“appearance of partiality” and has possibly disqualified himself/herself.

October 28, 2013 § Leave a comment

“Fraud On The Court By An Officer Of The Court”
And “Disqualification Of Judges, State and Federal”
1. Who is an “officer of the court”?
2. What is “fraud on the court”?
3. What effect does an act of “fraud upon the court” have upon the court proceeding?
4. What causes the “Disqualification of Judges?”

 


1. Who is an “officer of the court”?

        A judge is an officer of the court, as well as are all attorneys. A state judge is a state judicial officer, paid by the State to act impartially and lawfully. A federal judge is a federal judicial officer, paid by the federal government to act impartially and lawfully. State and federal attorneys fall into the same general category and must meet the same requirements. A judge is not the court. People v. Zajic, 88 Ill.App.3d 477, 410 N.E.2d 626 (1980).

2. What is “fraud on the court”?

        Whenever any officer of the court commits fraud during a proceeding in the court, he/she is engaged in “fraud upon the court”. In Bulloch v. United States, 763 F.2d 1115, 1121 (10th Cir. 1985), the court stated “Fraud upon the court is fraud which is directed to the judicial machinery itself and is not fraud between the parties or fraudulent documents, false statements or perjury. … It is where the court or a member is corrupted or influenced or influence is attempted or where the judge has not performed his judicial function — thus where the impartial functions of the court have been directly corrupted.”
“Fraud upon the court” has been defined by the 7th Circuit Court of Appeals to “embrace that species of fraud which does, or attempts to, defile the court itself, or is a fraud perpetrated by officers of the court so that the judicial machinery can not perform in the usual manner its impartial task of adjudging cases that are presented for adjudication.” Kenner v. C.I.R., 387 F.3d 689 (1968); 7 Moore’s Federal Practice, 2d ed., p. 512, ¶ 60.23. The 7th Circuit further stated “a decision produced by fraud upon the court is not in essence a decision at all, and never becomes final.”

3. What effect does an act of “fraud upon the court” have upon the court proceeding?

        “Fraud upon the court” makes void the orders and judgments of that court.
It is also clear and well-settled Illinois law that any attempt to commit “fraud upon the court” vitiates the entire proceeding. The People of the State of Illinois v. Fred E. Sterling, 357 Ill. 354; 192 N.E. 229 (1934) (“The maxim that fraud vitiates every transaction into which it enters applies to judgments as well as to contracts and other transactions.”); Allen F. Moore v. Stanley F. Sievers, 336 Ill. 316; 168 N.E. 259 (1929) (“The maxim that fraud vitiates every transaction into which it enters …”); In re Village of Willowbrook, 37 Ill.App.2d 393 (1962) (“It is axiomatic that fraud vitiates everything.”); Dunham v. Dunham, 57 Ill.App. 475 (1894), affirmed 162 Ill. 589 (1896); Skelly Oil Co. v. Universal Oil Products Co., 338 Ill.App. 79, 86 N.E.2d 875, 883-4 (1949); Thomas Stasel v. The American Home Security Corporation, 362 Ill. 350; 199 N.E. 798 (1935).
Under Illinois and Federal law, when any officer of the court has committed “fraud upon the court”, the orders and judgment of that court are void, of no legal force or effect.

4. What causes the “Disqualification of Judges?”

        Federal law requires the automatic disqualification of a Federal judge under certain circumstances.
In 1994, the U.S. Supreme Court held that “Disqualification is required if an objective observer would entertain reasonable questions about the judge’s impartiality. If a judge’s attitude or state of mind leads a detached observer to conclude that a fair and impartial hearing is unlikely, the judge must be disqualified.” [Emphasis added]. Liteky v. U.S., 114 S.Ct. 1147, 1162 (1994).
Courts have repeatedly held that positive proof of the partiality of a judge is not a requirement, only the appearance of partiality. Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847, 108 S.Ct. 2194 (1988) (what matters is not the reality of bias or prejudice but its appearance); United States v. Balistrieri, 779 F.2d 1191 (7th Cir. 1985) (Section 455(a) “is directed against the appearance of partiality, whether or not the judge is actually biased.”) (“Section 455(a) of the Judicial Code, 28 U.S.C. §455(a), is not intended to protect litigants from actual bias in their judge but rather to promote public confidence in the impartiality of the judicial process.”).
That Court also stated that Section 455(a) “requires a judge to recuse himself in any proceeding in which her impartiality might reasonably be questioned.” Taylor v. O’Grady, 888 F.2d 1189 (7th Cir. 1989). In Pfizer Inc. v. Lord, 456 F.2d 532 (8th Cir. 1972), the Court stated that “It is important that the litigant not only actually receive justice, but that he believes that he has received justice.”
The Supreme Court has ruled and has reaffirmed the principle that “justice must satisfy the appearance of justice”, Levine v. United States, 362 U.S. 610, 80 S.Ct. 1038 (1960), citing Offutt v. United States, 348 U.S. 11, 14, 75 S.Ct. 11, 13 (1954). A judge receiving a bribe from an interested party over which he is presiding, does not give the appearance of justice.
“Recusal under Section 455 is self-executing; a party need not file affidavits in support of recusal and the judge is obligated to recuse herself sua sponte under the stated circumstances.” Taylor v. O’Grady, 888 F.2d 1189 (7th Cir. 1989).
Further, the judge has a legal duty to disqualify himself even if there is no motion asking for his disqualification. The Seventh Circuit Court of Appeals further stated that “We think that this language [455(a)] imposes a duty on the judge to act sua sponte, even if no motion or affidavit is filed.” Balistrieri, at 1202.
Judges do not have discretion not to disqualify themselves. By law, they are bound to follow the law. Should a judge not disqualify himself as required by law, then the judge has given another example of his “appearance of partiality” which, possibly, further disqualifies the judge. Should another judge not accept the disqualification of the judge, then the second judge has evidenced an “appearance of partiality” and has possibly disqualified himself/herself. None of the orders issued by any judge who has been disqualified by law would appear to be valid. It would appear that they are void as a matter of law, and are of no legal force or effect.
Should a judge not disqualify himself, then the judge is violation of the Due Process Clause of the U.S. Constitution. United States v. Sciuto, 521 F.2d 842, 845 (7th Cir. 1996) (“The right to a tribunal free from bias or prejudice is based, not on section 144, but on the Due Process Clause.”).
Should a judge issue any order after he has been disqualified by law, and if the party has been denied of any of his / her property, then the judge may have been engaged in the Federal Crime of “interference with interstate commerce”. The judge has acted in the judge’s personal capacity and not in the judge’s judicial capacity. It has been said that this judge, acting in this manner, has no more lawful authority than someone’s next-door neighbor (provided that he is not a judge). However some judges may not follow the law.
If you were a non-represented litigant, and should the court not follow the law as to non-represented litigants, then the judge has expressed an “appearance of partiality” and, under the law, it would seem that he/she has disqualified him/herself.
However, since not all judges keep up to date in the law, and since not all judges follow the law, it is possible that a judge may not know the ruling of the U.S. Supreme Court and the other courts on this subject. Notice that it states “disqualification is required” and that a judge “must be disqualified” under certain circumstances.
The Supreme Court has also held that if a judge wars against the Constitution, or if he acts without jurisdiction, he has engaged in treason to the Constitution. If a judge acts after he has been automatically disqualified by law, then he is acting without jurisdiction, and that suggest that he is then engaging in criminal acts of treason, and may be engaged in extortion and the interference with interstate commerce.
Courts have repeatedly ruled that judges have no immunity for their criminal acts. Since both treason and the interference with interstate commerce are criminal acts, no judge has immunity to engage in such acts.

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Federal lawsuit adds to allegations of excessive force by family court marshals and the appearance of judges as well

October 28, 2013 § Leave a comment

COURT SECURITY

Federal lawsuit adds to allegations of excessive force by family court marshals

By Martha Neil

Oct 24, 2013, 12:40 pm CDT

A federal lawsuit alleging that Nevada family court marshals threw a man headfirst onto the concrete floor of the Las Vegas courthouse for no good reason is the latest development in an ongoing saga of allegations of excessive force and improper conduct at the court.

A poor-quality video of the February 2012 incident appears to offer some support for the claims made in the suit by plaintiff Peter Peterson, 42, who said he had been put in restraints prior to being thrown to the floor, according to the Las Vegas Review-Journal.

Marshals said in an incident report that Peterson was confrontational and tried to incite bystanders, but a witness complained in a 911 call that the marshals harassed Peterson and slammed him into the floor, the newspaper recounts.

The suit comes in the midst of a federal grand jury investigation of allegations of excessive force and improper conduct by family court marshals, and the FBI has sought records of internal investigations at the court, which is a division of Clark County District Court, the article says. The newspaper relies on unidentified sources for information about the ongoing probe.

Peterson contends in the suit that he was attacked after he complained about security procedures and alleges that a long-standing policy of ignoring and minimizing excessive force incidents have resulted in marshals feeling “empowered to harm citizens, knowing that there will be no punishment after the fact.”

A subsequent Las Vegas Review-Journal article says the FBI is interviewing both current and former court employees about both allegations of excessive force by the marshals and claims of a cover-up when complaints were made.

The Las Vegas Review-Journal has also editorialized about the allegations, saying that changes are needed now to ensure citizen safety in the courts.

Spokeswoman Mary Ann Price said court officials are cooperating with the FBI. “Court administration had advised the FBI of investigative files that upon subpoena would be provided,” she told the newspaper.

Another federal lawsuit was filed earlier this year over alleged groping by a family court marshal, and a judge at the family court is facing a legal ethics case over claimed conduct unrelated to the excessive force allegations.

See also:

ABAJournal.com: “Vegas Judge, 5 Others Federally Indicted re Claimed $3M Fraud Scheme”

ABAJournal.com: “Ex-prosecutor won’t be disciplined for relationship with judge”

Las Vegas Review-Journal: “Victim of Family Court groping incident files federal lawsuit”

Las Vegas Review-Journal: “Family Court judge argues disciplinary case against him shouldn’t continue”

Click here to view or post comments about this story

 

The assault on the First Amendment doctrine continues

October 28, 2013 § Leave a comment

28 October A.D. 2013

The assault on the First Amendment doctrine continues, but, at the end of the day, that won’t prevent this “Beast’s” date with Judgment.

The cover story for the warrant, Aug. 2013, was enforcement of the no-fire-arms policy regarding the journalist’s husband’s disarmament status stemming from a 1986 “resisting arrest” conviction.  If that seems “thin” on first pass, it doesn’t get any thicker on any subsequent reflection of the matter, either.

What the popular mindset continues to think is that there’s something valuable about “getting the word out” regarding corruption within “government.”  And, while there’ll be some value in that continuing line of activity, where we’re staring in the face of a third-world type dictatorship in the making, getting the word out is in the very same category as political solutions, generally.  What does getting the word out intend to promote?  Political response.  Where the political response mechanism is “controlled” at the source, i.e., keeping the journalists from investigating so as to prevent reporting so as to prevent political response by those in a position to act politically, the concept of political response is all the more neutralized.

As less and less about inside-job corruption is said, the more of that corruption can be expected to be going on.  “Government” isn’t “cleaned up” by attacking investigative journalists and their sources.  That’s like saying that the rodent population will go down by putting the cats somewhere else.

The preventative remedy for the Banana-Republic-style dictatorship is in the marketplace.  Coming to terms with the concept that “federal” means “federal” is the threshold step in that paradigm shift.  For so long as we’re thinking “law” and “politics” instead of “gotcha agreements,” this wanna-be dictatorship is going to continue to make progress down its preferred path.

As we get to the point of adjusting to the reality of the “gotcha-agreement” mechanism, part of that is implemented in the medium of exchange.  The use of the “funny money” tends to confirm the “choice of law” for that transaction.

That investigative journalist and her sources were continuing down the “full-back up the middle” approach to dealing with this “Beast” system.  They’ve been stopped in the backfield for a loss.  What is said in this day and age is less and less relevant.  It’s what we do that’s going to matter, and part of what we’ve got to do, in full support of what this investigative journalist and her sources were trying to do, is come to terms with the mechanism by which this present system functions.  To apply the concepts, it helps first to have them in mind.  Thus, the early part of what we do is educational in nature.  Those good people are still lost in the myths and lies on which we’re all raised of “law” and “politics.”  That’s just not our present legal reality.  It’s fair to say that even up to 1964, there was some measure of “control” via “law” and “politics,” but, when the “Beast” system went commercial circa 1965, which is when the last vestiges of honest weights and measures in general circulation no longer in general circulation, it’s been anything but “law” and “politics.”  The whole of the commercial mechanism was in place by that time, so that the transition would appear seamless.

Exposing this or that scam or corruption within “government” isn’t going to do anything more than cause a bit of very temporary embarrassment within this dictatorship-in-the-making.  To bring that line of insanity to a halt requires dealing with it for what it is rather than for what we wished it were.  To deal with it for what it is, we have to stop using its “funny money,” and, for that few who have a few fights in them, it’ll be very important to come to terms with the reality of the commercial mechanism on which this system depends.  For example, where there’s an issue within the Dept. of Transportation, while there may not be any way to curb the abuses from within that agency, we can do commercial curbing of the scope of their “outreach ministry” by realizing that “transportation” is “commercial” activity.  The feds don’t get much into the non-commercial activity, i.e., into the “traveler” arena, so the direct impact at the national level on that agency isn’t expected to be all that direct.  But, indirectly, since that national system is 100% addicted to the “funny money,” as we learn and apply the differences between “travel” and “transportation” at the STATE level, that will have a commercial impact on the national system, because it’ll start to be a ripple in the “money supply management” system (the “tickets,” when paid, operate to take that many “federal reserve note” “dollars” back out of circulation, which is “the” purpose for the “transportation” enforcement mechanism at the STATE level).

We think “law” and “politics” because we’ve been raised on “law” and “politics” because that’s where this present system has its “controls” in place.  “Law” and “politics” are the magician’s distraction to the reality of the commercial mechanism.  Our gazillion “dollar” “investment” in “law” and “politics” is music to the “Beast’s” ears.  Our focus on “law” and “politics” is what keeps us in the task of digger our hole that much wider and that much deeper.  “Law” and “politics” doesn’t even put the slightest ding in the “Beast’s” armor.  The long and the short on this assault on the First Amendment doctrine is that the First Amendment isn’t a source or mechanism of (effective) control over this “Beast.”  It used to be, but the “Beast” has, in the commercial analogy, bought out all the competition.  It’s not what is said that matters.  It’s what’s done that matters, and what’s done is either to enter a “gotcha agreement” or to avoid it.  What’s done is either to use “funny money” or something else.  We’re not “choosing ye this day” with our words.  We’re “choosing ye this day” with our commercial practices.  Thus, the investigative journalist getting “dirt” on this person or that process is doing a fine work, but an increasingly irrelevant work.  The investigative journalist who first gets his/her mind around our present legal reality will start teaching law and find a thousand-fold increase in the effectiveness of the effort to curb the abuses committed in the name of “government.”

If we’d “take” the push and the shove from this “Beast” and realize where all that “motive force” puts us, we’ll realize that “all” of the remaining options take us to the reality.  The more assaults we find on what vexes us, the more we’re going to have to realize that the “old ways” “don’t work.”  The sooner we realize that it’s not about “law” and “politics” but rather Monte Hall’s, “Let’s Make A Deal!”, the sooner we’re intellectually in a position to comprehend the mechanism of the problem.  To see the problem for what it is, is to see the solution.

In addition to the fact that our “law of man” problems are solved by applying fundamental Law of God solutions, the “law of man” we’ve been taught has been fully intentionally “fed” to us.  There’ll come a day where it’ll make good and perfect sense that we “know” what we “know” because that’s what “the bank” (masquerading as a “government”) taught us.  We’ve been taught what we’ve been taught for the benefit of the bank.  The path of tyranny and dictatorship is what is “good for the bank.”  Where that’s not good for the individual, we simply have a lot of unlearning to do so as then to learn the foundation of the Rock and to start building our foundation on the Rock instead of on the sand.

The Source we need for the investigative stories and exposes isn’t found working in or for this “Beast” system.  In other words, this journalist has been benefited, and while it doesn’t feel that way at the moment, there’ll come a day when it’ll be bright as day that the Source of the information that’s going to provide the solution toward which she’s intending to contribute is fully available in the libraries and on line.  In these life-changing moments, we’ll find the benefit, if we’ll just wear the right set of glasses.

Harmon L. Taylor
Legal Reality
Dallas, Texas

ILLINOIS FATHERS NEWS LETTER

October 23, 2013 § Leave a comment

Hello Illinois Fathers Membership,

I apologize for the inconsistency of sending out newsletters as of late. Taking over the Presidency has proven to be quite a timely task. Starting November first we will begin sending out a newsletter once a month. You will receive one newsletter a month between the first and the fifth. I encourage you all to read the newsletter and submit feedback to us so we can better serve you. I sent out a survey in my last newsletter asking for contact information as well as demographic information. I received negative feed back from a few asking why I needed their information. The answer is simple. Moving forward into 2014 we will be aggressively seeking grant money. When applying for this grant money we need to be able to show who we serve. By who we serve they want to know age groups, area, gender, in some cases race, and sometimes even income. The information they want to know depends on the money we are seeking. For instance if we find a grant that is to help needy families. The grantor would want to see the household income of the people we will be serving. We would not send your information on an individual basis we would send the statistics we calculate from the data we collected.
For example we would send a report saying that 55% of the people we serve have a household income of 30k or less a year. Last time I sent the survey I was very depressed when I read the results and had 14 responses.  To those who filled it out thank you so much.  For those who didn’t I can’t stress enough the importance of collecting this data and ensure you that your information will remain confidential and used strictly for the purpose of better serving you and non-custodial parents across the state. I encourage you to please fill out the survey that will be sent in the November first newsletter.

The Watkins story takes another twist. Shirley Skinner the grandmother of Stevens estranged wife Jennifer,  has asked to be granted clemency for her crimes.

“Circuit Judge Mark Schuering of Adams County sentenced Skinner to 55 years imprisonment for the first-degree murder of her granddaughter’s estranged husband in November 2008.
The sentence was 10 years more than that recommended by prosecutors for the slaying.
The judge said he did not want his signature on a sentencing order with the minimum penalty for the murder.
Because Skinner, 75, must serve 100 percent of the murder sentence, she would have to live to 130 to see life outside of prison.
The judge, who presided over the trial held in Quincy because of pre-trial publicity in Cass County, described the killing as “cold-blooded murder” and said he could not disagree with prosecutors’ characterization that it was an execution. ”

Illinois Fathers will be hosting a gathering on the Capitol steps in Springfield Ill, on November 25th 2013 to raise awareness and urge the public to sign the petition to deny Shirley Skinner clemency. More details coming in the next newsletter I will have start and end times setup by then. Please mark the date on your calendars and request the day off work.  This is a very important cause please come out and show your support.

Steven Westerfield
President
Illinois Fathers

GOVABUSE PROTESTS FRIDAY OCT .25TH 2013 11AM TO 1PM

October 22, 2013 § Leave a comment

GOVABUSE PROTESTS; FRIDAY OCT 25th, 2013-11:00 AM -to- 1:00PM – IF YOU HAVE NOT SET-UP YET- IT IS NOT TOO LATE>>>>
HOW TO GET INVOLVED – 2 hrs of your life for the most worthy cause: CONTACT 4-5 friends in your area, tell them the county (family / juvenile) courthouse to meet, send media press release, print a Govabuse ribbon & glue on signs with a catchy sentence re; injustice. Peacefully assemble for 2 hrs to protest & give short interview to reporters. Send us photo’s & video. FOLLOW PROTEST RULES. www.govabuse.COM Any Q’s, contact Nancy Rolfe via; facebook private msg. Have great & safe protests!!

All Across The Country, Prenda Law’s Rubble Is Getting Bounced

October 22, 2013 § Leave a comment

All of Popehat’s Prenda coverage is collected here.

It’s been two months since I wrote about Prenda Law. Since then its fortunes — and the fortunes of its principals — have been on the wane. Prenda, John Steele, Paul Hansmeier, Paul Duffy, and Mark Lutz have been suffering devastating blows across the country. Any one of these developments would be grave for any normal lawyer or legal enterprise. Combined, they represent a swiftly accelerating rout. Each development makes it more and more plausible that Judge Wright’s referral of Prenda’s principals to federal prosecutors will yield a grand jury investigation and, eventually, federal criminal charges. To one side, career and financial ruin loom as multiple courts issue brutal and reputation-destroying sanctions; to the other side, the door to federal prison yawns open.

So what’s been going on? Let’s look at updates state by state, and then turn to last Thursday’s big development in Los Angeles. Brace yourself; this is a long post.

Massachusetts

In the United States District Court for the District of Massachusetts, defendant Sandipan Chowdhury and his able lawyers from Booth Sweet LLP have been running rampant over a mostly absent Prenda. Prenda, through its entity AF Holdings, sued Chowdhury over alleged downloads of a movie called “Sexual Obsession.” Chowdhury did not go quietly. Chowdhury filed a counterclaim setting forth Prenda’s shady dealings and demanding cancellation of the copyright, and asked the court to order Prenda (through AF Holdings) to post a bond to continue. Prenda failed to do so. Prenda’s local counsel sought and obtained leave to withdraw in an astonishing motion that suggests that the he had concluded that Prenda is engaged in fraud and wanted none of it. Chowdhury and his attorneys, not ones to pass up the opportunity to club a baby seal, asked the court to enter a default against Prenda, citing Prenda’s failure to post the ordered bond and its failure to answer the counterclaim, as well as the emerging evidence of Prenda’s misconduct and deceit. Crucially, Chowdhury asked the court to enter default against AF Holdings and its “known aliases.”Prenda failed to respond once again. The court granted the motion, resulting in a default order that identifies Prenda Law, John Steele, Paul Hansmeier, and Paul Duffy as “aliases” of AF Holdings.1 Last week Chowdhury followed up with a request that the Court enter a final judgment based on the default order. Chowdhury’s proposed final judgment would impose a sizable judgment against the whole Prenda team:

It is hereby ORDRED, ADJUDGED AND DECREED that Defendant Chowdhury recover jointly and severally from Plaintiff AF Holdings, Inc., Prenda Law, Inc., John L. Steele, Paul A. Duffy, Paul R. Hansmeier and Mark Lutz the principal amount of $21,393.60, with costs and attorney’s fees trebled pursuant to M.G.L. c. 93(A) §9 for a total judgment of $64,180.80 with interest as provided by law.

It remains to be seen whether someone from Team Prenda will finally show up to oppose this. If history serves Prenda’s principals may revert to their “I wasn’t served and didn’t know about this” dodge. Even if they finally do show up, they’re deep in the hole in this district.

tl;dr Prenda is abandoned by its local counsel in Massachusetts, ignores developments in a case, and suffers a default judgment that may result in a $64,180.80 judgment that adjudicates Paul Duffy, John Steele, Paul Hansmeier, Mark Lutz, Prenda Law, and AF Holdings to be “aliases” of each other.

Georgia

When last we spoke of Georgia, Defendant Rajesh Patel was in a brutal struggle with Prenda Law in the person of its rather excitable local counsel Jacques Nazaire. Prenda — through its shell AF Holdings — had sought to abandon its case against Patel, but Patel had sunk his teeth into Prenda and wanted sanctions. The United States District Court for the Northern District of Georgia permitted Patel limited discovery not on the merits of the dismissed case, but to gather information in support of a motion for sanctions, which is very rare and was not at all a good sign for Prenda.  As you will see, the court now probably regrets that.  Nazaire distinguished himself by arguing that the Georgia court should ignore Judge Wright’s sanctions order against Prenda in California BECAUSE GAY MARRIAGE, ranting about Brett Gibbs and that notorious terrorist organization the Electronic Frontier Foundation, suggesting that Patel’s court-permitted discovery into Prenda should be cut short because blogs are mean to Prenda and Nazaire, and resorting to mediocre “yo mamma” insults.

Patel and Prenda have been trading multiple accusations and demands for sanctions. Prenda has been asking the court to halt Patel’s various discovery methods, and Patel has been asking the court to compel Prenda to answer that discovery.   United States District Judge William C. O’Kelley has finally had enough and issued an order telling the parties to stop filing motions, that he would hold a hearing on sanctions based on the motions to date in due course, and generally saying STOP THAT RACKET OR I’LL PULL THIS CAR RIGHT OVER SEE IF I DON’T. Patel — who may be lost to buck fever — has filed a motion asking for leave to filemore motions despite the court’s rather unambiguous signal. Maybe Patel thinks the federal judge doesn’t really mean it. Federal judges always really mean it.

