JOHN STEELE ARRESTED.

johnsteelearrested

We learned this morning that John Steele was arrested under 17 counts of mail fraud, wire fraud, money laundering, and perjury. I have detailed the charges lower down in the article, and a link to the Star Tribune article can be found here (and sincere kudos to both DTD & SJD for breaking this story).  The link to the indictment itself can be found here.

For those of you who became readers more recently, one of the first prolific copyright trolls was John Steele, formerly from Steele Law Firm PLLC, then from Steele|Hansmeier, then most popularly, from #Prenda Law Inc. (that last name even earned itself a hashtag and a group of followers on Twitter).

John Steele hired many lawyers across the US who acted as his “local counsel” just as Keith Lipscomb later did on a larger scale with the Malibu Media, LLC [x-art.com] copyright holder. [As I’ve written before, I believe that Voltage Pictures, Inc. is doing the same thing in a manner which has not yet become public knowledge with their Dallas Buyers Club, Fathers & Daughters, September Productions, Cell Productions, and a number of other non-pornographic copyright infringement cases slowly making their way through the federal courts.]

The relevance here is that John Steele was the original kingpin, and TODAY HE WAS ARRESTED for the following:

COUNT #1) Conspiracy to Commit Mail Fraud and Wire Fraud (18 USC §1349) [using the U.S. mail to extort settlements from bittorrent defendants]

sh-clip1-mailfraud

COUNTS #2-6) Mail Fraud 18 USC §1341 [using the U.S. mail to send “scare letters” threatening to sue accused John Doe Defendants unless they settled the claims against them.]

sh-clip2-mailfraud
COUNTS #7-16) Wire Fraud 18 USC §1343 [using the internet to process settlement checks and upload torrent files containing porn which they would later track and sue defendants for the download thereof]

sh-clip3a-wirefraudsh-clip3b-wirefraud

COUNT #17) Conspiracy to Commit Money Laundering (18 USC §1956(h)) [for the transfer of settlement funds received, knowing that those funds were proceeds from unlawful activity, and disguising the nature, source, ownership, and control of those proceeds.]

and,

COUNT #18) Conspiracy to Commit and Suborn Perjury (18 USC §371) [by scheming to conceal and disguise their involvement by providing false and misleading testimony and declarations, for example, and Mark Lutz (the paralegal) was really the CEO behind all of their activities, etc.]

In short, there is so much to say about this story which has been an evolving saga since 2010 (now six years and counting).  Many internet users were hurt by their activities, and the injustices that John Steele, the Hansmeier brothers, Mark Lutz, and the others more well known as “the Prenda gang” perpetrated on so many thousands of accused John Doe Defendants are still being copied by many copyright troll attorneys even today.

My personal opinion is that this arrest should be a warning sign to other copyright troll attorneys who are still filing lawsuits against John Doe defendants even today using the same tactics described here.  The scheme described in the indictment has not been stopped, and it continues (albeit in more hidden forms where attorneys go through such great lengths to make their outfit appear legitimate).  

My only message to the other copyright trolls perpetuating this scheme is not that “I’m watching,” or that “you’re being seen by the internet bloggers for what you are,” but that the U.S. Federal Government is watching.  

John Steele’s problems are not over.  There are still other departments likely analyzing their activities.  The one department that comes to mind is the Criminal Law Enforcement arm of the Internal Revenue Service (IRS).

Other Links of interest relating to this topic:

DieTrollDie: John Steele & Paul Hansmeier (Steele|Hansmeier, AKA: Prenda Law) Arrested – December 2016
Fight Copyright Trolls: Steele and Hansmeier Have Been Indicted On Fraud, Money Laundering Charges
ArsTechnica: Prenda Law ‘copyright trolls’ Steele and Hansmeier arrested

…and likely many others to come.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.

shalta boook now cta

Software Developers now tracking the USE of pirated software

Siemens PLM | Siemens Product Lifecycle Management Software Piracy Lawsuit

When Software Anti-Piracy Protections are built into the software.

There is a new problem that I am encountering where software developers are writing code in order to catch downloaders – not in the download of the software, but in the illegal USE of that software.  These software developers – with knowledge of the accused IP address of the so-called “pirates” are hiring attorneys to send out DMCA settlement demand letters, often requesting a hefty settlement for the piracy or use of that software without authorization.

Unlike the bittorrent cases that we have seen over the past six years — where an internet user would be caught downloading movies, music, or “scenes” using bittorrent or Popcorntime software (where the connection to other bittorrent users in a “bittorrent swarm” would reveal the IP address of the downloaders) — software developers are increasingly building in to their new software the capability to “phone home” to the developer. When the software “phones home,” it reports certain information to the software developer, including the IP address of users who are actively using the pirated software at that moment.

