Prenda Law: Paul Hansmeier Weighs In

Law

All of my coverage of the Prenda Law saga is collected here.

Last night I talked about a new filing by Prenda Law, Paul Duffy, and Angela Van Den Hemel in response to Judge Wright's OSC.

Today, Prenda Law principal Paul Hansmeier has filed a brief. The brief is here, a supporting declaration from his attorney is here, Exhibit A is here, and Exhibit B is here.

Hansmeier's brief echoes the structure, and many of the arguments, of the longer and more detailed brief that Heather Rosing filed yesterday. In some cases it incorporates that brief by reference. The notable new points are these:

The Fifth Amendment Issue: Hansmeier expands on the argument that Judge Wright's OSC proceedings were akin to criminal proceedings, and that therefore Judge Wright may not draw negative inferences from Paul Hansmeier's invocation of his Fifth Amendment rights. Hansmeier adds some additional authorities to support that point.

Hey Brett Gibbs, Something's Wrong With the Underside of That Bus. Can You Go Check It Out For Me? Hansmeier's primary argument against sanctions is that he did not participate in this litigation or supervise conduct by Brett Gibbs, and that Gibbs' testimony to the contrary should not be accepted. Hansmeier says that Gibbs never claimed to be supervised by others "until threatened with sanctions," and that in a declaration filed in a matter in Florida (attached as Exhibit B) Gibbs described his job without mentioning any such supervision. Hansmeier asserts that he was not involved in the investigation or litigation of the matters before Judge Wright and therefore not responsible for what Brett Gibbs did. He attacks, for instance, Gibbs' testimony that Gibbs passed along Judge Wright's order staying discovery to Hansmeier:

Outside of Gibbs’ testimony, there is no evidence that Gibbs instructed Hansmeier to instruct Respondent Van Den Hemel to instruct Verizon to not comply with the subpoenas issued months before the court’s order to cease discovery efforts. Such an instruction would be incompatible with Gibbs’ earlier characterization of Hansmeier as a supervising attorney; supervisory relationships are typically a one way
street.

So: Hansmeier didn't supervise Gibbs, which you know because Gibbs didn't mention it before, and Gibbs didn't pass along Judge Wright's order to Hansmeier, because you wouldn't do that to a supervisor. Gotcha.

Alan Cooper Contains Multitudes: What does Paul Hansmeier have to say about Alan Cooper's claim that his identity was stolen? Hansmeier says there's no evidence he is involved in any such — well, I'll let him explain:

Further, there is no evidence that Hansmeier obtained or represented that the signatures on the assignments over the name Alan Cooper were those of John Steele’s former caretaker, who bears that same name and who provided testimony to the court.

If you're paying attention, you'll see that Paul Hansmeier just coyly evaded the question of whether the "Alan Cooper" of AF Holdings is, or is not, the Alan Cooper who testified. He merely points out that Alan Cooper testified that he didn't talk to Hansmeier, and that there's no other evidence that Hansmeier secured the Alan Cooper signatures.

Interest? What Interest? Paul Hansmeier argues that there is no evidence that he concealed any financial interests in the Prenda Law plaintiffs, and repeats the now-familiar argument that any such concealment would be immaterial anyway. He also offers this:

But, the only evidence given regarding the financial interests to AF Holdings is that it is a limited liability company formed by Aisha Sargeant in May 2011 and is wholly owned by a trust with no defined beneficiaries. (ECF 69-1, pp. 21:18-2, 38:22-39:15, 40:8-12.) There has been no evidence that Hansmeier has an ownership interest in either AF Holdings or Ingenuity 13.2

Note that Hansmeier is referring to his own incredible deposition which Judge Wright aptly characterized as showing "so much obstruction" that "it's obvious that someone has an awful lot to hide." Paul Hansmeier had been presented at that deposition by AF Holdings as that entity's most qualified witness about AF Holdings' affairs. Hansmeier is therefore complaining that the record of AF Holdings' ownership is inadequate because it is based only on Hansmeier's own testimony in his role as the best witness for AF Holdings. This is, perhaps, not the most viscerally appealing argument anybody ever made.

Hansmeier's brief is decent, wisely relying on points deftly made by Rosing. But that farcical deposition Hansmeier gave will remain the albatross around his neck. It was a damned foolish way to act, emblematic of a hubristic crew of merely modest ability who believed that they could do what they wanted with impunity. That did not prove to be the case.