Patel may have overplayed his hand and eroded the court’s goodwill and inclination to sanction Prenda. But it has not been in vain. Patel’s subpoenas — permitted by the court as part of the discovery-to-support-sanctions process — uncovered crucial data that badly wounds Prenda. Among other things, Patel’s papers discuss documents and recordings disclosed by GoDaddy demonstrating that: (1) John Steele’s GoDaddy account was used to access a site registered to “Alan Cooper,” (2) the same email address is used in connection with sites registered to “Alan Cooper,” Mark Lutz, and John Steele, (3) recordings show the same male voice making tech support calls to GoDaddy and using the names John Steele, Alan Cooper, and Mark Lutz, (4) a purported “Alan Cooper” domain was registered using another John Steele email address. That information corroborates Alan Cooper’s assertions that John Steele stole his identity and is powerful evidence that John Steele was far more involved in running the business than he has claimed in court.

More explosively, Patel’s discovery to Comcast yielded IP address information showing that the same IP address (1) accessed John Steele’s GoDaddy account, (2) accessed Prenda site wefightpiracy.com, (3) was assigned to Steele Hansmeier PLLC, John Steele and Paul Hansmeier’s former firm, and (4) is the same IP address that, as others have shown, uploaded the copyrighted works to the internet before Prenda claims that various defendants illegally downloaded them.What does that last part mean? It’s compelling evidence in support of aprevious allegation that John Steele was using Prenda to run a “honeypot”: that is, rather than protecting copyrighted works, he was deliberately posting them in places where they were likely to be downloaded, and then suing the downloaders as a revenue-generating scheme. If true, that necessarily involved fraudulent misrepresentations and omissions to courts and to defendants, and undermined Prenda’s right to sue on the copyright. To learn more about the significance of that, and how people traced the IP to John Steele, you can read Joe Mullin orTorrentFreak. Prior to the release of the Comcast documents, John Steelehotly denied that he ran a “honeypot.” Technically, I suppose that is not evidence that he did.

Finally, Patel’s discovery campaign yielded an increasingly familiar result: Mark Lutz failed to show up for something. You may recall that Mark Lutz is — according to him and the other Prendarasts — formerly a paralegal for Steele and Hansmeier, a thoroughly useless “corporate representative,” an alleged unpaid “manager” or “CEO” of Prenda Law entity AF HoldingsAF Holdings is owned by a trust called Salt Marsh, the beneficiaries of which are Lutz’s own hypothetical and unborn children. Nothing suspicious about that! Anyway, Patel noticed Lutz’ deposition, and — in what will be a pattern in this post — Lutz didn’t show. Patel moved to compel him. Nazaire, who can keep a straight face through anything,said there is no legitimate reason to depose Lutz and that the only reason that Patel wants to depose Lutz is so that mean blogs can humiliate him:

Additionally, Mr. Lutz has every reason not to appear for a deposition. The deposition is sought out, not for seeking discoverable evidence, but rather to ridicule him.

That’s a great argument, Mr. Nazaire, because if Patel is investigating whether AF Holdings is involved in a large-scale fraud scheme there’s absolutely no reason to depose the CEO/manager of AF Holdings, the guy whose unborn children are the only beneficiaries of the mysterious trust that owns AF Holdings.

tl;dr: In Georgia, the court may have lost its patience with sanctions motions against Prenda, but discovery has yielded information substantially strengthening the fraud case against Prenda and its principals. Also, Mark Lutz is AWOL.

Illinois

I first started writing about Prenda Law when it blundered into my wheelhouse — frivolous defamation suits. John Steele, Paul Duffy, and Prenda law filed defamation suits simultaneously against Alan Cooper and his lawyer Paul Godfread in Illinois and Florida in retaliation for them revealing that Prenda had stolen Alan Cooper’s identity. John Steele used those lawsuits in an attempt to threaten Alan Cooper and deter him from testifying. When last I wrote about those suits, Cooper and Godfread removed the Illinois cases to the United States District Courts in the Northern and Southern Districts of Illinois and filed counterclaims arising from the theft of Cooper’s identity.

Since then the Illinois cases have not gone Prenda’s way.  First, The federal judge in the Southern District of Illinois transferred the Prenda law defamation suit to the Northern District where the Paul Duffy defamation suit is pending; now the same judge will hear both.Coordination and consolidation of cases won’t help Prenda, because it will be easier to observe Prenda’s misconduct across consolidated cases.

Second, Prenda ran a brief and unsuccessful scam in an effort to get one of the cases cases returned to state court, which would have been slower to recognize and punish its misconduct. You have to know a bit of federal civil procedure to understand the scam and how it failed. To file something in federal court, you need subject matter jurisdiction — that means either a federal claim or diversity of citizenship. “Diversity of citizenship” means that the plaintiffs and defendants are from different states. That basis for jurisdiction is a throwback to when we assumed a citizen of one state wouldn’t get fair treatment in the courts of another state. Diversity must be complete; if any plaintiff is from the same state as any defendant, there is no diversity jurisdiction. In removing the Prenda and Duffy defamation cases to federal court — a far more defense-friendly forum — Cooper and Godfread had to rely on diversity as the basis for federal jurisdiction because the cases did not involve state claims.

Prenda’s scam worked like this – they demanded that the federal court send the Prenda Law defamation complaint back to state court because just before Cooper and Godfread removed it to federal court, Prenda added the Alpha Law Group as an additional plaintiff. Since Alpha Law Group is a Minnesota entity, and since Cooper and Godfread are from Minnesota, there would be no diversity jurisdiction. What does Alpha Law Group have to do with the case? Absolutely nothing. Prenda changed nothing substantive about the case and only added Alpha as a plaintiff to destroy diversity. That’s the scam.

But Prenda got caught in deceit. See, under Illinois law, once Prenda and Duffy served Cooper and Godfread with the lawsuit, they couldn’t amend it without leave of the Illinois court. They had served Cooper and Godfread — indeed, as is noted above, Steele called Cooper to gloat and threaten him immediately after that service. Steele also called Godfread to gloat about serving him. So how did they file the amended complaints adding Alpha Law Firm? They did it by telling the Illinois court clerk that the suits had not been served. Godfread and Cooper submitted a declaration from an Illinois court clerk who says that she asked the Prenda Law local counsel how he could amend the complaint without a court order, and he claimed the complaint hadn’t been served. The amended complaint was therefore filed only because of a false statement, and filed in violation of Illinois law: it was a nullity and couldn’t defeat diversity jurisdiction.

Faced with this evidence, Paul Duffy withdrew the motion to remand. But it was too late: the scam was revealed. Prenda claims that the lackey attorney who went to the clerk’s office didn’t know that the complaint had been served on Cooper and Godfread. That may excuse the lackey, but it makes no sense as to Duffy and Team Prenda — they knew the complaint had been served and they knew they had no court permission to file an amended complaint and they filed amended complaint anyway, fraudulently adding the irrelevant plaintiff Alpha in an effort to stay out of federal court. Cooper and Godfread have filed a strong motion for sanctions on that basis, putting Prenda’s conduct in the context of the multiple sanctions levied against it across the nation. We’ll see how Prenda responds.

Moreover, Cooper and Godfread have filed very strong amended counterclaims against Duffy and Prenda for identity theft and abuse of process.

Even if Team Prenda somehow defeats the motion for sanctions, the Illinois cases represent nothing but an opportunity for their strongest critics to conduct invasive discovery into their entire operation. They have literally no upside. The defamation complaints — filed in a feckless attempt to intimidate Alan Cooper — have backfired disastrously.

tl;dr: In Illinois, Prenda faces sanctions after a clumsy attempt to fake a reason to send its bogus defamation case back to state court.

Minnesota (State Court)

In Minnesota state court, Prenda — in the form of one of its shell entities, Guava LLC — has been sanctioned yet again for litigation misconduct.

The saga is detailed in Judge Tanya M. Bransford’s sanctions order: Guava LLC sued Spencer Merkel in Minnesota state court for alleged illegal downloads despite neither Guava nor Merkel having an significant connection to the state. Guava was represented by Michael Dugas of the Alpha Law Firm — yes, the same Alpha Law Firm that Prenda tried fraudulently to add to the Illinois case, as described above. Paul Hansmeier and John Steele also appeared at various times for Guava. Dugas and Hansmeier swiftly used the case as a vehicle to seek orders directing ISPs to disclose subscriber information on various IP addresses. When subscribers objected, things fell apart, the center could not hold. Under scrutiny John Steele could not explain coherently why Guava sued in Minnesota, and could only describe Guava vaguely as a Nevis entity with offices in Las Vegas. Does that sound familiar? It should — it’s the same thing Team Prenda said about another one of its entities, Ingenuity 13. Moreover, Spencer Merkel — the defendant — described what sounds like a scheme to set up a fake case in Minnesota, with a willing defendant and a Prenda-provided defense lawyer, as a ruse to obtain subscriber information from ISPs:

In the affidavit Merkel stated that he was a Beaverton, Oregon resident and that he received a September 26, 2012 letter from Prenda’s Paul Duffy (“Duffy”), claiming that Merkel had illegally downloaded a movie named Amateur Allure – MaeLynn 2 and that Merkel could pay Prenda $3,400 by October 11, 2012 to avoid being named in the lawsuit, Hard Drive Productions, Inc. v. Does 1-1,495, which had been filed in the United States District Court for the District of Columbia. Merkel Aff. at ¶ 1; Exhibit A. Before the deadline, Merkel states that he called Prenda Law and spoke with someone named Mike or Michael. Id. at ¶ 2. Merkel attests that he informed“Michael” that he was unable to pay thesettlement amount butinquired if they couldsettle the case.Id.According to the affidavit,“Michael” told Merkel that to settle he would have to agree to the following: Merkel would be sued, Merkel had to provide a bit-torrent log from his computer, and Prenda would dismiss the claim against Merkel after receiving the bit-torrent information. Id. at ¶ 3. During the discussion with“Michael,” Merkel states that he was told that a pro-bono attorney may be willing to takethe case in Minnesota and that “Michael” did not know any pro-bono attorneys in Oregon. Id. at ¶ 4. Merkel states he agreed to be sued in Minnesota because he could not afford an attorney and obtained his attorney, Trina Morrison, based upon the information he received from Prenda. Id. Merkel also attests that he had never heard of Guava LLC or Alpha Law Firm LLC until this lawsuit; he believed that the opposing parties would be Prenda and Hard Drive Productions, Inc. Id. at ¶ 5-6. On January 15, 2013, Merkel received a voicemail from someone at Prenda stating that he “needed to make payment arrangements or [he] would be sued.” Id. at ¶ 8. According to Merkel, Guava had not requested either his bit-torrent log information or the names of any alleged co-conspirators. Id. at ¶ 9.3 Merkel’s counsel testified that she graduated from law school with Guava’s counsel Dugas and that she was approached to represent Merkel on a pro-bono basis after informing Mr. Dugas and Mr. Hansmeier that she may be interested in taking on a case pro-bono to gain experience. (See Hr’g Tr. At 17-20). (emphasis added)

Now, Dugas says that’s not true. Judge Bransford made short work of that: “[t]his Court finds that Dugas lacks any credibility with this Court based upon the actions he has taken in this matter.” Ultimately Judge Bransford concluded “Plaintiff Guava LLC and its counsel Michael K. Dugas of Alpha Law Firm LLC acted in bad faith and without a basis in law and fact to initiate this action in Minnesota State District Court,” and sanctioned them $63,367.52 to pay the attorney fees and costs of the objectors.

tl;dr: A Minnesota court sanctioned a Prenda entity and a Prenda local counsel for creating a fake case to discover ISP subscriber information.

Minnesota (Federal Court)

You think that Prenda only has problems with open cases? They should be so lucky.

In the United States District Court for the District of Minnesota, upon reviewing Judge Wright’s apocalyptic sanctions order against Team Prenda, a magistrate judge issued an order re-opening five cases and ordering Prenda shell AF Holdings to show cause whether Judge Wright’s finding of fraud is binding on the Minnesota cases. Michael Dugas — the lawyer sanctioned by the Minnesota state court — was AF Holdings’ lawyer in those cases. Paul Hansmeier filed a brief strugling mightily to convince the court that Judge Wright was wrong and that his order was misguided and not binding. Just to make things worse for Prenda, Alan Cooper (represented by Paul Godfread) sought and obtained leave tosubmit evidence that Cooper’s signature had been forged in the Minnesota cases.

This led to a contentious hearing pitting Cooper and Godfread on one side and Hansmeier and Steele on the other. You can read a description of the hearing here at TechDirt or here at Ars Technica. As before, Prenda tried to portray Cooper as a disturbed man who had, in fact, agreed that his name could be used in Prenda’s porn copyright enterprise. Steele, in particular, claimed that Cooper gave Mark Lutz permission to sign documents on Cooper’s behalf, thus explaining Cooper’s signature on various documents.

That argument suffered from (among other things) a glaring flaw: the absence of Mark Lutz. The Minnesota court had directed AF Holdings to produce a witness representing it and capable of authenticating the Cooper signatures. Yet Lutz was nowhere to be seen. Hansmeier, always the good soldier, did what he could:

Hansmeier said that Lutz was planning to come, and is the sole officer of AF Holdings, and did make it to an earlier conference in this case in person, but that he wasn’t present today, and that Mr. Hansmeier hadn’t been able to reach him by phone or email. He voluntarily elaborated that Steele and Lutz had been booked on the same flight from Miami, that Steele had gone to Lutz’s apartment to meet him (because Steele had Lutz’s boarding pass), but found him not home. Steele had then, according to Hansmeier, driven around Miami looking for Lutz, and even encountered some of Lutz’s friends who said Lutz had told them the night before that he had to make an early night of it because he was traveling to this court in the morning.

If “looking for Lutz on the streets of Miami” isn’t already on Urban Dictionary, representing some uncomfortable sexual practice, I shall be quite put out.

Hansmeier sought, and received, permission to file a supplemental declaration explaining what happened to Lutz. When he did so, it wasrather less than observers expected:

Mr. Lutz was traveling with another witness to the Hearing. The witness indicated that Mr. Lutz was not on the flight from Fort Lauderdale, Florida. I have attempted to contact Mr. Lutz but have been unable to reach him as of the time of this declaration. Based on my prior experience with Mr. Lutz, including Mr. Lutz’s prior in-person attendance before this Court on August 5, 2013, I believe that Mr. Lutz will be able to provide a good-faith reason for failing to make his flight to Minnesota.

So. The court ordered AF Holdings to produce an officer and someone who could authenticate documents. Mark Lutz, who is the unpaid CEO/manager of AF Holdings (in addition to a former paralegal of Steele and Hansmeier) and whose ungotten and unborn children are the beneficiaries of the mysterious trust that owns AF Holdings, and who allegedly received permission to sign for Alan Cooper in the manner that is the key issue in this entire hearing, didn’t show up, and hasn’t explained why, but Paul Hansmeier is confident he had a good reason.Well okay then. I’m sure that wont have any impact on Team Prenda’s credibility.

The judge has taken the motion under submission and will rule in “due course.” There’s no telling how long that will be, though I note that the hearing was weeks ago and orders saying “there is insufficient evidence to conclude fraud occurred and this matter is closed” don’t take much time. Moreover, nothing in the descriptions of the judge’s demeanor offered much hope.

An amusing coda: at the hearing, John Steele and Paul Hansmeier discovered through Alan Cooper’s testimony how he learned that his signature was being used: John Steele’s mother-in-law allegedly tipped him off by text. Joe Mullin offers this deathless line:

At this point, Steele exhaled loudly.

Team Prenda has subsequently offered new evidence claiming that John Steele’s mother-in-law wasn’t accusing anyone of fraud, and to the contrary Cooper had admitted to her husband that he knew his signature was being used. We’ll see how that plays out. I note that the affidavit relies on hearsay statements by the father-in-law but oddly fails to include an affidavit from him.

tl;dr: In Minnesota federal court Mark Lutz fails to appear at a hearing at which he is a crucial and required witness, and family drama increases popcorn consumption.

San Francisco, California

Up in San Francisco, Prenda has been in full retreat, attempting to extricate itself from cases without sanctions. Cathy Gellis previously guest-blogged for us and described how Team Prenda struggled —unsuccessfully — to dismiss AF Holdings v. Navasca “without prejudice,” meaning with leave to re-file if they so desired. United States District Judge Edward M. Chen rejected that approach, dismissed the case with prejudice (meaning, permanently), and gave defense attorneys Nick Ranallo and Morgan Pietz leave to make a motion for attorney fees as the prevailing party.

Pietz and Ranallo did so. Judge Chen granted the motion, awarding $22,531.93. Judge Chen’s order explicity concludes that the Alan Cooper signatures are forgeries, and that AF Holdings has litigated in a way that is “frivolous or objectively unreasonable,” and that Prenda’s motivation was not to protect copyright but “to sue people for downloading pornography in order to coerce settlements.” Judge Chen also considered evidence that Prenda was itself uploading the copyrighted materials to pirate sites to troll for defendants. He not only concluded that evidence was credible — he pointed out that Team Prenda quibbled with the evidence but failed to rebut it meaningfully:

But notably, what AF has not done is offer any counterevidence such as a declaration from Mr. Steele in which he denies that he is “sharkmp4” or other evidence that AF did not take steps to induce users to download the subject works. This evidence could easily have been offered by AF as a part of its opposition brief. AF’s failure to submit any factual denial under oath is telling.

Bear in mind that was Judge Chen’s conclusion even before the Comcast data was revealed in Georgia, as is discussed above. The case for Prenda itself uploading the materials to troll for defendants is now even stronger.

But the Northern District wasn’t done with Team Prenda yet.

Pietz and Ranallo filed a new motion for sanctions, this time arguing that Judge Chen should make the sanctions payable by John Steele and Paul Hansmeier, not just the shell AF Holdings. In support of that proposition they offered a new declaration from Brett Gibbs, who talked about how Steele and Hansmeier had supervised his work for AF Holdings. Team Prenda — through Paul Duffy — predictably ranted, raved, and attacked Gibbs’ credibility. Judge Chen assigned the motion to United States Magistrate Judge Nandor Vadas for hearing. In advance of the hearing, Magistrate Judge Vadas issued an extraordinary order detailing what he wanted to see at the hearing. That order called back to Paul Hansmeier’s utterly bizarre performance when he appeared at a deposition to testify on behalf of AF Holdings, the plaintiff in the case. Why, Judge Vadas wanted to know, did Hamsmeier show up to testify for AF Holdings if Mark Lutz was the CEO and Hansmeier was so pig-ignorant about the details? Why couldn’t he explain where the money from this enterprise goes? Who actually owns AF Holdings? Why did AF Holdings represent in court filings that it had no related parties if it was owned by the trust “Salt Marsh?” Vadas demanded that AF Holdings be prepared to answer those questions, and answering them clearly required the presence of CEO/manager Mark Lutz, and you already know what’s going to happen, don’t you?

The day of the hearing, Mark Lutz was a no-show. Steele and Hansmeier didn’t show up, either. Paul Duffy carried the water for Prenda Law, and carried it badly. Pietz and Ranallo called Brett Gibbs, who testified that Steele and Hansmeier directed Team Prenda’s litigation activities. Gibbs also testified that the voice on the GoDaddy customer service call tapes — revealed in the Georgia litigation, discussed above — was that of John Steele, notwithstanding that he identified himself as Alan Cooper and Mark Lutz in the calls. Finally, Gibbs testified that John Steele had said that “Salt Marsh” was an actual person who had signed documents in the case, an issue that Judge Chen had asked about. On cross-examination, Duffy flailed away, drawing questions from Judge Vadas about what he was trying to accomplish with his line of questions.

But Mark Lutz didn’t appear.

Days later, Team Prenda filed an affidavit from Lutz in which he claimed that he didn’t come to the hearing because he was mysteriously detained at the airport in Miami. Duffy asked for permission to file that under seal to protect Lutz from people saying hurty things about him. DENIED. Duffy asked to supplement the record with a declaration from Lutz about the substance of the hearing. DENIED. Judge Vadas pointed out that Team Prenda was attempting to insulate Lutz from cross-examination and called Duffy’s requests “gamesmanship.”

Soon thereafter Judge Vadas issued his order recommending findings of fact and conclusions of law to Judge Chen. It’s exceptionally difficult to imagine how it could have gone worse for Team Prenda. Judge Vadas concluded:

  • That though Judge Chen could not immediately sanction Steele and Hansmeier — because they were not parties to the action — Judge Chen could and should issue an order to show cause forcing them to explain why they shouldn’t be added to the attorney fee judgment as alter egos of AF Holdings;
  • That Team Prenda failed to address the points Judge Vadas told them to address, failed to introduce witnesses with relevant knowledge, failed to rebut — or sometimes even to address — the allegations against them, and that their attempt to start to do so only after the hearing showed that Duffy “is apparently not familiar with the rules of federal procedure, or with basic principles of motion practice”;
  • That Judge Chen should adopt Judge Wright’s conclusions about the relationship among AF Holdings, Steele, and Hansmeier, since they had an opportunity to litigate it but failed to do so;
  • That Duffy on behalf of Team Prenda failed to rebut the evidence that Prenda uploaded the videos at issue to the internet themselves, or the evidence that Prenda was “in cahoots” with the forensic “experts” who identified the downloaders, or that Prenda forged Alan Cooper’s signature.

Judge Vadas, in short, found sufficient facts to prove that Team Prenda did everything that Pietz and Ranallo accused them of doing, and that Team Prenda utterly failed to rebut that evidence, or in some cases even to respond to it.

In short order, after some ineffectual objections from Team Prenda, Judge Chen acccepted Judge Vadas’ recommended findings of fact and lawand ordered Steele and Hansmeier to appear and show cause why they should not be added to the attorney fee judgment in the case, making them liable for that $22,531.93. The findings of fact are far more harmful to Steele and Hansmeier than that potential award. Judge Chen also rejected AF Holdings’ objections, considering them even though Duffy filed them late. In doing so Chen made some telling points:

  • Rather than Steele and Hansmeier objecting to the proposed findings of fact and law, AF Holdings objected for them — including to the finding that Steele and Hansmeier control AF Holdings.  Yeah, chew on that one for a minute.
  • AF Holdings’ argument amounted to “well, Gibbs should have done an independent investigation and not relied on Steele and Hansmeier.”  But that does nothing to contradict the proof that Steele and Hansmeier controlled AF Holdings and directed Gibbs.
  • Judge Chen demolished, point by point, Team Prenda’s suggestions that the evidence was insufficient to support Judge Vadas’ conclusions.  He emphasized repeatedly that AF Holdings, Steele, and Hansmeier had a full opportunity to subpoena witnesses (Cooper, for instance) , appear themselves and testify, or otherwise present evidence, but suspiciously failed to do so.

So Judge Chen set a hearing, and made it clear that if Steele and Hansmeier want to have their assertions taken seriously, they had better show up and present live testimony:

While the parties and Mr. Steele and Mr. Hansmeier may submit declarations in support of their respective papers, the Court hereby forewarns all persons or entities involved that such declarations (or affidavits) will be given little to no weight because the Court shall be conducting an evidentiary hearing on the order to show cause on Thursday November 21, 2013. Thus, any testimony in a declaration (or affidavit) that a party or nonparty deems important, significant, or critical must be presented at the evidentiary hearing by a live witness, subject to cross-examination.  [boldface and indicia of imminent annihilation in original]

Judge Chen subsequently moved that date to December 19, 2013 and issued elaborate requirements for serving Steele and Hansmeier so they cannot pull their typical “I never got notice” routine.

The attorney fee number is modest, but this series of orders is perhaps the worst development for Team Prenda in this post — so far. It represents one more court making detailed findings of fact about Team Prenda’s fraudulent activities. Moreover, there is no way that Team Prenda can make a credible argument that they lacked a fair opportunity to contest the issues.

tl;dr: A federal court in San Francisco held a hearing about Team Prenda’s behavior, Team Prenda bizarrely failed to contest the issue competently, Mark Lutz failed to show up again, and the court make factual findings accepting nearly every material accusation of bad conduct levied at Team Prenda.

Los Angeles, California

That brings us to last week, in Los Angeles.

Last Thursday, in the case before Judge Wright that yielded so much drama, Brett Gibbs filed a curious document styled a “Motion for an Indicative Ruling” seeking to amend Judge Wright’s order and eliminate the sanctions against him.  Gibbs, representing himself, spilled more details about Team Prenda and revealed tantalizing documents, all in service of the argument that Judge Wright should reconsider his findings about Gibbs and sanctions against him.

I don’t think Gibbs will be successful in vacating the sanctions against him.  This is really a motion for reconsideration, and it’s both untimely and procedurally improper — Gibbs offers some facts and evidence he could have offered before, which is not a valid basis for reconsideration.  Moreover, the sanctions order is on appeal before the Ninth Circuit; Gibbs may have a difficult time convincing Judge Wright that he has jurisdiction to alter the order while it’s on appeal.

But I’m not sure that Brett Gibbs cares.  As he says in his conclusion:

While Gibbs is asking the Court to vacate the sanctions imposed upon him in its May 6 order, he is not asking the Court to withdraw the referrals the Court made to the U.S. Attorney, the Central District Disciplinary Committee, the State Bar and the Internal Revenue Service. Gibbs wants these investigations to proceed and will continue to cooperate fully with them. If the monetary sanctions against Gibbs are vacated, Gibbs will withdraw his appeal—which the Ninth Circuit has consolidated with the appeals of Prenda, the Principals and Plaintiffs. This will not prevent him from testifying about the actions and statements of the Principals in this or other cases.