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Cracked Software

When a downloader accesses a “pirate” site (e.g., The Pirate Bay), and downloads a piece of software with a “crack,” that crack alters the software code, to allow it to be used in a “registered state” (e.g., cracked software will allow a user to enter a serial code to register the software whereas in an “uncracked” state, that serial code would be rejected.  Thus, the user sees a message such as “your serial code has been accepted.  Thank you for registering your software.) This “registered” state allows the downloader to actively use the software; however, it does not stop the software from phoning home.

Have you read enough? Book Now to get help. > > >

Missed Instructions to Block Cracked Software from Connecting to the Internet

Very often included in the cracked software package will be what is known as “a .NFO file,” (which is a text file, and “NFO” sounds like “info”) where the hacker, a.k.a. the “cracker,” will instruct the user to block the software from connecting to outside networks (often advising that the downloader use a software firewall, such as Comodo Firewall). Conventionally, the purpose of this instruction to the downloader is to avoid the common scenario where the software developer automatically updates the software to work around and invalidate any cracks which it discovers in the wild. As a result, the downloader would find that his once-registered software is no longer registered.

Anti-Piracy Correction Attempts – “Please Buy The Software” Notices

Some software developers who have become savvy to this trend will create a pop-up screen which alerts the downloader that his IP address has been flagged and gives him an opportunity to purchase the software at a discounted rate.  By using this method, the software developer attempts to turn a pirate into a paying customer in a manner that is both ethically and morally sound.  However, and pardon my jaded view of the matter, but people get greedy, and software developers get frustrated with the piracy of their software, and thus they often turn from good business judgment to using the law as a prickly weapon to sting those caught downloading their software.

New Trend: Forced Settlement Requests sent to IP Address Holders

And with this greed, here is the trend for which I wrote this article.  I am now seeing a trend that the software developers are contacting attorneys and asking those attorneys to use the Digital Millennium Copyright Act (“DMCA”) rules to force the ISPs to send settlement demand letters to the internet users who are suspected of illegally using that software without a license.  However, instead of trying to turn that downloader into a paying customer, the software developer decides instead to gouge the internet downloaders into paying a bloated fee for a software license. In this scenario, this internet user receives a letter demanding that the user purchase the pirated software for an amazingly high amount of money, for example, $5,000-$20,000. If that internet user does not purchase the software as the letter demands, the threat of a copyright infringement lawsuit looms.

Have you read enough? Book Now to get help. > > >

Why Siemens Industry Software Inc. might seem like a copyright troll (they are not).

Now the first company you might think of when reading this article is the Siemens Industry Software Inc. company, who is currently suing John Doe Defendants for the download and unlicensed use of the Siemens NX software.  However, in defense of their lawyers, the Siemens attorneys are simply trying to stop engineers and companies who are using their software in a commercial manner from profiting from the use of their software without a license.  They are not gouging (so far as I know), and my personal experience with their attorneys have been (so far) positive.

Thus, the focus of this article is on other software developers and copyright holders who have begun to mimic the Siemens model of suing (or here, sending DMCA settlement letters through the ISPs and threatening to sue) users, and attempting to force them to purchase an enterprise-level, multi-thousand-dollar software license or face a copyright infringement lawsuit in a Federal court, even if they have absolutely no legitimate use or benefit from “owning” that software.

QUESTION: What to do if you receive a settlement demand letter.

To the internet user who receives such a letter requesting a settlement:  It is important to know that following the instructions of the software developer and purchasing a license (even an expensive one (e.g., a $5,000 license where the software itself costs only $150) does not protect you from being sued. Rather, your compliance may simply operate as an admission of guilt.

ANSWER: Hire an attorney, fix the problem.

Instead of simply following the instructions of the settlement demand letter, here is why it is advisable to STOP, THINK, RESEARCH THE TOPIC, and hire an attorney (me, or any other attorney competent in both copyright litigation and software licensing) to resolve the claim or claims against you.

Have you read enough? Book Now to get help. > > >

How an attorney can fix a copyright infringement / settlement demand letter problem.

