United States v. Paul Hansmeier, 988 F.3d 428

Paul Hansmeier and John Steele, Minnesota attorneys, ran litigation programs that identified BitTorrent downloaders and sued "John Doe" defendants to obtain ISP subscriber info for settlement demands.
They created and controlled shell entities (Prenda Law, AF Holdings, Ingenuity 13, Guava, Livewire, LW Systems) and sometimes uploaded copyrighted pornographic films themselves to file‑sharing sites to generate targets.
They used settlements (typically ~$2,500–$3,400) and, in some cases, "ruse defendants" accused of hacking to obtain discovery; between 2011–2013 they received over $6 million, roughly half to the partners.
A federal grand jury indicted Hansmeier (mail/wire fraud, conspiracy to commit mail/wire fraud, money laundering conspiracy, and perjury conspiracy); the district court denied his pretrial motion to dismiss the fraud and money‑laundering counts.
Hansmeier pleaded guilty to conspiracies to commit mail/wire fraud and money laundering while reserving his right to appeal the denial of the motion to dismiss; the court ordered $1,541,527.37 in restitution based on FBI calculations limited to payments after April 2011.
On appeal Hansmeier argued (1) the indictment failed to state a mail/wire fraud offense and (2) the restitution award improperly included payments not caused by his fraud. The Eighth Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the indictment sufficiently alleged a scheme to defraud under the mail/wire fraud statutes	Government: Indictment alleges deliberate concealment and affirmative lies (posting films, hiding financial interest, using ruse defendants) that are material and intended to induce courts to grant discovery to obtain settlements	Hansmeier: Alleged acts were independently lawful or nonfraudulent; the theory fragments conduct and fails to show misrepresentations to victims	Affirmed: Indictment adequate. Allegations (active concealment, materiality, intent to obtain settlements) satisfy fraud elements when accepted as true
Whether the $1,541,527.37 restitution award violated the MVRA by including "legitimate" settlement payments	Government: MVRA requires restitution for loss caused by scheme; FBI’s April 2011‑onward, victim‑linked calculation shows the amount is attributable to the fraud; plea did not waive appeal	Hansmeier: Calculation overbroad—includes settlements from nonfraudulent lawsuits; plea language waived MVRA challenge	Affirmed: No clear error. Government proved loss by preponderance; district court reasonably limited the calculation to April 2011 onward and found nonfraudulent payments negligible

United States v. Steffen, 687 F.3d 1104 (indictment sufficiency standard)
United States v. Luna, 968 F.3d 922 (elements of a scheme to defraud)
United States v. Heppner, 519 F.3d 744 (materiality standard for fraud)
United States v. Kidd, 963 F.3d 742 (active concealment and third‑party representations)
United States v. Blumeyer, 114 F.3d 758 (false representations to third parties can further a scheme)
United States v. Colton, 231 F.3d 890 (definition of active concealment)
Preston v. United States, 312 F.3d 959 (materiality discussion)
Kelly v. United States, 140 S. Ct. 1565 (object of misrepresentation must be obtaining money/property)
United States v. Fonseca, 790 F.3d 852 (government burden to prove restitution amount)
United States v. Frazier, 651 F.3d 899 (standard of review for restitution findings)
United States v. Karie, 976 F.3d 800 (payments systematically tainted by fraud may equal loss)