Paul R. Hansmeier, John L. Steele Indicted in Porn Extortion Scam

Federal prosecutors have unmasked a multimillion-dollar fraud operation led by attorneys PAUL R. HANSMEIER, 35, and JOHN L. STEELE, 45, who allegedly weaponized the U.S. legal system to extort thousands of unsuspecting internet users. The indictment, announced by U.S. Attorney Andrew M. Luger, charges the two lawyers with running a calculated scheme from 2011 to 2014 that used phony copyright lawsuits tied to pornography downloads to squeeze settlements from victims under threat of public exposure and massive fines.

Hansmeier and Steele created sham companies to claim copyrights over adult films—some of which they produced themselves—then seeded them on file-sharing networks like The Pirate Bay. When users downloaded the content, the defendants filed fraudulent lawsuits to subpoena internet service providers, harvesting subscriber data tied to IP addresses. Armed with personal information, they unleashed a wave of threatening letters and calls, demanding payments of thousands of dollars to avoid being sued for copyright infringement.

As courts grew suspicious and began blocking mass lawsuits, the duo pivoted to even more brazen tactics. They began filing false claims that their clients’ computers had been hacked, then recruited so-called ruse defendants—individuals previously caught downloading the same pornographic content—to serve as named defendants in their fake hacking cases. These patsies agreed to be sued in exchange for waived settlement fees, allowing Hansmeier and Steele to push for discovery against supposed co-conspirators, furthering the illusion of legitimacy.

“The defendants in this case are charged with devising a scheme that casts doubt on the integrity of our profession,” said U.S. Attorney Luger. “The conduct of these defendants was outrageous – they used deceptive lawsuits and unsuspecting judges to extort millions from vulnerable defendants. Our courts are halls of justice where fairness and the rule of law triumph, and my office will use every available resource to stop corrupt lawyers from abusing our system of justice.”

FBI Special Agent in Charge Richard T. Thornton condemned the betrayal of trust: “The charges announced today describe a fraud scheme perpetrated by lawyers and officers of the court who abused their positions of trust for personal enrichment.” IRS Criminal Investigation’s Shea Jones added that tracing the flow of illicit funds revealed layers of financial deception, underscoring the complexity of the probe.

Hansmeier was suspended from practicing law in Minnesota on September 12, 2016, as judicial scrutiny intensified. Now, with federal charges filed, the case stands as a stark warning: even those sworn to uphold the law can pervert it for profit. The investigation continues as authorities trace the full scope of the stolen funds and the network of shell entities used to launder them.