Last 5 posts by Ken White

64 Comments

64 Comments

  1. doedoh  •  Apr 9, 2013 @4:07 pm

    Again, its nice to see a competent defense, but it still irks me so much that this upgrade in lawyering skills is allegedly being funded by what amounts to extortion settlements of Does.

  2. Anonymous  •  Apr 9, 2013 @4:17 pm

    Do their lawyers get to keep the money they were paid if this is eventually found to be a fraud?

    We have laws against possession of stolen property; won't that essentially be the case with money paid to Prenda's attorneys, if and when they are found guilty of fraud? Or is keeping the ill-gotten gains they were paid with a perk of the legal profession?

  3. Jim Tyre  •  Apr 9, 2013 @4:28 pm

    And now the question becomes whether we'll hear from the lawyers for The Real Don^^^John Steele.

  4. Justin  •  Apr 9, 2013 @4:32 pm

    Why the evasive "there is no evidence that . . ." rather than a straightforward denial? Why "There has been no evidence that Hansmeier has an ownership interest in either AF Holdings or Ingenuity 13.2" rather than "Hansmeier has no ownership interest in either AF Holdings or Ingenuity 13.2", with perhaps a followup of "and anyone who says he does is a liar."

    Is this just how these sorts of things are written? It leaves open the possibility of changing his tune if/when more evidence comes to light and I'm just trying to figure out if this is good, conservative lawyering or obfuscation.

  5. Ken  •  Apr 9, 2013 @4:40 pm

    @Justin: He can't just deny it in the brief. That's not evidence. He'd have to deny it in a declaration. That would contradict his strategy of taking the Fifth. He can't both testify and refuse to testify.

  6. Ygolonac  •  Apr 9, 2013 @4:41 pm

    Justin – "There is no evidence" can be modified at a later time; "Hansmeier has no ownership interest" would, if evidence to the contrary were discovered, be straight-up perjury. (IANAL, so don't ding me on point-of-law/perjury qualifications please.)

  7. Delvan Neville  •  Apr 9, 2013 @4:42 pm

    But he can eat paste and refuse to eat paste. Mmm, sticky starchy paste.

  8. Ygolonac  •  Apr 9, 2013 @4:42 pm

    Argh, beaten by actual lawyer-speak. And my guess was wrong, too.

  9. Anonymous  •  Apr 9, 2013 @4:46 pm

    This is consistent with Prenda operations as Prenda and their Big Leaguers continue to describe them.

    The guy who owns the firm has no responsibility for anything and doesn't make any decisions or do anything, and now the manager claims he has no responsibility for anything and doesn't make any decisions or do anything.

    Do state Bar associations have a general competence requirement? I suppose that's supposed to be the Bar exam, but if these guys really are as clueless as they now find it convenient to appear, I would think their respective Bars would be trying to find some way to get their licenses revoked so they don't continue to embarrass the profession.

  10. DonaldB  •  Apr 9, 2013 @4:53 pm

    The reason for "there is no evidence…" is that this brief was not from Hansmeier. It was from his lawyer.

    Because Hansmeier took "the fifth", his lawyer must be careful not to offer any testimony.

    Every "no evidence" response is really saying "prove it beyond a reasonable doubt".

    But in almost every case, there is evidence. And that evidence is sufficient to draw a conclusion. Because Hansmeier took the fifth, after initially testifying, it's now unrefuted evidence.

    For instance, Gibbs testified that he reported back to the Prenda office that the subpoena was quashed, and they said they would take of it. That was testimony under oath — evidence. Hansmeier, Steele and Duffy did not dispute that testimony. It's unrefuted evidence. Gibbs has been misleading and untruthful before, but this isn't "he said, she said". It's "he said, and no one claims differently".

  11. Matthew Cline  •  Apr 9, 2013 @4:58 pm

    and Gibbs didn't pass along Judge Wright's order to Hansmeier, because you wouldn't do that to a supervisor.

    Because it's not like there's certain things that you'd want to keep your supervisor informed of, nor are there certain things a supervised employee lacks the authority to do himself.

    If you're paying attention, you'll see that Paul Hansmeier just coyly evaded the question of whether the "Alan Cooper" of AF Holdings is, or is not, the Alan Cooper who testified.

    To play devil's advocate: suppose that Hansmeier has no idea who Alan Cooper is. Would the brief be strengthened in any way if added "I have no idea who Alan Cooper is"? (Or would that be making a statement, which would be inconsistent with him pleading the Fifth?)