I think Brett Gibbs may be trying to redeem himself and trying to put things right, and to gain a measure of justice against the low people who betrayed and abandoned him.  Good for him.

Gibbs’ brief and exhibits are very damaging to Team Prenda’s narratives:

  •  Team Prenda says that John Steele was not involved in directing the Prenda litigation or operating Prenda Law.  Yet when Gibbs wrote to Steele seeking Prenda Law’s malpractice policy, Steele immediately provided information about the policy.  Why would Steele be involved or have that information if he wasn’t running Prenda Law?
  • Team Prenda says that Prenda Law’s clients have nothing to hide.  So why was Paul Duffy threatening Gibbs to try to keep him silent about the Prenda Law shell entities?
  • Team Prenda says that Gibbs was responsible for any misconduct, that he’s not reliable, and that he’s lied about Team Prenda.  So why, after Judge Wright issued his devastating May 6, 2013 sanctions order, did Steele and Hansmeier try to convince Gibbs to sign ridiculously one-sided agreements under which Steele and Hansmeier would pay for the appellate bond staying the sanctions order, and Gibbs would represent them on the appeal, agree to say that Steele had no involvement in a Florida case (something that Gibbs says is not true), and accept a “fiduciary relationship” with Steele and Hansmeier probably calculated to prevent him from testifying about them? Steele and Hansmeier also demanded, as the price of this epically ridiculous deal, that Gibbs promise to pay all sanctions arising from Judge Wright’s order and that Gibbs waive all claims against them. Seriously? Also, if Steele and Hansmeier think that Gibbs is so awful, why are they demanding that he represent them in their desperate appeal of a life-destroying sanctions order?
  • And, perhaps most astoundingly, Team Prenda says that Steele and Hansmeier have no ownership interest in Prenda Law, AF Holdings, Ingenuity 13, or the various other Prenda shells.  Yet Gibbs submits Prenda Law financial records — records which Prenda Law shrewdly shared with Gibbs via DropBox. Those records seem to show that in 2012, when Prenda Law took in almost $2 million from its litigation exploits, it distributed nearly 70% of that to Steele and Hansmeier directly and through an entity called “Under The Bridge” — perhaps a coy reference to their chosen life of trolling. That percentage doesn’t include payments to Steele’s wife, payments to Paul Duffy, and payments of extravagant travel, meals, and entertainment. Every IRS Criminal Investigation Division agent looking at those spreadsheets — and I promise you there are some — just had a Stimulating Personal Moment.  Check out the coverage of the financials from Joe Mullin or Mike Masnick. This was big money, and Team Prenda’s coyness or evasions to the contrary, these records suggest Steele and Hansmeier got most of it. I guess Mark Lutz’ unborn kids are shit out of luck.

Brett Gibbs’ brief is better written and more convincing than anything Paul Duffy, John Steele, and Paul Hansmeier have produced since Judge Wright’s order.  It may not succeed in lifting the sanctions against Gibbs, but it’s good lawyering.

The financial records, in particular, are very bad news for Team Prenda.  They are exactly the sort of thing that federal law enforcement likes to use as a jumping-off point for an investigation.  If this disclosure isn’t worse for Team Prenda than Judge Chen’s order, discussed above, it is at least a tie.

tl;dr:  In Los Angeles Brett Gibbs has filed a new motion releasing documents showing where the money went — and, despite Team Prenda’s claims, it went to Steele and Hansmeier.

So What Does All Of This Mean?

So what does all of this mean?  Well, first it means that Team Prenda faces more imminent hearings at which its members will have to make difficult choices between incriminating themselves or defending themselves.  Those hearings include the show cause hearing in December before Judge Chen and any hearing Judge Wright chooses to hold on Brett Gibbs’ motion.   Moreover, Team Prenda faces imminent rulings on under-submission rulings in Georgia and Minnesota.  They have little cause to hope those rulings will go their way.

Prenda’s Civil Prospects

Civilly, the problems mount not just for the Prenda entities, but for Prenda figures Steele, Hansmeier, Lutz, and Duffy. Judges will evaluate each case individually — as a formal matter. But practically speaking, each sanctions order, each order rejecting Team Prenda’s arguments, each order finding members of Team Prenda to be less than credible, and each finding of misconduct creates momentum against Prenda, makes judges more receptive to sanctions motions they might normally not consider, makes it more likely that judges and their staff will come into cases familiar with Prenda’s history, and substantially increases the chances that Team Prenda will lose any particular dispute. At some point judges will start to treat Team Prenda’s misconduct as so well established that they will resolve disputes in rather summary fashion against them.

Team Prenda’s prospects for turning that trend around are grim for four reasons:

  • They are being outlawyered across the nation. Despite their pretenses to being the “big leagues,” their written work and courtroom performance is mediocre. They continue to rely on Paul Duffy for hearings, and — as the San Francisco hearing shows — Paul Duffy is not much of a courtroom lawyer.  Of course, in his defense, he’s got the clients from hell.
  • Team Prenda still hasn’t picked a coherent and consistent narrative and stuck with it. Consider the Minnesota state case described above. Called upon at a hearing to explain the origin of Guava LLC and its connection to the forum, John Steele offered ambiguities and half-answers when the situation (an angry judge investigating accusations of misconduct) called for concise, specific, evidence-backed answers.  Misfortune ensued.
  • Team Prenda keeps touting Mark Lutz as the responsible answer man, but Mark Lutz keeps failing to appear at hearings where is presence is crucial to Prenda’s case.
  • Finally, the facts are against them — the emerging evidence described above and in the various sanctions motions rather convincingly demonstrates an ongoing fraud scheme.

Prenda’s Criminal Prospects

If you want federal prosecutors to launch a grand jury investigation, or federal agencies to investigate a fraud scheme, you need three things. You need a valid theory of a crime supported by some credible evidence, you need alleged misconduct serious enough (often as measured in dollars) to merit federal attention, and you need a spark — an X-factor. You need those things because federal prosecutors and federal agents have limited resources, and prefer to spend those resources by doing slow and (compared to local police) thorough investigations of fewercrimes rather than many short and slapdash investigations of morecrimes. The FBI and U.S. Attorney’s Office are awash with reports of fraud schemes; it takes something special to get their attention.

Judge Wright’s order was something special. A direct criminal referral by a federal judge is unusual and powerful. But based on my experience with federal criminal law — both as a prosecutor and defense attorney — the developments above have significantly increased the chance that federal prosecutors and federal agencies will investigate Team Prenda. First, the increasing number of judicial findings makes the case against Team Prenda more credible from the outset. Second, the financial evidence Gibbs has now released is the sort of thing that makes the feds drool. The spreadsheets show large amounts of money moving around in a way that seems to contradict Team Prenda’s claims about their operation; that will interest the IRS. Third, the evidence that Team Prenda uploaded the videos in question and then pretended to be outraged that they were pirated — thus defrauding courts and defendants — is exactly the sort of sexy x-factor that makes federal investigators and prosecutors pick a case out of a pile. Is federal criminal prosecution certain? No. But it’s considerably more likely than it was when Judge Wright ruled.

When will it happen? Not soon. The feds have a competitive advantage — the ability to conduct methodical investigations over years, gather documents from multiple sources using grand jury subpoenas, and flip lower-level bad guys against higher-level bad guys. It wouldn’t surprise me if we saw no reliable indication of a federal criminal investigation this year. But I suspect we’ll see indications next year.

Credible evidence is piling up, and federal judges are accepting it.  That evidence suggests that Team Prenda has (1) uploaded its films to pirate sites and then sued people for downloading them without disclosing their role in the uploading, (2) made misrepresentations under oath about the structure, financing, and operation of Team Prenda, (3) orchestrated fake cases to provide an opportunity to conduct ISP discovery, and (4) conducted questionable transactions with the proceeds of these activities.  The feds, looking at all that, may investigate wire fraud, mail fraud, money laundering, obstruction of justice, perjury, and false statements to the government.  If Team Prenda has done the things that Judge Chen and Judge Wright have found, you may rest assured that the feds will find an approach to charging them for it.  Federal criminal law is broad and malleable to an unprincipled degree.  That’s not a good thing in general for society, and in particular it’s a bad thing for Prenda.

What can Team Prenda do about it? They can get competent federal criminal defense attorneys to advise them. I suspect Steele, Hansmeier, and Duffy are too swollen with hubris to do that.

Are the other current or former members of Team Prenda smart enough?  Maybe.  Brett Gibbs seems eager to cooperate.  Even if he has personally engaged in criminal conduct — and it’s not clear to me that he has — as an early and important cooperator he could very plausibly avoid charges completely.  Mark Lutz, if he flipped early, might avoid charges or at least minimize his exposure and avoid jail time.  Local counsel, if they believed they had been used to advance a fraud scheme, could work with prosecutors to seek judicial determinations that the crime-fraud exception permits them to disclose their communications with Team Prenda.

I suspect nobody with Team Prenda is fond of me. But if any one of them would like a recommendation of a capable federal criminal defense attorney, I will give one. I would expect such an attorney to make no assumptions, and to evaluate carefully what course is in the best interests of the client, whether it is shutting up or cooperating. In Mr. Gibbs’ case, out of respect for his attempts to make amends, I would pledge to use my best efforts to use my contacts to find an exceptional federal criminal defense attorney to represent him pro bono.

tl;dr: We thought Team Prenda’s troubles couldn’t get worse. We were wrong.

  1. Using “aliases” here might be some Massachusetts terminology; the import seems to be a finding that they are alter egos of each other, responsible for the conduct of each other.  

Last 5 posts by Ken White

You are libel!

191 Comments

  1. Sami  •  Oct 20, 2013 @8:52 pm

    Yay, Prenda update!

    Just the thing to cleanse my spiritual palate after a difficult day.

    Washington State is remarkably beautiful, apart from the people nearly running me off the road and killing me then not stopping.

  2. Andrew Norton (@ktetch)  •  Oct 20, 2013 @9:12 pm

    I suspect that in Ga, there’s more than just the judge losing his good will. In July he said it was already messy, and he was quite scathing of Mr Nazaire about professionalism. It was certainly an ‘interesting’ hearing.

    Secondly, at the hearing, discovery was set at 60days, with that expiring Labor Day weekend, with an expectation of a hearing soon after

    We’ll set a date for a hearing after I see what’s going on and we get further down the line, but that may be shortly after that 60 days. Sixty days was July, August — that would be into September. So we may try to hear it in September, October, one, depending upon what my jury trial schedule will be at that time.

    (transcript pg 87)

    But as yet, there’s been no ruling on any of the motions, including those that were filed prior to the July 2 hearing (16, 21 and 30). In fact the only ordered made by the judge at all have been the discovery minute order, and the ‘hush now’ order, plus a decision of what he’d take judicial notice of.

    Kinda frustrating for me too, not knowing if/when I’m going to even be needed to testify, although short of anything new coming out on 6881, my area (bittorrent expert) likely won’t change much, it’s more a question of if I’ll even be needed now (which is annoying, having put a lot of hours in)

    It’s the limbo that gets me more than anything, and I think it’s contributed to the flurry of motions. It would appear that Judge O’Kelley is not one of those judges who is quick to issue rulings (although it’s really stupid to try and infer from one case)

  3. Jim Tyre  •  Oct 20, 2013 @9:24 pm

    In the main article, Ken wrote:

    I suspect nobody with Team Prenda is fond of me. But if any one of them would like a recommendation of a capable federal criminal defense attorney, I will give one.

    Really? Ken, you know I respect you greatly, and every criminal defendant (which the Prendanistas aren’t, yet) has a right to counsel. But given all you’ve said about them, why would you feel obliged to make a recommendation for them? Sure, I get representing (or at least making recommendations) for folks whose views don’t coincide with yours. You just made that point in the Kimberlin post, and my own practice provides many examples. But here? Really?

  4. Raul  •  Oct 20, 2013 @9:37 pm

    A Herculean undertaking executed perfectly. Thank you.

  5. SJD  •  Oct 20, 2013 @9:39 pm

    It remains to be seen whether someone from Team Prenda will finally show up [in MA] to oppose this.

    Funny fact that Duffy (at least during this year) claimed in writings and an infamous, now defunct, wefightpiracy.com that he is licensed in MA. Yet he will never appear there? I wish he would. Because MA Bar’s overseers are quite aware that his claims are not exactly correct.

  6. Andrew Norton (@ktetch)  •  Oct 20, 2013 @9:43 pm

    I dunno Jim, I can see a few possible motivations, but as I don’t know Ken well (or, lets be honest, at all) I couldn’t even guess as to the applicability of any of them.
    Could be the ‘web of influence’ (sometimes known as the puppetmaster) theory, where Ken likes to be the one calling the shots. Unlikely, because by now he’d have gone into politics (and as a strong 1st Amendment person, I know the Pirate Party would love him as a candidate – Ken, drop me an email if that does interest you though)
    Could be the Voltaire theory, as you suggest (the “I disapprove of what you say, but I will defend to the death your right to say it” description of Voltaire written by Evelyn Beatrice Hall)
    Or it could be the “preemptive strike” theory. You know, “how can you say I’m evil when I’ve even offered help finding you good local counsel”, which you ‘evil terrorist scum’ (aka Empire’s Forever Fiends, or EFF for short) failed to do, Jim, forever blackening your name in the face of All Things Good And American, like Apple Pie, and Nina Mercedez taking it 3 ways at once… 🙂

    Or it could be something completely different. (and if I knew more about ‘people’ so I could make a determination, I wouldn’t be a basement dwelling nerd any more….)

  7. Craig  •  Oct 20, 2013 @9:44 pm

    Mark Lutz’s habit of not appearing when ordered by federal judges to appear is reminding me of Dashiell Hammett’s “The Thin Man”, in which a man spends most of the book being very hard to find because he was, in fact, murdered before the book even started. Did Mr. Lutz ever exist in the first place, or is he another of Steele and Hansmeier’s fictions?

  8. SaltMarshGhost  •  Oct 20, 2013 @9:45 pm

    It wouldn’t surprise me if we saw no reliable indication of a federal criminal investigation this year. But I suspect we’ll see indications next year.

    I would think that Gibbs’s sudden dumping of financial data and that, with regards to investigations by bar associations, the CACD Standing Committee on Disciple, and the IRS and the USAO, Gibbs says that he “wants these investigations to proceed and will continue to cooperate fully with them” in a motion that, as Ken points out, has odd timing, to be a fairly good indication that the feds have become involved.

    We also of course have Mark Lutz’s story of why he didn’t show up in California. While it does strain credulity, assume that it is basically true, and that two feds met him at the airport and detained him for 16 hours. That would mean the feds not only knew about him, but were keeping such a close eye on matters that they knew he had a flight out of a particular airport on a particular morning.

    Unless Mark Lutz is involved in another significant criminal enterprise (which, tbh, we can’t really rule out), that would be another strong indication of a federal investigation into Prenda.

    (Also, due to Paul Hansmeier’s ego not letting him give up his admission request to the Ninth Circuit bar, we know for certain from his required status reports that there are several active bar investigations into the Prenda principals.)

  9. Justin Kittredge  •  Oct 20, 2013 @9:45 pm

    After,
    “Team Prenda’s prospects for turning that trend around are grim for four reasons:”
    you have a typo inside point 3

    failing to appear at hearings where is presence is crucial to Prenda’s case

    I would be grateful if you deleted this comment by me. I do not think it is worth looking at afterwards

  10. SaltMarshGhost  •  Oct 20, 2013 @9:51 pm

    @Craig,

    No, we know Mark Lutz exists. He’s appeared in court several times (all of them to great humorous effect) and there are pictures of him. And in fact, if memory serves, Mark Lutz was also the one in charge of Prenda’s dunning calls.

    Now, on the other hand, we have no idea if Lutz really is as involved as Steele/Hansmeier/Duffy put him out to be—future father to the beneficiaries of a mysterious trust, CEO of this, corporate representative of that, etc.

  11. SJD  •  Oct 20, 2013 @9:57 pm

    First reaction to the spillout of Prenda’s financial documents from Hansmeier. HT Zeno.

    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.

    This one made me laugh: as if law enforcement does not already know about Prenda’s. shenanigans

    (It’s me, I’m in a process of changing my email, and for some reason my gravatar does not propagate quickly).

  12. Matthew Cline  •  Oct 20, 2013 @10:09 pm

    But Prenda got caught in deceit. See, under Illinois law, once Prenda and Duffy served Cooper and Godfread with the lawsuit, they couldn’t amend it without leave of the Illinois court. They had served Cooper and Godfread — indeed, as is noted above, Steele called Cooper to gloat and threaten him immediately after that service. Steele also called Godfread to gloat about serving him. So how did they file the amended complaints adding Alpha Law Firm? They did it by telling the Illinois court clerk that the suits had not been served. …

    Faced with this evidence, Paul Duffy withdrew the motion to remand.

    I recall reading some comments saying that they kept on going on about the motion to remand even after getting caught. Like maybe telling other judges that this case should be ignored because it hadn’t been remanded? Anyone know what I’m talking about?

  13. Roki B  •  Oct 20, 2013 @10:37 pm

    Oh my god I think I just had a ten minute orgasm reading this.

    Gonna go out for a smoke. Thanks Ken.

  14. TheGeek  •  Oct 20, 2013 @10:38 pm

    Team Prenda has not learned the First Law of Holes: When you find yourself in one, stop digging.

  15. Katherine/Kat Anon  •  Oct 20, 2013 @10:42 pm

    Really? Ken, you know I respect you greatly, and every criminal defendant (which the Prendanistas aren’t, yet) has a right to counsel. But given all you’ve said about them, why would you feel obliged to make a recommendation for them? Sure, I get representing (or at least making recommendations) for folks whose views don’t coincide with yours. You just made that point in the Kimberlin post, and my own practice provides many examples. But here? Really?

    Yes. Really. Because this is what good people do. Ken is a good person. He’s also a class act.

  16. Katherine/Kat Anon  •  Oct 20, 2013 @10:43 pm

    I suspect that in Ga, there’s more than just the judge losing his good will.

    I can’t help but wonder if he’s forgotten how he felt about the case when he granted full on discovery.

    It’s the limbo that gets me more than anything, and I think it’s contributed to the flurry of motions.

    Yeah I kinda got the same impression from the motions of both sides. If the Judge had step up and presided over this case…

    Both attorneys are reminding me of neglected children desperate for their parents’ attention.

  17. Daniel Neely  •  Oct 20, 2013 @10:47 pm

    @Jim Getting Gibbs a good defense lawyer will make it less likely he ends up splatted by the Feds Party Bus when they take down the rest of the Prendanistas. Making cooperating seem less dangerous to Gibbs is pure win.

  18. Rob  •  Oct 20, 2013 @11:02 pm

    So why, after Judge Wright issued his devastating May 6, 2013 sanctions order, did Steele and Hansmeier try to convince Gibbs to sign ridiculously one-sided agreements under which Steele and Hansmeier would pay for the appellate bond staying the sanctions order, and Gibbs would represent them on the appeal, agree to say that Steele had no involvement in a Florida case (something that Gibbs says is not true), and accept a “fiduciary relationship” with Steele and Hansmeier probably calculated to prevent him from testifying about them? Steele and Hansmeier also demanded, as the price of this epically ridiculous deal, that Gibbs promise to pay all sanctions arising from Judge Wright’s order and that Gibbs waive all claims against them.

    Jesus, no wonder Gibbs flipped. They essentially asked him to take it up the ass for them, with absolutely nothing in it for him whatsoever. They didn’t even offer any lube. They are either complete idiots or have a very low opinion of Gibb’s mental faculties if they thought he would actually accept that.

    If I were Steele or Hansmeier, I’d liquidate whatever assets I had and book the next flight out of the country, preferably to someplace that lacks an extradition treaty with the US.

  19. Atropine1138  •  Oct 20, 2013 @11:04 pm

    If/When federal prosecutors file against the various Prenda entities, I assume they will join all the actions into one big happy pile. What will determine where they will file, given the disparate nature of Prenda’s activities? It seems like the strongest candidates would be either the Northern District of Illinois or the Central District of California.

    Also loved the tacit reference to FRCP Sec. 1359. Textbook example of collusive party admission, but isn’t there a debate about the merits of collusive joinder to remove federal jurisdiction, as opposed to artificially creating diversity? Just an idiot 1L question, my apologies if I’m being ignorant (as usual).

  20. AlphaCentauri  •  Oct 20, 2013 @11:09 pm

    Really? Ken, you know I respect you greatly, and every criminal defendant (which the Prendanistas aren’t, yet) has a right to counsel. But given all you’ve said about them, why would you feel obliged to make a recommendation for them? Sure, I get representing (or at least making recommendations) for folks whose views don’t coincide with yours. You just made that point in the Kimberlin post, and my own practice provides many examples. But here? Really?

    Ken can put aside his personal feelings here because he believes in the importance of the right to counsel, just like a trauma surgeon can put aside his feelings to save the life of a murderer who’s been shot during the commission of his crime. It’s professionalism.

    But in this case, I would have a lot of trouble referring S&H to anyone I would want to face in the future. In addition to their habit of not paying their attorneys, they can’t seem to get it into their heads to STOP CONTINUING TO COMMIT FRAUD. And once a lawyer is retained by someone like that, it’s like Hercules trying to get Atlas to take the earth back off his shoulders to get removed from the case.

  21. Noxx  •  Oct 20, 2013 @11:13 pm

    Very nice with the Yeats there

  22. James Pollock  •  Oct 20, 2013 @11:29 pm

    Really? Ken, you know I respect you greatly, and every criminal defendant (which the Prendanistas aren’t, yet) has a right to counsel. But given all you’ve said about them, why would you feel obliged to make a recommendation for them? Sure, I get representing (or at least making recommendations) for folks whose views don’t coincide with yours. You just made that point in the Kimberlin post, and my own practice provides many examples. But here? Really?

    Giving even the most heinous of defendants the best possible defense counsel makes it less likely that they will be able to get their well-earned punishment(s) overturned on appeal.

    In short, we want the good guys to win because they’re right, not because the bad guys couldn’t get good representation.

  23. Sami  •  Oct 20, 2013 @11:30 pm

    I have to say I respect Ken’s dedication to principle. I would have a hard time contemplating referring these festering fools to anyone I didn’t actively loathe.

    Unless that’s the idea…

  24. Gazza  •  Oct 20, 2013 @11:34 pm

    Hi Ken / All

    May I say thank you so much for this. Been a lurker on the side lines for a while now watching these crazy shanagins from over the Pond.

    It is one of the few things that have helped me through some difficult times personally.

    This is for the more knowlegable out there to ponder.

    The one thing that did pop up but which has not been fully explored is if the IRS deadline was 15 October [all indications are Mr Gibb’s Nuke was dropped after that date… I wonder why…] and these Financials cover 2012 and are bonifide, what is the bet that knowing this crowd they would have attempted to minimise their exposure by saying Prenda losing money left right and centre – also maybe as it is here in the UK also claiming back money from IRS for being in a loss making position [is that possible in the US? – Tax Rebate anyone?].

    Would they be that foolish I wonder?

    Keep up the good work people. May the Pop Corn be with you.

  25. SPQR  •  Oct 20, 2013 @11:34 pm

    Ken, many thanks for this post. A huge amount of work for you but greatly appreciated.

    Steele and Hansmeier’s “deal” with respect to continuing to represent them in the appeal are really bizarre. I can’t figure out if it represents the usual conmen ego trip that has them convinced that their BS will always be believed or if it is some sort of rear guard action to cover their imminent fleeing to sunnier climes.

  26. Another anonymous NAL  •  Oct 21, 2013 @12:28 am

    Wowzers. Is anyone else wondering what kinds of drugs the Prendarasts must be on? It’s gotta be some good stuff to think the following was a good plan:

    • Throw Gibbs under the bus, several times.
    • While doing that, share sooper-sekrit financial details with him via Dropbox.
    • Pull Gibbs out from under the bus to offer him a deal consisting of a bag of dicks, plus change.
    • Act surprised when Gibbs refuses deal, exposes sooper-sekrit finances, and starts cooperating with Feds.
    • Afterwards claim Mark Lutz can explain everything, and he’ll be along on the next bus.
  27. didgen  •  Oct 21, 2013 @12:55 am

    Looking for Lutz in all the wrong places…..

  28. Stephen H  •  Oct 21, 2013 @1:22 am

    Has Mark Lutz actually been seen recently? It may be time to start worrying about his health, given the number of no-shows.

    I am also curious about whether the Prendarasts are continuing to send demand letters, and how that may affect their legal fortunes given the various court decisions. Are they expected/required to notify their blackmail targets of the various court decisions against them (in particular the court’s decision that Prenda uploaded the file)?

    Finally, what about those poor suckers who were caught on the Prenda upswing – how are all of these court decisions helping them get their money back?

  29. Walter  •  Oct 21, 2013 @2:35 am

    Ken,

    thank you very much for this epic update. I had been following the developments on my own, but it’s great to have such a guide by my side.

