Legal Issues

by Tim Cushing


Filed Under:
doj, fraud, paul hansmeier

Companies:
prenda, prenda law



Government Knocks Hansmeier's Attempt To Talk Court Out Of Federal Prosecution

from the a-fraudulent-scheme-is-made-of-small-interconnected-acts dept

Paul Hansmeier -- bankrupt both in moral and financial terms -- is facing the blackness awaiting him at the bottom of a hole he dug himself. After engaging in copyright trolling, fraud, Disability Act trolling, more fraud, and generally embodying everything anyone hates about lawyers, he's now facing a multi-charge federal indictment. Fortunately for him, his representation is far more competent than he is.

His public defender crafted a motion to dismiss masterpiece, epic in length and containing a multitude of creative assertions that culminated in a not-completely-wrong point: to convict Hansmeier for engaging in bad-faith litigation would create a chilling effect on the act of litigation. Not included in this analysis of the issues was the fact that Hansmeier's copyright trolling also involved fraudulent behavior, which is the sort of thing most vexatious litigants manage to avoid.

It was a fun read, as far as motions to dismiss go. One over-the-top argument followed another until everything, including the reader, was exhausted.

The government has responded to the motion to dismiss. [h/t Sophisticated Jane Doe] Fortunately, the government cuts to the chase. It goes after the "litigation chilling effect" argument raised by Hansmeier's lawyer. From the government's reply [PDF]:

Defendant Hansmeier moves the court to dismiss Counts 1-17 of the Indictment. Hansmeier argues the detailed allegations set forth in the Indictment do not state an offense, and asserts the charges brought by the government impermissibly infringe on his “constitutionally-protected” right to engage in frivolous civil litigation. Unfortunately for Hansmeier, no such right exists. There is no safe harbor for fraud simply because one of the tools of the fraud involved litigation.

The government goes on to point out Prenda did not just engage in speculative invoicing.

Moreover, Hansmeier and his co-defendant, John Steele, did not simply file dubious lawsuits. They constructed an elaborate ruse designed to deceive people—state and federal judges as well as numerous victims who paid settlement fees to them—and, for that reason, violated the mail and wire fraud statutes. Hansmeier’s attempt to confuse this issue, through a convoluted 64-page memorandum wherein he pretends to champion the rights of unethical litigators and thereby create a strawman to save himself, should be rejected.

It attacks the assertions of the motion to dismiss, noting that separating each and every aspect of Prenda's schemes in order to make them appear singularly non-criminal is pretty much like denying a forest exists because it's just a bunch of single trees standing in the same general area.

Defendant also attempts to isolate each part of the scheme, arguing that each facet standing alone cannot state a fraudulent offense. However, the defendant did not commit each act in isolation. He did not merely breach his ethical obligations to the court. He did not solely mislead the court about the nature of his copyright infringement claims, or conceal his surreptitious ownership of his clients and their pornographic content. The indictment charges a multi-faceted scheme designed to deceive various courts and internet subscribers, and when viewed in its totality clearly describes a scheme to defraud.

The rest of the government's opposition motion details Prenda's fraud in greater detail, linking up all of Hansmeier's (and Steele's) illegal activities, which went far beyond simply filing lawsuits they knew to be meritless. Hansmeier's attempt to use civil litigation as a shield against prosecution fails for all the reasons listed in the government's reply: mainly that engaging in fraud during civil litigation doesn't immunize you from prosecution. Nor does Hansmeier's attempt to portray this all as something no more serious than an ethical violation find any sympathy. Again, the government points to Prenda's long history of fraud, perjury, and concealment.

The government also has an issue with the motion's demand for a better explanation of the charges than what's contained in the rather voluminous indictment. GFY motion entered:

Hansmeier also seeks to have the government define and explain the boundary between fraud and legality. The government is not required to prepare a treatise for the defendant explaining why precisely his conduct constitutes fraud. The defendants used various methods—all of which are described in the Indictment—to deceive state and federal courts into allowing them to pursue early discovery, and then tricked numerous individuals into parting with their money. The indictment in this case is more than sufficiently detailed, and has been supplemented by voluminous governmental disclosures that have gone well beyond what the government is legally obligated to provide.

In other words, the government was just as exhausted by the end of Hansmeier's 64-page motion as the rest of us were. It's ready to prosecute and Hansmeier is trying to argue it all away as though the grand jury had returned a dozen single-count indictments over several months or years, rather than the multi-count indictment tying all of Prenda's bad behavior together.


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  • icon
    Stephen T. Stone (profile), 9 Jun 2017 @ 4:03am

    Never enter into a war of attrition against the government. It has more experience in grinding slow the gears of justice.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 Jun 2017 @ 5:08am

    "They will appeal, and they will win." - horse with no name

    Still waiting for horse with no name/Whatever/Just Sayin'/My_Name_Here's prediction to come true at some point...

    reply to this | link to this | view in chronology ]

    • This comment has been flagged by the community. Click here to show it
      identicon
      Anonymous Coward, 9 Jun 2017 @ 6:13am

      Re:

      I hope Mike is giving you a raise for working overtime, Leigh. He likes his minions stinky and baiting.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 9 Jun 2017 @ 9:00am

        Re: Re:

        Giving your mobile phone a workout just to satisfy your paranoia again, huh?