First, the attorney that you hire will provide a legal “buffer” between you and the copyright holder’s attorney. Your attorney will be able to speak on your behalf without admitting guilt, whereas an accused defendant speaking alone to the copyright holder’s attorney might accidentally claim that they were only using the software to test the software (an act which according to the law would be copyright infringement, and would subject the internet user to statutory damages of $150,000 or more if there are multiple instances of infringement). Thus, an attorney can stop the copyright holder’s attorney from contacting you directly by putting them “on notice” (a legal term) that the attorney is representing you and, thus, all communications must go through the attorney.

Additionally, the attorney that you hire (knowledgeable in both copyright law and in software licensing) would be able to negotiate a settlement to allow you to purchase a license at a steep discount from the “gouging” amount that the copyright holder’s attorney was initially asking for in the settlement demand letter. Moreover, your attorney could obtain a release of liability, releasing you from all liability surrounding the unlicensed use and the unlicensed copying of the pirated software – something you would not be in a position to negotiate if you were handling the matter.

Similarly, [or in the alternative,] your attorney might negotiate a software license to allow you to pay for your “experimental” use of their software.

Have you read enough? Book Now to get help. > > >

What if you are a student accused of pirating the software?

If you are a student, then it may be a good strategy to have your attorney negotiate in the settlement agreement to allow you to purchase that product at a student discount at your local college as your “settlement payment.”

Why an attorney can assist you with a caught-piracy problem.

The above are all options that an experienced copyright/software development attorney (me, or anyone else) would be able and knowledgeable to negotiate on your behalf.  Your attorney would be able to oversee the payment of the licensing fee or the purchase of the actual software [for your own future legitimate use] and to obtain for you a written release of liability from the software copyright holder’s attorney, which means that following the conclusion of the settlement or the signing of the software license, you would never be sued for copyright infringement or any sort of piracy in a Federal court.

These are the benefits of hiring an attorney for your settlement demand letter issue rather than simply going out and paying whatever fine is requested of you.  Remember: Following the copyright holders instructions to pay them a fee or to purchase a piece of software after-the-fact (after the unlicensed activity or infringement occurred) will not provide you any protection.  Paying a settlement fee alone will not provide you with a settlement agreement or a release of liability.  Without a release of liability, you could still be sued in a federal court for copyright infringement, piracy, or any other relevant law relating to the unlicensed use, piracy, and possibly the cracking of software.

Have you read enough? Book Now to get help. > > >

OTHER ARTICLES ON THE SIEMENS INDUSTRY SOFTWARE INC. CASES:

How an attorney should handle a Siemens Industry Software Inc. lawsuit, on 1/11/2017.

Siemens Industry Software Inc. NX-based lawsuits – converting accused engineers into loyal customers, on 1/9/2017.

Software Developers are now tracking piracy through the USE of downloaded software, on 9/9/2016.

The Siemens Industry Software Case IS a Bittorrent Case, on 6/20/2016.

What to do about the Siemens Industry Software Inc. v. Does case (TX), on 1/16/2016.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.

Prenda Law Inc. sues the anti-troll internet community.

“Oh what a tangled web we weave, When first we practise to deceive!”
– Sir Walter Scott, Marmion: Canto VI. (1771 – 1832)

My greatest effort in this blog is not to decide what to write about, but what NOT to write about. I’ve been very aware of John Steele’s issues in Minnesota (where he made an appearance for one of his cases, and was served by Paul Godfread’s process server on the Alan Cooper identity theft issue). I’ve also been aware of the issues as to whether AF Holdings, Guava, (and we won’t mention Ingenuity 13, or the older MCGIP lawsuits) are in fact entities or whether there is an bit of sham involved in their formation and/or the enforcement of the intellectual property they appear to hold. I have also noticed the clear trend from the smarter lawsuits where Steele moved from suing hundreds of John Doe Defendants to him suing smaller numbers of John Does (20-75) in smaller “under-the-radar” lawsuits, and then finally to the “John Doe” individual lawsuits, some of which ended up with named defendants who were not served, others where the defendants were actually served, and finally others where a defendant and his attorney agreed to allow Prenda to add hundreds of unrelated defendants to the lawsuits as potential co-conspirators.

Then when even the individual lawsuits looked to no longer be fruitful for him, I noticed the move from copyright enforcement to absurd tactics, some of which involved having Mark Lutz pose as a representative for a production company.  I noticed when Prenda had their own local counsel (Joseph Perea) shift titles to avoid unauthorized practice of law issues (e.g., in Florida), and I noticed when local counsel Brett Gibbs ended up as “of counsel” for Prenda Law Inc., only to later disavow association from the firm when federal Judge Otis Wright mentioned the word “jail.” These absurd tactics have gone even farther, most recently with the creation of the Livewire Holdings, Inc. entity (see, Part I; Part II) using fake pictures on their website for their so-called “partners,” and reports that Mark Lutz (Prenda Law Inc.’s former paralegal, now pictured as “partner” in the Livewire Holdings, Inc. site) is back at it, calling dismissed defendants using a fake name.  I almost fell off my chair when I read local counsel Brett Gibbs’ most recent declaration [under oath] that [he has been informed that] Mark Lutz was the CEO for AF Holdings, LLC (p.4, paragraph 7), and that he was also the CEO for Ingenuity 13, LLC (p.4, paragraph 8).  Really?!?

