Scant recovery for bilked inventors
Miami Beach firm settles with FTC
At least World Patent Marketing won’t be allowed to market itself to would-be inventors anymore.
That’s about the only good news for some 1,500 victims in a settlement between the Federal Trade Commission and a Miami Beach company that the called a “scam” operation.
The bad news is $25 million of the $26 million the company is accused of scamming is likely unrecoverable.
Under the agreement signed Wednesday by U.S. District Judge Darrin P. Gayles in the Southern District of Florida, Scott Cooper, founder and CEO of World Patent Marketing and its parent, Desa Industries, will pay $1,055,000 in restitution, because that’s all investigators identified as “recoverable” after seizing control of the FTC company with a temporary order in March 2017.
If the $1,055,000 were to be split evenly, the 1,504 victims would receive about $701 each.
The FTC won’t decide how to divide the money until Cooper turns it over, said FTC spokesman Frank Dorman. Asked how recovered assets are typically split, he said, “In some cases, some people get more than others, depending upon what they lost. Other times, it’s split up equally. There’s also the administrative cost of the redress program to consider.” restraining
In a preliminary injunction granted in August, the FTC said its receiver found that World Patent Marketing signed up 1,504 consumers for patent application services and collected nearly $26 million in revenue between November 2014 and March 2017.
But in a document filed with the proposed settlement, the FTC said its analysis of bank records show that Cooper and his company “spent most of the money they obtained from consumers,” including $9.9 million on payroll, $6.7 million on credit card payments, and $2.2 million on marketing, among other expenses.
Cooper has seven days from Wednesday’s order to transfer $78,670 that were in a company bank account at the time of the seizure. To ensure he pays an additional agreed-upon $976,330 within seven months, Cooper agreed to let the FTC secure a lien and mortgage on his $3.2 million waterfront home in Miami Beach.
After those payments are made, the remainder of the $26 million