  12. Wick  •  Apr 9, 2013 @5:15 pm

    Of course, if AF Holdings were a legitimate enterprise, that Hansmeier should be able to produce documents from an officer or owner of AF Holdings stating that Hansmeier has no ownership interest — which would get around the problem of the 5th Amendment. Gosh, I wonder why they didn't do that?

  13. Wick  •  Apr 9, 2013 @5:17 pm

    In the first sentence for "that" read "then." With my inability to proofread, I must be Ken's distant cousin or something.

  14. gramps  •  Apr 9, 2013 @5:20 pm

    His quibbling over the judge using the "taking of the 5th" doesn't seem to reflect what was said in court. Reading the xcript, it sounded like the judge was going to decide based on what he already had at hand, and that information now (with the taking of the 5th) stood unrefuted.

  15. CHilidog99  •  Apr 9, 2013 @5:21 pm

    I would not expect the Cal Bar to do anything.

    Orly Taitz still has a law license.

  16. Nobody  •  Apr 9, 2013 @5:24 pm

    Ken, if the judge wanted criminal sanctions, could he remedy the lack of a proper prosecutor and such by holding yet another hearing? Or is it just more effective to refer them for prosecution? And if it's still a civil matter, can he still use the magic word "fraud upon the courts" to strip them of their privileges?

    Finally, is there any realistic hope of us getting to see them carted off to jail in a contempt order? I'm guessing that would be tough given that they have a competent defense lawyer now, but I'm curious as to whether there are any realistic ways for the judge to go about that.

    Because after watching Steele mock the judge on Twitter about the judge's bankruptcy, I can't help but feel that these guys deserve it.

  17. SPQR  •  Apr 9, 2013 @5:41 pm

    Its funny, but places where I read Rosing's arguments and reacted with: "OK, that's a nice try" where Hansmeier tries it my reaction is that the judge will instead react with: "No, that's too f'ing cute by half".

    Overall, the brief really only reinforces the deceptions.

    Not a success IMO.

  18. MCB  •  Apr 9, 2013 @5:59 pm

    From the Barry statement:

    14 On several occasions, Alan bragged that "If I pissed him off, they would never find my body, just like the others"

    Doesn't this sound like Barry is saying John Steele would murder him rather than any kind of bragging? My reading of it is sort of a tongue in cheek comment on Steele's ethics, which appears to be pretty accurate.

    Also as far as the identity theft goes, the aggravated identity theft statute is pretty broad. Not that that's the key issue with no criminal charges having been filed yet, though it's tough for me not to think the lawyers are now focusing more on keeping Prenda out of jail rather than defending their law licenses.

  19. MattS  •  Apr 9, 2013 @6:00 pm

    Ken,

    Damn you, the popcorn industry can't keep up with this.

    ;-)

  20. MCB  •  Apr 9, 2013 @6:15 pm

    My friend pointed out that the quotes are probably non-literal and I guess that must be right. Seems like a sloppy thing to let him put in his statement in that case.

  21. AR  •  Apr 9, 2013 @6:56 pm

    "Do their lawyers get to keep the money they were paid if this is eventually found to be a fraud?"


    Accordng to everybody associcated with Prenda, no one makes any money doing anything… so there probably isn't any money to be taken back from them. lol

  22. Anonymous  •  Apr 9, 2013 @7:12 pm

    The Barry declaration is a distraction, at best. In spite of Cooper apparently being a prolific texter, they have nothing specific that has anything to do with these cases, and since Steele hasn't come forward with a record of text messages between himself and Cooper that show Cooper was cooperating, I'm going to go out on a limb here and guess that nobody has any evidence to suggest Cooper was cooperating with Steele.

    A while back Steele was ranting pseudonymously on Twitter about the "iPhone record function," then that never materialized and then it was Gibbs' attorneys putting out feelers that Cooper denied under oath. Now Steele convinced some other guy to put his credibility on the line, when Steele himself has never made any of the claims Barry makes regarding Cooper and Steele working on paperwork, talking about their legal work around the campfire, etc. Why would Steele have waited so long to tell us these things, and then through a 3rd party after taking the 5th for himself?

    If you go with the non-literal interpretation of the texts… Well, I have to admit that under certain circumstances, like playing online games, I have threatened to forcibly sodomize each and every one of my male friends… More than once.

