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Whitaker fielded early fraud complaints from customers at patent company even as he championed it, records show

In World Patent Marketing videos from 2015, acting attorney general Matthew Whitaker is seen promoting products for a company the FTC called a fraud. (Video: Joyce Koh/The Washington Post)

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, records show.

Yet Whitaker, now the 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 an October 2017 voice mail, Matthew Whitaker emphasized his role as chief of staff to the Attorney General, while responding to a subpoena. (Video: Joyce Koh/The Washington Post)

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 two 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 on Friday. “I am now at the Department of Justice here in Washington, D.C., as the chief of staff to the attorney general, so I want to be very helpful.”

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.

Whitaker did not respond to a request for comment. In a previous statement, Justice Department spokeswoman Kerri Kupec said, “Acting Attorney General Matt Whitaker has said he was not aware of any fraudulent activity. Any stories suggesting otherwise are false.”

Rep. Elijah E. Cummings (D-Md.), 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 in a statement. “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.”

Sen. Tom Udall (D-N.M.) called Whitaker’s response to the FTC subpoena “beyond alarming.” Udall said Whitaker’s record was likely to have created serious hurdles if his nomination for the post of acting attorney general had been reviewed by Congress.

“The stains on Mr. Whitaker’s résumé and credibility likely would have caused serious problems for any nomination to serve in such a deeply consequential position,” Udall said.

As the FTC was investigating the company, agency officials examined whether Whitaker played a role in trying to help the company silence critics by threatening legal action, as The Washington Post previously reported.

When investigators learned about Whitaker’s new posting in Washington, they were stunned, the new records show.

“You’re not going to believe this,” James Evans, an investigator in the FTC’s Bureau of Consumer Protection wrote in late October 2017, several weeks after the agency issued Whitaker a subpoena. “Matt Whitaker is now chief of staff to the Attorney General. Of the United States.”

Federal investigators scrutinized Whitaker’s role in patent company accused of fraud, according to people with knowledge of case

Whitaker joined the board of World Patent Marketing in October 2014 after a failed U.S. Senate run, eventually collecting about $10,000 in fees, according to court documents. “As a former U.S. Attorney, I would only align myself with a first class organization,” Whitaker said in a company news release at the time.

A court receiver appointed to oversee the FTC settlement said that Whitaker was asked to return his fees so the money could be used to reimburse customers but that he did not respond.

The records show 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, MW.”

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 the complaint along to Cooper, records show.

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

Cooper, at times, updated Whitaker on the status of complaints, the records show. In May 2015, he emailed Whitaker: “spoke to customer — we refunded him 995 — he was a decent guy — just is broke.”

Whitaker told investigators in late October 2017 that he didn’t write to or email with complaining consumers, but “one guy showed up at my office because they listed me on their board or advisers or whatever,” according to investigators’ notes of the conversation.

The documents reflect that Whitaker did at one point help Cooper push back against a complaint — not from a consumer but from a former Cooper business partner who claimed Cooper owed him money from a previous deal and threatened to expose World Patent Marketing as a fraud if Cooper did not pay up.

The newly released emails show that Cooper enlisted Whitaker’s help, drafting an email he wanted Whitaker to send to the man. The email specifically referred to Whitaker’s role as a former U.S. attorney and threatened “civil and criminal consequences” if the man persisted. Whitaker sent the email, as requested.

Days later, World Patent Marketing sued the man in New York State Court, alleging defamation. The suit was settled out of court.

‘He was yelling’: Whitaker pushed back against early fraud complaints about company he advised

Cooper viewed Whitaker’s former role as a U.S. attorney in Iowa as a major asset and sought to use Whitaker’s 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 is 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 sent 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.”

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

FTC officials were taken aback when they heard that 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 connection to a company accused of fraud, according to people familiar with their reaction.

Cummings on Friday vowed to conduct 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.”

Alice Crites and Anu Narayanswamy contributed to this report.