back to article Smut-seeding Prenda Law ringleader must sell home to pay $2.5m debt

One of the key players in Prenda Law, a troll group that seeded smutty films onto file-sharing networks and then harassed the downloaders for payment, has been told he must sell his home and possessions to cover his creditors' bills. In 2013, the civil courts found that Paul Hansmeier and two associates had set up Prenda Law …

FAIL

I wonder how our Mr. Crossley is getting on...

Oh, he's working for some other algae^W law firm in Eastbourne.

Probably amending Wills...

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Re: I wonder how our Mr. Crossley is getting on...

The ars technica article, essential reading for those who didn't get your reference:

http://arstechnica.com/tech-policy/2010/09/amounts-to-blackmail-inside-a-p2p-settlement-letter-factory/

The resulting Hitler parody to enjoy:

https://vimeo.com/15463930

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Re: I wonder how our Mr. Crossley is getting on...

Ho Ho, it's been a while since I've watched one of those Downfall re-imaginings. I think the first one I saw, which really cracked me up, was the impending demise of HD DVD. Anyone remember that format?

https://www.youtube.com/watch?v=frZTf3mX97c

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Finally

This should have happened a long time ago.

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This post has been deleted by its author

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Re: Finally

Unfortunately Prenda are small fry when it comes to copyright trolling.

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It's nice to start the weekend...

...with an uplifting article that fills us with joy.

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g e

Re: It's nice to start the weekend...

Indeed, Christmas has come a little early!

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Happy Days

It is nice to see the courts slap any Prenda goon around.

For those not familiar with US bankruptcy laws. Chapter 7 is the liquidation of almost all assets with the proceeds used to pay the creditors. One gets to keep a vehicle and a few other necessary assets as approved by the court and allowed by law. Chapter 13 is basically a court supervised repayment plan. One pays the court a predetermined amount even month and each creditor gets a payment from the court. Typically Chapter 7 results in the creditors getting less money total but all of it at once.

The bankruptcy court is used to dealing with scoundrels who try to hide assets; it is a violation of federal law to do so. When one files, one must make an accurate accounting of all assets and debits to the court. The court is more interested in the assets and any attempt to hide them or otherwise abuse the system.

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Re: Happy Days

Given Prenda's track record, what i understand to be outright lies to the court, deliberate delays and obfuscations at every level, being more slippery than an eel in lube, this is a start. I'd also suggest a few body parts, as they'll not be as well hidden in a series of shell companies and trusts.

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Re: Happy Days

Given their ways and behaviours, perhaps they should not keep anything least of all the clothes they came to court in. That way every pocket can be properly searched. Plus they can be give a medical check for any other hidden assets - live on some streaming net service for those who like such things.

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Re: Happy Days

"One gets to keep a vehicle and a few other necessary assets as approved by the court and allowed by law."

Only if the court determines the bankruptcy declarations are honest. Prenda's principals are facing the possibility of investigations for making false declarations in the bankruptcy case and of playing shell games to hide the money - both are federal crimes stateside with nasty penalties. There's more than $20 million not properly accounted for, as a starting point and they're known to have shipped substantial money overseas in the last couple of years - mostly to caribbean tax havan/money laundering hotspots.

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Normally....

I wouldn't wish for people to lose their homes but in this case...... fuck them.

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Re: Normally....

Fuck them, fuck them at a porn show.

Losing one's house is relative, if the house is excessive, and if it has been funded from straight extortion one could argue it was never his house to begin with.

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Re: Normally....

Have they also been debarred?

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Re: Normally....

One would hope so, but that wouldn't come directly as a result of this. That is on the bar association, not the court system

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Re: Normally....

US Bankruptcy Courts have no jurisdiction over professional licensing. However, some professional licensing may be affected by bankruptcy.

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Re: Normally....

I believe there is a maximum limit on the number, value, and type of property one can keep/rent in bankruptcy. Hansmeier will be allowed to have a house or apartment if the value / rent is below a certain number. I believe this number varies based on the state. If his home is worth more than allowed I think he would be forced to sell and move into a cheaper home.

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Re: Normally....

