forbes.com
'
Diana Hembree
7-9 minutes
Matthew Whitaker (Photo By Douglas Graham/CQ Roll Call) Photo Credit: CQ-Roll Call,Inc.Getty
The Iowa attorney Trump has named as the acting Attorney General has only been on the job a day or so, but he’s already enveloped in scandal.
Matthew Whitaker, who replaced Jeff Sessions after he was forced out by Trump, served on the advisory board of World Patent Marketing, a Florida-based “scam that has bilked thousands of consumers out of millions of dollars,” according to a complaint filed by the Federal Trade Commission (FTC).
As part of a settlement with the FTC this May, the company was banned from the invention promotion business. Documents in the FTC’s docket show that Whitaker, who served on the World Patent Marketing board from 2014 to 2017, was not just a paid advisory board member — he threatened at least one victim who complained.
Whitaker and the Justice Department did not respond to a request for comment.
The settlement resolved charges that the agency brought against it in 2017, which alleged that “consumers paid the defendants thousands of dollars to patent and market their inventions based on bogus ‘success stories’ and testimonials,” according to an FTC press release.
“After stringing consumers along for months or even years, the defendants did not deliver what they promised,” the agency charged, “and many people ended up in debt or lost their life savings with nothing to show for it.”
In addition, the FTC alleged that owner Scott Cooper and his companies — World Patent Marketing and Desa Industries — “deceived consumers and suppressed complaints about them using threats, intimidation, and gag clauses.” In August 2017 a federal court subsequently shut down the Miami Beach-based patent scheme and froze its assets pending litigation.
In addition, the FBI is involved in a criminal investigation of World Patent Marketing during the period in which Whitaker worked there, according to the Wall Street Journal. The FTC settlement was a civil action, but the ongoing FBI investigation signals that criminal charges may be forthcoming.
Angry WPM customer to Whitaker: “You will be exposed”
In emails uncovered by the FTC investigation, Whitaker personally threatened a customer who complained, according to a story in the Miami New Times that was picked up by other news outlets.
The emails the FTC obtained, in fact, suggests Whitaker used his background as a U.S. attorney to try to silence customers who claimed they were defrauded by the company and sought to take their complaints public.
In this case, Whitaker sent an intimidating email to a customer on August 25, 2015, who had contacted World Patent Marketing with his grievances and and filed a complaint with the Better Business Bureau.
The FTC docket reviewed by New Times contains an email exchange on page 362 of 400 that described what happened next.
Rather than expressing concern about the customer’s charge of being cheated, Whitaker wrote him to let him know that he, Whitaker, was “a former United States Attorney for the Southern District of Illinois…Your emails and message 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 WPM’s reputation online. I am assuming you know that there could be serious civil and criminal consequences for you if that is in fact what you and your ‘group’ is doing. Understand we take threats like this quite seriously…Please conduct yourself accordingly.”
Apparently, though, he picked on the wrong customer.
“Do not email me with your scare tactics,” the customer known as “A. Rudsky” wrote back. Claiming that he, too, was an attorney, he added: “Stop with your bullshit emails…You are party to a scam…You will be exposed. I hope I make myself clear, Mr. Whitaker.”
Other victims threatened with prison, martial arts security team
In a preliminary injunction against the company in August 2017, United States District Judge Darrin P. Gayles of the United States District Court for the Southern District of Florida noted that Cooper, WPM’s head of security, and WPM’s lawyers had sought to intimidate customers who tried to exercise their right to complain of unfair treatment and force them to retract their statements. One female customer, the judge wrote, was threatened with criminal prosecution and prison:
“After months of trying to receive a refund or services, she filed a complaint with the BBB. She received a letter from a second lawyer who told her that 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. § 875(d).”
A 2017 FTC complaint that alleged WPM cheated 1,504 would-be inventors of more than $25 million cited another another way World Patent Marketing attempted to frighten its customers: “Defendants also cultivate a threatening atmosphere” by sending its customers 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 World Patent Marketing Security Team are the kind of guys who are trained to knockout first and ask questions later.”
Some customers braved threats to file complaints
Although World Patent Marketing allegedly tried to strike fear into the customers it cheated, many complained anyway An online search reveals 5 complaints on Ripoff Report, 108 complaints to the Better Business Bureau (BBB), and 233 reviews and complaints on ConsumerAffairs.com.
The complaints make for depressing reading, since many trace the joyous excitement of would-be inventors whose patent had been “chosen” for promotion, the rush to scrape together the money to pay for its success, and their panicked disillusionment when they realize they’ve lost their life savings to a scam.
Perhaps most poignant are the complaints that retain a flicker of the pride and awe the inventors felt before they realized their betrayal, when they still believed their life would soon take an incredible turn for the better.
In a 5/24/17 complaint to the BBB about a $15,000 investment that yielded nothing, one customer wrote, “I felt these people were really knowledgeable and really ‘knew their stuff’! I finally went ahead and depleted my savings account and invested in my future…They even had a ‘ninja’ team that you could email with any questions…These people really knew how to make everything look authentic!!”
Under “Desired Outcome,” the complainant wrote hopefully: “I would like all of my investment money returned to me.”
I’ve spent years covering consumer finance, science, health and the workplace as a journalist and editor based in the San Francisco Bay Area. I am a former senior…MORE
Diana Hembree has covered business, health and science issues for Time Inc., MoneyGeek.com and other media and is working on an M.S. in Sustainable Food Systems from Green Mountain College.
https://www.forbes.com/sites/dianahembree/2018/11/09/scam-company-advised-by-matthew-whitaker-threatened-victims-but-many-filed-complaints-anyway/#23f388591afa#23f388591afa
'
Diana Hembree
7-9 minutes
Matthew Whitaker (Photo By Douglas Graham/CQ Roll Call) Photo Credit: CQ-Roll Call,Inc.Getty
The Iowa attorney Trump has named as the acting Attorney General has only been on the job a day or so, but he’s already enveloped in scandal.
