A judge has issued a stinging rebuke against a Chicago law firm that claims to fight copyright piracy, saying it ran a fraudulent scheme to extort millions of dollars from people who shared pornographic videos.

In a ruling inexplicably laced with Star Trek references, judge Otis D Wright II said Prenda Law "boldly probe the outskirts of the law", ordered it to pay $80,000 and referred it to federal authorities for racketeering.

The judge said the firm in effect controlled the copyrights of several pornographic videos, monitored how they were shared online and aggressively pursued people who downloaded them in breach of copyright. Victims would often settle the cases rather than experience the embarrassment of litigation.

Wright wrote in his 11-page ruling:

They've discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle – for a sum calculated to be just below the cost of a bare-bones defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn.

Prenda Law, or its aliases, would offer to settle each copyright infringement claim for about $4,000 – the sum Wright references as being just below the standard cost of a defence.

As Wright said:

This nationwide strategy was highly successful because of statutory copyright damages, the pornographic subject matter, and the high cost of litigation. Most defendants settled with the Principals, resulting in proceeds of millions of dollars due to the numerosity of defendants.

Prenda Law made millions from the ruse. Although the $81,319.72 payment ordered by Wright may seem insignificant in the face of said profits, the number was chosen specifically.

The judge wrote in his footnotes:

This punitive portion is calculated to be just below the cost of an effective appeal.

The lasting damage, appeal or not, may be that Prenda's proprietors look likely to be disbarred. Wright noted that John Steele, Paul Hansmeier and Paul Duffy, some of the controlling Prenda Law parties, and Brett Gibbs, their seemingly hapless counsel suffer from "moral turpitude unbecoming of an officer of the court" – grounds for them to be banned from practising law.

Worse still, Wright referred Prenda Law's controlling parties to the Internal Revenue Service, having noted that "no taxes have been paid" on the money they extorted. He did so in language fitting the rest of his ruling: