Matthew Whitaker, Acting Attorney General, Once Used His Justice Bona Fides to Tout ‘Scam’ Business
He said that 'as a former US Attorney, I would only align myself with a first class' business. The FTC said it took customers for over $25 million, with some losing 'life savings.'
Our new acting attorney general was listed on the advisory board of a patent marketing company that federal authorities shut down as a fraudulent scheme that bilked aspiring inventors of millions of dollars and intimated that those who publicly complained might have to deal with a “security team” of Israeli ex-special forces operators schooled in Krav Maga.
Matthew Whitaker—chosen by President Trump on Wednesday to replace ousted Attorney General Jeff Sessions—was named to the advisory board of World Patent Marketing in 2014. He said in a statement attributed to him in a company press release announcing his affiliation, “World Patent Marketing has become a trusted partner to many inventors that believe in the American Dream. I have always admired World Patent Marketing and its innovative products and dynamic leadership team. It's an honor to join the World Patent Marketing board."
Two months into his association with the firm, a subsequent statement quotes Whitaker saying, “As a former US Attorney, I would only align myself with a first class organization. World Patent Marketing goes beyond making statements about doing business 'ethically' and translate those words into action."
The Federal Trade Commissioner took a dramatically different view in a 2017 compliant seeking a federal court order to shut down the company, saying it had bilked 1,504 aspiring investors of more than $25 million.
“Defendants have operated an invention-promotion scam that has bilked thousands of consumers out of millions of dollars,” the FTC complaint says of World Patent Marketing. “Defendants promise consumer inventors a patent and a lucrative licensing or manufacturing agreement that will allow consumers to successfully monetize their inventions. Defendants craft their marketing materials to create the impression that they have successfully helped other inventors, and thus that they are reliable and reputable. In truth and in fact, Defendants fail to fulfill almost every promise they make to consumers.”
The complaint goes on, “After Defendants collect thousands of dollars from consumers and string them along for months or years… In the end, after months or even years of stringing them along, Defendants leave most of their customers with nothing… Many of Defendants' customers end up in debt or losing their life savings or inheritances, after investing in Defendants· broken promises.”
The FTC complaint describes the company's response when its victims sought to go public with complaints or seek redress from law enforcement:
“Defendants respond by threatening to file a lawsuit for extortion, defamation, and other causes of action. Defendants and their lawyers have threatened consumers with lawsuits and even criminal charges and imprisonment for making any kind of complaint about Defendants.”
The FTC reported that one victim who sought a refund received a letter from a company lawyer “who told her that her conduct of seeking a refund constitutes extortion under Florida law and, 'Since you used email to make your threats, you would be subject to a federal extortion charge, which carries a term of imprisonment of up to two years and potential criminal fines. See 18 U.S.C. ii 875(d).’"
The FTC complaint adds that “Defendants also cultivate a threatening atmosphere” by sending its victims emails describing a company “security team” of “all ex-Israeli Special Ops and trained in Krav Maga, one of the most deadly of the martial arts.'' The company emails reported, “'The World Patent Marketing Security Team are the kind of guys who are trained to knockout first and ask questions later."
In May of this year, a federal judge issued a permanent injunction barring World Patent Marketing from conducting business. The judge also imposed a $25,987,192 fine, little of which is expected to be paid as the company's CEO and founder Scott Cooper pleads an inability to pay.
Three of the victims have filed a class-action suit against World Patent Marketing. A North Carolina man named Steven Harris had sought to patent and market an invention he calls “Teddie's Ballie Bumpers,” inflatable barriers designed to prevent objects from rolling under furniture. An Arizona woman named Crystal Carlson had sought to patent a battery operated “Baby Seat System.” A California woman named Geana Jones had sought to patent a silicone patch that covers up tattoos.
All contend they were cheated, as has a Florida surgeon, Dr. Christopher Seaver.
“A few years ago I came up with an idea for a cell phone case made out of netting with a pocket on the back for storing cards, money, or other things. I called it ‘Smart Net,’” he said in a statement supporting the FTC’s successful effort to shut the company down, “I secured a provisional patent on my idea through a company, but I shopped my idea around to other companies, looking for help to get a non-provisional patent and to make money from it.”
Seaver ended up paying World Patent Marketing $300,000.
“I could not afford to pay WPM any more,” he reported.
The FTC complaint notes that at least six members of World Patent Marking advisory board never gave the company advice, but it is not clear whether Whitaker was one of them. He does not seem to have disowned the statements attributed to him on company press releases.
The company founder, Cooper, was not available for comment. Nor was the the Justice Department, which was busy responding to the news that Sessions was out and Whitaker was the acting attorney general.