LiveWire Holdings: Evolution of Prenda’s Fraud. Part I

Posted: January 31, 2013 by SJD in Guava/Lightspeed, Prenda
Tags: Adam Urbanzcyk, AF Holdings, Anti-Piracy Law Group, Arte de Oaxaca, bittorrent, copyright, copyright troll, gaia, Guava LLC, Ingenuity 13, john steele, LiveWire Holdings, LW Systems, marcus london, Paul Hansmeier, Peter Hansmeier, prenda law, Quad International, Steve Lightspeed, torrentlitigation.com

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Emboldened by the selective permissiveness of the US legal system, Prenda’s staggering fraudulent activities continue unabated. The latest middle finger to the justice is being shown by Prenda as we speak. Steele Hansmeier / Prenda Law / Anti-Piracy Law group are currently working on a complete vertical integration of all the components necessary to continue and widen its racketeering campaign.

Part I. A missing link

Any organized crime operation tends to move towards vertical integration. A Mafiozo business is usually very effective, in part because it exercises control over all the operating stages. There are four main players/areas in any given porn copyright trolling operation:

• Porn producer
• Bittorent swarm monitor
• Copyright holder / assignee (Plaintiff)
• Lawyer’s network

If different people control these areas, all of them want their cut. Keith Lipscomb was lucky to find a somewhat talented, but not-so-smart porn producer, Brigham Field, who is happy to receive his 10% cut. Usually producers want more.
So far, John Steele’s criminal organization has been somewhat successfully integrating three areas out of four:

Bittorent monitoring

In-house “expert” Peter Hansmeier monitors bittorent swarms from the very beginning of Steele/Hansmeier involvement in the lucrative abuse of the court system. His software is still super-secret, and his company is not registered anywhere. Peter himself is not a certified forensic expert. His brother Paul, not John Steele, is the real Prenda’s mastermind according to some opinions.
Steele also experimented with Steve “Lightpeed” Jones’s own, extremely amateur “company” Arcadia Security (comprised of only Steve Jones himself), when he first tested CFAA waters. To the best of my knowledge, two former “friends” do not work together anymore (and even had some bad squabbles), although a couple of Lightspeed’s lawsuits, including the infamous Lightspeed Media Corporation v. Smith et al. (ILSD 12-cv-00889), are still lingering.

Plaintiffs

Plaintiffs AF Holdings, Ingenuity 13, LW Systems, Guava, Arte de Oaxaca, and maybe Quad International ¹ are shell or entirely bogus entities, assignees of copyrights to pornographic material. These “companies” do not use copyrights as intended, i.e. there are no sales, only lawsuits. Even more, it is reportedly impossible to find the titles used in those lawsuits in any online or brick-and-mortar store.
Prenda still works with real copyright holders, but obviously has been moving away from using them over recent couple of months: we witness mass dismissals of the cases assigned to plaintiffs other than the ones listed above. Only two categories of “real plaintiff” cases are still active: 1) cases that cannot be dismissed due to the defendants’ answers to complaints, and 2) cases in which default judgment was entered.
In addition to the fact that “real” plaintiffs demand their cut, they are unreliable and prone to unexpected problems.
The first experiment with a bogus plaintiff was attempted in 2010/2011 with creation of non-producing, Righthaven-like entity MCGIP. After TorrentFreak’s investigative reporting by Nicholas Ranallo was published, this entity was quickly dismantled. Crooks learned their lessons, and the next reincarnations of “mini-Righthavens” were obscured by ostensibly outsourcing to St. Kitts and Nevis. Even that may be not the case, and probably none of these corporations has been registered at all. It is only logical not to spend money on registration of a corporation that cannot be pierced anyway due to strict secrecy laws of this Caribbean state. Simply using someone else’s name as a CEO — Anthony Saltmarsh or Alan Cooper — will do.

Lawyer network

No explanation necessary. This category includes paralegals in charge of shaking down identified victims. Local counsels do not cost an arm and a leg to Prenda: usually underemployed, starving attorneys are hired only to submit pleadings written in the “troll command and control.” In a recent rare case when a local goon was trusted to write his own motion, he shamelessly lifted the entire pleading written by someone else.

