2016 IP Criminals Hall of Fame

The year 2016 had its share of notable people who got the attention of federal criminal authorities. Here are the winners. As we enter awards season, we recognize those who put considerable time and effort into criminal activity involving Intellectual Property. The awards go to:

Second Runner Up: Alanzo Knowles. Alanzo pleaded guilty in May 2016 to copyright infringement and identity theft charges. Originally from the Bahamas, Alanzo flew to New York City to sell 15 scripts and celebrity personal information for $80,000. Unfortunately for him, his buyer was a law enforcement agent. In jailhouse writings, Alanzo boasted that he was going to write a book to “shake up Hollywood”, presumably admitting that he was going to continue his nefarious activities. The judge was not amused. In doubling Alanzo’s sentence, Judge Paul A. Engelmayer stated “So far, the criminal justice system has totally failed to get your attention”.

First Runners Up: Artashes Darbinyan and Orbel Hakobyan. Artashes and Orbel pleaded guilty in a mass-mailing scam that targeted owners of U.S. trademark applications. The men admitted to stealing approximately $1.66 million from registrants and applicants of U.S. trademarks. They are part of a growing number of scam artists who set up companies to dupe the unwary trademark owner. Using the USPTO public records, they send out official looking documents that demand anywhere from $750 to $4,500 to “protect the trademark”. In fact, these companies don’t do anything but collect the money. The USPTO has tried to address these non-USPTO solicitations for years by giving numerous warnings to trademark applicants and registrants. But the number of these scam artists continues to grow. Lucky, Artashes and Orbel are among the first scammers to be caught and convicted. For more information, visit https://www.uspto.gov/trademarks-getting-started/non-uspto-solicitations.

Grand Prize: Paul Hansmeier and John Steele of the Prenda Law Firm. Paul and John were attorneys with the now-defunct Prenda Law Firm. They have been arrested and charged in an 18-count indictment that includes fraud, perjury, and money laundering counts.* According to the allegations, the Prenda attorneys created a ‘honey pot’ of porn movies that invited illegal downloads. When the downloads occurred, the firm filed copyright infringement suits. The plaintiffs were actually owned or controlled by Prenda. The suits named hundreds of defendants as John Does and listed their IP addresses. Using subpoenas served on the ISPs, the Prenda attorneys discovered the identity of the John Doe defendants. Once they discovered the identity of the defendants, the firm sent cease and desist letters demanding $4,000 or the firm would reveal in court papers the embarrassing fact that the defendant downloaded porn. The vast majority of the defendants paid the $4,000. No one knows exactly how much the Prenda Law Firm raked in, but estimates are anywhere from $1.9 million to $15 million. It all came crashing down when some of the defendants refused to pay the demand and hired lawyers to defend them. The lawyers discovered the scheme. There’s much more to the story including court ordered civil sanctions, perjured deposition testimony, the untimely death of one of the Prenda attorneys, and lost law licenses. For more on this story, visit http://arstechnica.com/tech-policy/2016/12/breaking-prenda-law-copyright-trolls-steele-and-hansmeier-arrested/.

WHY YOU SHOULD KNOW THIS. Our Hall of Famers, each in their own way, tried to game the system. They used Intellectual Property protections for greed and exploitation. Here’s hoping that in the coming year, would-be IP criminals turn their considerable energy to making the world a better place for us all.

• Note that for those who have been indicted, the Hall of Fame Award is not meant to make it appear that they have been convicted.