    If you go with the literal interpretation, which for some insane, incomprehensible reason, Prenda's attorneys actually seem to prefer (even the smart one, Rosing)… Well in that case… These people are sick. Manipulating a mentally ill man into becoming a front man for their shakedown scheme that appears to be on pretty shaky legal ground even if the Cooper signatures aren't forgeries? That's what they want people to believe? That's their GOOD option?

    Even beyond arguing that they are a bunch of horrible, terrible, evil, sick people and hoping the court believes it (well, it's not that hard to believe even if the Barry declaration is a red herring), this is still bad for Steele, because if true it would seem to confirm that Steele is both the client and the attorney, was right smack in the middle of everything and at least the driving force behind the "clients'" inception even while working for the law firm that would become their law firm. This is just more evidence that Steele has his hands in everything!

  23. MCB  •  Apr 9, 2013 @7:32 pm

    @anon,

    I saw the same thing in the texts that you did. You could even argue that it detracts from them because it is such an obvious attempt to just attack Mr. Cooper in any way they can. This is one of the problems with blowing up your credibility; it's tough to get it back.

    This was such a bad decision. The one thing they had going for them is that the underlying legal claim behind the suit had merit. No doubt porn is copied on a massive scale form bittorent, and if they buy some porn licenses it's a good bet they are being infringed. Forging the signature on the assignment, or even having your mentally ill caretaker sign as the CEO of the fake shell company, damages the only thing you've got going for you!

    What on earth were they thinking.

  24. MCB  •  Apr 9, 2013 @7:35 pm

    "Accordng to everybody associcated with Prenda, no one makes any money doing anything… so there probably isn't any money to be taken back from them. lol"

    Yeah. Mr. Lutz became the CEO of a porn holding company out of the goodness of his heart. What a classic moment that was.

  25. CO  •  Apr 9, 2013 @8:37 pm

    I think it's funny that Hansmeier denied supervising Gibbs. I wonder if Gibbs has hundreds of emails that prove otherwise.

  26. Bill Sides  •  Apr 9, 2013 @8:46 pm

    At what point, and by whom, will forensic accountants be called in? Thanks so much for this very entertaining series following Prenda.

  27. MarkH  •  Apr 9, 2013 @8:51 pm

    What kind of law firm hires a local attorney to look after one (or more) of their clients, including family members such as wives and fathers, without a written contract or some form of clear communication system in case something goes wrong with the case in court?

    If they didn't provide a clear communication path with attorneys they themselves hired to represent a client, then that is entirely their own damn fault. And I would think that a real client would be rather pissed off to hear how things are going. Is the case on track, or is it being wildly mishandled by subcontracted attorneys and broken communications?

    Didn't they learn that oral contracts aren't worth the paper they are written on, or was that just me in grade 11 law class? They don't seem to care about their own legal state any more than that of their clients.

    And the only thing I see are numerous attacks on Allan Cooper. First there are the many Steele phone calls to him that are astonishing if Alan is of sound mind, and outright abusive if he suffers from mental issues. And then the stream of lawsuits filed by lawyers who are pissed at him over … what? Poor housekeeping? If he is in violation of some sort of agreement (perhaps due to mental health issues), end the agreement and go on with life. Does it really need multiple lawsuits in multiple states?

    It seems like Alan Cooper is being hit pretty hard from all sides. I could see myself issuing a few angry texts or emails under those circumstances. And yet, how come Allan Cooper seems the clear headed in comparison to the attacks on him?

    I just keep thinking "wow, who is more nuts?", and so far it isn't Alan Copper who is winning.

  28. Another anonymous NAL  •  Apr 9, 2013 @9:21 pm

    All righty then. Looks like all we need now is a badly-photocopied refried-Rosing brief from Peter Hansmeier of AF Holdings LLC with their Nevis address. In it he'll explain how he didn't know nothin about nothin about no buses or bus routes, because Mark Lutz was collecting that data for Steele so he could direct Brett Gibbs in the hunt for a spare Alan Cooper…

  29. Matthew Cline  •  Apr 9, 2013 @9:24 pm

    What kind of law firm hires a local attorney to look after one (or more) of their clients, including family members such as wives and fathers, without a written contract

    Good point. This can can be extended to Alan Cooper: what kind of company hires someone as a corporate representative who is empowered to sign contracts, but without an employment contract? What if the representative signs a contract in the name of the company but hasn't been delegated the authority to sign that sort of contract? Wouldn't they want some sort of proof that the contract isn't valid/binding?