  30. Robin Bobcat  •  Oct 21, 2013 @3:13 am

    I NEED MORE POPCORN.

  31. That Anonymous Coward  •  Oct 21, 2013 @3:57 am

    *looks at Ken with wide childlike eyes*
    AND I HALPED! (shake-n-bake kid)

  32. Jona  •  Oct 21, 2013 @4:04 am

    There’s one little gem in Judge Chen’s order that I don’t think you emphasised enough in your summary: the magistrate judge found that the case for sanctions was made, but that the court couldn’t order them due to lack of personal jurisdiction. Judge Chen found that service of a court order on Steele and Hansmeier would establish personal jurisdiction – and that the Order to Show Cause therefore opens the door to the Court sanctioning them both under its inherent authority.

  33. Regular Guy  •  Oct 21, 2013 @4:57 am

    This post reminds me of just how exhausting this must be for the Prenda folks. I know that some people are complaining about the pace of things, but that’s like complaining that the rocks have not yet crushed the abdomen of the accused witch. I imagine that the weight of the rocks is no picnic in and of itself.

  34. Clark  •  Oct 21, 2013 @5:48 am

    > Steele called Cooper to gloat

    Sounds like someone failed to read and abide by the When I am an Evil Overlord list…specifically item #6.

  35. Andrew  •  Oct 21, 2013 @5:58 am

    I am eagerly awaiting news that Steele and Hansmeier murdered Lutz. It would explain the non-appearances and we know Steele wouldn’t be above forging Lutz signature on the affidavits.

  36. John Thacker  •  Oct 21, 2013 @6:02 am

    Technically, the IP address being the same is not completely airtight proof that Prenda uploaded the files themselves (since IP addresses do change due to DHCP), but admitting that would shoot a hole in the argument that they’ve used to say that defendents were downloading the porn.

  37. Matt  •  Oct 21, 2013 @6:10 am

    I first started writing about Prenda Law when it blundered into my wheelhouse — frivolous defamation suits.

    Ohh, right. It’s been so long, I’d literally forgotten how you got started on covering this 🙂

    Thinking metaphorically, to me it looks like after Prenda tried to throw Gibbs under the bus, his recent motion is attempting to Hulk out and throw the bus itself back at them.

  38. David Lang  •  Oct 21, 2013 @6:15 am

    @John Thacker

    while DHCP does change addresses, you missed the letter from Comcast stating that during the time in question that IP was allocated to Steel’s equipment.

  39. Clark  •  Oct 21, 2013 @6:21 am

    @John Thacker

    Technically, the IP address being the same is not completely airtight proof that Prenda uploaded the files themselves (since IP addresses do change due to DHCP), but admitting that would shoot a hole in the argument that they’ve used to say that defendents were downloading the porn.

    Ooh, that’s nice.

    A “fork” they call it in chess: you can pull one chestnut out of the fire, but not both.

  40. Steve Simmons  •  Oct 21, 2013 @6:30 am

    Reading liberally between the lines of Gibbs’ filings, I wonder if he’s been contacted by the IRS or one of the other potential investigating agencies.

  41. That Anonymous Coward  •  Oct 21, 2013 @6:30 am

    @Clark – it also would go quite a ways in destroying the copyright trolling model if a court made a finding of fact about it. Of course we are dealing with civil cases (I think) right now where the bar is more likely than not. Given the massive supporting information, it looks way more likely than not that they could have uploaded the material to create the opportunities to profit from.

    They wouldn’t be the first trolling operation to have done this. The ‘Germans’ made allowances in their contracts for creating honey pots, and Evan ‘Staggering Chutzpah’ Stone admitted to assisting in the spread of the works he was suing over. The problem is no court has ever had a chance to learn those facts of unclean hands.

    @Steve Simmons – I would be shocked if he has not been contacted. He is way more valuable than any other local counsel they have ever used. I think that the idea they are trying to clean up his image (well as best as one can in this situation) to make him more palatable to another Judge.
    Look at the Judge in MN who got confused and thought that Mr. Cooper was involved in the scheme, and even after this was clarified issued a wishywashy ruling sending everyone to their rooms without dessert.
    Given the antics Pretenda like to use, they need to shore up every possible avenue of attack.

  42. Dan Weber  •  Oct 21, 2013 @6:49 am

    So what’s wrong with uploading something in a putative sting to catch the people who download it? Would someone else be allowed to do it in the general case, but Team Prenda has specifically cut so many corners and dissembled before the courts so many times about the facts that they have lost that ability?

  43. Nicholas Weaver  •  Oct 21, 2013 @7:00 am

    Oh, one minor note: Gibbs released the financial spreadsheet a couple days after the 15th of October. Namely, a couple of days after Hansmeier and Steele’s deadline for filing personal income tax.

    So who wants to bet that our friendly neighborhood IRS CID agents are pulling S&H’s tax returns as we speak, to make sure they actually filed the income from Under the Bridge properly?

    Because if they didn’t, that is a nice million dollars worth of unreported income.

  44. Clark  •  Oct 21, 2013 @7:02 am

    @Nicholas Weaver

    So who wants to bet that our friendly neighborhood IRS CID agents are pulling S&H’s tax returns as we speak, to make sure they actually filed the income from Under the Bridge properly?

    Seems to me that if the crap is hitting the fan the smart thing to do is pay estimates and file for extensions, thus avoiding commiting yourself to anything, no?

  45. Nicholas Weaver  •  Oct 21, 2013 @7:04 am

    Dan: Since its civil copyright violation, uploading the .torrent gives defense a very strong claim that the plaintiff gave permission by publicly releasing the file, without constraints.

    Which would make the basis for suing outright fraud, since the plaintiff knows the defendant has permission!

  46. Nicholas Weaver  •  Oct 21, 2013 @7:06 am

    Clark: October 15 is the “you had your 6 month extension” drop dead date, so there is no extension to file, its due orlate for tax year 2012.

  47. Nicholas Weaver  •  Oct 21, 2013 @7:10 am

    Also, IP addresses change due to DHCP, but this is

    1: IP address at time X is Y

    2: ISP logs from DHCP for time X for Y say Z

    3: Even if someone spoofed the IP Y, they would have to be in the same neighborhood. So you are saying, two years ago, someone sought to frame Steele by spoofing his IP, locally?

    4: Even if at the IP Y there was unsecured wireless and an unknown guess, they specifically acted to upload the files that would form the basis of Steele’s suits?

  48. Regular Guy  •  Oct 21, 2013 @7:18 am

    Permit a question. Is there is disconnect between the credit card processing fees and the money shown as being distributed in the Quickbooks document? I’ve seen others estimate the credit card processing fee to infer that something in the nature of $5 or $6 million was taken in. For the record, I suspect that they are underestimating the credit card fee, but this still leaves a sizable gap. Or does the Quickbooks document account for this money being spent? (e.g. overhead, court fees, etc.)

  49. James  •  Oct 21, 2013 @7:31 am

    @Regular Guy The financial information Gibbs submitted was a cash receipts and disbursement journal for SOME of the accounts. Note that on the balance sheet the two accounts start with humble balances and end with humble (and still positive) balances. However, the cash disbursements are $450K larger than the cash receipts from professional fees. If you look closely at the transaction detail a lot of debits are transferred in from another account XX6943 that is not detailed in the Gibbs exhibits. Either Gibbs does not have that detail or he has chosen not to share it for some reason, but there is another pot of gold out there.

    Also there are some well-known persons involved with this saga (Duffy, Lutz, van Hammel(sp?)) who only receive minor disbursements from the detailed accounts. This is at least one, and quite possibly many more, accounts out there.

  50. RavingRambler  •  Oct 21, 2013 @7:34 am

    @Andrew I was thinking more along the lines that Lutz a)was a false identity and it’s been abandoned and the actual human has fled the country or b)Lutz has assumed a false identity and fled the country. Murder seems out of place to me for this bunch. They’ve (allegedly) lied, committed various frauds, and generally not known when to cut and run, but nothing violent that we know of so far. Murder’s a huge leap into violence if there are no prior indicators.

  51. Dan Weber  •  Oct 21, 2013 @7:34 am

    If I show up to buy cocaine but it’s actually a cop selling baking soda, I can’t say “it’s not illegal to sell baking soda” to get out of it, right?

    I fully realize I am mixing criminal and civil law there. But it seems that the people downloading sure expected it to be without permission.

  52. Nicholas Weaver  •  Oct 21, 2013 @7:56 am

    Analogies are like fishes: sometimes they have nothing to do with the problem at hand…

    In this case, however, its more the cop saying “hey, you wanna buy some Jolly Ranchers”. Person says “sure, ok” (buys em). Cop then says “Psyche, that was meth, your busted”

  53. That Anonymous Coward  •  Oct 21, 2013 @8:08 am

    @Dan Weber – Except that is a big distinction there.

    The police can setup a fake drug dealer and arrest customers. It has to follow guidelines and the law.

    A homeowner does not have the right to leave his garage open with a sign on the lawnmower that says take me, and then have people who try to take the lawnmower arrested.

    Random lawyer doesn’t have the right to run his own sting operation.
    An unsettled issue with filesharing is that it is copies of copies, it never removes the original. (this is why we debate if calling it stealing/theft is accurate.)
    See also lawyers who would squirt water on store floors, a shill would then “fall”, lawyer would extract a settlement. They were just running a sting to make sure stores would give victims fair settlements.

    There is this demonization of BT being nothing but ‘stolen’ content.

    Except many games use it to push patches.

    Dan Bull famously made some of his tracks available for free via BT on TPB while offering them for sale at various vendors. He sold enough that the songs broke into the charts. He has no major label backing him.

    Many of the works of Cory Doctrow are available via BT, legally because of his CC license.

    The Internet Archive uploaded huge amounts of Public Domain content.

    Treasure Island Media (don’t google it) created content and ran a special deal targeting those who would share their work via BT and uploaded it onto a few different sites.

    Many musical groups make their catalog available via BT to gain fans.

    TPB was running ‘The Promo Bay’, allowing artists to get huge promotion of themselves – a condition was to make some of their work available on TPB.

    So it isn’t as clear cut if the upload is authorized or not.
    Porn studios often put older content, scenes from newer things online as teasers.
    Heck there is even 1 studio suing for copyright infringement and some of the infringed titles are freely available online put there by the client. So there could be an argument if the original download was authorized, and if any laws were actually broken by someone sharing that free content with others. Of course with $150K to terrorize people with, these questions remain unanswered.

  54. Frankz  •  Oct 21, 2013 @8:10 am

    Team Prenda has not learned the First Law of Holes: When you find yourself in one, stop digging.

    Some people are just on cruise control and keep constantly digging, no matter what. Then there’s some like Prenda, that upon discovering themselves in a hole, just stomp on the gas and go into overdrive and dig that much harder and faster.

    .

    Afterwards claim Mark Lutz can explain everything, and he’ll be along on the nextbus.

    Once it sinks in to Steele/Hansmeier that things are at or near their worst, Lutz may be along under the next bus.

  55. That Anonymous Coward  •  Oct 21, 2013 @8:11 am

    @Nicholas Weaver – So you saw that story about the guys arrested for having “meth” that turned out to be Jolly Ranchers too?

  56. StephenH  •  Oct 21, 2013 @8:12 am

    IANAL, but wouldn’t the charge against a sting victim be conspiracy to purchase, or solicitation of, controlled substances, rather than actual purchase or possession of controlled substances?

  57. Dan Weber  •  Oct 21, 2013 @8:19 am

    Nicolas, that seems to run into mens rea issues. The person wanting Jolly Ranchers has no intention of dealing in drugs.

    The person grabbing the pron movies knows, or ought to know, that the provider really didn’t intend it.

  58. WDS  •  Oct 21, 2013 @8:27 am

    @John Thacker

    Many (most?) business have either static addresses or a reserved address on DHCP. In either case the addresses do no change. (For small businesses with only a single address the reserved DHCP address wastes fewer addresses for gateway and broadcast addressing).

  59. David  •  Oct 21, 2013 @8:38 am

    If there were a Pulitzer for blogging in the public interest, Ken, you’d deserve it.

  60. I was Anonymous  •  Oct 21, 2013 @8:38 am

    @Gazza, believe it or not, the IRS was shut down with everyone else.

    I had business with the IRS, and got a “Sorry we’re closed” when I called them a couple of days after the shutdown started.

  61. Anon  •  Oct 21, 2013 @8:44 am

    @Dan Weber

    You are definitely confusing the lines between criminal and civil. In civil law, there does not have to be intent (as well as some statutory crimes, but we’re not going into that here). The intent of the downloader does not matter (although, arguably, IMO, there should be a distinction between a downloader who only downloads for personal use v. a downloader who profits from the download).

    The issue here is, assuming that Steele and Co. created a honeypot (uploading their own copyrighted works in order to sue downloaders), did their own uploads give implied consent to the alleged downloaders? Another way to look at it, is there an implied in fact contract.

    Here, we have the owner of a copyrighted work making that work freely available via the torrent site. A downloader takes advantage and downloads the work. There exists a contract that implied in fact.

  62. Larry  •  Oct 21, 2013 @8:46 am

    I think I see what the motivation is to find these guys a Good lawyer.
    They have dug themselves a deep, deep hole. If they get an incompetent lawyer they can later try to blame the outcome on the lawyer. If they have a good lawyer they have no grounds for appeal, but the outcome will still be the same. Getting them a good lawyer simply assures that justice will be done.

  63. MDT  •  Oct 21, 2013 @8:57 am

    I’m fairly certain that an attorney as experienced as Ken is has the following things noted for future reference.

    1) Attorneys who are excellent at what they do.
    2) Attorneys he has the utmost respect for.
    3) Attorneys who are awful at what they do.
    4) Attorneys he has little respect for.
    5) Attorneys he really really likes.
    6) Attorneys he really really dislikes.
    7) Attorneys he really really really really really dislikes.

    Now I’m sure there is a lot of overlaps in groups. IE: People whom he likes and respects and who are good at what they do. Or people whom he really really really really dislikes, doesn’t respect, and who are awful at their job.

    For those wondering why he would wish to aid Prenda by siccing them on some poor attorney, I would suspect there is a few Attorneys who fit the following profile :

    Very good at their job.
    He respects them very much.
    He really really really really dislikes them.

    The nice thing about this group is, he can honestly recommend them to Team Prenda, they are very good at their job, and he really really doesn’t like them very much. This allows him to be both a good person and an ethical lawyer (good defense despite client’s lack of morals), and also sleep with a clear conscience that the lawyer deserves a client like Prenda. 🙂

  64. Nicholas Weaver  •  Oct 21, 2013 @9:01 am

    I think there is a big problem with these guys getting a good criminal attorney: Rosing and company never got paid!

    That was a major foundation of the “help, get us out of here” motion that was eventually accepted:

    The bases for Klinedinst’s renewed application is that Prenda has failed to pay Klinedinst for its Services and failed to execute a retention agreement memorializing the tenns and conditions of Klinedinsfs representation of Prenda in this matter, including the appeal.

    A reputation for not paying your lawyers is not going to make it easy around the criminal bar…

  65. Jonathan Kamens  •  Oct 21, 2013 @9:05 am

    Ken, thanks for putting the time and energy into writing this posting. I really appreciate it.

  66. Jonathan Kamens  •  Oct 21, 2013 @9:20 am

    I think there is a big problem with these guys getting a good criminal attorney: Rosing and company never got paid!

    On a similar note, if Prenda pays an attorney representing them using money derived from a criminal enterprise, could those payments to the attorney be clawed back by the government, leaving the attorney in the lurch?

  67. Frankz  •  Oct 21, 2013 @9:34 am

    On a similar note, if Prenda pays an attorney representing them using money derived from a criminal enterprise, could those payments to the attorney be clawed back by the government, leaving the attorney in the lurch?

    Wouldn’t the DOJ, or the IRS, whoever gets there first, freeze and/or seize any money they label as such? Before any trial, much less an appeal?

  68. Niall  •  Oct 21, 2013 @9:37 am

    I came here for the Prenda Law updates. I stayed for the different view point on many topics, because understanding more points of views can only lead to be a better person.

  69. Todd Knarr  •  Oct 21, 2013 @9:38 am

    @Dan: why would whether the provider didn’t intend it matter here? I’d think their intent would be irrelevant, the question would be whether the downloader knew or could reasonably assume from the information available that the provider was the copyright holder or not. If the downloader didn’t know that, then the intent of the copyright holder wouldn’t matter since regardless of intent the downloader knew he didn’t have permission (everyone knows that permission ultimately has to come from the copyright holder, nobody else can give it). And if the downloader did know it was the copyright holder putting the stuff up, then whether the copyright holder intended to do that or not they still put it up and any harm caused by that is their responsibility, not the downloader’s.

    It’d be the equivalent of my opening up my garage, laying things out on tables and racks and putting up a sign saying “Moving, don’t want to pack all this. Everything must go. Take what you want, I want it gone by tonight.” and leaving it unattended. But in the process I left the stuff I did want to keep on shelves along the wall in the garage and didn’t mention anything about it. And of course people took everything, including the stuff off the shelves. I may not have intended “everythingeverything” but I still said “everything”, I gave people every reason to know everything in the garage was free for the taking and I gave them no reason to believe I intended otherwise. I might be entitled to ask for my stuff back, but I don’t have any basis to sue to get it back nor to file theft complaints against people.

  70. Dan Weber  •  Oct 21, 2013 @9:42 am

    Anon, are you saying that in civil matters, intent doesn’t matter, only actions? That seems reasonable, but would that mean if I think I’m downloading Joe Shmoe’s porn movie with Joe’s permission, but it turns out that I’m actually getting it from Evil Leon who doesn’t have permission, that I am now civilly liable?

    On the paying lawyers side, ISTR cases from the 80s where the Justice Department went after their targets’ lawyers with RICO claims. I don’t know if there have been any checks-and-balances put in since then.

  71. mark mitchell  •  Oct 21, 2013 @9:44 am

    I suspect the entirely selfish reason Ken would like to introduce competent attorneys into this glacial train wreck is that the spectacle would be prolonged. It might introduce a measure of Prenda hope, but Ken knows that hope would be excised with a federal chainsaw. A shameless love of popcorn, shameless.

  72. lakonislate  •  Oct 21, 2013 @9:45 am

    Is the PDF with the withdrawal request from Prenda’s counsel in Massachusetts dated September 25, 2012? Is that a typo? Or am I missing something?

  73. Billy V.  •  Oct 21, 2013 @9:49 am

    @Todd you seem to be under the impression that everything on bit torrent is illegal. It in fact is not, as was stated many content creators place old stuff out there as teasers for free, basically allowing anyone to come and get it for free. If you as the content owner are burning dvd’s on your computer, then handing them out to people as they walk by can you have someone else at the end of the block arresting them for having stolen content since the dvd was clearly burned and not made professionally?

  74. Anonymous Coward  •  Oct 21, 2013 @9:53 am

    Wow, long post! Good read.

    It seems to me that the Prenda gang are currently laundering their money and are preparing to either skip town or file for bankruptcy. I seriously doubt that those ill-gotten gains will be surrendered to the people who have won judgements against them.

    What a bunch of jerks.

  75. adam  •  Oct 21, 2013 @9:58 am

    wooooooooooooooooooooooooooo! can’t wait to start reading. thanks ken! (is it wrong that i’m enjoying this or just that i didn’t use any caps?)

  76. zilong555  •  Oct 21, 2013 @10:05 am

    Sorry, no rubble left to bounce. All that is happening right now is a collective effort to ensure that the crater is of a scale worthy of a monument to Prenda’s hubris.

  77. Robert Q  •  Oct 21, 2013 @10:23 am

    @Todd @Dan @Billy V

    FWIW, I’m on the side of saying that it would not be copyright infringement if made publicly available and then claiming infringement when accessed.

    I think the best analogy would be a writer [let’s call him Ken] posting pseudonymously on Reddit “Click here for a copy of Ken’s new bookStallion Wars – Episode 1:The Pony Menace and then suing people who had the audacity to click through, saying “but I didn’t say you could actually read it!”

    The only way to find a difference in the torrent arena would be if there was a presumption that the file was uploaded without permission. However, if that was a valid legal presumption, I think torrent hosting sites and torrent program companies would be in a lot more hot water than they are, not to mention the issues flowing from the correlated presumption that someone using a torrent program would be presumed to be acting unlawfully.

    If anything, since uploading content without permission is illegal, there could be the opposite presumption that whatever is uploaded was put there with the owner’s permission, and therefore not an infringement to take a copy.

  78. Basil Forthrightly  •  Oct 21, 2013 @10:24 am

    @Dan Weber

    There’s nothing magic about posting a file to BitTorrent, versus posting a file to an FTP server or web server. If we allow Prenda to sue BitTorrent downloaders for taking files they posted themselves, then Ken could sue everyone who downloaded his post above (which we all did to read it).

    The entire Internet (not just the web) runs on a theory of implied license; that folks who post content they own expect it to be downloaded and used, subject to the fair use limitations of the Copyright act.

    The media type doesn’t matter to the law; movies, music, or text, its either lawfully posted and therefore lawfully downloadable, or not.

    Now if AF were a distinct entity from Prenda/Steele AND they hadnt authorized the posting, then they would have a case against their lawyers.

  79. Ashera  •  Oct 21, 2013 @10:27 am

    IANAL, so perhaps some lawyerish-type can explain to me. Gibbs was Prenda’s lawyer, so I am wondering why he is able to testify and provide information about them. Why doesn’t it fall under the attorney/client privilege? Is it that the information and documents he is providing now were given to him after he stopped being their attorney, and so it doesn’t fall under the privilege? (These Prenda relationships have become so convoluted– intentionally so, I am sure– that it has become difficult for me as a layman to keep track of who is doing what to/ for whom!)

    Re Lutz: My theory as to his not showing up when ordered to do so is that he is not available to show up. I bet he’s fled the country.

  80. James  •  Oct 21, 2013 @10:39 am

    @Ashera Gibbs was not Prenda’s attorney, he was AF Holdings’ attorney. He may have had confidentiality obligations to Prenda according to the terms of an engagement letter, but confidentiality agreements are only as broad as their scope and often don’t cover information that is accidentally disclosed like being upload to a DropBox account. There is a reason Prenda tried (unsuccessfully) to get Gibbs to enter into a formal legal agreement after the Wright hearing; they were trying to create an attorney client privilege after the fact.

    There is also a crime-fraud exception to the attorney client privilege that might apply here.

  81. Andrew Norton (@Ktetch)  •  Oct 21, 2013 @10:41 am

    Todd, my understanding of copyright law is that the assumption is of legality, until the rightsholder complains, then there has to be the proof of infringement, through distribution via unauthorised parties; or at least that’s as simple as I can put it without ten pages on it (when I get started, I just don’t seem to stop writing, my editor just wishes he could get me started most of the time…). however, that’s the underpinning and intent given by things like the DMCA.
    There’s plenty of stuff on bittorrent that’s there, not only with the knowledge of the rightsholder, but with their preferences. I could point out a hundred or more, but I’ll give you two. one is… ME!. Click on this link and it’ll take you to the PirateBay (assuming it’s allowed by your ISP/court system), and more specifically, to my uploads. Every one of them is authorised for distribution by the rightsholder (which is me in many of the cases). The second example is Michael moore, and Slacker Uprising. he convinced the lawyers to give the film away in a torrent. Trent Reznor was the same (and I know because I’ve spoke to both Michael and Trent on this topic)

    Also, don’t believe the seed/peer totals on my torrents, they’re not really like that (and are trivially easy to manupulate, 10 years ago the Youceff tracker used to give random numbers), but it’s something that catches many people out, such as the ‘experts’ hired by AFACT to provide evidence for their lawsuit against the ISP IInet in Australia. The university of Ballarat got caught out by spoofed (fake) torrents, and built a study on that, and even then, doing everything wrong, STILL found 3% “non infringing content” – as much as the SCOTUS needed in 82 to find for Sony in Betamax. The worst thing is, it’s the SECOND time they’d done this, and we’d offered to help them the first time (and it caught others out too, like Ars (http://ktetch.co.uk/2010/07/ars-forgets-how-torrents-work-cites-faulty-study/) which is why I guess Joe covers it now, rather than the Apple person.

    There is a massive amount of FUD put out, especially by the content industry, over bittorrent and other things. Mainly it focuses on how it will ‘kill creativity’. The problem they have is 50,000+ years of human creativity, 600+ years of recorded creativity still in existance, 100 years of “creativity industry” (aka commercial middlemen) all undone by 20 years of the Internet (P2P was alive and well in the early 90s – I remember it well, and in fact bittorrent is an automated refinement of the method created back then for ‘the scene’ which is still used now)

    And the irony carries on. Hollywood is the home of US filmmaking, because the movie studies (including a man named William Fox) kept heading west to avoid paying Edison his royalties. Hollywood was established because of Piracy. When the phonograph was starting, artists hated it too. John Philip Sousa was one of the big names of the time opposed to it (read his “The Menace of Mechanical Music,” from 1906 and you will see the record industry now saying the same things about p2p)

    And people wonder why I got out of the music industry (used to be a copyright enforcer for a UK label), and why I don’t work on TV shows (Done shows on the BBC, channel4, Comedy Central, and ZDTV[later called G4]) any more. It’s the hypocrisy.

