Paul Hansmeier Tries To Explain Away Brett Gibbs Revealing Prenda Spreadsheets

from the might-not-be-real-and-if-they-are,-so-what? dept

Tue, Oct 22nd 2013 2:35am — Mike Masnick

So, last week, Brett Gibbs dropped quite the bombshell in one of the key Prenda cases, in which he revealed some spreadsheets that had been shared with him via a Dropbox account, showing that John Steele and Paul Hansmeier had received about 70% of Prenda's proceeds, despite insisting they had no direct relationship with the firm. As expected, lawyers in other Prenda cases have rushed to file those documents in their cases as well. In Minnesota, Paul Hansmeier has responded, seeking to block the filing of the documents to Magistrate Judge Franklin Noel, who has been overseeing an investigation into the possibility of fraud on the part of Team Prenda. The argument, summed up, is "who knows if those documents are legit, they don't show anything bad, they're not relevant and they were obtained illegally." Almost all of that is, in typical Hansmeier fashion, ridiculous:

Second, the documents Mr. Godfread proposes to file are inadmissible because they are not authenticated. Mr. Godfread claims that the exhibits "appear" to be financial records of Prenda Law, Inc. Perhaps he is right, but I have not reviewed Prenda Law's financials and neither, presumably, has he. Until he can authenticate the documents, they are inadmissible;

Seems like there's a pretty quick way to take care of that. Judge Noel can put one of the Prendaristas on the stand and ask them if the documents are accurate. Either way, claiming that they're not "authenticated" seems like pretty weak sauce at this stage of the game.

Third, the documents undermine Mr. Godfread's narrative. I have consistently stated—often to deaf ears—that I sold my law practice to Prenda Law in late-2011 and subsequently pursued other interests. That is what these documents show. I am labeled an "old owner" throughout the documents. With one de minimus exception, the only transfers I received from Prenda Law were in consideration of the sale of my practice;

As Gibbs detailed in his filing, the use of "old owners" was clearly done to leave open exactly this excuse, but it does not seem even remotely credible given the massive amount that continued to go to both Steele and Hansmeier long after the sale. While it's certainly not unheard of for service businesses like law firms and accounting firms to include a percentage of ongoing revenue for a few years after sale, having this much go to Steele and Hansmeier suggests something else. At the very least, it's quite relevant for a deeper discussion into Hansmeier's and Steele's claims of having no relationship with Prenda.

Fourth, the documents have no relevance to the subject-matter of this case, which was filed as an action for copyright infringement. Although it has since morphed into a different matter, the day-to-day ledgers of a law firm are not relevant to either inquiry;

Really? I mean, this one doesn't even require a response, since the "subject-matter" of the case is about whether or not Prenda and related companies and individuals were engaged in fraud. It seems highly relevant.

Fifth, if these documents are authentic, then they were stolen. No business would release sensitive financial documents to its adversaries. I understand that this matter is being investigated and will be reported to law enforcement, as appropriate.

Again, as Gibbs explained, it appears these documents were placed in a shared Dropbox account, meaning they were given to him. Yes, at the time he was still part of Team Prenda, but that doesn't mean the documents were "stolen." Anyway, there's something kind of funny about Hansmeier saying that this 'theft' "will be reported to law enforcement." It seems quite likely that law enforcement already knows... and that's because there's an ongoing investigation of Hansmeier.

Gov Uscourts Mnd 126519 57 0 (PDF)Gov Uscourts Mnd 126519 57 0 (Text)

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: brett gibbs, franklin noel, john steele, paul hansmeier, spreadsheet
Companies: af holdings, ingenuity 13, prenda, prenda law

36 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

That One Guy (profile), 22 Oct 2013 @ 12:54am

Talk about shooting your argument in the foot...
The second and fifth points seem to be directly contradicting each other. If the documents are legitimate, then they could have been stolen(though with the shared account, that's not likely something a judge would buy), however, if they aren't legitimate, then they'd be fabrications, and you can't steal fake documents.

So go ahead Hansmeier, inform the authorities of the 'theft', and not only legitimize the documents, but get a hearty laugh out of the police as they explain that you can't steal something you were already given.

Of course if he's going to claim that they were stolen(to a Judge no less) and then not inform the police, that would say plenty too...