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 9 Jun 2017 @ 10:09am

        Re: Re:

        Ahh your heros are going down the river and the best you got is junior high school insults? That's fucking weaksauce boy.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 9 Jun 2017 @ 6:31pm

          Re: Re: Re:

          The word is spelled 'heroes' not 'heros'.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 11 Jun 2017 @ 1:08am

            Re: Re: Re: Re:

            Hann-smear (not a typo) and his lickspittles, bootkissers and fawning peons can only resort to typos and direct personal attacks.

            Because they lost. big time. Of course they'll try to shrug it off and attach themselves to some other fraudulent loser asshole with all the sex appeal of a maggot-infested pineapple left out in the sun, but there you go.

            reply to this | link to this | view in chronology ]

      • icon
        sophisticatedjanedoe (profile), 9 Jun 2017 @ 2:44pm

        Re: Re:

        No, Richard: Eric, who wrote this story, didn't get a raise for a long time. You probably confuse him with Maryanne. So, alas, Diane, your assumption is wrong.

        reply to this | link to this | view in chronology ]

  • identicon
    peter, 9 Jun 2017 @ 5:36am

    and the downside is...?

    "....to convict Hansmeier for engaging in bad-faith litigation would create a chilling effect on the act of litigation."

    Um. Good!

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 11 Jun 2017 @ 1:10am

      Re: and the downside is...?

      Indeed. I'd upvote you but this isn't Reddit :)

      Some people have got it into their heads that lawyers, courts and litigation are "A GOOD THING(tm)" instead of an absolute last resort to obtain Justice.

      reply to this | link to this | view in chronology ]

  • icon
    wshuff (profile), 9 Jun 2017 @ 5:38am

    The big leagues are hard.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 Jun 2017 @ 6:07am

    "in a not-completely-wrong point: to convict Hansmeier for engaging in bad-faith litigation would create a chilling effect on the act of litigation."

    yes! I hope this approaches slam dunk levels of magnitude here! For once I agree with nasty government, but this dumb fucking lawyer must have really pissed off a judge or important person to get this kind of attention.

    "The government is not required to prepare a treatise for the defendant explaining why precisely his conduct constitutes fraud."

    Well, it should be! I might hate bad-faith litigation, but bad-faith prosecution is even worse, a lot of actually innocent folks are rotting in jail from it!

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 9 Jun 2017 @ 1:56pm

      Re:

      I think you misunderstood the government's point. They have stated very clearly what Prenda did, and what Prenda did is very clearly fraud. Nobody (in this case) is trying to pull a prosecutorial fast one.

      What the defense is arguing is, "that's not fraud, because the statutes don't clearly lay out this exact set of circumstances, and you haven't shown a precise fit to the statutes". And the government is saying "You lied to people in order to get them to pay you money that they didn't owe you. That's all we have to show, and we have."

      That's not the prosecution pulling a fast one. That's the defense trying to make the prosecution prove the foundations of basic fraud law in their filings, which is not actually something the prosecution should have to do.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 Jun 2017 @ 6:19am

    It will be interesting to see if Hansmeier will go full scorched-earth in his defense: disputing absolutely everything and everyone, filing endless motions and then appealing every rejected motion, and pushing forth every sort of counter-accusation and conspiracy theory that's ever been invented.

    There's also the various foot-dragging techniques which are generally losing proposals can be very effective in a war of attrition. Things like disputing the venue, trying to get the judge and prosecutor kicked off the case, and accusing every juror, one by one, of some imagined conflict.

    reply to this | link to this | view in chronology ]

    • icon
      Ninja (profile), 9 Jun 2017 @ 6:33am

      Re:

      Does he have the money to keep the war going?

      reply to this | link to this | view in chronology ]

      • icon
        Mike (profile), 9 Jun 2017 @ 7:08am

        Re: Re:

        Depends how much space is under his bed these days

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 9 Jun 2017 @ 10:36am

        Re: Re:

        Once in a jail cell, he'll have a bottomless legal defense fund, since acting as his own lawyer he'll get to file frivilous lawsuits and endless motions all day long for years on end. Taxpayers will of course have to foot the bill to oppose all the legal chicanery he's sure to be spewing out while in prison.

        reply to this | link to this | view in chronology ]

        • identicon
          Anon, 9 Jun 2017 @ 5:53pm

          Re: Re: Re: Jailhouse Lawyer

          Wasn't there a recent (last 10 or so years) change to statutes that a vexacious jailhouse litigant may reach the point where they need a judge's permission to file another lawsuit?

          reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 9 Jun 2017 @ 6:34am

    This could be a good sequel to "The Walking Dead". These guys won't let us drop the popcorn!

    reply to this | link to this | view in chronology ]

    • icon
      Ryunosuke (profile), 9 Jun 2017 @ 8:00am

      Re:

      I am surprised I haven't heard of a Netflix show about this whole ordeal. Not saying one is in the works or not, just haven't heard of it yet.

      reply to this | link to this | view in chronology ]

      • identicon
        Wendy Cockcroft, 12 Jun 2017 @ 5:18am

        Re: Re:

        Indeed; the script pretty much writes itself, doesn't it? Who would play That Anonymous Coward and Sophisticated Jane Doe? I can imagine scene jumps from Prenda personnel to the poor schmoes caught up in their schemes to TD writers typing it up to regular commenters adding their tuppence-worth. It'd be an epic series. I would totally get Netflix if it did get made.

        reply to this | link to this | view in chronology ]

  • icon
    Mason Wheeler (profile), 9 Jun 2017 @ 8:58am

    His public defender crafted a motion to dismiss masterpiece, epic in length and containing a multitude of creative assertions that culminated in a not-completely-wrong point: to convict Hansmeier for engaging in bad-faith litigation would create a chilling effect on the act of litigation.

    *sigh* Only a lawyer would say that this is a bad thing...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 Jun 2017 @ 9:23am

    wow.

    64 pages to make the point, in effect, that copporn and popcorn are really the same thing.

    reply to this | link to this | view in chronology ]

  • identicon
    Pixelation, 9 Jun 2017 @ 9:31am

    He should have cut a deal. Of course, it's much more entertaining that he didn't.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 9 Jun 2017 @ 11:57am

      Re:

      It's possible he couldn't, in that he had nothing to offer that would be greater than the possibility of prosecuting him and they were sure enough of their case that they didn't think a plea bargain would be worth it on their side.

      reply to this | link to this | view in chronology ]

      • icon
        sophisticatedjanedoe (profile), 9 Jun 2017 @ 12:26pm

        Re: Re:

        Agreed. Look at two subtle hints in the government's reply:

        p. 17:

        Although Hansmeier now claims to have believed his copyright infringement claims were legitimate (Doc. 49 at 38-41), the jury will find that during the relevant time period Hansmeier knew that: (1) his conduct was not lawful; (2) as noted above, if courts had known what he was doing, they would not have permitted him to obtain early discovery; and (3) if users had known what he was doing, many would not have settled with him.

        p. 24:

        To the extent that defendant argues he believed his conduct was lawful, and therefore he lacked the requisite intent to defraud, this is a factual issue that should be resolved at trial, not through a motion to dismiss.

        Someone's shadow is lurking behind the bus. Is it John's?

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 9 Jun 2017 @ 12:40pm

        Re: Re:

        But isn't it standard practice that the first of the partners-in-crime to cave in and agree to testify for the prosecution gets offered the best deal, while the last holdout gets offered the worst?

        It seems that if John Steele, Paul Hansmeier and Paul Duffy had played their cards right, Steele and Hansmeier would have plea bargained early for a light sentence in order to nail holdout Paul Duffy, whose eventual death would have basically wasted those two plea-bargains as far as the prosecution was concerned.

        ... or can plea bargains be reversed if the person the bargainee agrees to testify against (hence the main reason for offering the plea bargain) ends up dying?

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 9 Jun 2017 @ 5:46pm

        Re: Re:

        There's also the fact that his old buddy John Steele would have had to throw him under the bus to save his own ass...

        reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 9 Jun 2017 @ 3:58pm

    I'm looking forward to a big party in 2030 when all of the appeals and legal stunts are over and the case finally starts.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 9 Jun 2017 @ 6:01pm

      Re:

      "I'm looking forward to a big party in 2030 when all of the appeals and legal stunts are over and the case finally starts."

      You mean Prenda v World, or SCOXQ v World?

      Or a new movie "A lien v Prendatort"

      reply to this | link to this | view in chronology ]

  • identicon
    Kronomex, 9 Jun 2017 @ 4:58pm

    While reading the housing troll article I thought that I hadn't seen anything about Hansmeier for a while. Lo and behold, a couple of turns of the mouse wheel and...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 Jun 2017 @ 6:53pm

    Litigation NEEDS a "Chilling effect."

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 Jun 2017 @ 11:36pm

    He just can't stop digging and throwing shit at the wall to see if it sticks. I wonder if he'll finally realize he should have stopped digging when he's being escorted to his new 6 X 8 home for the next couple decades.

    reply to this | link to this | view in chronology ]

  • icon
    Get off my cyber-lawn! (profile), 12 Jun 2017 @ 2:54pm

    Serious question about observing a Federal Court case

    Do they sell popcorn there or will I need to smuggle some in under my coat?

    reply to this | link to this | view in chronology ]


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