’m saying is that if these people can’t make a profit…maybe its because they’re doing something wrong.

That Anonymous Coward (profile) says:

“I’m very comfortable with the facts, and everything in my possession leads me to believe that Mr. Cooper’s involvement with AF Holdings was different than what he led the court to believe.”

And yet when this could have been offered to totally shatter the claim in court and destroy the ongoing lawsuit in MN not to mention the defamation suits being blown wide open…. you sat on this information.
I wonder if what Steele actually has is some crayon drawings of how he dreamed it happening…

anonymouse says:


The Irs will soon get to the bottome of all of this, they will investigate every penny he has ever earned over the last few years and make sure that he accounts for everything, and then , like the IRS normally does they will destroy him, they will take everything he has and then demand more, that is how the irs works. And especially since he has been referred by a judge they will i am sure investigate a lot deeper, if that is possible, than any other case they normally deal with. Just one question, will we ever get to hear about the IRS report or would someone have to request it, is it public knowledge or hidden from everyone to know how someone has not paid their taxes.

WTF? says:

Choice Quotes:

I’m well aware Mr. Cooper said he never signed those documents.

everything in my possession leads me to believe that Mr. Cooper’s involvement with AF Holdings was different than what he led the court to believe.

And for the love of God, where is the evidence [of forgery]? If someone had found something, it would be on the front page of Ars Technica and half a dozen other sites within minutes. There’s no way any of that evidence could exist. Because it’s not true.

Sounds to me that if he has something in his possession that proves Alan Cooper’s claim to be false, couldn’t he just produce that evidence rather than requiring the “nay-sayers” to disprove his claim?

BTW, Mr. Steele, I believe your interview just put it on the front page of Ars (and Techdirt)…I’d recommend you continue pleading the fifth.

special-interesting (profile) says:

Steel’s brazen use of the word ?pirate? is surely just as childish as in any other case. Its irresponsible and unprofessional because it might poison the available jury pool or easily swayed judge. The ?word? pirate is a presupposition of guilt associated with bad things of which the accused have never done. It would be a great idea for any interviewer to challenge it by asking exactly what the use of the word ?pirate? means. Its a likely form of slander that should be a proprietorial offense.

Its important that the idiocy be called out in the open at every level. Its obvious hypocrisy that they would call anyone ?pirates? when at the same finger-pointing 5th grade brat/bully level they could themselves be called ?pirates? for endorsing legislation that ?steals? culture from the Public Domain Rights.

AF holdings… hmmmm.

Guess; 30-160 million Prendda profit (plus expenses) (to unknown foreign offshore holding shell firms?)from copyporn trolling. Who knows for real? The offshore holding company is just to sophisticated an operation for just 1 to 15 million. (keep in mind that hiding cash from government or hostile adversaries is likely a good thing regardless of their political standing/position/opinion)

Have been absorbing a lot of the Prendda news lately. Heard lots of great things but so far its limited to court procedure related violations. Its a good start and probably a good thing. Will munch much popcorn as the case(s) prosecution closes in for the bite.

Unless Prendda gets the evidence tossed there seems no escaping some of these charges. The real fun is that there seems so much more going on than just these simple court procedure violations.

It seems that the real problem Prendda has… is that they have too many irons (lawsuits) in the fire. Especially since its their business to put them (lawsuits) in there (the fire). Expect Prendda to step on their foot(s) in the future. Each step and misstep might lead to other discoveries. It could even cascade. (the depth of this rabbit hole is unmeasured, as of yet.)

Prendda seems to have attempted various damage control maneuvers most notably was the closing of several vulnerable cases except some that were to late. Expect more of that along with an ultimate effort in the court of appeals. Every step along the way will be one more revealing aspect of the mysterious unknown Prendda rabbit hole.

It is some disappointment that they still are in the lucrative money making business of copyporn trolling? This industry needs to be quashed with a (few?) good civil lawsuit(s) at the multi million dollar level. Wouldn’t this be taking advantage of religious and or puritanical attitudes?

Now is the time. (?!) Because… they wont take the stand or wont answer much in their defense. Since because of the (many?) missteps made by Prendda the court procedure violations might affect the civil trial they possibly would be good defense based questions. This would possibly be a discrimination case and it would be significant if they broke the law or court procedures going out of their way to discriminate?

They (Prendda) might be more worried about the likely criminal charges of falsifying/altering/forging court records and or documents. (and other stuff, its not as if anyone would know how deep the rabbit hole is) This behavior might continue until the statute of limitations runs out which is various in all the states except the fed. And. If they are not… then there is more evidence or perjury to fuel the court procedures violations cases.

All that is needed is a totally pissed off, beyond any recrimination, citizen that somehow understands the religious and or puritanical bulls eye that they have been targeted by. If they were hit by some legal ‘rock’ thrown by an overzealous law firm… (looking only for profit and willing to break the law to do so?) then they might have a significant case. (…)

One might want to dismiss all of this(?) in some claim of businesses as usual and thats the way to make money. If only money were the criteria of success (as a moral and intellectual society we do have some growth potential here) then thats fine. But. There are many social and cultural complications. What is important is intent to harm.

Example; Steel used the word ?piracy? which might be considered slander at best especially if used before a defendant has revived a verdict. Also. The words ?theft? and or ?stolen? do not apply for copyright violations.

Just an opinion.

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