Also, as a general rule of thumb, I think it would be safe to say that if a person/persons are receiving over 50% of the profits from a company(or the 69-70% in this case), they most certainly still own the company, or at the very least control it, regardless of whatever patsy they've got sitting in the CEO's spot.
[ link to this | view in chronology ]
- Anonymous Coward, 22 Oct 2013 @ 7:37am
  
  Re: Talk about shooting your argument in the foot...
  It's not all that unusual to put claims that would seem contradictory when protesting a submission like this.
  
  It's a little legal game they play so that they can continue to claim they have no knowledge of it being true or untrue.
  
  It's not true because of this, this and this. However if it is true, it doesn't matter because of this, this and this.
  
  This sort of BS only happens in the legal world.
  [ link to this | view in chronology ]
  - Jon R (profile), 22 Oct 2013 @ 7:55am
    
    Re: Re: Talk about shooting your argument in the foot...
    > This sort of BS only happens in the legal world.
    
    And in the world of 5-year-old kids. "I didn't do it. You didn't see me do it. It wasn't my fault. It's not that big a deal."
    [ link to this | view in chronology ]
  - WDS, 22 Oct 2013 @ 9:51am
    
    Re: Re: Talk about shooting your argument in the foot...
    The most famous of all:
    
    My dog doesn't bite.
    My dog was tied up that night.
    I don't believe you really got bit.
    I don't have a dog.
    [ link to this | view in chronology ]
    - Anonymous Coward, 22 Oct 2013 @ 1:57pm
      
      Re: Re: Re: Talk about shooting your argument in the foot...
      And, of course, "you must have provoked it first"
      [ link to this | view in chronology ]
  - Derek, 22 Oct 2013 @ 12:14pm
    
    Re: Re: Talk about shooting your argument in the foot...
    But it will be fun to watch how they get backed into either the "it's a fake" corner or the "it was stolen" corner.
    [ link to this | view in chronology ]
    - That One Guy (profile), 22 Oct 2013 @ 5:07pm
      
      Re: Re: Re: Talk about shooting your argument in the foot...
      Personally I look forward to when they try both at once, likely in different courts, claiming that it's both fake and stolen.
      [ link to this | view in chronology ]
      - Matthew Cline (profile), 22 Oct 2013 @ 7:59pm
        
        Re: Re: Re: Re: Talk about shooting your argument in the foot...
        Some nasty pirate fabricated the spreadsheet, hacked into their computers, and planted it there. Then Gibbs hacked into their computers and stole it. See, no contradictions!
        [ link to this | view in chronology ]
Anonymous Coward, 22 Oct 2013 @ 2:43am

Damn, this is kinda sad, I almost feel sorry for for them because they're terrible lairs. You'd expect them to be pros lairs I mean shit, they're lawyers, it's their job!

Maybe they went to "zee specal lahh skool fer de giftzddzed?"
[ link to this | view in chronology ]
Anonymous Coward, 22 Oct 2013 @ 3:04am

If one of the Prendaristas can tell the judge if the spreadsheet is correct/incorrect, they will admit they knew about the finances - which they've been trying so hard to deny. So: admit evidence because you can't know anything about it, or: say evidence is wrong and admit you lied in court.
[ link to this | view in chronology ]
- Anonymous Coward, 22 Oct 2013 @ 9:56am
  
  Re:
  Not true. All they have to say is they received no money whatsoever. They don't have to admit to knowing if the numbers are correct - all numbers are, by definition, incorrect in such a situation.
  [ link to this | view in chronology ]
Anonymous Coward, 22 Oct 2013 @ 3:11am

Bet they are regretting throwing Brett Gibbs under the bus right about now.
[ link to this | view in chronology ]
anonymouse, 22 Oct 2013 @ 3:20am

Seriously.
[ link to this | view in chronology ]
anonymouse, 22 Oct 2013 @ 3:23am

!!!!
Could this not be resolved rather quickly by the Judge just asking for all financials from All of those involved.
Surely this would clear everything up and the lies could be stopped completely from both sides.
[ link to this | view in chronology ]
Kodo, 22 Oct 2013 @ 3:25am

Would it be possible to subpoena Dropbox to find out who made the file available to the shared account, and to who had access to the account. Would Dropbox do that possibly, or would it be a breach of their privacy agreement. Though I guess if they are asked by the court they probably would. They wouldn't be revealing the information in the files, just who had access and submitted the files.

