Prenda's Paul Hansmeier Now Under FBI Investigation For His ADA Lawsuits
from the lawyer-working-on-fraud-hat-trick dept
The wheels of justice have turned to the point where Team Prenda copyright trolling efforts have netted John Steele and Paul Hansmeier federal indictments. The list of charges the pair face is ugly: mail fraud, wire fraud, conspiracy to commit money laundering, and suborning perjury.
After Prenda's many copyright lawsuits fell apart, Paul Hansmeier decided to start trolling small, local businesses with ADA lawsuits, hoping to turn what little legal expertise he has into profitable settlements. During this time, Hansmeier was also facing the dismantling of an attempted bankruptcy filing -- one that very much looked like an attempt to avoid paying judgments resulting from Prenda's years of bullshit. To avoid having his assets turned over to creditors, Hansmeier engaged in some creative accounting, like handing off money to a newly-formed trust and... dumping cash into a cardboard box.
Hansmeier's ADA lawsuits weren't particularly successful and his efforts were beginning to attract judicial scrutiny. Worse, it appears the lawsuits have also attracted the attention of the FBI, which means Hansmeier could soon be facing a second set of indictments.
Jennifer L. Urban, an attorney for DSA [Disability Support Alliance], said in court filings that the nonprofit was a victim of a crime perpetrated by Smith and Hansmeier, his former attorney.
Urban wrote that the DSA filed criminal complaints with the Burnsville Police Department against Smith and another former DSA director, Aaron Dalton, over a series of cash withdrawals earlier this year. A Burnsville detective helped DSA retrieve $4,400 that Dalton was captured on camera taking out of an ATM but was unable to recover $6,900 withdrawn by Smith, Urban said.
The FBI, meanwhile, notified Urban in October that DSA was a possible victim of a federal crime. She wrote Wednesday that DSA is “cooperating with the ongoing federal criminal investigation/prosecution of Paul Hansmeier.”
During the short period Hansmeier was in the ADA trolling business, he filed nearly 100 lawsuits against Minnesota small businesses. Some settlements were obtained, but not nearly as many as Hansmeier would have hoped. His law license was suspended this fall, which meant his trolling efforts have to continue without his assistance. Someone who helped Hansmeier hide money from creditors is now the new face of Minnesota ADA trolling.
His wife, Padraigin Browne, picked up his pending disability access lawsuits — including the CCRE federal suit — and has since filed a number of her own.
Apparently, Hansmeier has more cash on hand -- and has helped others similarly situated in the ADA trolling business.
DSA Board Chair Eric Wong hired Urban’s firm late last year, partly to investigate suspected internal theft. The investigation revealed the theft by Smith and Dalton but also that Hansmeier helped four DSA directors — Smith, Dalton, Zachary Hillesheim and Melanie Davis — steal settlement proceeds from litigation efforts, according to Urban.
She said the investigation also revealed that Hansmeier got $312,218 — more than 70 percent of the revenue generated by DSA litigation — from July 2014 to June 2016 despite never litigating a case to a verdict and being awarded attorney’s fees or invoicing DSA for payment.
A letter [PDF] from the FBI to Jennifer Urban of the DSA confirms the investigation. The letter informs her of her rights as a victim and cautions that investigations are often lengthy and not easily resolved. But the good news is that another set of justice wheels are grinding, however slowly. And at the end of the grind is a lawyer who never found a way to turn his law degree into an honest living.