Production

Ultimate bottomless greed did not let criminal masterminds sleep. Porn producers / initial copyright holders still require their cut and they are a hassle to deal with. Therefore, not surprisingly, John Steele decided to forge the missing link and hired a director and performers to film and subsequently license his own pornography. Of course I oversimplify, and greed is definitely not the only motivation: see a brilliant comment embedded at the bottom of this post.
As an anonymous commenter precisely described the situation after John’s plans became obvious,

It shows that the crook is now clearly involved at the very root of the scam. Directly involved in the MAKING of the smut that is soon to be licensed to AF Holdings or Ingenuity 13 or (insert new sham offshore LLC name here). Soon this newly produced smut will have a registered copyright, and be immediately seeded into honeypot torrents, and immediately monitored by the seeder (6881 Forensics LLC, or whatever they will call themselves since they cannot be found to be officially a licensed business either) for “OMG! Copyright Infringement!”

The smut that Steele is producing does not have to be of a particularly high quality: remember, it will not be sold, it will not be streamed, but it will be used only for extortion purposes. Bittorent curious porn hunters will download anything based solely on the filename and/or description, simply to check it out. Throw a relatively famous (in their universe) names to the mix, and you get your swarm to milk. It does not matter that only about 70% of harvested IP addresses more or less point to people who knowingly shared the pornography in question, the other 30% will be harassed and pushed to settle anyway.
John’s hubris was the main reason why he could not keep his mission under wraps. @bittorrentbull on Twitter thought that it is impossible that others can provably link John Steele to @bittorrentbull screen name, and he tweeted a myriad of self-incriminating things: from documenting vexatious and vindictive reasons behind federal Guava lawsuits to damaging his position in the ongoing Alan Cooper v. John Steele et al. He was probably drunk when he exchanged his Twitter screen name with a porn performer/director Marcus London and a pornstar Gaia. Unknowingly, they setup him later by tweeting about the filming, and even confirmed @bittorentbull’s identity (at the very bottom of the dialog):

(Click on the image to enlarge)

Featured comment

Anonymous on January 31, 2013 at 3:17 am:

Although vertical integration does have its benefits, especially with Steele crossing the line and doing completely illegal stuff like stealing Alan Cooper’s identity, I think another important consideration is that this is a sign of just how marginalized John has become.
All things being equal, with the reported 90% cut of settlement dollars for John, there would not be a huge monetary incentive to go through all of this trouble, so there are likely non-monetary reasons he has given up on having clients. A big one is publicity, we know from their own words in interviews that porn producers don’t like their neighbors to know what they do for a living. Another is fear of liability, I’m sure Paul Pilcher’s example of having to pay off two countersuits didn’t exactly instill confidence in other potential clients. Third is probably just that the money dried up. I thought it was a big-time tell when Boner from Chica’s Place mentioned on DTD’s site that he has not used Prenda in a while; no explanation, but the guy is obviously not sympathetic to troll-haters so he had reasons other than ethics to stop using John’s services and it was almost certainly because of money. We also have the insider’s report from Slashdot that confirmed Steele is basically a joke to his target market.
So at this point, with Prenda/APLG not even filing lawsuits anymore, it’s pretty clear this is also just a last desperate attempt to have something (anything) to work with. The sad thing is if LiveWire can come up with halfway decent content maybe John will figure out he can actually just make something people want and monetize it and actually do some honest work for a change.
If we can keep close enough tabs on their shenanigans it’s actually very possible to seriously undermine his scam. Just keep an eye out for their content going up on torrent sites and carpetbomb the comments with warnings and links to this site. It might even be smart to ask the tracker operators to take down John’s torrents. Actually, in retrospect, that would have been a great community project all along, getting the word out by spreading awareness at the source of distribution for torrent files that trolls are suing over. Obviously that’s not going to prevent false-positives and people who are getting fingered because someone leeches their Wi-Fi, but every little bit helps.

Continue to Part II: A new bogus company.

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¹ On the surface, Quad International looks differently than the other “family members”: it even has its own Wikipedia page. Admittedly, we did not look closely enough, although there are some troubling reports (too early to reflect). Nonetheless, even a mere fact that Quad was not touched by the recent mass dismissals and currently enjoys the company of clearly artificial entities, warrants a serious suspicion. We will get there: it is just a matter of time.