State bar regulators say Hansmeier hid money, lied in court.
Today Jerome Larkin, Administrator of the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois, via Counsel Wendy J. Muchman and Marita C. Sullivan, filed a seven-count, 14,000-word complaint against Prenda’s John Steele alleging massive professional misconduct and fraud on the Court (the word “fraud” is used 17 times throughout the document).
“Piercing the corporate veil” of Paul Hansmeier’s law firm was justified.
The Cook County Medical Examiner has not yet declared a cause of death.
It appears that the courts are now just piling on when it comes to Prenda Law. In the case of Lightspeed v. Anthony Smith, the court that was one of the first to call out team Prenda for “flat-out lies” and then blasted their weak attempt to plead poverty — leading, instead, to holding Team Prenda in contempt — has struck again. Having lost badly on appeal, the district court slammed the lawyers again, arguing that Team Prenda lied to the court and obstructed the discovery process concerning where they hid their money. It ordered sanctions of $65,263 and asked Smith’s lawyers at Booth Sweet to submit their costs to be added on to the total. Those costs came out to $94,343.51 — and Prenda lawyers John Steele and Paul Duffy complained that the number was unfair.
Prenda Law was a “copyright trolling” scheme that sued thousands for downloading online porn, but the organization was buried under a wave of judicial sanctions beginning in 2013.
However, the three lawyers found to be intertwined with the organization—John Steele, Paul Hansmeier, and Paul Duffy—continue to get in hot water. On Friday, an Illinois federal judge reconsidered (PDF) a 2014 ruling in which he found there wasn’t enough evidence for a “contempt of court” finding. New evidence has convinced US District Judge David Herndon that Steele and Hansmeier should be found in contempt, and last week he ordered them to pay $65,263. That amount will get progressively larger, the judge warned, “if they continue their misdeeds before this Court.”
In addition, Steele and Duffy “engaged in unreasonable, willful obstruction of discovery in bad faith,” and Herndon ordered those two to pay for the defense’s discovery expenses, needed to unwind the complex financial records.
The three offending lawyers have until July 15 to pay up.
“We’re ecstatic because we finally got it, and this order gives them a set date by which to pay,” said defense lawyer Jason Sweet in an interview with Ars. “They didn’t have to obstruct discovery. It was always in their control. As the court found, they’ve shown a willingness to lie, and they’ll continue to do so unless they’re sanctioned.”