In the state of Florida, ANY "primary residence" is completely off-limits in bankruptcy, which is why there are so many mega-mansions there. The laws vary hugely state-by-state.

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Re: Normally....

Have they also been debarred?

"Disbarred" is the usual term in the US (don't know about other regions).

The article says: "Meanwhile, the Office of Lawyers Professional Responsibility has asked the Minnesota Supreme Court to suspend or disbar Hansmeier" - but perhaps it was edited after you posted your query.

I expect it takes a while, and some pretty strong evidence of wrongdoing, to disbar someone. And that's how it should be. Sometimes lawyers do things which are legal but go against the popular opinion of the time, but are later seen as good and appropriate. We wouldn't want an overzealous bar association to discourage such efforts by threat of disbarment. In a case like this I think it's pretty clear that the Prenda principals are scum and ought to be disbarred, but I'd still want it to happen with due deliberation and sober process.

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Re: Normally....

Disbarred: Not yet, but proceedings are underway.

That's unusual in the USA. Normally a lawyer gets away with withdrawing his bar accreditation and as such ends up free to practice in another state. When a State Bar takes action it usually starts a domino effect.

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Re: Normally....

"In the state of Florida, ANY "primary residence" is completely off-limits in bankruptcy"

There are exceptions for fraudulent behaviour and I'm pretty sure they've punched a big enough hole for that to stick.

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Pint

Excellent news..

Friday and I'll raise a pint as a troll is finally biting the dust. I hope his associates get the same treatment. Bloody scum suckers.

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Lawyers investigating lawyers?

They'll get off lightly.

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Re: Lawyers investigating lawyers?

...even scum has standards. Just not high by normal standards, but standards nonetheless.

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Happy

Re: Lawyers investigating lawyers?

Is there a lawyer in the house?

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In times like these,

we need an icon like this.

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The only downsides

Ken White decided over a year ago that they'd become too boring & stopped writing up their antics.

No judge seems to have decided that they'll be provided with alternative housing for a substantial number of years

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Anonymous Coward

More upside Re: The only downsides

Don't worry, this is only one of several ongoing cases against them.

The real hammer is going to come down in California where they are being investigated for perjury over extensive and extended attempts to deceive the court as well as contempt of court in their responses to that.

That's the kind of thing that in the American legal system gets you dropped in a dark hole and never seen again.

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Re: More upside The only downsides

"Don't worry, this is only one of several ongoing cases against them."

I should have included "yet" in my last sentence. Perjury doesn't go down too well with the courts on this side of the pond either.

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Re: The only downsides

Unless fraud on the court is done (mostly hiding assets), there will be no criminal actions from the bankruptcy court. At this point, the proceedings are purely a civil matter. But if Hansmeier stupidly tries to hide significant assets the court can make its displeasure felt. Given the size of the bankruptcy, I suspect some of the creditors are trying to do a little poking around to see if anything shakes loose - this is legal.

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Re: The only downsides

Contempt of court can be assessed by any court; it's a special case meant to punish people who don't adhere to the rules of the court, and as long as the court can justify it, punishment is immediate as there is no "guilty" or "not guilty" about it; you're simply found "in contempt of court" and punished for that, period.

As for perjury, that would be separately tried in a criminal court. And since perjury, like contempt of court, entails corruption of the justice system, most jurisdictions (definitely the federal system) classify it as a felony, which can have permanent consequences.

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Re: The only downsides

Ken White decided over a year ago that they'd become too boring & stopped writing up their antics.

Despite that, he did post an update last May, so he might have more to say about it yet.

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Re: The only downsides

"Unless fraud on the court is done (mostly hiding assets), there will be no criminal actions from the bankruptcy court."

They've made it very clear they have no qualms about attempting fraid on the court - and there's substantial evidence pointing to them having hidden assets (mostly to avoid the Californian cases) and not declared them in the bankruptcy.

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*fist pump* yes!

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Miscreants should not be allowed to hide behind bankruptcy laws to avoid paying court ordered payments.

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Anonymous Coward

Actually, not all debts can be removed by bankruptcy. Notably, debts given or mandated by the state are immune to bankruptcy. This includes state-funded student loans and, in this case, court-ordered restitution. Also, debts secured by collateral (like a hire-purchase/installment plan) are immune to bankruptcy, too.