Matthew Whitaker, who replaced Jeff Sessions after he was forced out by Trump, served on the advisory board of World Patent Marketing, a Florida-based “scam that has bilked thousands of consumers out of millions of dollars,” according to a complaint filed by the Federal Trade Commission (FTC).
As part of a settlement with the FTC this May, the company was banned from the invention promotion business. Documents in the FTC’s docket show that Whitaker, who served on the World Patent Marketing board from 2014 to 2017, was not just a paid advisory board member — he threatened at least one victim who complained.
Whitaker and the Justice Department did not respond to a request for comment.
The settlement resolved charges that the agency brought against it in 2017, which alleged that “consumers paid the defendants thousands of dollars to patent and market their inventions based on bogus ‘success stories’ and testimonials,” according to an FTC press release.
“After stringing consumers along for months or even years, the defendants did not deliver what they promised,” the agency charged, “and many people ended up in debt or lost their life savings with nothing to show for it.”
In addition, the FTC alleged that owner Scott Cooper and his companies — World Patent Marketing and Desa Industries — “deceived consumers and suppressed complaints about them using threats, intimidation, and gag clauses.” In August 2017 a federal court subsequently shut down the Miami Beach-based patent scheme and froze its assets pending litigation.
In addition, the FBI is involved in a criminal investigation of World Patent Marketing during the period in which Whitaker worked there, according to the Wall Street Journal. The FTC settlement was a civil action, but the ongoing FBI investigation signals that criminal charges may be forthcoming.
Angry WPM customer to Whitaker: “You will be exposed”
In emails uncovered by the FTC investigation, Whitaker personally threatened a customer who complained, according to a story in the Miami New Times that was picked up by other news outlets.
The emails the FTC obtained, in fact, suggests Whitaker used his background as a U.S. attorney to try to silence customers who claimed they were defrauded by the company and sought to take their complaints public.
In this case, Whitaker sent an intimidating email to a customer on August 25, 2015, who had contacted World Patent Marketing with his grievances and and filed a complaint with the Better Business Bureau.
The FTC docket reviewed by New Times contains an email exchange on page 362 of 400 that described what happened next.
Rather than expressing concern about the customer’s charge of being cheated, Whitaker wrote him to let him know that he, Whitaker, was “a former United States Attorney for the Southern District of Illinois…Your emails and message 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 WPM’s reputation online. I am assuming you know that there could be serious civil and criminal consequences for you if that is in fact what you and your ‘group’ is doing. Understand we take threats like this quite seriously…Please conduct yourself accordingly.”
Apparently, though, he picked on the wrong customer.
“Do not email me with your scare tactics,” the customer known as “A. Rudsky” wrote back. Claiming that he, too, was an attorney, he added: “Stop with your bullshit emails…You are party to a scam…You will be exposed. I hope I make myself clear, Mr. Whitaker.”
Other victims threatened with prison, martial arts security team
In a preliminary injunction against the company in August 2017, United States District Judge Darrin P. Gayles of the United States District Court for the Southern District of Florida noted that Cooper, WPM’s head of security, and WPM’s lawyers had sought to intimidate customers who tried to exercise their right to complain of unfair treatment and force them to retract their statements. One female customer, the judge wrote, was threatened with criminal prosecution and prison:
“After months of trying to receive a refund or services, she filed a complaint with the BBB. She received a letter from a second lawyer who told her that 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. § 875(d).”
A 2017 FTC complaint that alleged WPM cheated 1,504 would-be inventors of more than $25 million cited another another way World Patent Marketing attempted to frighten its customers: “Defendants also cultivate a threatening atmosphere” by sending its customers 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 World Patent Marketing Security Team are the kind of guys who are trained to knockout first and ask questions later.”
Some customers braved threats to file complaints
Although World Patent Marketing allegedly tried to strike fear into the customers it cheated, many complained anyway An online search reveals 5 complaints on Ripoff Report, 108 complaints to the Better Business Bureau (BBB), and 233 reviews and complaints on ConsumerAffairs.com.
The complaints make for depressing reading, since many trace the joyous excitement of would-be inventors whose patent had been “chosen” for promotion, the rush to scrape together the money to pay for its success, and their panicked disillusionment when they realize they’ve lost their life savings to a scam.
Perhaps most poignant are the complaints that retain a flicker of the pride and awe the inventors felt before they realized their betrayal, when they still believed their life would soon take an incredible turn for the better.
In a 5/24/17 complaint to the BBB about a $15,000 investment that yielded nothing, one customer wrote, “I felt these people were really knowledgeable and really ‘knew their stuff’! I finally went ahead and depleted my savings account and invested in my future…They even had a ‘ninja’ team that you could email with any questions…These people really knew how to make everything look authentic!!”
Under “Desired Outcome,” the complainant wrote hopefully: “I would like all of my investment money returned to me.”
I’ve spent years covering consumer finance, science, health and the workplace as a journalist and editor based in the San Francisco Bay Area. I am a former senior…MORE
Diana Hembree has covered business, health and science issues for Time Inc., MoneyGeek.com and other media and is working on an M.S. in Sustainable Food Systems from Green Mountain College.
https://www.forbes.com/sites/dianahembree/2018/11/09/scam-company-advised-by-matthew-whitaker-threatened-victims-but-many-filed-complaints-anyway/#23f388591afa#23f388591afa
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