In a unique ruling the adult movie company AF Holdings and their infamous law firm Prenda have been ordered to repay the settlements they extracted from four alleged BitTorrent pirates. The court concluded that the movie outfit perpetrated fraud on the court, as it could provide no proof that it holds the copyrights to the titles they sued for.

The world’s most famous porn pirate hunters have been on quite a losing streak just recently.

Over the past year they’ve been hit for roughly $311,000 in damages and costs, while hitting a roadblock in developing new revenue.

Little over a month ago the ongoing saga received yet another twist when a significant blow was dealt to the embattled law firm by the mother-in-law of Prenda front-man John Steele.

After a month of deliberation the court has now handed down additional good news for five accused BitTorrent pirates. Yesterday’s ruling made it clear that there is no evidence that AF Holdings holds the copyrights to the titles they sued the individuals over.

“The copyright-assignment agreements […] in each of these five cases are not what they purport to be. Alan Cooper denies signing either agreement and also denies giving anyone else the authority to sign them on his behalf. AF Holdings failed to produce any credible evidence that the assignments were authentic.”

As a result of this fraud, U.S. Magistrate Judge Franklin Noel ordered the company to repay the four defendants who already settled their cases, including their legal fees. In addition, the judge dismissed the suits against all five alleged file-sharers.

“The Court has been the victim of a fraud perpetrated by AF Holdings, LLC. The Court concludes that the appropriate remedy for this fraud is to require AF Holdings to return all of the settlement money it received from all of the Defendants in these cases, and to pay all costs and fees incurred by the Defendants.”

The order further suggests that there may need to be more investigation into the Prenda law firm and its principles. As a result, the court ordered the following (among other things):

The Clerk of Court shall send a copy of this order to the following individuals and entities for the purpose of further investigation:

– The United States Attorney’s Office for the District of Minnesota

– The Minnesota Attorney General’s Office

– The Minnesota Lawyers Professional Responsibility Board

– The Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois

With the above, the ruling echoes that of Judge Wright, bringing the firm to the attention of lawyer disciplinary boards and criminal investigators.

Of course, the total amount of damages so far doesn’t even come close to the alleged $1.9 million that Prenda took in settlements during 2012, but with the IRS, FBI and even state law enforcement investigating, asset forfeiture is always a possibility.