    Regardless, the REALLY fun thing about bittorrent is the lovely detail about distribution. Except in a few circumstances, the only people that can seed a torrent, are the ones that’s made the torrent file. We know the uploader for at least one torrent was at S-H’s office. Because of the lovely way bittorrent piece-hashing works, you need every file to be identical to the one used to create the torrent, to full distribute it. Have a file name spelt wrong, or even a missing text file, and you’re going to have missing pieces, which means you’ll never ‘finish’. Given the non-descriptive names of the files in some of the torrents, the ONLY way they could have 100% availability (meaning every piece) was if the creator seeded them. When the person authorised to distribute, does so in a manner that requires further distribution (such as a tit-for-tat protocol like Bittorrent, rather than, say, a straight download) there is an implied license to redistribute.

    I could go on much more, and for another 20 pages, but I’m not going to. Not because I don’t want to, but because I don’t want to bore y’all.

    Also, for the person that was wondering about the difference between ‘theft’ and ‘infringement’ earlier, one of the pieces I worked on for TorrentFreak on that very topic has actually just been picked up by a New York textbook publisher for a book on copyright infringement. But you can read it here http://torrentfreak.com/copyright-infringement-and-theft-%E2%80%93-the-difference-110827/

  82. Ygolonac  •  Oct 21, 2013 @10:51 am

    It’s… Prendalicious!

    Also, while a number of people are speculating that Mark Lutz may be holding up a Salt Marsh somewhere, I don’t think Steele/Hansmeir/Duffy/etc. (aka The Doomed) are *quite* desperate enough yet to resort to that level of idiocy.

    Of course, there may be more goings-on behind the curtain than we realise…

  83. Sharon  •  Oct 21, 2013 @10:53 am

    Prenda did represent some clients that were bona fide companies independent of Prenda. I wonder if they seeded the torrents for those clients’ films, too.

  84. Dan Weber  •  Oct 21, 2013 @10:57 am

    Robert Q, that’s a good argument.

    There are contextual clues that let me figure out if a link someone posted on reddit is legal. If it’s at youtube or dropbox or something operated in easy reach of American law and in public[1], I assume it’s lawful, or else will be rapidly destroyed. If they are linking to a foreign site, I assume that it is not legal, assuming American authorship.

    I.e., if it would be trivial for the legitimate owner to search and find this site and DMCA it down it unauthorized, and it still works, it’sprobably authorized.

    ([1] I have seen people posting private YouTube links of recent TV shows asking others not to publicize them — this is pretty clearly done as a copyright violation as they are trying to remain hidden as long as possible.)

  85. That Anonymous Coward  •  Oct 21, 2013 @11:13 am

    @Sharon – about that….
    http://copyrightclerk.com/2013/05/31/hard-drive-productions-paul-pilcher-talks-to-businessweek-about-prenda/

    And IIRC they had a client that was also the expert that provided the ‘expert’ statement supporting hacking charges in a novel take on copyright shakedowns. CFAA state cases.
    Website operator unable to notice he was “hacked” for months, but expert enough to claim the list of IP’s they had totally pointed at the guilty parties. o_O

    The problem is the $150K bludgeon and the easy money that can be made seems to be spawning a cottage industry of trolling to box office success. A horrible D movie, straight to video, $4.99 price tag for the dvd at retail… and because we saw an IP address you should pay us thousands, because fighting will cost you at least double. At least they are classy enough to state in the complaints they aren’t pursuing porn films so no one should worry about the public embarrassment making people settle. o_O

  86. Steve Simmons  •  Oct 21, 2013 @11:19 am

    If the Prendanistas are looking for an appropriate lawyer, I hear that cyber-law specialist Charles Carreon is available.

  87. WDS  •  Oct 21, 2013 @11:24 am

    @Ashera,

    Gibbs was not Prenda’s attorney. He was an attorney working for Prenda.

    Gibbs was AF Holding’s attorney.

  88. adam  •  Oct 21, 2013 @11:27 am

    “Mark Lutz, if he flipped early, might avoid charges or at least minimize his exposure and avoid jail time.”

    Assuming he can be located.

  89. Christenson  •  Oct 21, 2013 @11:32 am

    I think Ken’s motivation can be summed up from Mathew 25:40, discussing who is with and not with the lord:
    “The King will reply, ‘Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me”
    and 25:45:
    “He will reply, ‘Truly I tell you, whatever you did not do for one of the least of these, you did not do for me.’

    If the law can be abused, if the most evil can go undefended in court, then any one of us, who is not evil, is next. The overwhelming power of the state must be controlled and limited, even when it is doing what we think it should. This is the problem with NSA, with Guantanamo, with CIA torture, with targeted killings — even if you agree with the dubious proposition that the programs were effective.

    As for Gibbs: I don’t think he’s told the whole truth, and I expect Judge Wright to state as much in denying his petition. Popcorn futures are making me rich!

    Thank you, Ken, for the new Prenda post.

  90. En Passant  •  Oct 21, 2013 @11:50 am

    Nicholas Weaver wrote Oct 21, 2013 @9:01 am:

    I think there is a big problem with these guys getting a good criminal attorney: Rosing and company never got paid!

    Wowsa! Rosing is elite of the elite in California. There are only so many ways to spell stupid.

    Reading Ken’s overviews and analyses here is like watching several simultaneous fission chain reactions in slow motion, and wondering just when the temperature and pressure will overcome the Coulomb barrier and make fusion inevitable.

    Prenda’s original strategy of massive stupiditron emission worked for a while to insulate each case from the others. But refusing to pay counsel for the best defense available is certain to increase heat and pressure in one jurisdiction, and likely to interfere with obtaining counsel in others.

    The only question is whether this will end in meltdown or explosion.

  91. Ultraviolet admin  •  Oct 21, 2013 @11:52 am

    Oh and they paid Gibbs crap too. 40k for SF. I was offered a job working with him that smelled like rotten fish and the pay was less then I could make temping.

  92. jimmythefly  •  Oct 21, 2013 @11:56 am

    Correct me if I am wrong, but originally wasn’t one of the issues was that the attorneys (Steele specifically) appeared to have an ownership/financial stake in the company they were representing?

    Also, though I don’t know how much of an argument this makes in court, but it has always been very curious how hard they went after downloaders, while at the same time never once pursuing whoever was doing the illegal uploading to begin with.

  93. ZarroTsu  •  Oct 21, 2013 @12:28 pm

    At this point, Steele exhaled loudly.

    Now THAT would make a good popehat t-shirt.

  94. David Schwartz  •  Oct 21, 2013 @12:32 pm

    @DanWeber The law exists to right wrongs and to help those who are wronged by others. You can’t make a business model out of intentionally creating wrongs that you can then sue people over when no harm would have come to you had you not done so.

    Sure, the police can set up a sting to catch someone who would have committed a crime anyway in a way that permits them to be caught. But a private individual can’t manufacture wrongs for the courts to set right as a business model.

  95. Scote  •  Oct 21, 2013 @12:34 pm

    “adam • Oct 21, 2013 @11:27 am

    “Mark Lutz, if he flipped early, might avoid charges or at least minimize his exposure and avoid jail time.”

    Assuming he can be located.”

    I’d say “Assuming he can be located alive.” :-p

  96. Yendor  •  Oct 21, 2013 @12:36 pm

    @Dan
    The crucial difference between a drug sting and a supposed copyright sting is that it is illegal to buy drugs period. It is only illegal [civil law] to download copyright materials if the owner has not given permission.

    There may be reason to wonder whether or not a foreign site is more likely than a US site to host unauthorized content, but the law doesn’t care where it is posted — only whether the copyright owner has given permission. And uploading something to a Torrent site is pretty clearly giving others permission to download it. As others have pointed out, there is “legal” content distributed via Bit Torrent — and it now seems as if the Prenda movies are in that set.

  97. Hulinut  •  Oct 21, 2013 @12:41 pm

    Brace yourself; this is a long post.

    No thanks, I prefer to dive right in

  98. Todd Knarr  •  Oct 21, 2013 @12:55 pm

    @RobertQ: The distinction would be between the author posting the work, claiming in the posting to be the rightsholder and authorizing the transaction, and things like user ID confirming this (it’s the ID the author notes on his own Web site), vs. the author posting under a random name not his own, using a user ID not known to be connected to him, and not claiming anywhere to have any rights to the work. In the first case a downloader could reasonably assume the author’s distributing the work and you have permission to download it, in the second case a downloader would have no reason to think the work’s being posted by the rightsholder. In the second case the author could legitimately press a claim for infringement because the downloader had no reason to believe he had permission (J. Random Person can’t authorize distribution of the author’s works, and as far as the downloader knows it’s just J. Random Person posting it), but in the first case he couldn’t (the downloader has every reason to believe the posting is authorized).

  99. Jon  •  Oct 21, 2013 @1:08 pm

    As is often the case, Ken’s file names are worth several chuckles by themselves (my favorite here: DammitEndora).

    I’m hoping for another epic Judge Wright hearing on Gibbs’ latest document drop — though it wouldn’t surprise me if Wright declines to have one; as others have pointed out, it’s not clear Gibbs has a legal basis for delaying the filing for so long.

  100. AlphaCentauri  •  Oct 21, 2013 @1:20 pm

    Gibbs may have shared the file with the feds long ago and delayed this filing at their suggestion. Prendanistas have known that they were under the microscope for months; they didn’t need this to tell them they should mind their p’s and q’s with the IRS. But they’re too accustomed to snorting their hubris with $100 bills.

  101. Matt  •  Oct 21, 2013 @1:23 pm

    Brace yourself; this is a long post.

    I couldn’t resist.

  102. Andrew Norton (@ktetch)  •  Oct 21, 2013 @1:37 pm

    It’s a nice thought, Todd, but doesn’t work.

    Distribution rights are private civil contracts. There’s no way to tell who has permision to distribute, unless you’re the rightsholder yourself, and you know.
    That’s actually the BIGGEST issue with copyright these days. it’s got so long, and automatic, that we have a huge area of works called ‘orphan works’ – thats where the rightsholder is not known, or unable to be contacted.

    Additionally, Contracts for rights assignments are not made public, certainly not in a central place. For instance, one of the TV shows I worked on, I actually have some rights. I was assigned the (non-exclusive) right to publicly perform the show, and to make limited duplications of it, but both only within the EU. You can’t tell, unless you contact me, or the rightsholder and ask directly. To assume I don’t, and then to take punitive action, is actually very chilling to speech (and tends to create monopolies), but happens quite often, especially with those buffoons at ICE (see Rojadirect, or DaJazzi1 for instance)
    Now, how would anyone getting or viewing my copies know if they were licensed or not? You don’t. That’s the adversarial nature of copyright enforcement. It’s also the basis behind the DMCA’s Notice&takedown process (not to be confused with Youtube’s Notice, takedown, and GFY process)
    You then add in fair use to it. And finally, there’s the (older) opinion amongst artists that any infringing usage that would actually materially affect the rightsholder, would be detectable by that rightsholder.

    Anyway, what all this means is that as a user, you’ve a presumption that anything you see is legit. However, as the provider, you have a requirement to not infringe,but that isn’t put onto the user. So if later on, the rightsholder comes along and sees it and feels it’s infringing, he can claim, there can be a counterclaim,etc.
    The automatic ‘everything must be infringing’ idea doesn’t work, because mostly it’s a lie to extend control. It’s used to stifle speech, often deliberately (from UMG taking down Kim Dotcom’s Mega Song, to the case against the game review last week). There’s a HUGE festering undercurrent of lies that has driven copyright law since the late 80s/early 90s, which could be summed up in a single reccomendation made to the UK government in the Hargreaves report “Copyright law should be made on the basis of evidence, not lobbying”.

    You’d think that was like a ‘well duh, of course’ statement, but no, that was groundbreakingly revolutionary. But then again, we’re also talking about an industry that counts supermarket shelf-stackers as part of the ‘creative industry dependent on copyright’, who will use a number someone picked at random 20 years ago, and claim it is true each and every year (the number of jobs lost to piracy, for instance), Flat out lie (such as writing a speech for an MEP underscoring why piracy is bad, by saying the sales of pirate DVDs funded the first attack on the World Trade Center in 1994 – gotta love time-travel!) or my personal favourite, claiming two contradictory numbers for the same thing (in 06, the MPAA claimed the UK lost £99.1Million ($176M) in total tax due to piracy [2006 Lek report] while at the same time, their UK arm, the BVA, claimed £108.5M ($192.5M) lost to the government JUST IN VAT (sales tax) as part of the ‘piracy is a crime’ campaign (which you’d know best as the origin for the ‘you wouldn’t steal a car’ video)

    TL;DR
    Trying to claim that ‘they should know’ doesn’t work at all when it comes to the reality of copyright law.

  103. Tork  •  Oct 21, 2013 @1:44 pm

    Matthew Cline • Oct 20, 2013 @10:09 pm

    I recall reading some comments saying that they kept on going on about the motion to remand even after getting caught. Like maybe telling other judges that this case should be ignored because it hadn’t been remanded? Anyone know what I’m talking about?

    Before the cases in Illinois were consolidated Prenda filed a motion on April 10, 2013, to remand the case in the southern district. On May 10, Cooper/Godfread opposed it and showed them the affidavit from the clerk saying that they told her no one had been served.

    After the cases were consolidated, Prenda filed a renewed motion to remand on August 12 that was almost identical to the first one and ignored the affidavit. At a hearing on August 14 they continued to argue that the case should be remanded. Later that day Prenda requested permission to withdraw the motion because of the “confusion.” The judge then invited Cooper/Godfread to request sanctions.

  104. htom  •  Oct 21, 2013 @1:48 pm

    Matt: :Brrrrrr: Very Good.

    I wonder if Gibbs even knows the whole truth to tell? I suspect he knows much more of it now than when he started, and telling those two parts (his beginning, and what he now knows — or now believes) might be enough for the system to be lenient.

  105. Tim  •  Oct 21, 2013 @2:19 pm

    I’ve enjoyed reading this series, but there’s something I don’t quite understand about this Prenda saga.

    Here’s what I think I know:
    1. Prenda bought up copyrights.
    2. Prenda uploaded the videos.
    3. Prenda pursued downloaders, pushing for settlements.
    4. Prenda created a bunch of shell companies, lied to the courts, and generally acted like douchebags.

    It seems like #1 and #3 were a viable business model, and completely legal. Mixing in #2 is stupid and greedy, but if they want to catch more downloaders, it at least makes a twisted kind of sense.

    But what’s up with #4? I don’t get it. Why did they create these shell companies? Why forge a signature to pretend someone else owns it? Why all this weird sequence of lying to the court? Wouldn’t their scheme of buy-copyrights-sue-downloaders have worked on its own? I don’t get what they were hoping to accomplish. Tax dodging, perhaps?

  106. Steven H.  •  Oct 21, 2013 @2:42 pm

    @Tim:

    #1 and #3 were fine, as you say.
    #2 might be okay if they weren’t the ONLY source of the copyrighted works. But they’re not.
    #4 was all about the TAXES, man. The forged signature is all about the “only source of the copyrighted works” thing (if Alan Cooper owned the copyrights, Prenda couldn’t own them).

    Lying to the court and such is covered by “taxes” and “going to jail”….

    Note that this is purely a layman’s view, of course….

  107. Scote  •  Oct 21, 2013 @2:43 pm

    “But what’s up with #4? “

    I assume that there are a number of reasons why a sociopath might create a tangle of lies and shell companies. The first is that the Prendarests may have decided that it was too much work, too uncertain and too unprofitable to find legitimate clients and track down actual copyright infringers to extort money from them. So, why not cut out the middle man and set up a honeypot? So much faster and easier to track down people downloading your own seed. And you get to keep *all* of the settlement money, especially if you set up a series of fake shell companies and purported trusts two hide behind. Counter suits? No problem, you get to hide behind the corporate veil. And, if you are a sociopath, you are better than everyone else, so why *wouldn’t* you do it? It isn’t like judges are going to stop you – not until judge Wright, and only then after the intervention of other lawyers.

    What is perhaps more troubling to me than the apparently sociopathic tactics of Prenda et al. is that the courts let them get away with it, letting them slide over and over again. It shouldn’t take an opposition motion for a judge to disallow a misjoinder or to throw out a case for improper jurisdiction, nor for a judge to refuse expedited discovery where it isn’t warranted.

  108. ricker  •  Oct 21, 2013 @2:56 pm

    What about the Arizona case? Are there not still sanctions pending?

  109. Palimpsest  •  Oct 21, 2013 @2:58 pm

    Thanks for the epic article . I do wonder if this overview gives the Prendarettes a better view then they have bothered to keep for themselves to date, e.g. their neglect of Massachusetts.

    Does any of the Steele ” I was just the prior owner and this was stolen” argument work if looked at by a Judge?

  110. That Anonymous Coward  •  Oct 21, 2013 @3:03 pm

    @En Passant – Sadly Ms. Rosing should have Googled them before accepting them as a client. Even with the terms, which we assume were limited to the 1 hearing from how things were laid out in filings, Pretenda just wanted to force them to keep repping them. Everyone deserves proper representation (even giant asshats) but the writing was on the wall by that time that they do not and will not pay up.

    I wonder how the bond company feels right about now?

    @Tim – Hans laid it out in the deposition. They bought up “worthless” copyrights and created value in them by suing. It was an investment.
    The shell companies, etc. they were to deal with the online community. S|H had a HORRIBLE brand problem, they lied to courts and got caught. They rebranded and moved on. They created a series of shells after their “real” clients were unhappy with the results they were getting. IIRC the cash split form the settlements was heavily towards Prenda. By having these shells, formed in a country where there is no paperwork requirements – requires $25K and hiring a local lawyer to even THINK about digging into ownership they thought they had isolated anyone finding out the truth. With the shells and some cheaply bought up copyrights they were set to keep 100% of the income.

    If they had to disclose to the courts that they owned the material they were suing over, it would call the entire operation into question. Would any judge trust an expert who had a direct financial gain tied to success in the case moving forward?

    One part of their scheme that might have bit them in the ass is the simple fact the material was no longer available at any price in the market. The law only requires you to have content, not to have tried to earn money to start wielding the $150K or else sword at people. That sorta makes it way more valuable to have a “leak” than to compete in the marketplace for bad content.

  111. Todd Knarr  •  Oct 21, 2013 @3:08 pm

    @AndrewNorton: Where in law do you find the basis for your assumption that any distribution of a copyrighted work is authorized unless there’s evidence to the contrary? I was of the understanding that copyright law said exactly the opposite: that unless you could show evidence of authorization the distribution was not authorized.

    With books in a bookstore, for instance, there’s a wide-spread acceptance of the legitimacy of the publishing chain: that publishers generally don’t publish books unless they have a contract with the author, and distributors and bookstores carry books from those publishers rather than getting their copies from random sources. When I see a book in a bookstore and assume it’s authorized I’m not merely making a random assumption, I’m basing that assumption on that accepted publishing chain.

    Contrast that with a rip of Iron Man 3 posted by someone not affiliated with the studio or production company. Exactly what grounds would you have for believing it was an authorized copy? None. So where would you find justification for assuming it was authorized?

    Note that BitTorrent has nothing to do with the logic here, we could be talking about physical DVDs in a bin somewhere. If I see a DVD in a jewel case with a black-and-white text-only cover sheet, and the DVD’s a DVD-R with no silk-screening on it rather than a pressed and printed disc, and it’s in a box at a swap meet with tons of other similar discs, I have the same lack of reason to believe it’s authorized compared to say seeing a pressed disc in professionally-done packaging on the rack at Target.

  112. Alex  •  Oct 21, 2013 @3:15 pm

    @Tim: because people who find nothing wrong with the combination of #1 & #3, are prone to #4. As simple as that.

  113. Matthew Cline  •  Oct 21, 2013 @3:22 pm

    @David Schwartz:

    The law exists to right wrongs and to help those who are wronged by others. You can’t make a business model out of intentionally creating wrongs that you can then sue people over when no harm would have come to you had you not done so.

    There’s the concept of mitigation of damages:

    Mitigation in law is the principle that a party who has suffered loss (from a tort or breach of contract) has to take reasonable action to minimize the amount of the loss suffered. As stated by the Canadian Federal Court of Appeal in Redpath Industries Ltd. v. Cisco (The), “It is well established that a party who suffers damages as a result of a breach of contract has a duty to mitigate those damages, that is to say that the wrongdoer cannot be called upon to pay for avoidable losses which would result in an increase in the quantum of damages payable to the injured party.”

    In this case, Prenda has taken the opposite of “mitigation of damages” and distilled it down to its purest form.

  114. Ann  •  Oct 21, 2013 @3:24 pm

    I’ve got “Where in the world is Mark Lutz” running through my head, but it doesn’t have the same ring–too few syllables. It worked a little better for Snowden.

    This may be thinking way too far ahead, but what of the many, many fraudulent cases they’ve processed?

  115. JR  •  Oct 21, 2013 @3:29 pm

    @Tim. Number 3 would have been fine if they really had evidence or could tell who the person was behind an IP address. Also they never intended to have anything play out in court, just use early discovery to get the names that are paying for an IP address, then try to shake them down with things like, “If you didn’t download it and is was a house next you using your WiFi, then I guess we will have to ask everyone you know about your porn habit.”

    They also try to say that everyone downloading a film are in a conspiracy, thus only filing fees for one case to sue hundreds of people in one shot.

    They try to say that you have some duty to keep your WiFi secure and monitor it for freeloaders. If I’m having a party and a guest picks up my phone and calls someone with a death threat, No way in hell just because I pay the phone bill that I’m in on some murder plot.

    Just in case some defense lawyers read this. Recently a factory back door was found in a very common home WiFi router. No tech skills required, tell Firefox to report your browser as a certain string, and you can do anything to the router, no password needed. That should bust any claims that you were negligent for not securing a router.

    Then of course saying they will drop you from the case if you pay just under what it would take to mount a defense.

    The other problem Prenda has is that in at least one case the film was uploaded to BT by Steele before the copyright was registered for the film. The film also has never made it to DVD or any pay sites.

    Now if a company bought the rights to film, then hired Prenda to be on the lookout for violations of their copyright, and once one was spotted, issue the right DCMA request to the cable company, and if it continued, then sue that person. Then it would have all been fair play. Prenda and it’s lawyers should not be the owners of the shell company that owns the rights for things to be fair.

    The other problems come in when Prenda says they work for AF. “Well judge, that is what my client has told me, and I have to believe them.” But Prenda is AF and they had a duty to disclose that fact. If they are the client then they can’t pull that game with the courts.

    On top of that we have the whole Alan Cooper mess. It sure looks like Prenda found orphaned content and then faked a copyright transfer.

    I hope that explains number 4, them playing games with the courts. They have to do that to hide all the aspects of the scam.

  116. I was Anonymous  •  Oct 21, 2013 @3:34 pm

    @Clark: Quoth Nicholas Weaver

    Clark: October 15 is the “you had your 6 month extension” drop dead date, so there is no extension to file, its due or late for tax year 2012.

    And the IRS’s voice mail during the shutdown essentially said, “Yeah, we’re shut down, but you still need to get all your taxes in by October 15.

  117. Troutwaxer  •  Oct 21, 2013 @3:36 pm

    The tower fell and the ground opened up and swallowed all the orcs.

  118. Lucius  •  Oct 21, 2013 @3:39 pm

    I wonder how the bond company feels right about now?

    At the time the bonds first appears, there was an analysis by a poster here arguing that the extremely low bond fee implies that it was 100% secured, with no risk to the bonding company (who are pretty good at not getting burned). The purpose of the bond was probably more to hide assets from view, rather than insufficient available assets. If true, S|H will pay every penny of the bond out of their own large pockets.

    @Todd – A nice package is not necessary for a perfectly legitimate good offered for sale. Legitimate CDs do not have to come in expensive professionally-pressed mass-produced units. We all buy rather casually, with focus on quality and price. If you are good at analyzing fine points to go further and cleverly deduce the history of what you buy, great. Most people can’t and don’t.

  119. Sharon  •  Oct 21, 2013 @3:40 pm

    Owning the companies themselves not only gave Steele & Co. control of the money, it gave them full control of the litigation, too.

    They didn’t have to worry any more about a lucrative client saying “I don’t like what I’m reading and hearing about our lawsuits being over-the-top, I don’t feel comfortable with what you’re doing IN MY NAME, I don’t like waking up to another week of our website being down because people are unhappy with the suits or having my family harassed.” and withdrawing, or demanding lots of details, or demanding the tactics be changed. They lost Hard Drive Productions not because the money stopped flowing in, but because the guy wasn’t comfortable working with them any more (at least, that’s my take on the interview) and that kind of business model.

    The last thing they want is a client who is going to be able to interfere with the gravy train by firing them or demanding changes in the tactics.

    So, an “offshore” shell that no one can find owners to harass, and that you can control all of the information flow about because no one can find any other way to contact that shell except through you … is a great solution if you’re not concerned with ethics or legality.