All of this drama (including the Minnesota lawsuit and the so-called fake Alan Cooper issue) are topics I have purposefully chosen NOT to write about for the sole reason that they do not help my clients or potential clients understand the issues surrounding the copyright infringement lawsuits they face when they receive a subpoena notice from their ISP in the mail.

Behind the scenes, as owner of the Cashman Law Firm, PLLC, I and my staff have spent literally months building up local counsel networks and researching each federal court’s rules to properly defend clients who are named as defendants in their copyright infringement lawsuits. I personally warned a number of copyright trolls that if they named my clients, myself and the attorneys I work with would find a way to make defending these cases affordable. So you can understand why I was amused when the principals at Prenda Law Inc. shifted from what looked to be a trend towards individual lawsuits against former John Doe Defendants to their more recent “world domination” shenanigans which led to widespread questions as to the identity of the “real” AF Holdings, LLC Alan Cooper, which of the copyright troll entities are real and which are shams, and then once caught, which led to the finger-pointing which began between their local counsel and other defense counsel, and then ultimately to the finger-pointing towards the principals at Prenda Law Inc. I’m happy that their lawsuits have gone nowhere these recent months, but personally I feel that their focus has shifted to “doubling down” on what appear to be outright lies rather than representing their clients to stop the piracy of their copyrighted films.  I often stop myself from asking, “wasn’t that the whole purpose of this grand charade?”  At least the war I thought I was fighting was to defend internet users from being subjected to copyright extortion-like lawsuits for the downloading or viewing of copyrighted movies and videos.

For these reasons, I really have nothing to say or comment because what Prenda Law Inc. / formerly, Steele|Hansmeier PLLC/ or more recently, the Anti-Piracy Law Group / John Steele / Paul Duffy / Brett Gibbs / former paralegal Mark Lutz (and their local counsel, many still disgruntled) have been doing and their antics have little-to-nothing to do with the so-called “rampant piracy” and the copyright infringement I thought they were here to stop.

So now John Steele and the entities he supposedly has nothing to do with are suing Paul Godfread, the real Alan Cooper (as opposed to the one they have not yet produced), along with all of the anti-copyright troll internet population, probably most notably, Sophisticated Jane Doe (http://www.fightcopyrighttrolls.com), Die Troll Die (http://www.dietrolldie.com), and probably a handful of others who have been hugely helpful to our law firm over the years through their reporting on Twitter. I could easily be part of this group of anti-copyright troll “Does” from all the posts I have written on his cases.

The problem with the “sue everyone for defamation” approach is 1) the elements of defamation are simply not there (as Forbes Magazine might report, John Steele is clearly a “public person” who has cast himself forth as being one of the foremost and first copyright trolls), 2) his lawsuits likely invoke the anti-SLAPP laws because they appear to have been filed to “create chilling effects and to stifle speech,” and most importantly, 3) people like Sophisticated Jane Doe, Die Troll Die, and the others blog and tweet anonymously. Thus, even if they figured out which IP addresses did the posting or the tweeting, the IP address will likely point to a private VPN service who have no ability to even know who these anonymous bloggers are.

In closing, there is not much to say about these lawsuits. Techdirt wrote about them here.  ArsTechnica wrote about them here.  Sophisticated Jane Doe wrote about them here. Copyright Clerk wrote about them here. Jordan Rushie wrote about them here. No doubt there will be many more articles, and no doubt there will be much more drama. However, as far as these lawsuits affect his copyright infringement and “hacker” lawsuits (the purpose for which I write this blog), I cannot see them affecting his lawsuits positively, and if anything, this was a misstep for Steele and his affiliates.


UPDATE (3/9/2013): DENIED.  Automattic, Inc. letter to Prenda Law Inc. (on behalf of WordPress.com sites) rejects Prenda’s attempts to ascertain the IP addresses of the anti-troll community citing five (5) deficiencies in their subpoena.  Other notable reasons for non-compliance with the subpoena include: 1) rights under the First Amendment to anonymous speech; 2) right to privacy; 3) subpoena (“outrageously”) overly broad; 4) subpoena seeks information that is not likely to lead to discoverable information.

