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helped DSA retrieve $4,400 that Dalton was captured on camera taking out of an ATM but was unable to recover $6,900 withdrawn by Smith, Urban said.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.

Filed Under: ada, ada troll, copyright troll, fbi, investigation, paul hansmeier

Bankruptcy Fight May Be The Least Of Team Prenda's Concerns, As The FBI Comes Knocking

from the whoo-boy dept

If you've been following the Prenda Law saga around here for any length of time, you're aware that it's been going on for years, with sketchy copyright trolling practices that appeared to include Team Prenda uploading their own content to torrent sites, tracking who downloaded them, and then filing questionable lawsuits. That scheme fell apart after a series of judges, led by Judge Otis Wright, called out Team Prenda for committing fraud on the courts, and referred the issue to the feds, while also hitting them with a fine. That was three years ago. Other courts piled on more fines and attorneys' fees -- and more referrals to the feds. After the second such referral, Ken "Popehat" White noted that these things take time, but that something would probably happen eventually:

The wheels turn slowly, friends, but make no mistake, the wheels turn. The wheels are grinding down Team Prenda, and doing so faster and faster every month. With two different federal judges referring the matter to state bars and the U.S. Attorney's office, the probability of bar investigations and federal grand jury investigations approaches certainty.

Of course, it's been three years since then and a few things have happened. One of the three main members of Team Prenda (though, probably the least involved of the three) passed away. But the other two are both facing bar complaints over ethical violations. Paul Hansmeier also famously tried to declare bankruptcy, but appears to have lied to the court in the process. Fight Copyright Trolls just recently had an update on that case, and suffice it to say, it's hilarious. Hansmeier has not just lost his lawyer after she told the court that she could no longer represent him and be a servant of the court (i.e., heavily hinting that Hansmeier was likely asking her to lie to the court), but he's also lashed out at the trustee handling his bankruptcy for... buying a new car.

And, of course, both Hansmeier and Steele have moved on to a revamped version of the same old trolling trick, but this time using the Americans with Disabilities Act as the fulcrum, rather than copyright law.

But, it appears that all that may be small potatoes. Because, as White told us three years ago, the wheels of justice do keep turning, and he now has strong indications that not only is the FBI actively investigating Steele and Hansmeier for fraud, but that they may be just about ready to move on to the next steps:

Based on my 21 years in the federal criminal justice system, I believe the letter reflects an active, determined investigation in its later stages. The letter represents an abandonment of operational security and confidentiality; it suggests the FBI no longer sees a need for stealth. That, in turn, suggests that the FBI believes it's already developed the evidence it needs to prove the substance of its case (that Team Prenda committed wire and/or mail fraud) and is just identifying as many victims as possible for potential witnesses and to establish the amount of damages. Bear in mind that under the Federal Sentencing Guidelines, the more money wrongdoers made, the more time they're facing.

Now, to be fair, over the years we've noted many times that the DOJ often misrepresents things in criminal filings, so it will be interesting to see what charges are actually filed, assuming that the case really is ready to move. But as White also noted, "Team Prenda needs federal criminal defense attorneys, and needs them right now."

Filed Under: ada, ada troll, copyright, copyright troll, fbi, fraud, john steele, paul hansmeier
Companies: prenda, prenda law