The former prosecutor tapped to head the Justice Department following Attorney General Jeff Sessions’ ouster was previously involved in a Miami Beach patent-marketing firm ordered to pay $25 million in penalties for allegedly deceiving clients and threatening legal action against others.
Matthew Whitaker, President Donald Trump’s pick for acting attorney general, served on the advisory board of World Patent Marketing, a go-between for aspiring inventors looking to patent their ideas and get their products into stores. His involvement with the company was first reported by the Miami New Times in a 2017 story about the company.
A federal judge shut the firm down in May after the Federal Trade Commission accused the operation of deceiving its clients with false promises and charging them up to $65,000 for “almost no service” in return.
Board members, according to the FTC, reviewed potential inventions. Whitaker is not named in the lawsuit but in a video posted to the company’s Vimeo account three years ago, he was filmed discussing the benefits of a razor prototype that would protect users from cuts.
In their initial meetings with inventors, salespeople would say that board approval was required before follow-up consultations could proceed, the FTC said. Florida Republican Congressman Brian Mast was also listed as being on the board, but a spokesman denied that, according to the New Times.
Whitaker also used his former job title as a former U.S. attorney for the Southern District of Iowa to intimidate and threaten a World Patent Marketing client who complained about losing money to the firm. In the 2015 email, Whitaker says there can be “serious civil and criminal consequences” if the client were to “smear” World Patent Marketing’s reputation by filing a complaint with the Better Business Bureau or another watchdog agency.
“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 message from today seem to be an apparent attempt at possible blackmail or extortion,” Whitaker wrote in the 2015 email. “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.”
A law professor at the University of Miami said Whitaker appeared to have crossed the line when he invoked his former position as a prosecutor and threatened criminal action against the patent company’s client.
“He does seem to me to be threatening on the criminal side,” said Anthony Alfieri, director of the UM Law School Center for Ethics and Public Service. “That would raise concerns for any state bar disciplinary authority because it implicates rules of professional conduct.”
As acting attorney general, Whitaker is now the acting head of the Justice Department overseeing the special counsel investigation into the Trump campaign’s ties to Russian election interference. He was selected Wednesday as the new acting attorney general, taking over for his former boss Jeff Sessions. He previously had worked as chief of staff to Sessions.
“It is a true honor that the President has confidence in my ability to lead the Department of Justice as Acting Attorney General,” Whitaker said in a statement on Wednesday. “I am committed to leading a fair Department with the highest ethical standards, that upholds the rule of law, and seeks justice for all Americans.”
He joined World Patent Marketing in 2014.
“World Patent Marketing has become a trusted partner to many inventors that believe in the American Dream,” Whitaker was quoted as saying in a press release. “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.”
After the Federal Trade Commission charged the firm in its “invention-promotion scam,” a federal judge in May ordered the firm to pay back $25,987,192 and ruled that the firm would be permanently barred from invention promotions.
The FTC alleged that individual inventors were charged up to almost $65,000 for World Patent Marketing services, and “virtually none” of the clients made their money back. Many clients leave in debt, “having kissed their life savings good-bye.”
Unhappy clients who said they would post unfavorable reviews about World Patent Marketing or lodge reports with the Better Business Bureau or with the government were “threatened with lawsuits, criminal charges, and even prison,” the FTC said.
In an email to clients, the firm linked to a company blog claiming that one client had been removed from the World Patent Marketing offices by an “intimidating security team, all ex-Israeli Special Ops and trained in Krav Maga, one of the most deadly of the martial arts.” The team was later described as “the kind of guys who are trained to knockout first and ask questions later.”
“This case is about protecting innovators, the engine of a thriving economy,” former Acting FTC Chairman Maureen K. Ohlhausen said last year. “The defendants promised to promote people’s inventions and took thousands of dollars, but provided almost no service in return. Then they added insult to injury by threatening people who complained.”
The regulatory agency added: “What’s more, the complaint alleges that the defendants generally fail to get people patents, don’t secure licensing deals or royalty income for them, and didn’t even successfully market the inventions featured in their website testimonials.”
Whitaker’s ascension to the head of Trump’s Justice Department is not the only link between the Miami Beach firm and the president.
He served as executive director for the conservative watchdog group Foundation for Accountability and Civic Trust, which goes by the acronym “FACT.” The group gained headlines in the run-up to the presidential election for scrutinizing then-candidate Hillary Clinton, filing an ethics complaint that Clinton had given friends and associates preferential treatment at the State Department and calling for investigations into other Democrats.
In 2013, years before Trump would win the White House promising to “Make America Great Again,” World Patent Marketing cut an advertisement that echoed the campaign slogan.
“Do you know what makes America great?” asks a paid spokeswoman in the advertisement. “The graphics behind her change from images of the Founding Fathers to an American flag and then wads of cash falling from the sky. “People like you who still believe in the American dream to invent a new product idea that everyone needs.”
Miami Herald staff writer Jay Weaver contributed to this story.