  30. C. S. P. Schofield  •  Apr 9, 2013 @9:48 pm

    So, can the fact that these pillocks were admitted to practice law be taken as a classic example of "setting the Bar low"?

  31. MattS  •  Apr 9, 2013 @10:30 pm

    I just had a terrible thought…

    What if the whole Prenda scheme is actually a money laundering operation.

    They have fake clients and sort of fake lawyers, why not fake defendants?

    The FBI started sniffing around their operation so they concoct a few fake defendants to fight back and collapse the operation, vanishing before the FBI can build a case.

  32. Michael K.  •  Apr 9, 2013 @10:45 pm

    @MCB: I once heard an interview with an investigator who said that one of the most common mistakes in running a large criminal enterprise is forgetting to run the legitimate parts of your business legitimately. I guess some people are so allergic to truth, they fail to use it even when it's overwhelmingly in their best interest to do so.

  33. G  •  Apr 10, 2013 @12:28 am

    Alan should fly out to West Indies cash out and retire somewhere warm and send out postcards saying
    Oops, damn meds, I totally forgot…my bad, but here's a $5 for reminding me.

  34. Avid Watcher  •  Apr 10, 2013 @12:38 am

    When can we expect Judge Wright's answer to this mess? With the hopefully very entertaining sanctions and appropriate referrals to every alphabet agency that could possibly be interested in this?

  35. bdb  •  Apr 10, 2013 @12:39 am

    Am I the only one that noticed the part in the Patel motion about Prenda finding its lawyers on Craig's List? Maybe I missed that one in Ken's notes on how to find a lawyer.
    Somewhere in my mind this reminded me of the fact that the Nigerian scammers make their letters stupid enough to filter out anyone with a brain from the start.

  36. Kat  •  Apr 10, 2013 @4:23 am

    Did he actually file papers in federal court alleging that AF is owned in full by a trust with no defined beneficiaries?!

    OH – MY – GOD!

  37. Lounging Lizard  •  Apr 10, 2013 @4:50 am

    Alan Cooper should sign an authorization providing the IRS or any other investigative agency access to all of AF's records in whatever tax haven it may exist. We'll see how Steele and Co. react.

  38. James  •  Apr 10, 2013 @5:23 am

    At the end of the day this is going to come down to breach of the lawyer's obligation to investigate the truthfulness of the initial pleading. Attorneys are not supposed to be independent private investigators but they are responsible for making rudimentary inquiries about who the client really is and whether there are grounds for docketing a case.

    Gibbs was not engaged by AF Holdings, he was asked to step in and provide local representation on behalf of Prenda and has sworn to that under oath in this case, and has made similar utterances in open in court such as in the Florida hearing. So what this all comes down to is that Prenda is denying (well, actually saying "there is no evidence") that there even exists a client that they know about and, in the alternative, if there were a client then they did absolutely nothing to supervise the behavior of the local counsel they engaged. This sad state of affairs repeated itself in many cases in multiple jurisdictions due to identical "independent frolics" by local counsel. I can see Judge Wright extending his pinkie finger in his best Dr. Evil impersonation and saying "RiiiiiiiiiiighT".

    Chewbacca defense it is!

  39. Austin  •  Apr 10, 2013 @5:39 am

    I suppose it's only fitting that Hansmeier would let Prenda's lawyer do the heavy lifting. The brief looks like it was whipped up in a few hours after reading Rosing's.

    Seems like Hansmeier's attorney should be able to produce better arguments in Hansmeier's defense than Rosing does, as Rosing is actively trying to deflect blame from her clients onto Hansmeier.

  40. Frankzzz  •  Apr 10, 2013 @6:54 am
  41. mcinsand  •  Apr 10, 2013 @8:23 am

    @Kat: IANAL, so all I knew about the filing with respect to trusts is that not having the beneficiary clearly noted is just plain weird. However, that this triggered a rapid OMG from you illustrates how little I know. Would you mind saying a bit more?

  42. Ygolonac  •  Apr 10, 2013 @8:23 am

    (Quoting one of MCB's posts:)

    "From the Barry statement:

    14 On several occasions, Alan bragged that "If I pissed him off, they would never find my body, just like the others" "

    :catstare: And I was just going for a gag, when I suggested "Alan Cooper" was pinin' for the fjords.

    How many people are holding up Steele's salt marsh, anyway?

    Of course, being a Prenda-sourced statement, there's issues – do most proper court documents begin: "Once upon a time…"?