Why is it that Lightspeed Media Corp. cases are DEAD, and yet SO MANY DEFENDANTS are still receiving letters?

Lightspeed Media Corp. has been one of the more aggressive copyright trolls over the past two years. They are intimately associated with John Steele and Prenda Law Inc., and have changed their lawsuits as the case law has changed over the years.

They started out as one of Prenda Law Inc.’s first bittorrent lawsuits in the U.S. District Court for the Northern District of Illinois, where they sued 100 John Doe Defendants in the Lightspeed Media Corporation v. Does 1-100 (Case No. 1:10-cv-05604), of which 99 WERE DISMISSED ON 12/21/2010, with the remaining one shortly afterwards.

Then Lightspeed Media Corp. amended their complaint to sue 1,000 defendants instead of 100 defendants, and as we wrote about in our “Judge Steeles The Life From A Second Torrent Case” article, the judge responded by SEVERING AND DISMISSING ALL DEFENDANTS but one.

Just when we thought this case was dead, John Steele filed an amended complaint on 4/11/2011 and brought the case back to life by suing one John Doe. The funny part, however, was that they continued to send “scare” letters to ALL THE SEVERED AND DISMISSED DEFENDANTS (even though they were no longer defendants in the case). The court picked up on this and berated Steele on 4/19/2011. A few months later, the zombie Lightspeed Media Corp. federal case was DEAD.

Then, Lightspeed and Steele came up with a novel idea — sue defendants across the U.S. for violation of federal hacker statutes, alleging that accused internet users accessed Lightspeed’s websites using stolen passwords (which “through no fault of their own” were “leaked” onto the internet). The twist was that their new lawsuit was filed in the corrupt ILLINOIS STATE COURT (even though the subject matter of the lawsuits belong in the federal courts). In the Lightspeed “Hacker” lawsuit, even if the accused John Doe Defendants used the passwords to access Lightspeed’s websites, THEY WOULD NOT VIOLATE THE FEDERAL STATUTES WHICH WERE ASSERTED AGAINST THEM IN THE COMPLAINT. This is the joke about the case — it simply has no merit, but the case persists. It befuddles me that the state court is still allowing subpoenas to be sent out (even though the Illinois SUPREME COURT has come in and voiced its opinion that this case is a fraud and that it should be shut down). Yet, it persists.

These same Hacker lawsuits were also filed in the Miami Dade, FL state courts (equal in integrity to the Chicago state courts) in the Lightspeed Media Corp. v. John Does (Case No. 12-05673 CA 05), and in the Maricopa County, AZ state court (Case No. CV2012-053230). There is a lot that is written about these cases, but because they are taking place in state courts (in which we do not have eyes), we have not been tracking these cases. Essentially, it is important to note that the lawsuits are filed against one Doe Defendant, but implicate HUNDREDS of Doe Defendants as co-conspirators.

Word is that a few weeks ago, Lightspeed Media Corp. has been sold to another company (perhaps to Prenda Law Inc.?), yet the lawsuits continue.

So as you see, Lightspeed Media Corp. is essentially a zombie company that keeps coming back asking internet users for more and more money. If you take a look on http://www.rfcexpress.com, you’ll see that there are a few cases on the books, but they are ALL DISMISSED. Yet, if you asked the internet world how many thousands of internet users are still getting calls or letters for Lightspeed, you’ll get a surprising answer.

FEDERAL CASES FILED ON BEHALF OF LIGHTSPEED MEDIA CORPORATION
Lightspeed Media Corporation v. Does 1-9 (CAND; 4:11-cv-02261) [DEAD]
Lightspeed Media Corporation v. Doe (ILND; 1:11-cv-00385) [DEAD]
Lightspeed Media Corporation v. Doe (ILND; 1:11-cv-00209) [DEAD]
Lightspeed Media Corporation v. Does 1-100 (then 1-1,000) (ILND; 1:10-cv-05604) [DEAD]

KNOWN STATE CASES FILED ON BEHALF OF LIGHTSPEED MEDIA CORPORATION
Lightspeed Media Corp. v. John Doe (Miami Dade, FL Case No. 12-05673 CA 05)
Lightspeed Media Corp. v. John Doe (St. Clair, IL Case No. 11-L-683)
Lightspeed Media Corp. v. World Timbers, Inc. & John Doe (Maricopa, AZ Case No. CV2012-053230)

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