Back story: www.adultfyi.com/read.php?ID=57514

from www.arstechnica.com – [Last week] we wrote about the elaborate chart defense attorney Morgan Pietz created to help Judge Otis Wright [pictured] keep track of the many organizations associated with porn copyright trolling firm Prenda law, all of which seem to be run by the same half-dozen people.

Pietz has now released a transcript of a remarkable deposition he took of Paul Hansmeier, who along with John Steele is widely regarded as the brains behind Prenda’s litigation campaign.

Officially, a Prenda-linked shell company called “AF Holdings” is suing Pietz’s client for infringing copyright by downloading a pornographic film from BitTorrent. But in recent weeks, the focus of the litigation has shifted to alleged misconduct by Prenda, including whether the firm stole the identity of Minnesota resident Alan Cooper to use as an officer of AF Holdings. Judge Wright has scheduled a Monday hearing to get to the bottom of the allegations.

Last month, we covered a filing by Prenda attorney Brett Gibbs, who insisted that all the important decisions had been made by “senior members of the law firms” connected to Prenda. Gibbs later identified these individuals as Hansmeier and Steele.

On February 19, Pietz finally got a chance to interview Hansmeier in a deposition for a related case in Northern California. In a marathon seven-hour session, Pietz grilled Hansmeier about the business practices of Prenda Law, the shell company AF Holdings, and various other entities listed in Pietz’s chart. Hansmeier went to incredible and often comical lengths to avoid giving Pietz any useful information.

One of the most basic questions is who owns AF Holdings. Hansmeier said the company was owned by a trust, but he didn’t know the name of the trust. When Pietz pressed Hansmeier to say who owned or controlled the trust, he said that it was an “undefined beneficiary trust” and he couldn’t name anyone who had an ownership stake in it.

Pietz’s colleague Nicholas Ranallo pressed Hansmeier on this point:

Ranallo: You previously testified this trust is the sole owner of AF Holdings; is that correct?
Hansmeier: That’s correct.
Ranallo: And has been since the beginning of AF Holdings?
Hansmeier: Yes, that’s correct.
Ranallo: Does this trust have a name?
Hansmeier: If it does have a name, I don’t know what it is
Ranallo: In this case on July 20, 2012, AF Holdings through their counsel filed an ADR certification identifying Salt Marsh as its owner. That seems to contradict your testimony today, does it not?
Hansmeier: No.
Ranallo: So Salt Marsh is an owner of AF Holdings?
Hansmeier: My testimony was that I don’t know what the exact name of the trust is. If the name of the trust is Salt Marsh, then Salt Marsh is the owner. If the name of the trust is not Salt Marsh, then—
Ranallo: Let me ask you this then. Because this ADR certification requires a human being to read something. A trust can’t read something; is that true?
Hansmeier: I’ll take your word for it.

The two went back and forth for another eight pages about whether “Salt Marsh” was a person or a trust. Hansmeier insisted that AF Holdings is owned by a trust, but he doesn’t know what the trust’s name is or who owns it.

Hansmeier later admitted that a man named Anthony Saltmarsh, who Pietz has described as the “live-in boyfriend” of John Steele’s sister, had also acted as a “corporate representative” for AF Holdings. When asked if “Salt Marsh” might be an alias for Anthony Saltmarsh, Hansmeier said, “I’m a bit skeptical of that theory because it says AF Holdings owner and Anthony Saltmarsh is not an owner of AF Holdings.”
The volunteer CEO

According to Hansmeier, AF Holdings has only one employee: Mark Lutz, a former paralegal at Steele and Hansmeier’s law firm. Hansmeier insisted that Lutz received no compensation for his work at AF Holdings, which included hiring and supervising attorneys for numerous lawsuits filed around the country:

Pietz: Could you elaborate on the terms of Mr. Lutz’s employment with AF Holdings?
Hansmeier: He is the—well, he’s essentially the CEO of AF Holdings.
Pietz: How much is he paid?
Hansmeier: He does not receive a salary for duties as CEO.
Pietz: Does he receive a salary for any other role fills at AF Holdings?
Hansmeier: He does not receive a salary from AF Holdings.
Pietz: Does he receive any other kind of compensation other than salary from AF Holdings?
Hansmeier: I guess my answer to that question is that AF Holdings does not pay Mr. Lutz money.
Pietz: What does it pay Mr. Lutz then?
Hansmeier: It has not paid Mr. Lutz anything to date.

Pietz and Hansmeier went on like this for another six pages, with Hansmeier claiming that Lutz receives no compensation of any kind from AF Holdings for his work as the sole employee of AF Holdings.
The many non-employees of AF Holdings

Hansmeier’s claim that Lutz is the only employee of AF Holdings seems to be contradicted by a document in which Gibbs described himself as the “in-house counsel” of AF Holdings. Confronted with this document, Hansmeier denied that Gibbs was the in-house counsel of AF Holdings.

Gibbs was present at the deposition, serving as Hansmeier’s attorney. So Pietz turned the question to him. “It’s not my deposition,” Gibbs said. “I’m not quite sure why I would be answering questions.”

“I thought I’d give you the opportunity as a courtesy to clarify for the record,” Pietz replied.

“I don’t think I need to address it,” Gibbs said. And he didn’t.

Hansmeier also denied having any knowledge of the Alan Cooper issue, saying that Steele had arranged for Cooper to act as a “corporate representative” for AF Holdings and to sign a document on behalf of AF Holdings. Hansmeier testified that Steele had told Lutz that Alan Cooper’s signature was not a forgery. And Hansmeier said it was “a matter of open debate between Mr. Cooper and Mr. Steele and any other third party regarding the signature and I trust that the matter will be addressed in due course with the litigation between Mr. Cooper and Mr. Steele.”

Hansmeier claimed that AF Holdings uses “corporate representatives” like Cooper and Saltmarsh to sign documents on its behalf because “there’s a lot of people out there who don’t like what we’re doing, specifically… people who have infringed on works and want to retaliate against people who are enforcing copyrights.” He claimed that AF Holdings wanted to protect Lutz from “being targeted by these individuals.” According to Hansmeier, AF Holdings does not pay “corporate representatives” like Cooper and Saltmarsh to sign documents on its behalf.
No laughing matter

Near the end of the deposition, Hansmeier became angry with Pietz for smirking when Hansmeier was giving yet another weaselly answer.

“You and your client and you personally, Mr. Pietz, nationwide, have accused AF Holdings of fraud and of criminal activity,” he said. “I believe you’ve used the word ‘criminal’ in a few of your pleadings. With all due respect, I don’t believe that an officer of the court should take such humor and take such levity with respect to matters that are of such gravity and importance.”

Pietz assured Hansmeier that “I do indeed take the allegations of fraud in Prenda cases very seriously. I anticipate and look forward to getting to the bottom of it.”

The day of reckoning may come soon. With only one person testifying, it was easy for Hansmeier to plead ignorance and pass the buck to Lutz or Steele. But Lutz, Steele, Hansmeier, and Gibbs are all due to appear together in the courtroom of Judge Otis Wright on Monday. He’ll be able to demand that one of them give him straight answers to his questions and to hold them in contempt if they refuse to do so. Needless to say, Ars will have a reporter in the courtroom.

As lawyer and blogger Ken White wrote about the transcript, “As I was reading the deposition, I had to ask myself repeatedly if I was being hoaxed, if this was some epic troll painstakingly created and uploaded to PACER. But it’s not.”