New Acting Attorney General Part Of A Patent Scam Company Recently Shut Down By The FTC And Fined Millions

from the grifters-everywhere dept

As you've certainly heard by now, yesterday President Trump forced out Attorney General Jeff Sessions and, at least for now, installed Sessions' Chief of Staff Matthew Whitaker to be the acting Attorney General. So who the hell is Matthew Whitaker? Well, Eric Boehlert summed up his history succinctly on Twitter:

for last 10 yrs, Matt Whitaker was a failed would-be Iowa politician practicing private law. in Aug 2017 he wrote CNN column saying Mueller was on witch hunt--4 wks later he was appt'd Session's chief of staff. one year later he's Acting AG — Eric Boehlert (@EricBoehlert) November 7, 2018

Fascinating. But, getting even closer to the usual stuff that we cover on Techdirt, it also appears that Whitaker played a key role in a patent promotion scam company that was recently fined millions of dollars by the FTC. And, Whitaker apparently used his former job as an Assistant US Attorney to try to intimidate an unhappy "customer" of this firm away from filing a Better Business Bureau complaint. In other words, not only is Whitaker associated with a scammy patent marketing company, he also abused his former title in an effort to create a chilling effect on someone's speech.

The Miami New Times had a big article last year about the scam that was World Patent Marketing, which (of course) was based in Florida (why are so many of these scams based in Florida?). There are a bunch of these kinds of firms out there, that prey on unsophisticated individuals who were able to patent something or (more frequently) think they have something worth patenting. In this case, the Miami New Times describes WPM's way of working:

Thousands of would-be inventors like Masti were ripped off in the scheme, the feds allege. Padded, posterior-enhancing jeans; fruit crossbred with marijuana; a urinal shield to catch splatter — each one was sure to be a best seller, the company promised inventors, if they just paid for the firm's expertise in bringing ideas to market. In reality, the firm's illustrious board — which included big names such as time-travel scientist Ronald Mallett and Florida International University professor Aileen Marti— simply took cash without ever meeting or reviewing any pitches. Some of the supposed innovations the company green-lit already existed, so patent applications were regularly denied. And despite the many "success stories" featured on its website, virtually none of the firm's clients ever made money. As millions poured in, the firm's tough-talking CEO, Scott J. Cooper, boasted about trips to remote islands on his yacht and lashed out in expletive-laden tirades at inventors who complained. In screeds posted online and emailed to customers, the company bragged about its security team composed of ex-Israeli special forces trained in Krav Maga and threatened critics with lawsuits — or worse.

As the article notes, the FTC has gone after a ton of similar companies over the past couple decades, but new ones keep popping up. And apparently World Patent Marketing dove in with gusto:

In the long history of invention scammers, though, experts say few exceeded Cooper at wringing so much money out of individual victims. With a unique combination of New York bluster and salesmanship — and a fighter's willingness to scrap with naysayers — Cooper charmed hopefuls into sending thousands of dollars before scaring away anyone who thought about blowing the whistle, burned inventors say.

Despite only starting in 2014, the company raked in millions. The Miami New Times article is incredibly detailed in how Cooper ran such a scam. But it also talks about how he would angrily go after dissatisfied "customers." And apparently some of that included using "advisory board member" Matthew Whitaker. The company revealed in the evidence in the case the FTC filed against the firm, including sending an email to an unhappy customer "A Rudsky" who had threatened to report WPM to the Better Business Bureau. It appears that Cooper passed on this threat to Whitaker, who sent the following email in August of 2015:

If you can't see that, it says the following ("Scott" is Scott Cooper, who was the CEO/founder of World Patent Marketing):

Mr. Rudsky: Scott forwarded me your emails and I am concerned about what you are trying to communicate to Scott Cooper and WPM. I am a former United States Attorney for the Southern District of Iowa and I also serve on World Patent Marketing's Advisory Board. Your emails and messages from today seem to be an apparent attempt at possible blackmail or extortion. You also mentioned filing a complaint with the Better Business Bureau and to smear World Patent Marketing's reputation online. I am assuming you understand that there could be serious civil and criminal consequences for you if that is in fact what you and your "group" are doing. I am familiar with your background and your history with Scott. Understand that we take threats like this seriously. Perhaps you can email me and specifically explain to me exactly what your intentions are with regards to World Patent Marketing so I can respond accordingly.

I can be reached at this email address. Please conduct yourself accordingly.

Why is it that dubious threat letters from sketchy lawyers always seem to end with some variation on "govern yourself accordingly"?

Anyway, in March of 2017, the FTC filed a complaint concerning Cooper and World Patent Marketing. In May of this year, the case was closed out with the court granting a permanent injunction and monetary judgment against Cooper and World Patent Marketing. The court ordered a $26 million payment from the defendants, but also required Cooper specifically to hand over nearly $1 million from the sale of his $3.5 million home, and the rest of the judgment was suspended. There are a bunch of other stipulations in the order, requiring Cooper to accurately submit details of his business activities for many years into the future, and he is "permanently restrained and enjoined from advertising, marketing, promoting or offering for sale, or assisting in the advertising, marketing, promoting or offering for sale of any Invention Promotion Service."

Whitaker, it seems, was a bit player in this invention promotion scheme, but clearly was closely enough involved that he acted as a legal threat bully in at least that one case. That should certainly raise significant questions about how just a couple years later that same guy is suddenly the country's acting Attorney General.

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Filed Under: attorney general, free speech, ftc, intimidation, matthew whitaker, patent marketing, patent promotion, patents, scam, scott cooper, threats

Companies: world patent marketing