No Offshore Companies Needed for This Patent Fraud Scheme


The Panama Papers have shined a light on how the powerful and wealthy can hide behind offshore shell companies. But not everyone bothers with a foreign disguise, even when committing fraud. 

Take the case of patent lawyer Jason T. Throne, who last week pled guilty to fraud and tax evasion charges stemming from fake patent services he billed to Hunter Douglas Inc., where he served as in-house counsel for over 20 years. 

Throne and his wife created Patent Services Group Inc. (PSG), a shell company in Colorado, according to a document filed with the PTO. PSG proceeded to bill Hunter Douglas for nearly $5 million in fees for non-existent patent searches conducted since 2000. As in-house counsel, Throne then approved payment of the bills, which included patent searches purportedly performed by his wife, who is neither a lawyer nor a patent agent. 

In addition to pleading guilty in the criminal case, Throne settled the civil case brought by Hunter Douglas, agreeing to repay over $5 million in restitution. He also agreed to resign from the patent bar

Though Throne hid his involvement with PSG from Hunter Douglas, he doesn’t appear to have gone to extreme lengths to conceal the connection. The documents of incorporation list Throne’s wife, Mary Catherine Throne, as the registered agent. PSG’s corporate disclosure statement as filed in the civil suit says it has no parent or subsidiaries. 

While debate over using offshore shell companies as a shield from taxes, regulators or creditors continues, the Throne case shows how fraud can occur without ever leaving home.