  43. Jim Tyre  •  Apr 10, 2013 @8:48 am

    Alan Cooper should sign an authorization providing the IRS or any other investigative agency access to all of AF's records in whatever tax haven it may exist. We'll see how Steele and Co. react.

    Several folks have said similar things, whether in these comments or on other Prenda Law posts. Please think.

    If one believes Cooper's testimony in Court on March 11, he has nothing to do with AF. Were he now to do what the commenter suggests, he would be committing fraud. It would be no different than if I impersonated Ken to do something that only Ken can do. Whether I have impersonated Ken to learn how much ConAgra stock he holds is purely hypothetical. But ConAgra being the owner of many brands of popcorn, I am curious whether all of Ken's blogging on the subject is being done for the sole and cynical purpose of increasing the value of his shares. '-)

    Oh, this just in. Steele's lawyers just filed their response to the OSC. Much of it is just a rehash from the responses by the lawyers for Duffy and for Hansmeier, respectively. But interestingly, Steele does nothing to refute the claim that he forged Cooper's name. Instead, his lawyers say this:

    The Court’s February 7, 2013 OSC raised three concerns regarding a suspected “fraud on the Court” involving Alan Cooper’s renouncement of any involvement with AF Holdings and accusation that his purported signature on assignment agreements attached to Complaints in the subject cases was not genuine6. The Court stated: “First, with an invalid assignment, Plaintiff has no standing in these cases.” Dkt 48, at 9:8. Apparently re-articulating the same concern, the Court added: “Second, by bringing these cases, Plaintiff’s conduct can be considered vexatious, as these cases were filed for a facially improper purpose.” Dkt 48, at 9:9-10. As both Gibbs and Prenda/Duffy/ Van Den Hemel
    noted in their Responses To The OSC, the Court is mistaken about the law in this regard; the signature of the assignee is irrelevant to the validity of the assignment, so long as the assignor signs. See Dkt 49,
    at 25:9-26:19; Dkt 108, at 11:24-12:9.; see also 17 U.S.C. 204(a). Lastly, the Court stated: “the Court will not idle while Plaintiff defrauds this institution.” Dkt 48, at 9:10-11. However, even if the Court
    were to discount the evidence submitted impugning Cooper’s credibility and blame Steele for this “fraud,” it hardly rises to the level of fraud upon the court recognized by the Ninth Circuit, i.e., “a fraud perpetrated by officers of the court so that the judicial machinery cannot perform in the usual manner its impartial task of adjudging cases that are presented for adjudication.” In re Intermagnetics
    Am., Inc., 926 F.2d 912, 916 (9th Cir. 1991).

  44. doedoh  •  Apr 10, 2013 @8:53 am

    @Jim Tyre,

    Though I'm not sure if this was the original line of thought, but couldn't Alan Cooper say, "Hey, if I AM the Alan Cooper they say I am, well then I'm going to go ahead and allow the IRS to have my records."

    Thus forcing Prenda et. al. to say, "WAIT! STOP! No, he's not the right guy!"

  45. Anglave  •  Apr 10, 2013 @8:55 am

    Is it just me, or is that LA Times article chock full of factual inaccuracies and misrepresentations? I mean, they've got the general picture, but they've mixed up the details.

    "Furthermore, he observed, if Cooper's identity really was misappropriated, then Gibbs and Prenda may have committed a 'fraud on the court.'"

    Isn't the fraud related to the lawyers having financial interest in their clients and/or the clients being hollow shells that exist for the sole purpose of bringing litigation?

    "At the deposition, Wright fumed, 'there was so much obstruction … that it is obvious that someone has an awful lot to hide.'"

    Wright wasn't at the deposition.

    "'Seriously?'" he snapped. 'You can hardly keep a straight face, can you?'

    'No, your honor,' Waxler replied."

    Did this exchange happen this way? I don't remember reading Waxler essentially admitting to Wright that he was having trouble making assertions with a straight face. Is Waxler's response taken out of context in the article?

  46. Anonymous  •  Apr 10, 2013 @9:04 am

    No, that exchange did not happen that way. Wright and Waxler were talking over each other (OK, to be fair Wright was talking all over Waxler), and the "No, your honor" was meant as a denial that the lawyers and clients were the same.

    I definitely thought it was amusing that it comes out that way because of how the court reporter serialized the conversation, and it obviously makes for a great quote in an article, but it is not at all a fair representation of that exchange.

