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Rogue Lawyers Made $6 Million Shaking Down Porn Pirates, Feds Say (theverge.com)
An anonymous reader quotes a report from The Verge: The copyright violation notice is every pirate's worst nightmare, a clear legal sign that a major copyright holder knows what you've been torrenting and is ready to make you pay for your crimes. But according to an indictment filed today in Minnesota federal court, that system has also opened the door to some very creative forms of fraud. The indictment alleges that two lawyers -- Paul R. Hansmeier and John L. Steele -- used the copyright system to extort roughly $6 million out of porn pirates over the course of three years. Prosecutors say the lawyers uploaded their own pornographic videos to torrent services -- including the embattled Pirate Bay -- then aggressively targeted users who downloaded the content, discovering names through the standard copyright violation process and then threatening pirates with damages up to $150,000 unless they agreed to a settlement. The typical cost of a settlement was $4,000, far less than the cost of challenging the order in open court. Throughout the process, Feds allege that Hansmeier and Steele concealed their role in uploading the videos, although the underlying copyright claim was often legitimate. The duo typically obtained copyright to the videos through shell companies, although in some cases they actually filmed and produced their own pornography as part of the scheme.
There's more good coverage of this on Popehat which has been covering this since the very start if you look through their archives.
I'm glad to see the submitter linked to the actual indictment.
They put up the torrents themselves. This isn't leaving a $100 on the floor. This is putting a stack of $100s out with a sign saying "Free - take me!". They can't explicitly give the file out to people, then say you can't take it.