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Whitaker linked to defunct 'scam' company
03:05 - Source: CNN
CNN  — 

Matthew Whitaker, the acting US attorney general, was on the advisory board of a Florida company that was shut down by the Federal Trade Commission and served with a $26 million judgment earlier this year for what court documents called “a scam that has bilked thousands of consumers out of millions of dollars.”

The company, World Patent Marketing, promised to help inventors get patents.

Whitaker was named as an advisory board member in October 2014 and Federal Election Commission filings showed the company’s owner donated $2,600 to Whitaker’s campaign when he was running for the US Senate. A payment record also shows Whitaker was paid at least $9,375 by the company from October 2014 to February 2016, and was due to be paid an additional $7,500 in 2016 and 2017, but it is unclear whether he received that money.

According to a World Patent Marketing press release announcing Whitaker’s position on the board, Whitaker was quoted as saying, “World Patent Marketing has become a trusted partner to many inventors that believe in the American Dream,” and “I have always admired World Patent Marketing and its innovative products and dynamic leadership team.”

In May, the company agreed to a settlement with the FTC amid allegations that World Patent Marketing used unfair tactics, including threats of legal action, when customers complained about the company or its services. The court banned the company from the invention promotion business; in addition, the judge ordered the $26 million judgment to be partially suspended as long as the company’s owner Scott Cooper paid about $975,000. Whitaker’s involvement was first reported by The Miami New Times.

Whitaker was so involved in the company he sent a threatening email to a disgruntled customer, which was filed in the case by the FTC. In it, Whitaker accuses a customer of “blackmail or extortion” because the customer had threatened to complain to the Better Business Bureau.

“I am a former United States Attorney for the Southern District of Iowa,” the email says. “I am assuming you understand that there could be serious civil and criminal consequences for you” if the customer filed a complaint, Whitaker wrote, adding, “Understand that we take threats like this quite seriously.”

The customer responded that Whitaker was “party (to) a scam.”

Justice Department spokesperson Kerri Kupec said in a statement that Whitaker “has said he was not aware of any fraudulent activity. Any stories suggesting otherwise are false.”

The FTC said customers who had paid thousands of dollars to World Patent Marketing to market their inventions received nothing in return after months or even years of paying the company. An FTC press release said that after working with World Patent Marketing, “many customers ended up in debt or lost their life savings with nothing to show for it.”

CNN’s Uliana Pavlova and Laura Jarrett contributed to this report.