    AF Holdings and the other non-companies sound like the Prenda version of “my girlfriend lives in Canada”.

    Part of me wonders if they even bothered to create the shell in Nevis in the first place. Has anyone confirmed that it exists as a registered entity? It’s one thing to not reveal details of ownership but another entirely to not reveal existence.

  120. I was Anonymous  •  Oct 21, 2013 @3:46 pm

    @Tim,

    But what’s up with #4? I don’t get it. Why did they create these shell companies? Why forge a signature to pretend someone else owns it?

    IANAL, nor do I play one on TV… but wasn’t there something about not being able to be a lawyer for a corp that you’re an officer of, or something like that?

    The Cooper forgery was an attempt to get around that.

  121. Tim  •  Oct 21, 2013 @4:07 pm

    @IwasAnonymous,

    Ah, that makes sense; I’d wondered about that. Although it still seems like they could have formed an informal partnership, with one being the copyright-holder, and one being the legal team. There are multiple people involved in this, and it seems like that would’ve been simpler than using shell companies.

    It still seem like there were easier ways for them to go about this, and seems like a lot of their fraud/scam/illegal stuff was unnecessary, so it still doesn’t make a lot of sense to me, but then IANADLHBOATLSTSP (I am not a douchebag lawyer hell-bent on abusing the legal system to screw people).

  122. [REDACTED]  •  Oct 21, 2013 @4:08 pm

    It’s official: I have lost my taste for popcorn. Far too many shell fragments stuck in my teeth to be worth it anymore.

  123. Frankz  •  Oct 21, 2013 @4:09 pm

    What about the Arizona case? Are there not still sanctions pending?

    Wait, Ken missed a state? Time for an update!

  124. Frankz  •  Oct 21, 2013 @4:11 pm

    IANAL, nor do I play one on TV…

    …but I did stay at a Holiday Inn Express last night.

  125. cdru  •  Oct 21, 2013 @4:16 pm

    @Todd Knarr:

    Where in law do you find the basis for your assumption that any distribution of a copyrighted work is authorized unless there’s evidence to the contrary? I was of the understanding that copyright law said exactly the opposite: that unless you could show evidence of authorization the distribution was not authorized.

    If indeed sharkmp4 is prenda, and they posted it to The Pirate Bay, and they served the file up to the user, then they authorized the distribution. You can’t argue that the file was being distributed illegally when the copyright owner itself was the one knowingly and willingly serving up the file.

    If the file is downloaded from other non-Prenda peers in the swarm THAT may be unauthorized distribution. But without the logs from the sending peer or the receiving peer, Prenda wouldn’t be able to prove that anything was transferred outside of their own connections. And it may be possible to argue that Prenda’s implicitly authorized distribution via the bittorrent protocol also allows others to do so as well as part of the same swarm.

    The people that did download the files posted by sharkmp4 likely got a get out of lawsuit free card if indeed Prenda posted the torrent and seeded the file (and it appears as if they did). Had they merely joined a swarm for an existing torrent of their works and repeated the process, only this time not posting the torrent or seeding the file, only passively looking, then they wouldn’t be in as much of a predicament they are now. But then again, if they didn’t share the file, they may not have actually had anyone to go after.

  126. norahc  •  Oct 21, 2013 @4:17 pm

    It gets even better. Techdirt is reporting that Steele filed a Motion to Dismiss the lawsuit Cooper filed against him by claiming that although the name Alan Cooper was signed on the documents, it wasn’t that Alan Cooper because it’s a fairly common name.

    http://www.techdirt.com/articles/20131019/01033124933/john-steele-tries-to-get-out-alan-coopers-lawsuit-arguing-that-use-alan-cooper-was-coincidental.shtml

  127. Ronald Pottol  •  Oct 21, 2013 @4:20 pm

    I do wonder why they have not fled, the big people in this seem to have received millions, I’d think a place where you cannot be extradited from and a quite lifestyle beats the hell out of the federal pen, and then trying to make a living as a disbarred convicted felon.

  128. Mark Wing  •  Oct 21, 2013 @4:28 pm

    This is just like a George R. R. Martin book, except with lawyers.

  129. James Pollock  •  Oct 21, 2013 @4:28 pm

    “The intent of the downloader does not matter (although, arguably, IMO, there should be a distinction between a downloader who only downloads for personal use v. a downloader who profits from the download).”

    Not so. The statutory damages are different depending on whether or not the infringement was “willful”.
    As for the personal use/for profit dilemma, that distinction is relevant to whether or not criminal charges, in addition to civil damages, are appropriate.

  130. James Pollock  •  Oct 21, 2013 @4:34 pm

    “If indeed sharkmp4 is prenda, and they posted it to The Pirate Bay, and they served the file up to the user, then they authorized the distribution.”

    If they do that, and then stop seeding, how much leeway is there before the copying becomes unauthorized? This is of interest not because of Prenda, but because other, less odious content owners may want to distribute some content free, then switch back to paid distribution. (Is it OK to pirate movies bcause the studio once held free trial screenings? How about pay cable shows because these channels were offered during a free weekend as a promotion? and so on.)

  131. [REDACTED]  •  Oct 21, 2013 @4:35 pm

    @Mark Wing

    Gibbs: “Judge Wright sends his regards.”

  132. David Lang  •  Oct 21, 2013 @4:37 pm

    @todd

    the problem is that it’s not possible for someone downloading to know if the person uploading was authorized or not.

    take a look at the $bigstudios who sued Google over items posted to YouTube that later turned out to be uploaded by the publicity department of those very same studios. If they couldn’t recognize that things were uploaded with permission when it was a part of them (or a company hired by them) that did it, how is your average person supposed to keep track of this?

    As for a law giving a presumption of legality for anything posted, I would argue that the DMCA results in exactly that. If the thing posted is not legal, the rightowner has a mechanism to take it down. Unless the hosting company is told via a DMCA notice to take it down, what else can be assumed other than that it is authorized?

    I know the studios would like to reverse this and make the hosting companies responsible for checking everything, but systems like that can’t tell what’s really going on and are the type of thing that shut down the streaming of the Democratic National Convention during M Oboma’s speach because they heard some music in the background that matched their copyrighted database.

    Are you supposed to assume that at a National Political Convention, any music that they play is pirated and unauthorized? or does it make more sense to assume that they have properly received permission to play the music in a public setting (completely ignoring the discussion of if they _should_ need to get special permission to play the music)

  133. David Lang  •  Oct 21, 2013 @4:46 pm

    @James
    bittorrent doesn’t include any way in the protocol to say ‘this is only authorized for a short time’, so seeding anything there is a pretty permanent grant of permission.

    you could say in the description, or at the beginning of a video that free permission is only granted for a fixed time, but lacking that I don’t see any way of telling people that they are no longer authorized to share the content.

    Remember that BT is a peer-to-peer sharing protocol, once the material is seeded, the person who initially seeds it has no need to remain connected as long as there are other people who have a copy of it to share.

    This is built in to the system, it’s intentional not accidental, it benefits the initial uploader because they don’t need to pay for the bandwidth of all the downloads, it benefits everyone else because they will automatically get the material from the closest source that has it, and it benefits the ISPs because the material will tend to be transferred over their internal network (where they tend to have a lot more bandwidth available) rather than through their more limited links to other ISPs

    but the tradeoff that you get in exchange for people being willing to let you use their bandwidth to distribute your files is that you have no control over the files after you send them out.

  134. Andrew Norton (@ktetch)  •  Oct 21, 2013 @5:01 pm

    Exactly David.
    James, when it’s seeded, it’s an implicit license to distribute.
    There are ways to do it with bittorrent but it’s not common (and wouldn’t show up on TPB anyway), so that you can kill a specific torrent for a timegated release.

  135. George William Herbert  •  Oct 21, 2013 @5:06 pm

    One could make a perfectly coherent argument that BitTorrent is a form of broadcasting – if one uploads something, one has to assume it will be reshared and rereshared, it’s intrinsic to the medium.

    Usenet was (in the day) similarly regarded – once you put something out on it, you had no recourse to its continued distribution. There was a standard (not legally tested that I recall) for an X-no-archive header which would keep archivers like Google Groups from archiving messages, but normal read distribution was usually unlimited.

  136. That Anonymous Coward  •  Oct 21, 2013 @5:11 pm

    @Todd Knarr – And that book reference was already tried and failed.
    Amazon and 1984.
    Oops we sold a bunch of things we apparently didn’t have the rights to. So it isn’t always crystal clear.

    *and I snip my points about copyright being broken in its current format*

    Copyright law currently allows a NPE to extract payments from people on mere accusation of wrongdoing, and gives them a $150K as a weapon to scare people into paying a settlement. They can collect magnitudes beyond $150K, and never put it on the market. How does this benefit the public again?

  137. George William Herbert  •  Oct 21, 2013 @5:17 pm

    The obvious implication is, that if it’s a form of broadcasting, then that they uploaded a particular work to it implies consent to download.

    Which would mean that it’s not just the copyright ownership andcompany ownership they’ve potentially committed fraud over – even the claim that downloads were unauthorized and therefore that a copyright violation occurred in the first place would be fraudulent, and a fraud upon the courts. If the entire premise of every suit they ever filed was fraudulent, they’re cooked.

  138. Matthew  •  Oct 21, 2013 @5:20 pm

    Pedantic technical correction to the people talking about DHCP. DHCP is used to dynamically assign IP addresses on a local network, ISPs assign addresses via PPP (Point-to-Point Protocol) as part of authentication process when a connection is made (unless the client has a permanent leased line in which case it’s configured manually and doesn’t change). A particular account will normally be given an address dynamically from a pool, but can also be associated with a static address. And if the address is dynamic, it will only be renewed if the connection drops and is brought back (there is no lease time, like with DHCP) – and even then it will depend on the ISP’s infrastructure as to whether the address actually changes (cable connections can be pretty static while DSL ones tend to change, at least in the UK).

    The IP address assigned is always logged as part of the connection process, so it’s always possible to work out what account was using that IP address at the time, if the logs still exist.

    Which is basically what everyone has already said, but there’s no harm in getting the details right.

  139. Christenson  •  Oct 21, 2013 @5:20 pm

    You really can’t tell, as a downloader, if there’s a copyright problem or not, before you even BEGIN to consider “fair use”. I recall an incident on another forum, where somebody posted a technical book, said it was cool. I downloaded it, glanced through it in much the same way I would have if I had been in a university bookstore with dead trees, and then asked the poster how he had rights to upload the book, since he didn’t seem to be author or publisher.
    His lack of an answer lead to the link being removed…but to figure it out, I had to download the book and then ask questions.

    When I say I don’t believe Gibbs isn’t telling the whole truth, I mean that he knows more than he says, and I don’t believe him for a new york minute about the size of that postage stamp house in California. His document reveal is obviously strategic, and he has not come clean. Falsus in unum, falsus in omnes, caveat emptor, caveat lector!

  140. Anon  •  Oct 21, 2013 @5:39 pm

    A little checking into Aisha Sargeant and the company she supposedly worked for and set up AF, I13 and Guava as well as the trust might just show something other then what S/H claimed.
    XSC Digital the company on Livewire’ website as a partner, and who Robt Balazaire in Miami was paid 3k on the Prenda Financial sheet, is 1) NOT AN ACTIVE COMPANY ( 2009) 2) was owned by RAYMOND ROGERS when it was active – not Robt ( who was the first attorney Steele put down as Miami owner of Prenda when Steele got caught in Fla) – but yet, Robt is getting a payment in 2012 from Duffy/S/H for a non existent company who was owned by the very supposed assigner of the AF Holdings copyrights. Something smells fishy again!!http://www.corporationwiki.com/California/Santa-Clarita/xsc-digital-corp/45193165.aspx

  141. En Passant  •  Oct 21, 2013 @5:40 pm

    George William Herbert wrote Oct 21, 2013 @5:06 pm:

    Usenet was (in the day) similarly regarded – once you put something out on it, you had no recourse to its continued distribution. There was a standard (not legally tested that I recall) for an X-no-archive header which would keep archivers like Google Groups from archiving messages, but normal read distribution was usually unlimited.

    There was also a cancel message that most but not all NNTP servers honored.

  142. George William Herbert  •  Oct 21, 2013 @5:50 pm

    En passant:

    There was also a cancel message that most but not all NNTP servers honored.

    No, not really…

  143. unidan  •  Oct 21, 2013 @6:05 pm

    I don’t think Mark Lutz is a real person. Is there any evidence I missed to the contrary?

  144. SparkBunny  •  Oct 21, 2013 @6:10 pm

    Well, now i just wasted an hour of my life on a website made 17 years ago. Thanks, Clark.

  145. anne mouse  •  Oct 21, 2013 @6:23 pm

    Steele’s latest motion is actually pretty good: brief, well-structured, gets right to the point, clearly identifies what’s contested. I tend to believe that he’s intentionally overlooking a lot of relevant case law, since I tend to assume that Cooper’s lawyers are not idiots, but this motion is at least plausible. As legal argument goes, it’s way better than Gibbs’ recent pro se motion to relieve himself of sanctions.
    Given that Steele (when he can control his temper) knows what a legal brief ought to look like, it’s all the more interesting that he bothered hiring Gibbs, who usually can’t put three paragraphs together. Yeah, I know that Steele was desperate for warm bodies licensed in various states (he hired lawyers off Craig’s List, for chrissakes!), but I’m thinking he also had in mind that he’d get more plausible deniability this way.

  146. Ryan  •  Oct 21, 2013 @6:24 pm

    First, credit where it’s due: Ken, that was a truly fantastic post.

    Second, I have some questions about the US legal system because I’m fairly confident that if these guys tried this in my country that would either have been thrown in jail or directly sanctioned by the judge(s), or would at least be charged by now. Here goes:

    -Can judges over civil matters in the US not directly order sanctions and/or jail time for people who file fraudulent documents with the court (or outright lie about the details when they’re filed)?

    -Does the Us have federal “proceeds of crime” legislation that could enable seizure of all Prenda-related financial assets if they are charged and convicted?

    Third, I cannot believe the IRS does not mask their IP addresses. Unless their popehat readers are not actually investigators but just interested parties.

    Anyway, glad to see Prenda looks like they’re going to receive what’s justly coming their way.

  147. David Schwartz  •  Oct 21, 2013 @6:24 pm

    No, #1 and #3 are not fine. You cannot deliberately set out to make yourself a victim of a crime and then sue the people who “victimized” you as a profit model. Courts cost money and are provided to right actual wrongs, not to enrich people who intentionally set traps for others. When someone does exactly what you hoped they would do, what you induced them to do, in no sense have they wronged you.

  148. David  •  Oct 21, 2013 @6:42 pm

    @Matthew

    Pedantic technical correction to the people talking about DHCP. DHCP is used to dynamically assign IP addresses on a local network, ISPs assign addresses via PPP (Point-to-Point Protocol) as part of authentication process when a connection is made (unless the client has a permanent leased line in which case it’s configured manually and doesn’t change).

    A correction only counts as pedantic if it’s actually correct.

    Things may go the way you describe in your neighborhood. In mine, ISPs use PPP for DSL connections, but they use DHCP for cable connections. And in my neighborhood, which spans most of the United States, cable trumps DSL.

  149. Clark  •  Oct 21, 2013 @6:47 pm

    @SparkBunny

    Well, now i just wasted an hour of my life on a website made 17 years ago. Thanks, Clark.

    I live to serve.

  150. Tim  •  Oct 21, 2013 @6:48 pm

    @JR thanks for the detailed response!

    That meshes with my current understanding of the situation (#3 could’ve been done in a perfectly legal way). I didn’t realize that #1 & #3 posed a problem (Is it illegal for them to own the copyright _and_ sue infringers, or just wrong to hide their ownership?). #2 seems obviously problematic (their uploading could be interpreted as implicit permission to download).

    I see what’s wrong with #4, but I’m still fuzzy as to why they felt it was necessary. The more everything comes unraveled, the more I wonder why they did #4. I feel like most of the things they’re getting in trouble for could have been easily avoided and they could have stuck to legal avenues (for the most part).

    Maybe I just shouldn’t expect rational behavior from them.

  151. ChrisTS  •  Oct 21, 2013 @6:54 pm

    Life is Good.

  152. Tim  •  Oct 21, 2013 @6:57 pm

    @David Schwartz

    You cannot deliberately set out to make yourself a victim of a crime and then sue the people who “victimized” you as a profit model

    I feel like I’m missing something here. I feel like that applies to combining #2 & #3 (i.e. uploading it yourself and then pursuing downloaders). But I’m unclear on how #1 and #3 are in conflict (i.e. buying the copyright and pursuing infringers).

    I fully agree that it’s a morally bankrupt business model, I just feel like I’m not understanding why parts of this are problematic. Apologies if this is a stupid question, but I’m trying to wrap my brain around their scheme.

  153. Rich Fiscus  •  Oct 21, 2013 @7:14 pm

    @Matthew

    David is correct that, at least in the US, DHCP is the standard for assigning IP addresses, even static ones, for cable Internet.

    On the DSL side it varies significantly depending on the specifics of the system. They may use PPP for everything, PPP and bridged connections for business service but DHCP for both static and dynamic consumer addresses, PPP for all static addresses and DHCP for all dynamic ones, or DHCP for everything.

    Probably not by coincidence until recently the level of serious networking expertise at cable companies was significantly lower than the traditional PTSN providers. The situation is significantly more even today as cable company staffers have gained significant experience and the old guard telco employees have retired or been pushed out to save money.

  154. Stephen H  •  Oct 21, 2013 @7:15 pm

    Does anyone have a spreadsheet version of the Gibbs evidence? I know it’s available in PDF, but converting such stuff can take quite a while. If someone does have a spreadsheet version, I (and many websites that are following all of this) would be keen to access it.

  155. naught_for_naught  •  Oct 21, 2013 @7:16 pm

    Great read. It was like binge watching an entire season of a Survivor where in the end no one survives.

  156. Zem  •  Oct 21, 2013 @7:20 pm

    I see what you did there! The more competant Mr. Gibbs’ defence team is, the worse it will actually be for the Prenda 3.

  157. En Passant  •  Oct 21, 2013 @7:24 pm

    George William Herbert wrote Oct 21, 2013 @5:50 pm:

    No, not really…

    I was never a sysadmin on a usenet server, but I distinctly recall cancels being issued by news server admins to combat spam, and these propagated to other servers. I also recall some flaps about rogue cancels.

    Cancels weren’t entirely successful for the anti-spam purpose, but I recall they were used. Cancel was also specified in RFC 1036 as a control header.

    Although maybe we’re talking about different things.

  158. Jim Tyre  •  Oct 21, 2013 @7:29 pm

    I was never a sysadmin on a usenet server, but I distinctly recall cancels being issued by news server admins to combat spam, and these propagated to other servers. I also recall some flaps about rogue cancels.

    Can any discussion of Prenda and Usenet be complete without a mention of the Usenet Death Penalty?

  159. George William Herbert  •  Oct 21, 2013 @7:32 pm

    Tim wrote in part:

    I’m unclear on how #1 and #3 are in conflict (i.e. buying the copyright and pursuing infringers).

    This goes way back in the Prenda story, but Ken and others have written that for a law firm, it is illegal / improper / unethical / fattening for them to create an underlying legal cause and then sue under it for their own benefit.

    A movie company could create or buy a movie (#1), then start chasing after illegal downloaders as a profit stream (#3), legally. #2 would give them unclean hands and #4 would be unnecessary for them

    #4 (the hive of shell companies etc) was presumably either 4.a. to hide that Prenda Law itself owned the assets and was suing to enrich itself, as opposed to on behalf of a client, or 4.b. to hide the ownership for tax reasons or some such, or both.

    4.a. is the fraud upon the court thing; which at the very least has gotten a whole bunch of judges quite unhappy with them, and could result in serious charges.

    There seems to be significant documented evidence for 4.a.

    4.b. has not been clearly shown in the evidence made public so far, but would add a goodly long federal jail term on top of 4.a. were it true.

    The bank account / transfers info put into evidence by Gibbs makes a great case for 4.a. but does not show 4.b. . Someone (presumably the IRS) would need to see the various Prenda principals’ tax records to see if they declared the income they were getting via the 4.a. scheme. If they did then there’s no 4.b. to argue. If they did not…

  160. Tim  •  Oct 21, 2013 @7:40 pm

    @George William Herbert

    for a law firm, it is illegal / improper / unethical / fattening for them to create an underlying legal cause and then sue under it for their own benefit.

    Ah, thank you. That was the puzzle piece I was missing.

    So… could Prenda have bought the rights (#1), and then hired a separate law firm to do #3? Or are they not even allowed to do #1?

    This makes a lot more sense now. They were doing things that they knew were in violation of laws/ethics rules/etc, and tried to hide it with a myriad of shell companies, fake owners, etc. All for greed.

  161. George William Herbert  •  Oct 21, 2013 @7:40 pm

    Jim Tyre wrote:

    Can any discussion of Prenda and Usenet be complete without a mention of the Usenet Death Penalty?

    I had a brief flashback wondering where Dick Depew of ARRM fame ended up (I happened to be watching when that debacle happened, live; it’s the only time in about 20 years of active Usenet activity that I literally fell out of my chair laughing).

    to En Passant – I was somewhat more involved than the average bear in Usenet technology and governance (as it was) for a while. You are correct that cancel messages were in the protocol definition, and were used. The earlier statement that most servers accepted and acted upon them was not true after cancel wars broke out; most admins disabled any cancel action.

  162. Dormammu  •  Oct 21, 2013 @7:43 pm

    Rogue cancels on Usenet–ah, those were the days. If Usenet had not been replaced by the various common Web fora and social networking sites, the Prenda principals would be there now, creating sockpuppets and being pilloried in AUK.

  163. Docrailgun  •  Oct 21, 2013 @7:43 pm

    Clark is a Bene Gesserit? Who knew?

  164. Jim Tyre  •  Oct 21, 2013 @7:47 pm

    I had a brief flashback wondering where Dick Depew of ARRM fame ended up (I happened to be watching when that debacle happened, live; it’s the only time in about 20 years of active Usenet activity that I literally fell out of my chair laughing).

    Not unrelated to the Usenet Death Penalty, but not the same. If memory serves, the first UDP was imposed on UUNet in about 1997. Whether well thought out or otherwise, it was deliberate, not a comedy of errors.

  165. George William Herbert  •  Oct 21, 2013 @7:48 pm

    Tim:

    Ah, thank you. That was the puzzle piece I was missing.

    So… could Prenda have bought the rights (#1), and then hired a separate law firm to do #3? Or are they not even allowed to do #1?

    This makes a lot more sense now. They were doing things that they knew were in violation of laws/ethics rules/etc, and tried to hide it with a myriad of shell companies, fake owners, etc. All for greed.

    I don’t know what law firms are restricted from doing in other business and investment activity.

    The principals could certainly have gone off and created an unrelated firm, and hired another law firm to do the dirty work.

    I have not yet seen an “accounting analysis” of the accounts activity Gibbs posted, in the sense of attempting to figure out what the cashflow behavior, overhead costs, earnings, profits etc. work out to based on that information. It’s possible that this is a lucrative way for a law firm to bulk up its business activity but not hugely profitable for someone else to hire a law firm to do. Alternately, it might be sufficiently profitable that a third party could hire unrelated lawyers to do it for them, and still come out with a good profitability / cash flow.

    If it’s the latter, then Prenda shot themselves in the foot; they should have done it (without the seeding the video part) with more films and an outside law firm, rather than a tangled web and themselves, and they’d not be in trouble now.

    In point of fact, some genius is probably starting to do that, with the same basic premise (legal threat to sue bordering on but not quite extortion) but with clearly legal copyright ownership and corporate structure etc. The inherent #1 #3 activity absent #2 and #4 is not clearly illegal – just unethical and fattening – and therefore would seem to remain a credible (if offensive) business model…

  166. Andrew Norton (@ktetch)  •  Oct 21, 2013 @7:57 pm

    @George – it’s been done a bunch, see Hurt Locker etc.

  167. Craig  •  Oct 21, 2013 @8:02 pm

    I see a one way plane ticket to Ecuador in the futures’ of Mark Lutz, Paul Duffy, Paul Hansmeier and John Steele.

  168. George William Herbert  •  Oct 21, 2013 @8:04 pm

    Jim Tyre responding to my mention of ARRM:

    Not unrelated to the Usenet Death Penalty, but not the same. If memory serves, the first UDP was imposed on UUNet in about 1997. Whether well thought out or otherwise, it was deliberate, not a comedy of errors.

    It was a comedy of errors, but also deliberate.

    I understand the 1997 UUNet UDP and 1993 Depew incident weren’t related, it was just a trip down memory lane.

  169. George William Herbert  •  Oct 21, 2013 @8:08 pm

    Andrew Norton:

    it’s been done a bunch, see Hurt Locker etc.

    There’s a difference between a producer going after pirates, and an attempt to monetize specifically by going after pirates (as opposed to, by making and showing or selling copies of the movie).

