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The Federal Bureau of Investigation is conducting a criminal investigation into a Florida corporation accused of having cheated millions of customers during the period when Matthew Whitaker, acting Attorney General of the United States, was a paid member of the US an advisory council, according to an alleged victim who has been contacted. by the FBI and other people familiar with the issue.
The investigation is being conducted by the Miami FBI office and the US Postal Inspection Service, according to an email sent to the alleged victim last year by an FBI casualty specialist. A phone line registration set up by the Department of Justice to help victims indicates that the case remains active.
Whitaker, appointed by President Trump on Wednesday to replace Jeff Sessions as head of the justice department, is overseeing the FBI in his new role.
According to Justice Department guidelines, Mr. Whitaker should avoid any involvement in the Florida case, which concerns a company called World Patent Marketing Inc., said Stephen Gillers, Ethics Expert at the Faculty of Law from New York University. Mr. Gillers stated that Mr. Whitaker was "undeniably disqualified from any investigation or prosecution of World Patent Marketing".
A spokeswoman for the Justice Department declined to comment.
World Patent Marketing, based in Miami Beach, closed down last year after being accused by the Federal Trade Commission of cheating clients for $ 26 million. The company has charged potential inventors millions of dollars to patent and promote their inventions, but has barely provided real services and threatened plaintiffs, the FTC said.
The action of the FTC was a civil proceeding. The existence of an ongoing FBI investigation suggests that authorities are also investigating potential criminal charges.
An FBI spokeswoman in Washington declined to comment.
According to court documents, Mr. Whitaker received a total of $ 9,375 to serve on the company's advisory board. He has appeared in at least two promotional videos published by the company on his website. He also wrote a 2015 email on behalf of the company to an unhappy client, citing his US lawyer background and threatening the client with "serious civil and criminal consequences," according to the documents.
According to a press release issued in December 2014 by the company, Mr. Whitaker reportedly stated, "As a former US lawyer, I would only align with a top-notch organization. World Patent Marketing does not just make statements about the "ethical" behavior of business and translates them into action. "
President Donald Trump told the press at the White House that he did not know Matthew Whitaker, his new acting attorney general, but that he was "a very respected man". Photo: AP
The court documents show that the company promoted its advisory board, which included other personalities than Mr. Whitaker, to help convince customers of its good faith.
"This advisory board was created on the World Patent Marketing website to attract consumers," said Joe LoPiccolo, a lawyer who has filed a class action against World Patent Marketing, a pending case.
Some of the other members of the advisory board said in court that they were doing little or nothing for the company, and the FTC did not appoint any member of the advisory board as the respondent.
Mr. Whitaker was appointed US Attorney for the Southern District of Iowa in 2004, a position he held until 2009, when the Obama administration appointed a replacement. In 2014, he was defeated in the Republican primaries of the US Senate by Joni Ernst, who subsequently won the general election.
Earlier this year, the FTC settled the case with World Patent Marketing and its founder, Scott Cooper, who agreed to not promote any invention promotion services. The FTC has obtained a judgment for the total amount allegedly lost by its customers – $ 26 million – and Mr. Cooper has agreed to return to the FTC a waterfront property in Miami Beach, according to court records .
Mr. Cooper and his wife of the day each contributed $ 2,600 to Mr. Whitaker's campaign in the Senate, according to the federal election records. The contributions were made in 2013, before the creation in February 2014 of World Patent Marketing.
Neither Mr. Cooper nor his attorney responded to requests for comment.
The FBI began contacting victims of alleged fraud at World Patent as early as June 2017. In a letter sent to a victim who was reviewed by the Wall Street Journal, the FBI Victim Specialist stated that the case could "be a long-term endeavor and, for a number of reasons, we can not talk to you about its progress at the moment. "
A court-appointed receiver for World Patent Marketing said that several of the other members of the advisory council had returned the taxes they had received from the company, but that Mr. Whitaker had not responded to a notice of application sent by the receiver.
-Lisa Schwartz contributed to this article.
Write to Mark Maremont at [email protected]
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