Last year's federal investigators investigated whether Matthew G. Whitaker, as a member of the advisory board of a patent company accused of fraud by Miami clients, had played a role in helping the company to silence its critics by threatening lawsuits, according to two people familiar with the investigation.
Whitaker, appointed this week by President Trump as Acting Attorney General, has occasionally served as an outside legal advisor to World Patent Marketing, writing a series of letters on his behalf, according to people close to his role.
But he rebuffed an October 2017 subpoena of the Federal Trade Commission seeking his records concerning the company, according to two people familiar with the case.
In a lawsuit filed in 2017, the FTC alleged that the company had blamed customers with fraudulent promises to help them market their invention. The FBI has also investigated the commercialization of patents worldwide, the Wall Street Journal reported Friday.
Whitaker was not named in the FTC's complaint. World Patent Marketing, without admitting its fault, has settled the case for more than $ 25 million earlier this year, according to court documents.
Department of Justice officials declined to comment on Whitaker's treatment of the FTC's appearance.
In a statement, Justice Ministry spokeswoman Kerri Kupec said, "Acting Attorney General Matt Whitaker said he was unaware of any activity. fraudulent. All stories suggesting the opposite are false. "
Whitaker's connection with World Patent Marketing was a surprise to senior officials of the Justice Department and the White House, said several officials.
During its investigation, FTC staff sought to learn more about the role played by members of the company's advisory board, including Whitaker, a former US lawyer whose role had been highlighted by the company in recent years. press releases and marketing materials.
The company said the board would help examine inventors' ideas to maximize their ability to grow rich, based on promotional materials and old customers.
In fact, the committee did not meet and rarely examined the inventors' ideas, according to court documents.
Whitaker, however, sometimes seemed to act as the company's lawyer, according to people familiar with his role.
Whitaker told officials that he had held limited positions as an external legal advisor to the company and had provided occasional advice, but that it was not part of daily operations, said an official of the Ministry of Justice, condition of anonymity due to the sensitivity of the case.
When the FTC summoned Whitaker to appear for his company-related records in October 2017, he provided no information, telling investigators that he was busy at that time relocating from Iowa in Washington for a new job, according to people familiar with the case. .
At the time, Whitaker was preparing to take up a new position: Chief of Staff Attorney General of the time, Jeff Sessions.
Another member of the advisory board who also practiced legal activities for the company, New York-based lawyer Eric Creizman, said that he had also received a subpoena from the FTC and had handed over records concerning the company.
"I thought you had to sort out the subpoenas," he said. "If you're busy, it does not give you the right to avoid a subpoena."
In the end, the FTC investigators did not get any evidence or internal communication that Whitaker was aware of the company's fictitious promises to help investors patent and market their ideas, according to people who knew Well the case.
This week, court clerk Jonathan Perlman, who oversaw the details of the settlement, told the Washington Post that he had "no reason to believe that [Whitaker] was aware of wrongdoing. "
A few months after giving Whitaker the assignment, the FTC began discussions for settlement with World Patent Marketing and its managing director, Scott Cooper.
On Friday, the Wall Street Journal announced that the FBI had opened a criminal investigation into World Patent Marketing by posting an email sent to one of the company's victims by a victim specialist for the office.
The July 2017 e-mail indicated that the FBI was investigating the issue at the time, with the US Postal Inspection Service, and was inviting the person to call a hotline to discuss his experiences with the company.
Spokespersons for the US Attorney's Office in Miami and the FBI's Miami Field Office declined to comment.
In its investigation of the company, FTC investigators concluded that World Patent Marketing had actively "suppressed" claims against the company through "threatening, intimidating and gagging clauses," according to a statement. published by the agency.
They noted that Cooper had used the threat of lawsuits as a cudgel to prevent clients from posting negative reviews online or to complain to the Business Conduct Bureau.
A client who persisted in filing a complaint with the office had received an email from Cooper's attorney accusing him of engaging in an activity that could subject him to a "charge of extortion". Federal Court, "pointing out that the crime was punishable by two years in prison, with the complaint of the FTC.
Neither Cooper nor his current lawyer has responded to requests for comment.
In an email dated August 2015, Whitaker had threatened one of the company's critics, stressing that he was a former US lawyer.
In response to a man who had complained to Cooper about the company and had threatened to file a complaint with the Bureau of Business Ethics. Whitaker warned "there could be serious and criminal consequences" he was proceeding. Whitaker spoke of his previous role as federal prosecutor in southern Iowa and included an image of his law firm's logo.
Four days after Whitaker's e-mail was sent, the company filed a lawsuit against the man in New York alleging he had defamed Cooper and tried to extort him. In the case, the company noted that Whitaker had intervened at Cooper's personal request.
The trial was settled amicably in 2016.
Alice Crites, Devlin Barrett and Matt Zapotosky contributed to this report.