    With legit movie producers, I believe they’re doing something counterproductive by suing downloaders (as opposed to seeing it as free advertising), but it’s not unethical to try and protect their creation.

    Someone buying “used porn film copyrights” (past the point that they’re otherwise economically viable) and setting out to zap downloaders for profit, is entirely different.

  170. Craig  •  Oct 21, 2013 @8:14 pm

    We can see the trouble a rinky-dink operation like Prenda Law can cause. Imagine what skilled lawyers who work for the patent trolls like IV are doing to the court system, individuals, and businesses? Take away the blackmail aspect of extorting money from people for downloading porn that you posted and if you don’t pay we’ll go public telling everyone your sexual tastes and put in multiple ambiguous patents that are held over companies to extort licensing fees or we’ll litigate you into bankruptcy.

  171. Shay  •  Oct 21, 2013 @8:16 pm

    I agree with Scote: Mark Lutz is somewhere deep in the Everglades with 50 lbs of concrete chained to his ankles.

  172. Frankz  •  Oct 21, 2013 @8:30 pm

    Third, I cannot believe the IRS does not mask their IP addresses. Unless their popehat readers are not actually investigators but just interested parties.

    What is that referring to? I missed seeing anything about IRS reading this site. But, if that’s what it is, it could also be one of Hansmeier’s brothers, who supposedly works for the IRS.

  173. AlphaCentauri  •  Oct 21, 2013 @8:38 pm

    Interesting … If one wanted to move around large amounts of money without attracting attention, creating a business where people desperate to remain anonymous send you several thousand dollars each, and then moving that money around from account to account (with a stop in Nevis), would be a pretty useful way to go about it.

    I agree that other trolls will try to find ways to make this work legally. But I suspect that organizations that need to launder money might find it attractive as well.

  174. En Passant  •  Oct 21, 2013 @9:08 pm

    George William Herbert wrote Oct 21, 2013 @7:40 pm:

    The earlier statement that most servers accepted and acted upon them was not true after cancel wars broke out; most admins disabled any cancel action.

    Got it. I was just a user who watched events, and listened to contemporaneous tales from a friend who ran a news server. Cancel wars did ruin a good thing. Infectious asshattery does that.

  175. MCB  •  Oct 21, 2013 @9:12 pm

    AlphaCentauri:

    As money laundering this scheme is just plain stupid. You don’t want the account statement for your money laundering conspiracy to list hundreds of thousands of dollars of payments directly to the people running said conspiracy. Because those people do time based on the amount laundered by the conspiracy, not their individual shares.

    Steele and and Hansmeier’s only defense that I can see at this point is:

    This is a law suit. Our failure to inform them of the forged signatures, personal financial stake int he litigation, and the fact that we originally seeded the torrent shouldn’t matter because you should never trust representations by the opposing party in litigation. That argument strikes me as a loser.

  176. Billy V.  •  Oct 21, 2013 @9:27 pm

    iirc Comcast uses Cisco as a backbone for their cable internet service. Cisco offers BPI+ (basically security certificate assigned to the HFC MAC of the modem it is issues to) which prevents MAC address cloning and IP hijacking. This was a huge deal because it was when comcast started stopping users from using their own modems and pissed a bunch off which then turned into a compatible modem list which all had BPI+ security availability.

    If this is the case, the argument that the IP was hijacked is thrown out the window.

  177. SJD  •  Oct 21, 2013 @9:35 pm

    As for me, #3 is bad enough…

  178. xbradtc  •  Oct 21, 2013 @9:41 pm

    Someone mentioned the rule of mitigation. Did the Prendateers ever send DCMA notices to the various torrent hosts? Or just seek to fleece downloaders? Seems a relevant question that defense counsel might have asked.

  179. Rich Fiscus  •  Oct 21, 2013 @10:10 pm

    It’s worth pointing out that the entire issue of what downloaders should have assumed or rationally concluded with respect to the Prenda honeypot isn’t really relevant in the context of copyright infringement damages. Not that it couldn’t be in another case, but the entirety of the specifics here basically nullify it completely. IANAL but I’ve studied a lot of caselaw in this area.

    In the Betamax decision the Supreme Court ruled that personal, not for profit copying is presumptively fair use unless the copyright holder can make a cogent argument that it’s at least reasonable to believe it would affect their revenue from the work in question. While this technically involves the additional element of distribution it’s essentially no different.

    There is no revenue to affect so there can be no damages. An injunction against further distribution perhaps – the circumstances of BitTorrent notwithstanding. Damages, though, not so much.

    While it’s true statutory damages do not require a showing of actual damage that’s not the same thing as saying they apply even when there is no possibility there was any. Rather they are proscribed when actual damages cannot be accurately calculated. In these cases the damage can be easily calculated to be exactly nothing, ergo that’s what the correct damage award is under the law.

  180. Jim Tyre  •  Oct 21, 2013 @11:10 pm

    Someone mentioned the rule of mitigation. Did the Prendateers ever send DCMA notices to the various torrent hosts? Or just seek to fleece downloaders? Seems a relevant question that defense counsel might have asked.

    Without getting into a debate about whether a torrent host is a service provider as defined in the DMCA, DMCA notices are meaningless unless the service provider has designated a DMCA agent for service of process, registered the agent with the Copyright Office, and taken other steps.

  181. David Schwartz  •  Oct 21, 2013 @11:24 pm

    @Tim: It really is this simple — when someone does exactly what you most wanted them to do, you can’t then claim in a court of law with a straight face that they wrongfully harmed you.

  182. Anonypants  •  Oct 22, 2013 @1:01 am

    @xbradtc : IIRC, the answer re: DMCA takedowns depends on whether a Prenda shell owned the video in question.

  183. Cat G  •  Oct 22, 2013 @2:38 am

    Something I can’t stop wondering about – the Prendateers claim Lutz was detained for 16 hours by federal officials at an airport. I can think of only two federal entities normally present in an airport, and one of them (TSA) does not actually have the legal authority to perform such a detention (for the majority of the workforce, at least). (Anytime you see “TSA detained x”, it’s usually actually the local PD that did the detaining.) Unless traveling internationally, I can’t see CBP or ICE detaining either. Regardless, telling a judge someone was detained but not providing any other detail is kind of fishy – this is something I’d expect could be easily verified or disproven with a phone call from the judge or an aide to various law enforcement entities in that area. To say nothing of the doublespeak involved in saying “I had his ticket and we were leaving from Miami” becoming “He was booked leaving Ft. Lauderdale but was detained.” Utter lack of credibility engaged.

    Also, no, most normal government IT systems don’t mask themselves. Well, the NSA and possibly the DOD might, as well as some sections of various intelligence agencies. But the IRS? Probably not.

  184. Cat G  •  Oct 22, 2013 @2:42 am

    Oh, I just thought of another possible reason for Mr. Lutz’s sudden disappearing act. It’s juicy, too.

    Maybe he’s already flipped for a possible investigation, and they’ve placed him into witness protection because the Prendateers are crazy and he’s concerned for his safety.

  185. James Pollock  •  Oct 22, 2013 @3:04 am

    “bittorrent doesn’t include any way in the protocol to say ‘this is only authorized for a short time’,”
    Sure it does. You can query the swarm to see who’s in it; if the copyright owner is in the swarm, then it’s authorized, if not, it’s presumed not. (Yeah, you’ll have to learn who the copyright owner is out-of-band.
    The actual problem is that you can’t tell if you’re downloading matches the description says it is until the download is done. So, for example, you might think you’re getting file A, but what actually shows up is file B instead, and you don’t know it until after you’ve made an unauthorized and infringing copy of file B, PLUS participated in the unauthorized distribution of file B, both of which are infringements of copyright on file B.

  186. Austin Collins  •  Oct 22, 2013 @6:42 am

    Forgive me if I missed it in the links or comments, but is there a link to Godfread’s letter to Judge Noel seeking to submit the recent Gibbs-provided financials?

    I find several links to Hansmeir’s response, and see it on the docket, but don’t see the letter he’s seeking to object to. Tried googling, simply found references to the document and Hansmeir’s opposition.

  187. Austin Collins  •  Oct 22, 2013 @6:44 am

    Forgive me if I missed it in the links or comments, but is there a link to Godfread’s letter to Judge Noel seeking to submit the recent Gibbs-provided financials?

    I find several links to Hansmeir’s response, and see it on the docket, but don’t see the letter he’s seeking to object to. Tried googling, simply found references to the docket and Hansmeir’s opposition.

  188. Craig  •  Oct 22, 2013 @6:53 am
  189. Austin Collins  •  Oct 22, 2013 @7:00 am

    Craig:

    Thank you for the quick response and link.

    However, what I’m trying to find is the letter Godfread wrote to Judge Noel, mentioning Gibbs’ filings, that Hansmeir is now responding to.

    And I don’t see that on the techdirt or ars technica coverage articles. And while Hansmeir’s letter objecting to Godfried’s letter is on the docket athttp://ia601203.us.archive.org/34/items/gov.uscourts.mnd.126519/gov.uscourts.mnd.126519.docket.htmlGodfriend’s letter is not.

    Apologies in advance if I’m missing something. Double-checked the techdirt link you provided just to be sure I didn’t miss it the first time.

  190. David Lang  •  Oct 22, 2013 @7:33 am

    @james
    checking to see if the copyright holder is in the swarm or not doesn’t work

    first off, you don’t have a way to know who the copyright holder is

    second, you don’t have a way to know if the copyright holder hired someone else to post it for them (at which point it’s still authorized)

    third, what about the case where they posted it, then the system that they posted it from looses connectivity, dropping them out of the swarm. that doesn’t make it now illegal

  191. rsteinmetz70112  •  Oct 22, 2013 @7:38 am

    One of the most interesting things Gibbs files was a list of the Gibbs/Prenda clients. I know some of therm were”legitimate” but were all of these known?

    Livewire Holdings LLC
    AF Holdings LLC
    Ingeuity13 LLC
    Millennium TGA LLC
    Hard Drive Productions, Inc.
    Lightspeed Media Corporation
    First Time Videos, LLC
    Guava, LLC
    Arte de Oaxaca
    LY Systems, LLC
    CP Productions, INC.
    OpenMind Solutions, Inc
    Pink Lotus Entertainment, LLC
    Boy Racer Inc.
    Pacific Century, LTD
    XSC Digital Corp
    Exoticgold LTD
    Sunlust Pictures LLC

    Some of these names are familiar, others new to me at least.

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Team scumbags Prenda

October 22, 2013 § Leave a comment

All of Popehat’s Prenda coverage is collected here.

It’s been two months since I wrote about Prenda Law. Since then its fortunes — and the fortunes of its principals — have been on the wane. Prenda, John Steele, Paul Hansmeier, Paul Duffy, and Mark Lutz have been suffering devastating blows across the country. Any one of these developments would be grave for any normal lawyer or legal enterprise. Combined, they represent a swiftly accelerating rout. Each development makes it more and more plausible that Judge Wright’s referral of Prenda’s principals to federal prosecutors will yield a grand jury investigation and, eventually, federal criminal charges. To one side, career and financial ruin loom as multiple courts issue brutal and reputation-destroying sanctions; to the other side, the door to federal prison yawns open.

So what’s been going on? Let’s look at updates state by state, and then turn to last Thursday’s big development in Los Angeles. Brace yourself; this is a long post.

 

Massachusetts

In the United States District Court for the District of Massachusetts, defendant Sandipan Chowdhury and his able lawyers from Booth Sweet LLP have been running rampant over a mostly absent Prenda. Prenda, through its entity AF Holdings, sued Chowdhury over alleged downloads of a movie called “Sexual Obsession.” Chowdhury did not go quietly. Chowdhury filed a counterclaim setting forth Prenda’s shady dealings and demanding cancellation of the copyright, and asked the court to order Prenda (through AF Holdings) to post a bond to continue. Prenda failed to do so. Prenda’s local counsel sought and obtained leave to withdraw in an astonishing motion that suggests that the he had concluded that Prenda is engaged in fraud and wanted none of it. Chowdhury and his attorneys, not ones to pass up the opportunity to club a baby seal, asked the court to enter a default against Prenda, citing Prenda’s failure to post the ordered bond and its failure to answer the counterclaim, as well as the emerging evidence of Prenda’s misconduct and deceit. Crucially, Chowdhury asked the court to enter default against AF Holdings and its “known aliases.”Prenda failed to respond once again. The court granted the motion, resulting in a default order that identifies Prenda Law, John Steele, Paul Hansmeier, and Paul Duffy as “aliases” of AF Holdings.1 Last week Chowdhury followed up with a request that the Court enter a final judgment based on the default order. Chowdhury’s proposed final judgment would impose a sizable judgment against the whole Prenda team:

It is hereby ORDRED, ADJUDGED AND DECREED that Defendant Chowdhury recover jointly and severally from Plaintiff AF Holdings, Inc., Prenda Law, Inc., John L. Steele, Paul A. Duffy, Paul R. Hansmeier and Mark Lutz the principal amount of $21,393.60, with costs and attorney’s fees trebled pursuant to M.G.L. c. 93(A) §9 for a total judgment of $64,180.80 with interest as provided by law.

It remains to be seen whether someone from Team Prenda will finally show up to oppose this. If history serves Prenda’s principals may revert to their “I wasn’t served and didn’t know about this” dodge. Even if they finally do show up, they’re deep in the hole in this district.

tl;dr Prenda is abandoned by its local counsel in Massachusetts, ignores developments in a case, and suffers a default judgment that may result in a $64,180.80 judgment that adjudicates Paul Duffy, John Steele, Paul Hansmeier, Mark Lutz, Prenda Law, and AF Holdings to be “aliases” of each other.

Georgia

When last we spoke of Georgia, Defendant Rajesh Patel was in a brutal struggle with Prenda Law in the person of its rather excitable local counsel Jacques Nazaire. Prenda — through its shell AF Holdings — had sought to abandon its case against Patel, but Patel had sunk his teeth into Prenda and wanted sanctions. The United States District Court for the Northern District of Georgia permitted Patel limited discovery not on the merits of the dismissed case, but to gather information in support of a motion for sanctions, which is very rare and was not at all a good sign for Prenda.  As you will see, the court now probably regrets that.  Nazaire distinguished himself by arguing that the Georgia court should ignore Judge Wright’s sanctions order against Prenda in California BECAUSE GAY MARRIAGE, ranting about Brett Gibbs and that notorious terrorist organization the Electronic Frontier Foundation, suggesting that Patel’s court-permitted discovery into Prenda should be cut short because blogs are mean to Prenda and Nazaire, and resorting to mediocre “yo mamma” insults.

Patel and Prenda have been trading multiple accusations and demands for sanctions. Prenda has been asking the court to halt Patel’s various discovery methods, and Patel has been asking the court to compel Prenda to answer that discovery.   United States District Judge William C. O’Kelley has finally had enough and issued an order telling the parties to stop filing motions, that he would hold a hearing on sanctions based on the motions to date in due course, and generally saying STOP THAT RACKET OR I’LL PULL THIS CAR RIGHT OVER SEE IF I DON’T. Patel — who may be lost to buck fever — has filed a motion asking for leave to filemore motions despite the court’s rather unambiguous signal. Maybe Patel thinks the federal judge doesn’t really mean it. Federal judges always really mean it.

Patel may have overplayed his hand and eroded the court’s goodwill and inclination to sanction Prenda. But it has not been in vain. Patel’s subpoenas — permitted by the court as part of the discovery-to-support-sanctions process — uncovered crucial data that badly wounds Prenda. Among other things, Patel’s papers discuss documents and recordings disclosed by GoDaddy demonstrating that: (1) John Steele’s GoDaddy account was used to access a site registered to “Alan Cooper,” (2) the same email address is used in connection with sites registered to “Alan Cooper,” Mark Lutz, and John Steele, (3) recordings show the same male voice making tech support calls to GoDaddy and using the names John Steele, Alan Cooper, and Mark Lutz, (4) a purported “Alan Cooper” domain was registered using another John Steele email address. That information corroborates Alan Cooper’s assertions that John Steele stole his identity and is powerful evidence that John Steele was far more involved in running the business than he has claimed in court.

More explosively, Patel’s discovery to Comcast yielded IP address information showing that the same IP address (1) accessed John Steele’s GoDaddy account, (2) accessed Prenda site wefightpiracy.com, (3) was assigned to Steele Hansmeier PLLC, John Steele and Paul Hansmeier’s former firm, and (4) is the same IP address that, as others have shown, uploaded the copyrighted works to the internet before Prenda claims that various defendants illegally downloaded them.What does that last part mean? It’s compelling evidence in support of aprevious allegation that John Steele was using Prenda to run a “honeypot”: that is, rather than protecting copyrighted works, he was deliberately posting them in places where they were likely to be downloaded, and then suing the downloaders as a revenue-generating scheme. If true, that necessarily involved fraudulent misrepresentations and omissions to courts and to defendants, and undermined Prenda’s right to sue on the copyright. To learn more about the significance of that, and how people traced the IP to John Steele, you can read Joe Mullin orTorrentFreak. Prior to the release of the Comcast documents, John Steelehotly denied that he ran a “honeypot.” Technically, I suppose that is not evidence that he did.

Finally, Patel’s discovery campaign yielded an increasingly familiar result: Mark Lutz failed to show up for something. You may recall that Mark Lutz is — according to him and the other Prendarasts — formerly a paralegal for Steele and Hansmeier, a thoroughly useless “corporate representative,” an alleged unpaid “manager” or “CEO” of Prenda Law entity AF HoldingsAF Holdings is owned by a trust called Salt Marsh, the beneficiaries of which are Lutz’s own hypothetical and unborn children. Nothing suspicious about that! Anyway, Patel noticed Lutz’ deposition, and — in what will be a pattern in this post — Lutz didn’t show. Patel moved to compel him. Nazaire, who can keep a straight face through anything,said there is no legitimate reason to depose Lutz and that the only reason that Patel wants to depose Lutz is so that mean blogs can humiliate him:

Additionally, Mr. Lutz has every reason not to appear for a deposition. The deposition is sought out, not for seeking discoverable evidence, but rather to ridicule him.

That’s a great argument, Mr. Nazaire, because if Patel is investigating whether AF Holdings is involved in a large-scale fraud scheme there’s absolutely no reason to depose the CEO/manager of AF Holdings, the guy whose unborn children are the only beneficiaries of the mysterious trust that owns AF Holdings.

tl;dr: In Georgia, the court may have lost its patience with sanctions motions against Prenda, but discovery has yielded information substantially strengthening the fraud case against Prenda and its principals. Also, Mark Lutz is AWOL.

Illinois

I first started writing about Prenda Law when it blundered into my wheelhouse — frivolous defamation suits. John Steele, Paul Duffy, and Prenda law filed defamation suits simultaneously against Alan Cooper and his lawyer Paul Godfread in Illinois and Florida in retaliation for them revealing that Prenda had stolen Alan Cooper’s identity. John Steele used those lawsuits in an attempt to threaten Alan Cooper and deter him from testifying. When last I wrote about those suits, Cooper and Godfread removed the Illinois cases to the United States District Courts in the Northern and Southern Districts of Illinois and filed counterclaims arising from the theft of Cooper’s identity.

Since then the Illinois cases have not gone Prenda’s way.  First, The federal judge in the Southern District of Illinois transferred the Prenda law defamation suit to the Northern District where the Paul Duffy defamation suit is pending; now the same judge will hear both.Coordination and consolidation of cases won’t help Prenda, because it will be easier to observe Prenda’s misconduct across consolidated cases.

Second, Prenda ran a brief and unsuccessful scam in an effort to get one of the cases cases returned to state court, which would have been slower to recognize and punish its misconduct. You have to know a bit of federal civil procedure to understand the scam and how it failed. To file something in federal court, you need subject matter jurisdiction — that means either a federal claim or diversity of citizenship. “Diversity of citizenship” means that the plaintiffs and defendants are from different states. That basis for jurisdiction is a throwback to when we assumed a citizen of one state wouldn’t get fair treatment in the courts of another state. Diversity must be complete; if any plaintiff is from the same state as any defendant, there is no diversity jurisdiction. In removing the Prenda and Duffy defamation cases to federal court — a far more defense-friendly forum — Cooper and Godfread had to rely on diversity as the basis for federal jurisdiction because the cases did not involve state claims.

Prenda’s scam worked like this – they demanded that the federal court send the Prenda Law defamation complaint back to state court because just before Cooper and Godfread removed it to federal court, Prenda added the Alpha Law Group as an additional plaintiff. Since Alpha Law Group is a Minnesota entity, and since Cooper and Godfread are from Minnesota, there would be no diversity jurisdiction. What does Alpha Law Group have to do with the case? Absolutely nothing. Prenda changed nothing substantive about the case and only added Alpha as a plaintiff to destroy diversity. That’s the scam.

But Prenda got caught in deceit. See, under Illinois law, once Prenda and Duffy served Cooper and Godfread with the lawsuit, they couldn’t amend it without leave of the Illinois court. They had served Cooper and Godfread — indeed, as is noted above, Steele called Cooper to gloat and threaten him immediately after that service. Steele also called Godfread to gloat about serving him. So how did they file the amended complaints adding Alpha Law Firm? They did it by telling the Illinois court clerk that the suits had not been served. Godfread and Cooper submitted a declaration from an Illinois court clerk who says that she asked the Prenda Law local counsel how he could amend the complaint without a court order, and he claimed the complaint hadn’t been served. The amended complaint was therefore filed only because of a false statement, and filed in violation of Illinois law: it was a nullity and couldn’t defeat diversity jurisdiction.

Faced with this evidence, Paul Duffy withdrew the motion to remand. But it was too late: the scam was revealed. Prenda claims that the lackey attorney who went to the clerk’s office didn’t know that the complaint had been served on Cooper and Godfread. That may excuse the lackey, but it makes no sense as to Duffy and Team Prenda — they knew the complaint had been served and they knew they had no court permission to file an amended complaint and they filed amended complaint anyway, fraudulently adding the irrelevant plaintiff Alpha in an effort to stay out of federal court. Cooper and Godfread have filed a strong motion for sanctions on that basis, putting Prenda’s conduct in the context of the multiple sanctions levied against it across the nation. We’ll see how Prenda responds.

Moreover, Cooper and Godfread have filed very strong amended counterclaims against Duffy and Prenda for identity theft and abuse of process.

Even if Team Prenda somehow defeats the motion for sanctions, the Illinois cases represent nothing but an opportunity for their strongest critics to conduct invasive discovery into their entire operation. They have literally no upside. The defamation complaints — filed in a feckless attempt to intimidate Alan Cooper — have backfired disastrously.

tl;dr: In Illinois, Prenda faces sanctions after a clumsy attempt to fake a reason to send its bogus defamation case back to state court.

Minnesota (State Court)

In Minnesota state court, Prenda — in the form of one of its shell entities, Guava LLC — has been sanctioned yet again for litigation misconduct.

The saga is detailed in Judge Tanya M. Bransford’s sanctions order: Guava LLC sued Spencer Merkel in Minnesota state court for alleged illegal downloads despite neither Guava nor Merkel having an significant connection to the state. Guava was represented by Michael Dugas of the Alpha Law Firm — yes, the same Alpha Law Firm that Prenda tried fraudulently to add to the Illinois case, as described above. Paul Hansmeier and John Steele also appeared at various times for Guava. Dugas and Hansmeier swiftly used the case as a vehicle to seek orders directing ISPs to disclose subscriber information on various IP addresses. When subscribers objected, things fell apart, the center could not hold. Under scrutiny John Steele could not explain coherently why Guava sued in Minnesota, and could only describe Guava vaguely as a Nevis entity with offices in Las Vegas. Does that sound familiar? It should — it’s the same thing Team Prenda said about another one of its entities, Ingenuity 13. Moreover, Spencer Merkel — the defendant — described what sounds like a scheme to set up a fake case in Minnesota, with a willing defendant and a Prenda-provided defense lawyer, as a ruse to obtain subscriber information from ISPs:

In the affidavit Merkel stated that he was a Beaverton, Oregon resident and that he received a September 26, 2012 letter from Prenda’s Paul Duffy (“Duffy”), claiming that Merkel had illegally downloaded a movie named Amateur Allure – MaeLynn 2 and that Merkel could pay Prenda $3,400 by October 11, 2012 to avoid being named in the lawsuit, Hard Drive Productions, Inc. v. Does 1-1,495, which had been filed in the United States District Court for the District of Columbia. Merkel Aff. at ¶ 1; Exhibit A. Before the deadline, Merkel states that he called Prenda Law and spoke with someone named Mike or Michael. Id. at ¶ 2. Merkel attests that he informed“Michael” that he was unable to pay thesettlement amount butinquired if they couldsettle the case.Id.According to the affidavit,“Michael” told Merkel that to settle he would have to agree to the following: Merkel would be sued, Merkel had to provide a bit-torrent log from his computer, and Prenda would dismiss the claim against Merkel after receiving the bit-torrent information. Id. at ¶ 3. During the discussion with“Michael,” Merkel states that he was told that a pro-bono attorney may be willing to takethe case in Minnesota and that “Michael” did not know any pro-bono attorneys in Oregon. Id. at ¶ 4. Merkel states he agreed to be sued in Minnesota because he could not afford an attorney and obtained his attorney, Trina Morrison, based upon the information he received from Prenda. Id. Merkel also attests that he had never heard of Guava LLC or Alpha Law Firm LLC until this lawsuit; he believed that the opposing parties would be Prenda and Hard Drive Productions, Inc. Id. at ¶ 5-6. On January 15, 2013, Merkel received a voicemail from someone at Prenda stating that he “needed to make payment arrangements or [he] would be sued.” Id. at ¶ 8. According to Merkel, Guava had not requested either his bit-torrent log information or the names of any alleged co-conspirators. Id. at ¶ 9.3 Merkel’s counsel testified that she graduated from law school with Guava’s counsel Dugas and that she was approached to represent Merkel on a pro-bono basis after informing Mr. Dugas and Mr. Hansmeier that she may be interested in taking on a case pro-bono to gain experience. (See Hr’g Tr. At 17-20). (emphasis added)

Now, Dugas says that’s not true. Judge Bransford made short work of that: “[t]his Court finds that Dugas lacks any credibility with this Court based upon the actions he has taken in this matter.” Ultimately Judge Bransford concluded “Plaintiff Guava LLC and its counsel Michael K. Dugas of Alpha Law Firm LLC acted in bad faith and without a basis in law and fact to initiate this action in Minnesota State District Court,” and sanctioned them $63,367.52 to pay the attorney fees and costs of the objectors.

tl;dr: A Minnesota court sanctioned a Prenda entity and a Prenda local counsel for creating a fake case to discover ISP subscriber information.