  47. Austin  •  Apr 10, 2013 @9:04 am

    @Anglave: The way I read the transcript was that Waxler was denying having difficulty keeping a straight face. The way Wright's question was phrased (oh, if only someone had channeled their inner Gibbs and objected to that question as compound!) makes it a little muddy. I bet it was more clear in person.

  48. Anonymous  •  Apr 10, 2013 @9:14 am

    BTW, I love this recurring argument that nobody's lawyer has the balls to make explicitly, that it is OK to file forged documents with the court as long as the forgery wouldn't really matter anyway. Great to see the standard the legal profession holds itself to.

  49. Nick  •  Apr 10, 2013 @9:53 am

    This has been my question from day one:

    What was stopping these idiots from following corporate formailties? Actually setting up a legitimate corporate structure is really not a hard thing to do (you'll get what you pay for, but places like LegalZoom will set up an LLC for you for $50). If they had simply gone through the process of following corporate formality, they could have legitimately designated someone as a 30(b)(6) corporate representative that could have described the whole process in detail in a deposition.

    If Hansmeier was actually the manager of the LLC, he could have described the flow of funds in detail. Potentially, the worst thing on record against the firm could have been that Prenda overcharged its clients. Instead, the same collective of meatheads is in serious trouble.

  50. Rusty  •  Apr 10, 2013 @10:23 am

    Jim Tyre said: "But interestingly, Steele does nothing to refute the claim that he forged Cooper's name."

    Yeah, it seems like the Prenda peeps are sticking with a "what difference does it make?" explanation. Hey, it worked on Benghazi.

  51. En Passant  •  Apr 10, 2013 @10:51 am

    Ken wrote in OP [emphasis mine]:

    If you're paying attention, you'll see that Paul Hansmeier just coyly evaded the question of whether the "Alan Cooper" of AF Holdings is, or is not, the Alan Cooper who testified.

    Please excuse this nigh mystical observation, but Prenda's developing circular firing squad defense strategy and the mystery of "AF Holdings" has just rendered my poor brane terribly sensitive to historical coincidence. History may not repeat itself, but sometimes it stutters.

    In 1942 "AF" was the Imperial Japanese Navy's designator for Midway Island. Bruce Schneier notes today that Rear Admiral Donald "Mac" Showers, the last surviving participant in the greatest troll in modern history if not all history, has died. The purpose of the troll was to discover or verify exactly what place "AF" actually indicated. You can read about it here. Its success marked the beginning of the end of the Imperial Japanese Navy.

    Conduct yourselves accordingly. Or something.

  52. Ygolonac  •  Apr 10, 2013 @12:13 pm

    En Passant – so, you're suggesting the prespective movie for all this be titled LAWYER! LAWYER! LAWYER!?

    (So it was Pearl and not Midway, it's a horrible enough joke to be made.)

  53. J D U H L C  •  Apr 10, 2013 @12:35 pm

    It is irksome to see so much hatred for attorneys or the legal profession.

    These Prenda guys are just a bunch of jerks, and sociopaths exist in every profession. Justice Wright is a JD, and the prosecutors and judge that will put them away in a few months (years?) will be JDs. Many other JDs, or JD students in my case, who understand the situation are disgusted (and enthralled) by the whole affair.

    Look in your SBA's disbarment report if you want to see what really happens to most attorneys who commit malpractice.

  54. earthclanbootstrap  •  Apr 10, 2013 @1:01 pm

    @ Ygolonac

    Nevertheless, I think it is fair to say that they have woken a sleeping giant.

  55. George William Herbert  •  Apr 10, 2013 @1:43 pm

    One note …

    We don't KNOW that the corporate shell structure was not in fact filed and documented correctly.

    We just know that they have failed to describe it in depositions and filings. That is somewhat different than it not existing.

    It could exist but lay transparent the conflicts of interest the attorneys have, which would explain the reluctance to admit its details. The Hansmeier deposition would have been obstructionistic but not necessarily fraudulent.

    Cooper's participation seems … questionable, but we'll see about that.

    Wright did not ask for testimony or documents about the corporate structure, that I recall. So they're not yet in extra trouble for not having clarified it.

  56. Fredric L. Rice  •  Apr 10, 2013 @2:01 pm

    Hansmeier doesn't know Brett, has never heard of Brett, and Hansmeier has no idea who Brett is, according to what Hansmeier would like the court to believe, it seems to me.

