Pti Ordered To Pay $60 Million
Pti Ordered To Pay $60 Million
Sep 11 2007, 06:44 AM
Joined: 1-October 02
From: California, USA
Member No.: 2
Invention Promotion Swindlers Ordered to Pay $60 Million in Scheme that Defrauded 17,000 Consumers
FTC Press Release, September 6, 2007
The operators of an invention promotion business, which a judge called “one
grand con game to take money away from consumers,” have been ordered to pay
$60 million for violating a 1998 court order.
“By changing the name of their company, these individuals thought they could
continue to make false promises and take inventors’ money, but they didn’t
get away with it,” said Lydia Parnes, Director of the FTC’s Bureau of
Consumer Protection. “This scam should also remind inventors to question the
assurances of promotion firms. No one can guarantee an invention’s
Under the 1998 order, Julian Gumpel, Darrell Mormando, Michael Fleisher, and
Greg Wilson were barred from misrepresenting the services they offered to
amateur inventors, but they revived their scam under a new name, the Patent & Trademark Institute (PTI).
For a fee of $895 to $1,295, PTI promised to
evaluate the marketability and patentability of inventors’ ideas, but its
evaluations were almost always positive and were not meaningful, according
to the FTC. For a fee of $5,000 to $45,000, PTI’s clients were offered legal
protection and assistance to obtain commercial licenses for their
inventions. They also were told that PTI would help them earn substantial
royalties from their inventions, but PTI did not help consumers license
their inventions, and clients did not earn royalties.
In January 2007, the FTC charged the defendants with civil contempt and
obtained a temporary asset freeze against PTI and its owner, Gumpel, and the
appointment of a receiver over PTI. In March, the FTC added Fleisher,
Mormando, and Wilson as contempt defendants, alleging that they participated
in the order violations as managers and salesmen.
On May 3, 2007, after a four-day hearing, U.S. District Court Judge Gerald
Bruce Lee held the defendants in contempt, finding, among other things, that
PTI failed to disclose to consumers that none of its clients had
successfully marketed an invention. The judge concluded that consumers were
defrauded of $61 million through “lies and misstatements.”
On July 12, 2007, the court permanently banned Gumpel, Mormando, and Wilson
from engaging, in any way, in the marketing of invention promotion services.
The court did not enter a ban against Fleisher because he did not sign the
original order, although the court found that he knew about it and was
subject to it. On August 27, 2007, the court entered an order holding PTI
and Gumpel jointly liable for a $61 million judgment, and holding Fleisher,
Mormando, and Wilson jointly and severally liable for the judgment to the
extent of $59,682,958.
PTI operated through several corporate entities, including original
defendants Azure Communications, Inc. and London Communications, Inc., and
through United Licensing Corp., International Patent Advisors, Inc.,
Datatech Consulting, Inc., International Product Marketing, Inc., and
Unicorp Consulting, Inc. These companies also were held in contempt and
ordered to pay $61 million.
The Commission appreciates the substantial assistance in this case provided
by the U.S. Attorney's Office for the Eastern District of Virginia and the
U.S. Patent & Trademark Office.
The FTC has established a phone line for consumers who may have been harmed
by PTI's conduct. Consumers may call 202-326-2926 for more information.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair
business practices in the marketplace and to provide information to help
consumers spot, stop, and avoid them. To file a complaint in English or
Spanish or to get free information on any of 150 consumer topics, call
toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at
http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet,
telemarketing, identity theft, and other fraud-related complaints into
Consumer Sentinel, a secure, online database available to more than 1,600
civil and criminal law enforcement agencies in the U.S. and abroad.
Feb 13 2008, 02:02 AM
Joined: 13-October 02
Member No.: 10
I know this is old news, but the bastards are working hard at scamming the inventors as we speak (or read).
Be aware do not fall for their selling pitch and admiration for your idea. They like any idea as long as they get their money.
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