I am going to be a very sad Aussie when all the Prenda stuff is finished. It is the highlight of the last few months going through my newsfeeds everyday.
[ link to this | view in chronology ]
- madasahatter (profile), 22 Oct 2013 @ 6:50am
  
  Re: Subpoena
  Subpoenas can be issued to Dropbox, Prenda, Gibbs, etc for the relevant records. Also, look at the document's metadata for possible clues. Most people are unaware there is document metadata which might detail the original author (actually originating computer).
  [ link to this | view in chronology ]
Jake, 22 Oct 2013 @ 3:47am

Good Lord, guys. Just cut your losses, convert your assets to small bills and make a run for the border already, huh? There's nothing noble or dignified about going down with the ship here.
[ link to this | view in chronology ]
- That One Guy (profile), 22 Oct 2013 @ 4:35am
  
  Re:
  That's the thing, they really are their own worst enemies, as they probably still think that they'll be able to talk/BS their way out of all the trouble they're in. Just one more filing, one more argument, one more round of smoke and mirrors, and they'll be home free!
  
  It's like Righthaven and/or Carreon all over again, some lawyers just cannot admit to being wrong, or realizing that they've been caught out on their lies, as their egos make it impossible for them to accept the idea that they might not be as smart as they think they are.
  [ link to this | view in chronology ]
- S. T. Stone, 22 Oct 2013 @ 5:02am
  
  Re:
  I still think at least one of them will end up making a bedsheet noose for himself once Prenda�s last-ditch efforts fail.
  
  I�m not wishing for any of them to harm themselves, mind you. I just think one of them will end up at least trying to take the �easy� way out.
  [ link to this | view in chronology ]
  - avideogameplayer, 22 Oct 2013 @ 7:26am
    
    Re: Re:
    Which might explain what happened to that Lutz (or Lulz) character...
    
    Either that or he took the money and ran...
    [ link to this | view in chronology ]
  - Anonymous Coward, 22 Oct 2013 @ 7:56am
    
    Re: Re:
    I doubt any of these jokers are gonna be doing "hard time". More than likely, they've been secretly stashing money in untouchable assets over the last year or so, and this whole charade will end with them being disbarred and slapped on the wrist.
    
    They'll go on their merry way with a few million $, and start some new crooked corporation to rape the public with.
    [ link to this | view in chronology ]
Anonymous Coward, 22 Oct 2013 @ 4:21am

Gibbs is singing.

Adele - Rolling in the Deep

There's a fire starting in my heart
Reaching a fever pitch and it's bringing me out the dark
Finally I can see you crystal clear
Go 'head and sell me out and I'll lay your ship bare
See how I leave with every piece of you
Don't underestimate the things that I will do
There's a fire starting in my heart
Reaching a fever pitch and its bringing me out the dark
[ link to this | view in chronology ]
DeadBolt (profile), 22 Oct 2013 @ 5:05am

After reading this and Popehat's blog about the current standing of Prenda across the country, someone really needs to dedicate a Burn Ward at a hospital to Prenda.

That or a septic tank ^.^
[ link to this | view in chronology ]
Baron von Robber, 22 Oct 2013 @ 5:34am

Wanted flyers printed yet?
Time to post officers at their local airports. :-)
[ link to this | view in chronology ]
RyanNerd (profile), 22 Oct 2013 @ 5:59am

nom nom nom....
Popcorn!
[ link to this | view in chronology ]
roarshock44, 22 Oct 2013 @ 7:27am

i predict gibbs, nazaire, dugas, lutz, duffy, angelina whatshername, the hansmeiers, numerous others unknown to us at this time, and steele's wife and the better part of her family will be discovered recently deceased at john steele's lake cabin.� in a move of historic courage and decisiveness, steele will have discovered gibbs dispatching the last of the group and - ignoring his own safety - will have sent gibbs on his personal trip to hell, but, alas, not before gibbs' completion of his gruesome task of eliminating everybody who could flip on john steele.
[ link to this | view in chronology ]
Namel3ss (profile), 22 Oct 2013 @ 8:18am

No white collar country club prison for these assclowns
To quote Office Space, "federal pound-me-in-the-ass prison" is clearly called for.
[ link to this | view in chronology ]
Anonymous Coward, 22 Oct 2013 @ 8:28am

Copyright enforcement's best and brightest, carrying on the legacy of copyright.
[ link to this | view in chronology ]
Anonymous Coward, 22 Oct 2013 @ 10:51am

I think they should have avoided the entire "old owners" argument by just stating that payments were to the god-fathers of Lutz's future grandchildren in payment for schools supplies, shoe laces, and a year of fresh gruel.