Minnesota (Federal Court)

You think that Prenda only has problems with open cases? They should be so lucky.

In the United States District Court for the District of Minnesota, upon reviewing Judge Wright’s apocalyptic sanctions order against Team Prenda, a magistrate judge issued an order re-opening five cases and ordering Prenda shell AF Holdings to show cause whether Judge Wright’s finding of fraud is binding on the Minnesota cases. Michael Dugas — the lawyer sanctioned by the Minnesota state court — was AF Holdings’ lawyer in those cases. Paul Hansmeier filed a brief strugling mightily to convince the court that Judge Wright was wrong and that his order was misguided and not binding. Just to make things worse for Prenda, Alan Cooper (represented by Paul Godfread) sought and obtained leave tosubmit evidence that Cooper’s signature had been forged in the Minnesota cases.

This led to a contentious hearing pitting Cooper and Godfread on one side and Hansmeier and Steele on the other. You can read a description of the hearing here at TechDirt or here at Ars Technica. As before, Prenda tried to portray Cooper as a disturbed man who had, in fact, agreed that his name could be used in Prenda’s porn copyright enterprise. Steele, in particular, claimed that Cooper gave Mark Lutz permission to sign documents on Cooper’s behalf, thus explaining Cooper’s signature on various documents.

That argument suffered from (among other things) a glaring flaw: the absence of Mark Lutz. The Minnesota court had directed AF Holdings to produce a witness representing it and capable of authenticating the Cooper signatures. Yet Lutz was nowhere to be seen. Hansmeier, always the good soldier, did what he could:

Hansmeier said that Lutz was planning to come, and is the sole officer of AF Holdings, and did make it to an earlier conference in this case in person, but that he wasn’t present today, and that Mr. Hansmeier hadn’t been able to reach him by phone or email. He voluntarily elaborated that Steele and Lutz had been booked on the same flight from Miami, that Steele had gone to Lutz’s apartment to meet him (because Steele had Lutz’s boarding pass), but found him not home. Steele had then, according to Hansmeier, driven around Miami looking for Lutz, and even encountered some of Lutz’s friends who said Lutz had told them the night before that he had to make an early night of it because he was traveling to this court in the morning.

If “looking for Lutz on the streets of Miami” isn’t already on Urban Dictionary, representing some uncomfortable sexual practice, I shall be quite put out.

Hansmeier sought, and received, permission to file a supplemental declaration explaining what happened to Lutz. When he did so, it wasrather less than observers expected:

Mr. Lutz was traveling with another witness to the Hearing. The witness indicated that Mr. Lutz was not on the flight from Fort Lauderdale, Florida. I have attempted to contact Mr. Lutz but have been unable to reach him as of the time of this declaration. Based on my prior experience with Mr. Lutz, including Mr. Lutz’s prior in-person attendance before this Court on August 5, 2013, I believe that Mr. Lutz will be able to provide a good-faith reason for failing to make his flight to Minnesota.

So. The court ordered AF Holdings to produce an officer and someone who could authenticate documents. Mark Lutz, who is the unpaid CEO/manager of AF Holdings (in addition to a former paralegal of Steele and Hansmeier) and whose ungotten and unborn children are the beneficiaries of the mysterious trust that owns AF Holdings, and who allegedly received permission to sign for Alan Cooper in the manner that is the key issue in this entire hearing, didn’t show up, and hasn’t explained why, but Paul Hansmeier is confident he had a good reason.Well okay then. I’m sure that wont have any impact on Team Prenda’s credibility.

The judge has taken the motion under submission and will rule in “due course.” There’s no telling how long that will be, though I note that the hearing was weeks ago and orders saying “there is insufficient evidence to conclude fraud occurred and this matter is closed” don’t take much time. Moreover, nothing in the descriptions of the judge’s demeanor offered much hope.

An amusing coda: at the hearing, John Steele and Paul Hansmeier discovered through Alan Cooper’s testimony how he learned that his signature was being used: John Steele’s mother-in-law allegedly tipped him off by text. Joe Mullin offers this deathless line:

At this point, Steele exhaled loudly.

Team Prenda has subsequently offered new evidence claiming that John Steele’s mother-in-law wasn’t accusing anyone of fraud, and to the contrary Cooper had admitted to her husband that he knew his signature was being used. We’ll see how that plays out. I note that the affidavit relies on hearsay statements by the father-in-law but oddly fails to include an affidavit from him.

tl;dr: In Minnesota federal court Mark Lutz fails to appear at a hearing at which he is a crucial and required witness, and family drama increases popcorn consumption.

San Francisco, California

Up in San Francisco, Prenda has been in full retreat, attempting to extricate itself from cases without sanctions. Cathy Gellis previously guest-blogged for us and described how Team Prenda struggled —unsuccessfully — to dismiss AF Holdings v. Navasca “without prejudice,” meaning with leave to re-file if they so desired. United States District Judge Edward M. Chen rejected that approach, dismissed the case with prejudice (meaning, permanently), and gave defense attorneys Nick Ranallo and Morgan Pietz leave to make a motion for attorney fees as the prevailing party.

Pietz and Ranallo did so. Judge Chen granted the motion, awarding $22,531.93. Judge Chen’s order explicity concludes that the Alan Cooper signatures are forgeries, and that AF Holdings has litigated in a way that is “frivolous or objectively unreasonable,” and that Prenda’s motivation was not to protect copyright but “to sue people for downloading pornography in order to coerce settlements.” Judge Chen also considered evidence that Prenda was itself uploading the copyrighted materials to pirate sites to troll for defendants. He not only concluded that evidence was credible — he pointed out that Team Prenda quibbled with the evidence but failed to rebut it meaningfully:

But notably, what AF has not done is offer any counterevidence such as a declaration from Mr. Steele in which he denies that he is “sharkmp4” or other evidence that AF did not take steps to induce users to download the subject works. This evidence could easily have been offered by AF as a part of its opposition brief. AF’s failure to submit any factual denial under oath is telling.

Bear in mind that was Judge Chen’s conclusion even before the Comcast data was revealed in Georgia, as is discussed above. The case for Prenda itself uploading the materials to troll for defendants is now even stronger.

But the Northern District wasn’t done with Team Prenda yet.

Pietz and Ranallo filed a new motion for sanctions, this time arguing that Judge Chen should make the sanctions payable by John Steele and Paul Hansmeier, not just the shell AF Holdings. In support of that proposition they offered a new declaration from Brett Gibbs, who talked about how Steele and Hansmeier had supervised his work for AF Holdings. Team Prenda — through Paul Duffy — predictably ranted, raved, and attacked Gibbs’ credibility. Judge Chen assigned the motion to United States Magistrate Judge Nandor Vadas for hearing. In advance of the hearing, Magistrate Judge Vadas issued an extraordinary order detailing what he wanted to see at the hearing. That order called back to Paul Hansmeier’s utterly bizarre performance when he appeared at a deposition to testify on behalf of AF Holdings, the plaintiff in the case. Why, Judge Vadas wanted to know, did Hamsmeier show up to testify for AF Holdings if Mark Lutz was the CEO and Hansmeier was so pig-ignorant about the details? Why couldn’t he explain where the money from this enterprise goes? Who actually owns AF Holdings? Why did AF Holdings represent in court filings that it had no related parties if it was owned by the trust “Salt Marsh?” Vadas demanded that AF Holdings be prepared to answer those questions, and answering them clearly required the presence of CEO/manager Mark Lutz, and you already know what’s going to happen, don’t you?

The day of the hearing, Mark Lutz was a no-show. Steele and Hansmeier didn’t show up, either. Paul Duffy carried the water for Prenda Law, and carried it badly. Pietz and Ranallo called Brett Gibbs, who testified that Steele and Hansmeier directed Team Prenda’s litigation activities. Gibbs also testified that the voice on the GoDaddy customer service call tapes — revealed in the Georgia litigation, discussed above — was that of John Steele, notwithstanding that he identified himself as Alan Cooper and Mark Lutz in the calls. Finally, Gibbs testified that John Steele had said that “Salt Marsh” was an actual person who had signed documents in the case, an issue that Judge Chen had asked about. On cross-examination, Duffy flailed away, drawing questions from Judge Vadas about what he was trying to accomplish with his line of questions.

But Mark Lutz didn’t appear.

Days later, Team Prenda filed an affidavit from Lutz in which he claimed that he didn’t come to the hearing because he was mysteriously detained at the airport in Miami. Duffy asked for permission to file that under seal to protect Lutz from people saying hurty things about him. DENIED. Duffy asked to supplement the record with a declaration from Lutz about the substance of the hearing. DENIED. Judge Vadas pointed out that Team Prenda was attempting to insulate Lutz from cross-examination and called Duffy’s requests “gamesmanship.”

Soon thereafter Judge Vadas issued his order recommending findings of fact and conclusions of law to Judge Chen. It’s exceptionally difficult to imagine how it could have gone worse for Team Prenda. Judge Vadas concluded:

  • That though Judge Chen could not immediately sanction Steele and Hansmeier — because they were not parties to the action — Judge Chen could and should issue an order to show cause forcing them to explain why they shouldn’t be added to the attorney fee judgment as alter egos of AF Holdings;
  • That Team Prenda failed to address the points Judge Vadas told them to address, failed to introduce witnesses with relevant knowledge, failed to rebut — or sometimes even to address — the allegations against them, and that their attempt to start to do so only after the hearing showed that Duffy “is apparently not familiar with the rules of federal procedure, or with basic principles of motion practice”;
  • That Judge Chen should adopt Judge Wright’s conclusions about the relationship among AF Holdings, Steele, and Hansmeier, since they had an opportunity to litigate it but failed to do so;
  • That Duffy on behalf of Team Prenda failed to rebut the evidence that Prenda uploaded the videos at issue to the internet themselves, or the evidence that Prenda was “in cahoots” with the forensic “experts” who identified the downloaders, or that Prenda forged Alan Cooper’s signature.

Judge Vadas, in short, found sufficient facts to prove that Team Prenda did everything that Pietz and Ranallo accused them of doing, and that Team Prenda utterly failed to rebut that evidence, or in some cases even to respond to it.

In short order, after some ineffectual objections from Team Prenda, Judge Chen acccepted Judge Vadas’ recommended findings of fact and lawand ordered Steele and Hansmeier to appear and show cause why they should not be added to the attorney fee judgment in the case, making them liable for that $22,531.93. The findings of fact are far more harmful to Steele and Hansmeier than that potential award. Judge Chen also rejected AF Holdings’ objections, considering them even though Duffy filed them late. In doing so Chen made some telling points:

  • Rather than Steele and Hansmeier objecting to the proposed findings of fact and law, AF Holdings objected for them — including to the finding that Steele and Hansmeier control AF Holdings.  Yeah, chew on that one for a minute.
  • AF Holdings’ argument amounted to “well, Gibbs should have done an independent investigation and not relied on Steele and Hansmeier.”  But that does nothing to contradict the proof that Steele and Hansmeier controlled AF Holdings and directed Gibbs.
  • Judge Chen demolished, point by point, Team Prenda’s suggestions that the evidence was insufficient to support Judge Vadas’ conclusions.  He emphasized repeatedly that AF Holdings, Steele, and Hansmeier had a full opportunity to subpoena witnesses (Cooper, for instance) , appear themselves and testify, or otherwise present evidence, but suspiciously failed to do so.

So Judge Chen set a hearing, and made it clear that if Steele and Hansmeier want to have their assertions taken seriously, they had better show up and present live testimony:

While the parties and Mr. Steele and Mr. Hansmeier may submit declarations in support of their respective papers, the Court hereby forewarns all persons or entities involved that such declarations (or affidavits) will be given little to no weight because the Court shall be conducting an evidentiary hearing on the order to show cause on Thursday November 21, 2013. Thus, any testimony in a declaration (or affidavit) that a party or nonparty deems important, significant, or critical must be presented at the evidentiary hearing by a live witness, subject to cross-examination.  [boldface and indicia of imminent annihilation in original]

Judge Chen subsequently moved that date to December 19, 2013 and issued elaborate requirements for serving Steele and Hansmeier so they cannot pull their typical “I never got notice” routine.

The attorney fee number is modest, but this series of orders is perhaps the worst development for Team Prenda in this post — so far. It represents one more court making detailed findings of fact about Team Prenda’s fraudulent activities. Moreover, there is no way that Team Prenda can make a credible argument that they lacked a fair opportunity to contest the issues.

tl;dr: A federal court in San Francisco held a hearing about Team Prenda’s behavior, Team Prenda bizarrely failed to contest the issue competently, Mark Lutz failed to show up again, and the court make factual findings accepting nearly every material accusation of bad conduct levied at Team Prenda.

Los Angeles, California

That brings us to last week, in Los Angeles.

Last Thursday, in the case before Judge Wright that yielded so much drama, Brett Gibbs filed a curious document styled a “Motion for an Indicative Ruling” seeking to amend Judge Wright’s order and eliminate the sanctions against him.  Gibbs, representing himself, spilled more details about Team Prenda and revealed tantalizing documents, all in service of the argument that Judge Wright should reconsider his findings about Gibbs and sanctions against him.

I don’t think Gibbs will be successful in vacating the sanctions against him.  This is really a motion for reconsideration, and it’s both untimely and procedurally improper — Gibbs offers some facts and evidence he could have offered before, which is not a valid basis for reconsideration.  Moreover, the sanctions order is on appeal before the Ninth Circuit; Gibbs may have a difficult time convincing Judge Wright that he has jurisdiction to alter the order while it’s on appeal.

But I’m not sure that Brett Gibbs cares.  As he says in his conclusion:

While Gibbs is asking the Court to vacate the sanctions imposed upon him in its May 6 order, he is not asking the Court to withdraw the referrals the Court made to the U.S. Attorney, the Central District Disciplinary Committee, the State Bar and the Internal Revenue Service. Gibbs wants these investigations to proceed and will continue to cooperate fully with them. If the monetary sanctions against Gibbs are vacated, Gibbs will withdraw his appeal—which the Ninth Circuit has consolidated with the appeals of Prenda, the Principals and Plaintiffs. This will not prevent him from testifying about the actions and statements of the Principals in this or other cases.

I think Brett Gibbs may be trying to redeem himself and trying to put things right, and to gain a measure of justice against the low people who betrayed and abandoned him.  Good for him.

Gibbs’ brief and exhibits are very damaging to Team Prenda’s narratives:

  •  Team Prenda says that John Steele was not involved in directing the Prenda litigation or operating Prenda Law.  Yet when Gibbs wrote to Steele seeking Prenda Law’s malpractice policy, Steele immediately provided information about the policy.  Why would Steele be involved or have that information if he wasn’t running Prenda Law?
  • Team Prenda says that Prenda Law’s clients have nothing to hide.  So why was Paul Duffy threatening Gibbs to try to keep him silent about the Prenda Law shell entities?
  • Team Prenda says that Gibbs was responsible for any misconduct, that he’s not reliable, and that he’s lied about Team Prenda.  So why, after Judge Wright issued his devastating May 6, 2013 sanctions order, did Steele and Hansmeier try to convince Gibbs to sign ridiculously one-sided agreements under which Steele and Hansmeier would pay for the appellate bond staying the sanctions order, and Gibbs would represent them on the appeal, agree to say that Steele had no involvement in a Florida case (something that Gibbs says is not true), and accept a “fiduciary relationship” with Steele and Hansmeier probably calculated to prevent him from testifying about them? Steele and Hansmeier also demanded, as the price of this epically ridiculous deal, that Gibbs promise to pay all sanctions arising from Judge Wright’s order and that Gibbs waive all claims against them. Seriously? Also, if Steele and Hansmeier think that Gibbs is so awful, why are they demanding that he represent them in their desperate appeal of a life-destroying sanctions order?
  • And, perhaps most astoundingly, Team Prenda says that Steele and Hansmeier have no ownership interest in Prenda Law, AF Holdings, Ingenuity 13, or the various other Prenda shells.  Yet Gibbs submits Prenda Law financial records — records which Prenda Law shrewdly shared with Gibbs via DropBox. Those records seem to show that in 2012, when Prenda Law took in almost $2 million from its litigation exploits, it distributed nearly 70% of that to Steele and Hansmeier directly and through an entity called “Under The Bridge” — perhaps a coy reference to their chosen life of trolling. That percentage doesn’t include payments to Steele’s wife, payments to Paul Duffy, and payments of extravagant travel, meals, and entertainment. Every IRS Criminal Investigation Division agent looking at those spreadsheets — and I promise you there are some — just had a Stimulating Personal Moment.  Check out the coverage of the financials from Joe Mullin or Mike Masnick. This was big money, and Team Prenda’s coyness or evasions to the contrary, these records suggest Steele and Hansmeier got most of it. I guess Mark Lutz’ unborn kids are shit out of luck.

Brett Gibbs’ brief is better written and more convincing than anything Paul Duffy, John Steele, and Paul Hansmeier have produced since Judge Wright’s order.  It may not succeed in lifting the sanctions against Gibbs, but it’s good lawyering.

The financial records, in particular, are very bad news for Team Prenda.  They are exactly the sort of thing that federal law enforcement likes to use as a jumping-off point for an investigation.  If this disclosure isn’t worse for Team Prenda than Judge Chen’s order, discussed above, it is at least a tie.

tl;dr:  In Los Angeles Brett Gibbs has filed a new motion releasing documents showing where the money went — and, despite Team Prenda’s claims, it went to Steele and Hansmeier.

So What Does All Of This Mean?

So what does all of this mean?  Well, first it means that Team Prenda faces more imminent hearings at which its members will have to make difficult choices between incriminating themselves or defending themselves.  Those hearings include the show cause hearing in December before Judge Chen and any hearing Judge Wright chooses to hold on Brett Gibbs’ motion.   Moreover, Team Prenda faces imminent rulings on under-submission rulings in Georgia and Minnesota.  They have little cause to hope those rulings will go their way.

Prenda’s Civil Prospects

Civilly, the problems mount not just for the Prenda entities, but for Prenda figures Steele, Hansmeier, Lutz, and Duffy. Judges will evaluate each case individually — as a formal matter. But practically speaking, each sanctions order, each order rejecting Team Prenda’s arguments, each order finding members of Team Prenda to be less than credible, and each finding of misconduct creates momentum against Prenda, makes judges more receptive to sanctions motions they might normally not consider, makes it more likely that judges and their staff will come into cases familiar with Prenda’s history, and substantially increases the chances that Team Prenda will lose any particular dispute. At some point judges will start to treat Team Prenda’s misconduct as so well established that they will resolve disputes in rather summary fashion against them.

Team Prenda’s prospects for turning that trend around are grim for four reasons:

  • They are being outlawyered across the nation. Despite their pretenses to being the “big leagues,” their written work and courtroom performance is mediocre. They continue to rely on Paul Duffy for hearings, and — as the San Francisco hearing shows — Paul Duffy is not much of a courtroom lawyer.  Of course, in his defense, he’s got the clients from hell.
  • Team Prenda still hasn’t picked a coherent and consistent narrative and stuck with it. Consider the Minnesota state case described above. Called upon at a hearing to explain the origin of Guava LLC and its connection to the forum, John Steele offered ambiguities and half-answers when the situation (an angry judge investigating accusations of misconduct) called for concise, specific, evidence-backed answers.  Misfortune ensued.
  • Team Prenda keeps touting Mark Lutz as the responsible answer man, but Mark Lutz keeps failing to appear at hearings where is presence is crucial to Prenda’s case.
  • Finally, the facts are against them — the emerging evidence described above and in the various sanctions motions rather convincingly demonstrates an ongoing fraud scheme.

Prenda’s Criminal Prospects

If you want federal prosecutors to launch a grand jury investigation, or federal agencies to investigate a fraud scheme, you need three things. You need a valid theory of a crime supported by some credible evidence, you need alleged misconduct serious enough (often as measured in dollars) to merit federal attention, and you need a spark — an X-factor. You need those things because federal prosecutors and federal agents have limited resources, and prefer to spend those resources by doing slow and (compared to local police) thorough investigations of fewercrimes rather than many short and slapdash investigations of morecrimes. The FBI and U.S. Attorney’s Office are awash with reports of fraud schemes; it takes something special to get their attention.

Judge Wright’s order was something special. A direct criminal referral by a federal judge is unusual and powerful. But based on my experience with federal criminal law — both as a prosecutor and defense attorney — the developments above have significantly increased the chance that federal prosecutors and federal agencies will investigate Team Prenda. First, the increasing number of judicial findings makes the case against Team Prenda more credible from the outset. Second, the financial evidence Gibbs has now released is the sort of thing that makes the feds drool. The spreadsheets show large amounts of money moving around in a way that seems to contradict Team Prenda’s claims about their operation; that will interest the IRS. Third, the evidence that Team Prenda uploaded the videos in question and then pretended to be outraged that they were pirated — thus defrauding courts and defendants — is exactly the sort of sexy x-factor that makes federal investigators and prosecutors pick a case out of a pile. Is federal criminal prosecution certain? No. But it’s considerably more likely than it was when Judge Wright ruled.

When will it happen? Not soon. The feds have a competitive advantage — the ability to conduct methodical investigations over years, gather documents from multiple sources using grand jury subpoenas, and flip lower-level bad guys against higher-level bad guys. It wouldn’t surprise me if we saw no reliable indication of a federal criminal investigation this year. But I suspect we’ll see indications next year.

Credible evidence is piling up, and federal judges are accepting it.  That evidence suggests that Team Prenda has (1) uploaded its films to pirate sites and then sued people for downloading them without disclosing their role in the uploading, (2) made misrepresentations under oath about the structure, financing, and operation of Team Prenda, (3) orchestrated fake cases to provide an opportunity to conduct ISP discovery, and (4) conducted questionable transactions with the proceeds of these activities.  The feds, looking at all that, may investigate wire fraud, mail fraud, money laundering, obstruction of justice, perjury, and false statements to the government.  If Team Prenda has done the things that Judge Chen and Judge Wright have found, you may rest assured that the feds will find an approach to charging them for it.  Federal criminal law is broad and malleable to an unprincipled degree.  That’s not a good thing in general for society, and in particular it’s a bad thing for Prenda.

What can Team Prenda do about it? They can get competent federal criminal defense attorneys to advise them. I suspect Steele, Hansmeier, and Duffy are too swollen with hubris to do that.

Are the other current or former members of Team Prenda smart enough?  Maybe.  Brett Gibbs seems eager to cooperate.  Even if he has personally engaged in criminal conduct — and it’s not clear to me that he has — as an early and important cooperator he could very plausibly avoid charges completely.  Mark Lutz, if he flipped early, might avoid charges or at least minimize his exposure and avoid jail time.  Local counsel, if they believed they had been used to advance a fraud scheme, could work with prosecutors to seek judicial determinations that the crime-fraud exception permits them to disclose their communications with Team Prenda.

I suspect nobody with Team Prenda is fond of me. But if any one of them would like a recommendation of a capable federal criminal defense attorney, I will give one. I would expect such an attorney to make no assumptions, and to evaluate carefully what course is in the best interests of the client, whether it is shutting up or cooperating. In Mr. Gibbs’ case, out of respect for his attempts to make amends, I would pledge to use my best efforts to use my contacts to find an exceptional federal criminal defense attorney to represent him pro bono.

tl;dr: We thought Team Prenda’s troubles couldn’t get worse. We were wrong.

  1. Using “aliases” here might be some Massachusetts terminology; the import seems to be a finding that they are alter egos of each other, responsible for the conduct of each other.  

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