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No Assets?

Surely there are some valuable business records that could be sold off, at a profit, to former customers or those who have a disagreement with former customers.

On a more serious note: try make sure that you use what journalists used to call "the million dollar word".

That is, "_alleged_ miscreants". Otherwise you are just rooting for the sort of police extortion rapidly becoming a plague of a different kind in the U.S.

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Re: No Assets?

No need. The court found them guilty so it's not alleged - it's proven

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Joke

Poor 'ole Prenda Lawyers

....getting what they truly deserve.

I shed shitloads of crocodile tears for those unethical, money grubbing bastards.

"Take their houses away, but where will the poor dears live?" a fool might ask.

I can think of the most perfect place for them, it is a large concrete building replete with lots of steel bars dividing the interior space into these little, small windowed rooms with a stainless steel sink and toilet. The walls of this 'retreat' are quite high, and topped with barbed wire and in strategic locations, men armed with guns, are stationed to keep those inside from escaping their """home""".

Hell, I even found pictures typical of such accommodations:

Here are pictures of the outside:

http://vignette4.wikia.nocookie.net/primeval/images/1/12/Prison-4.7-exterior.jpg/revision/latest?cb=20130528185650

http://i.dailymail.co.uk/i/pix/2012/11/19/article-2235213-161CF302000005DC-953_964x494.jpg

http://www.signplanning.com/wp-content/uploads/2013/06/Bop-ext-ps.jpg

And of the inside:

http://i.dailymail.co.uk/i/pix/2014/03/19/article-2584306-1C69971600000578-694_634x421.jpg

http://electls.blogs.wm.edu/files/2010/04/1-jail-cell.jpg

http://cdn.thinkprogress.org/wp-content/uploads/2015/04/Jail-toilet.jpg

http://www.biocleanservices.com/images/jailcell.png

It would be so very nice if they could be accommodated for the next 20 years or so.

</sarcasm>

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Go

Hmmm...

I believe kidneys are an asset, with a real sale value. I recommend the court forces sale of these.

As are lungs, liver, heart....

Sorry, forgot it was a lawyer, so no heart.

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A correction: the court didn't order the sale of the condo.

Hansmeier initiated the sale process without informing the court. He was attempting to sell the property, presumably with the proceeds immediately going to his wife and trusts and thus being unreachable by the bankruptcy cout. He has used trusts in the past to move money out of his companies, leaving them insolvent.

Even after the sale was caught by the trustee, Hansmeier was attempting to retain control of the money in a trust held by his lawyer. The trustee objected. The reason wasn't stated in the hearing, but it was clear to those involved. If Hansmeier controlled the money, he had already planned the scheme to drain that money from that account. One of his earlier trusts, Monyet, was used to drain money from his insolvent 'Alpha Law LLC'. Monyet has been paying the mortgage and for various "improvements". It's now clear why that was happening. It was so that a big chunk of the sale proceeds would go to that trust to "pay back" its "investment" in the property. They would attribute the increase in value to the "improvements", leaving only a token amount as a net gain after the bank mortgage and closing costs were paid.

Don't worry too much about Hansmeier being out on the street. He, along with Steele, have devoted years to dodgy schemes, shell companies, and making themselves judgement-proof. This was just one of his many hidey-holes for money. There are millions of dollars that haven't been traced.

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More info in the case. The Chapter 7 Trustee filed a motion to "determine the source of funds used to purchase, and renovate the property and to pay expenses, including the mortgage associated with

the property".

It does appear that that Hansmeier is claiming that Monyet and his wife were the source of the funds used to buy, maintain and renovate the condo, and that all proceeds should go to her and not into the estate.

I think that there is still a fair chance that Hansmeier will get away with most of the other money, but he has played too fast and loose with Monyet for this specific 'judgement proofing' scheme to work.

It does confirm why Hansmeier fought so hard to put the sales proceeds into an trust account with his attorney, rather than with the trustee. He would have immediately paid the money "due" to his wife and Monyet, and trustee would have to decide if it was worth spending years in court to pursue the fraud.

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