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Whitaker promoted patent company for years despite early fraud complaints, records show

The FTC accused World Patent Marketing of falsely promising customers that it would help them patent and profit from their inventions.

Acting Attorney General Matthew Whitaker speaks during a news conference, Friday, Nov. 30, 2018, in Cincinnati.
Acting Attorney General Matthew Whitaker speaks during a news conference, Friday, Nov. 30, 2018, in Cincinnati.Read moreAP Photo/John Minchillo (custom credit)

WASHINGTON - Months after joining the advisory board of a Miami-based patent company in 2014, Matthew G. Whitaker began fielding angry complaints from customers that they were being defrauded, including from a client who showed up at his Iowa office to appeal to him personally for help, new records show.

Yet Whitaker, now the nation's acting attorney general, remained an active champion of World Patent Marketing for three years - even expressing willingness to star in national television ads promoting the firm, the records show.

Internal Federal Trade Commission documents released Friday in response to a public records request reveal the extent of Whitaker's support for World Patent Marketing, even amid a barrage of warnings about the company's behavior.

The FTC eventually filed a complaint against World Patent Marketing, accusing it of cheating customers and falsely promising that it would help them patent and profit from their inventions, according to court filings. Some clients lost their life savings, the agency alleged.

In May of this year, a federal court in Florida ordered World Patent Marketing to pay a settlement of more than $25 million and close up shop, records show. The company did not admit or deny wrongdoing.

Whitaker, a former U.S. attorney, did little to assist the investigation. When the FTC subpoenaed for his records, he missed the deadline to reply. In a voice mail responding to follow-up calls from investigators, Whitaker said he was happy to cooperate and stressed an important role he had just assumed in Washington.

"I didn't know that you had served a subpoena," Whitaker said in his October 2017 message, released by the FTC Friday. "I am now at the Department of Justice here in Washington DC, as the chief of staff to the Attorney General, so I want to be very helpful."

But Whitaker never provided any of his records, according to two people familiar with the investigation. He had told the FTC that most of his communications were privileged legal discussions because he provided legal advice to the company's founder. He also said he had a minimal role at the company and "wouldn't have personally ever said anything about the business," according to an investigator's notes.

A Whitaker spokeswoman did not immediately respond to a request for comment.

Maryland Rep. Elijah Cummings, the ranking Democrat and future chairman of the House Oversight and Government Reform Committee, said the records show Whitaker was alerted early to the alleged fraud and should have taken action.

"These new documents suggest that Mr. Whitaker was personally aware of allegations of fraud by World Patent Marketing and its CEO at the same time he was receiving payments as a member of the Advisory Board," Cummings said. "If true, this is extremely troubling and raises serious concerns about his fitness to serve as acting Attorney General and whether he was properly vetted for this critical position."

The records show that Whitaker fielded angry complaints about World Patent Marketing, starting in April 2015. He appeared to forward them to company founder Scott Cooper without taking other action.

When a customer complained to Whitaker by voice mail on May 29, 2015, Whitaker forwarded the message to Cooper, writing: "Another WPM customer reaching out to me. FYI. I do not plan to call back unless you want me to. Thanks, WM."

One September 2016 email from someone who said she was a customer sought Whitaker's help.

"Dear Matthew, can you get a message to Scoot [sic] Cooper," she asked. "You are on his advisory board but what you don't know is how many people were scammed by him and how fraudulent they are and how much money they robbed from people. I am not happy and would love to meet him in person and show him how upset I am.

The writer ended by threatening physical violence against Cooper.

Whitaker passed along the complaint to Cooper, records show.

"Scott, Just forwarding this along," Whitaker wrote. "I hope all is well. MGW"

Cooper viewed Whitaker's former role as a U.S. attorney in Iowa as a major asset and sought to use his background to lend his company credibility, the records show.

In November 2014, Cooper wrote to a web designer, "Let's build a Wikipedia page and use Whitaker to make it credible."

Cooper hoped to broadcast ads featuring Whitaker on CNN, the records show. It's unclear what happened to that plan, but Whitaker and Cooper discussed how much Whitaker should be paid for appearing in them.

"I do not have a dollar amount in mind," Whitaker wrote to Cooper in December 2014. "What does talent of my type usually demand?"

Cooper repeatedly cited Whitaker's prosecutor role in marketing material and in correspondence. In an Aug. 14, 2015 email to a complainant, for example, Cooper wrote:

"I have copied my corporate counsel, Bernie Egozi, and former US Attorney Matthew G. Whitaker, who happens to sit on my board, in this email as I am frankly confused by your behavior and it sounds as though you are trying to blackmail me for something," he wrote.

In December 2015, Cooper wrote to another complainant that he was copying Whitaker, and highlighting that he was "a board member and former U.S. attorney." In the future, Cooper advised the complainant to "communicate directly with the two of us on this matter."

FTC officials were taken aback when they heard Trump had named Whitaker acting attorney general four weeks ago and braced for media inquiries, internal records show.

At the same time, Justice Department and White House officials were surprised to learn of Whitaker's participation in such a controversial company, according to people familiar with their reaction.

Whitaker's selection for the staffer position was unusual. Sessions did not know Whitaker; he was recommended for the job by the White House, after coming to the attention of the president for his public comments on CNN blasting the special counsel investigation.

Cummings vowed a deeper probe.

"Unfortunately, these documents are incomplete, and do not show what actions Mr. Whitaker took after learning about these concerns," he said. "Congress needs all of the documents to determine the full extent of Mr. Whitaker's involvement with this company that deceived consumers and suppressed complaints."

The Post’s Alice Crites and Anu Narayanswamy contributed to this report.