Who would deny unborn children those things?!?!!? It would be an outrage.
[ link to this | view in chronology ]
Anonymous Coward, 22 Oct 2013 @ 11:08am

You've got most of it right, but you've got to modify it a little bit for Prenda's sake:

My dog doesn't bite.
My dog does bite, but it only bites humans.
You have no right to call yourself "Alan Cooper" since that is a human name and you're not human.
My dog is named Alan Cooper and your client is also named "Alan Cooper" but the suit is illegal since you can't sue based on a dog's behalf.
I never owned a dog.
I did own a dog, but my dog died thirty years ago.
I currently own a dog but it lives in Vietnam and is owned by a Vietnamese person named "Alan Cooper".
Dogs don't exist, and have never existed.
Dogs do exist, but Alan Cooper is a cat's name, this lawsuit is about dogs, therefore the lawsuit should be thrown out.
I am not a carbon-based lifeform and therefore cannot be sued.
Alan Cooper is a time-travelling werewolf.
[ link to this | view in chronology ]
- peter, 22 Oct 2013 @ 4:28pm
  
  Re:
  the dog ate my Filing?
  
  the dog ate my Airline ticket?
  
  the dog is the trust's recipient?
  [ link to this | view in chronology ]
  - G Thompson (profile), 22 Oct 2013 @ 7:40pm
    
    Re: Re:
    The dog's name is Salt... he lives in a marsh
    [ link to this | view in chronology ]
DB (profile), 22 Oct 2013 @ 11:22am

A good pleading.
This is a perfectly reasonable legal pleading, with only a minor issue.

If it is real, it may not have been gotten through proper means. That doesn't mean that it's stolen. The filing clearly states how Gibbs obtained a copy the document, and any original is still available to Prenda, undiminished by the copy. So the question is 'was the release proper'.

Prenda can't claim a copyright on the purely functional accounting data. It's not a breach of attorney-client communications, although that's closer call. Prenda might assert that it's effectively the client. It closer to being a breach of a confidentiality agreement or duty. But any obligation is erased in the case of fraud.

Hansmeier does have a credible claim to not having seen this specific document, and it's reasonable to point out that it's unauthenticated. But given the effort to verify it would be less than the time to write point 2, this isn't an especially useful point. There isn't an objection that it conflict with facts on the record, or that it's not timely (although the reference to motion practice might be read as such).
[ link to this | view in chronology ]
Wally (profile), 22 Oct 2013 @ 12:18pm

Redundant Arguement is Redundant
Can you see it?

"Second, the documents Mr. Godfread proposes to file are inadmissible because they are not authenticated. Mr. Godfread claims that the exhibits "appear" to be financial records of Prenda Law, Inc. Perhaps he is right, but I have not reviewed Prenda Law's financials and neither, presumably, has he. Until he can authenticate the documents, they are inadmissible;"

No? How about now?

"Second, the documents Mr. Godfread proposes to file are inadmissible because they are not authenticated. Mr. Godfread claims that the exhibits "appear" to be financial records of Prenda Law, Inc. Perhaps he is right, but I have not reviewed Prenda Law's financials and neither, presumably, has he. Until he can authenticate the documents, they are inadmissible"

Lets shorten that shall we?

"The documents Mr. Godfread proposed to file are inadmissible because they are inadmissible!"

Prenda's practices are totally illegal because they are totally illegal :-P
[ link to this | view in chronology ]
That Anonymous Coward (profile), 22 Oct 2013 @ 3:05pm

So everyones up to speed on why I was never that concerned when they tried to unmask me..right?
[ link to this | view in chronology ]
Anonymous Coward, 8 Dec 2013 @ 7:36pm

horse with no name just hates it when due process is enforced.
[ link to this | view in chronology ]