    There's more than shoving Brett under ye-ole-transportation conveyance here, there's outright denial of having any involvement in or knowledge of the criminal activities that Brett is seemingly committing because Brett is acting alone, no supervision, just a wild rose growing in a desert berift of any other individual's controls, leave alone Hansmeier's unsoiled hands.

    My opinions only, as always, and only my opinions, yet I find this particular defense Hansmeier is offering somewhat, well, entertaining. :)

  57. Fredric L. Rice  •  Apr 10, 2013 @2:10 pm

    "The guy who owns the firm has no responsibility for anything and doesn't make any decisions or do anything, and now the manager claims he has no responsibility for anything and doesn't make any decisions or do anything."

    Not only that, there are no beneficieries of record and no administrators of record for the trust that appears to be involved? Seriously? How does that work? The establishment of any kind of trust entity requires actual human names which can be uased to throw crooks in prison with, blatant obstruction of the identity of actors is supposedly impossible to accomplish due to the policies and procedures, documentary requirements and such associated with the establishment of trusts.

    Nobody knows who's responsible? Really?

  58. Fredric L. Rice  •  Apr 10, 2013 @2:12 pm

    "I think it's funny that Hansmeier denied supervising Gibbs. I wonder if Gibbs has hundreds of emails that prove otherwise."

    Well, after Hansmeier read your comment and experienced a profound, "Holy damn! I didn't think of that!" moment, no. Gibbs does not. Not any more. :)

  59. George William Herbert  •  Apr 10, 2013 @2:38 pm

    Fredrick Rice:
    "Seriously? How does that work? The establishment of any kind of trust entity requires actual human names"

    Actually, not so in St Nevis, apparently. Which is presumably why the trust is there.

  60. Matthew Cline  •  Apr 10, 2013 @5:11 pm

    @Nick:

    What was stopping these idiots from following corporate formailties?

    Following corporate formalities probably develops a paper trail. If they planned far enough ahead to think "what happens if we get caught", they'd probably want to have as small a paper trail as possible. I mean, assuming that Alan Cooper the caretaker is the Cooper of AF Holdings, it would seem that they have no written contract with him, which would make sense if they had a policy of "if at all possible, don't leave anything in writing".

    On the other hand, if they had planned ahead to "what if we got caught", you'd think that they would have gotten their story straight, but they're still flip-flopping on things.

    @Fredric L. Rice:

    Not only that, there are no beneficieries of record and no administrators of record for the trust that appears to be involved? Seriously? How does that work?

    Fight Copyright Trolls has an article on that. It turns out that in the country of Nevis, where the trust was created, there can exist "Purpose trusts", which has no defined beneficiaries but have a purpose to carry out. While this is normal for charitable trusts, Nevis seems to be the only country which allows this for non-charitable trusts. So Lutz, who had the trust formed, could have made the purpose be "fight Internet copyright pirates" or something, and in Nevis it's all perfectly legal.

  61. Fredric L. Rice  •  Apr 11, 2013 @9:49 am

    I find it fascinating that there is a corporate "purpose trust" that can be created which specifically seems to be designed to allow organized crime to be committed without any designated crook holding overall responsibility. Either that was intended, else the "purpose trust" phenomena being used to shield criminals from prosecution is an inadvertent side effect law makers did not intend.

    'Course I'm not a lawyer, duh, and I'm utterly ignorant on such phenomena despite having been in the anti-Scientology-crime arena since 1994.

    Scientology tried some of what Prenda Law has been doing, but Scientology never took these blackmain/extortion activities to such levels that Prenda has.

  62. DonaldB  •  Apr 11, 2013 @7:11 pm

    A 'Purpose Trust' is indeed very odd.
    I doubt that Nevis lawmakers consider its ability to be used for evil a inadvertent side effect.

    It brings a lot of business and money to what would otherwise be an insignificant island. None of that business would be there if it could be done legally at home.

    Just like a Swiss bank account used to be, it's absurdly profitable for the locals. People don't risk an offshore account to stash $10K. They do it to hide millions. And they don't mind spending $10K to make certain that their secrets are well kept. Plus any good secret is only known by one person, usually a rich old guy that dies suddenly. That means lots of unclaimed millions to be split between the government and (local) trustees.

  63. Tori  •  Apr 12, 2013 @10:36 am

    It's ok, the busses run every few minutes so there won't be a shortage.

  64. Nobody  •  Apr 15, 2013 @12:11 pm

    How much longer until this bus they're all checking out the underside of leaves the station? Some of us are getting a bit impatient waiting for things to get a move on.