Scammed out of $150,000: allegations of fraud, threats and USPTO impersonation – World Trademark Review

  • WTR speaks to family duped out of $150,000 by digital logo design agency
  • Company impersonated USPTO and law firm in effort to pressure payments
  • USPTO tells WTR it is as “frustrated by scammers as much as anyone”

A family in the US has revealed to WTR the trauma of losing $150,000 to a company based in Pakistan. The company, Logo Iconix, allegedly sent threats that have the couple fearing for their safety, with further evidence that representatives impersonated a US law firm and the USPTO. In response, USPTO trademark commissioner David Gooder voiced his frustration at recent scam campaigns and pledged to do more.

Since the beginning of the year, WTR has reported on allegations of fraud at various online trademark agencies and logo design firms. Over 200 such websites were operated by a company based in Karachi, Pakistan called Digitonics Labs which has been accused by the Pakistan government’s Federal Investigation Agency (FIA) of mass fraud, money laundering and the impersonation of US government agencies.

Elsewhere, the low-cost filing agency Trademark Terminal (along with various sister platforms) has come under criticism, with unusual activity identified on thousands of trademark applications it has filed at the USPTO. Once again, evidence has come to light suggesting this company is based in Pakistan rather than – as it claims – the US. This latest incident of alleged fraud also involves an entity allegedly based in Pakistan which appears to be directly linked to Trademark Terminal.

The family – made up of a small business owner, their partner, and young children – reached out to WTR and, due to fears for their safety, have chosen to remain anonymous. The story of how they ended up spending approximately $150,000 and feeling under threat begins with a search for affordable digital services. “I found out about Logo Iconix last year after receiving a text message advert,” the small business owner explained. “It was promoting a logo design for $29, and it all started with that. I believed at that time that if they could target me through texting, they must be a legitimate marketing company. It was one of the main reasons I went with them, to be honest.”

At first, all seemed well. Over the first couple of months, Logo Iconix “honoured their word” by creating a logo after several revisions. The initial cost was less than $200. It was at that point representatives began up-selling, with promises of services that would transform the new business. The company charged over $3,000 to create a website with “unlimited revisions, lifetime maintenance and 24/7 support” – but that fee soon spiralled into new costs. “I was definitely out of my element with the back-end stuff that goes with websites, and they came at me with more charges for ‘hosting the website’ and ‘website add-ons’,” they said. “They started offering me ‘lifetime deals’, which sounded cheap when calculated over five or six years – certainly cheaper than anything I was comparing on GoDaddy or BlueHost. It seemed like a good deal.”

It didn’t stop there. Following the website, there was the creation of an ‘app’ and the filing of a trademark – both being necessary to grow the business, they were told. A further $7,500 was charged for ‘lifetime search engine optimisation’ after they were told the new website wouldn’t appear on Google without it. “I now know that was bullshit because when I Google my brand name now, nothing comes up,” they note. “At that point, though, it got ridiculous.”

A representative for Logo Iconix then claimed that the company’s CEO “had a connection with Forbes magazine”, and subsequently charged thousands of dollars to “publish an article in Forbes and add a Wikipedia page” – with a claim that both were needed for effective SEO and for any chance to obtain a utility patent. Despite previously being told by law experts that there was little chance of being able to get a patent for their invention, Logo Iconix stated otherwise. “They told me that the publication of a Forbes article was a 100% guarantee that I would be granted a domestic and international patent,” they said. “Ultimately, I fell for the scheme. I was hesitant, and after the third or fourth fee I had a really bad gut feeling. However, they would always tell me that I’d spent so much already, and if I didn’t spend the next amount, that I’d lose everything I’d already paid for. For whatever reason, I kept going down the rabbit hole.”

The problems really began to spiral when the utility patent came into play. A few months after claiming it was filed, the business owner received a phone call from someone “claiming to be from the USPTO to personally congratulate me that the patent had been approved”. An email (seen by WTR) was also sent purporting to be from the “chairman of the USPTO’s PPAC” to offer their “great pleasure and privilege” on the patent being granted, and outlining further fees that would need to be paid. WTR reached out to the USPTO representative named in the email, who confirmed that no such email had been sent and that they would be reporting such impersonation to relevant authorities.

Further charges were demanded from Logo Iconix after claiming the patent had been approved, including approximately $25,000 for the issuing of the patent and $39,000 for future maintenance. When the latter fee was not paid, a typo-ridden letter claiming to be from the USPTO’s “Advisory Committee” (with an official-looking USPTO letterhead) demanded the fee be paid. “It claimed I had 72 hours to comply or all the money I’d spent on the patent would be gone,” they said. “Things really clicked then – at that point, I ceased and desisted from any more payments, and finally woke up to the scam.”

WTR has found no evidence that a patent was actually filed. WTR did discover a trademark application filed for the small business owner’s logo, but the correspondence emails named on that application are from Trademark Terminal – confirming, it appears, that the two entities are linked.

Threats and devastation

When the small business owner ceased payments, the attitude of Logo Iconix representatives quickly changed. In dozens of text messages sent over a single evening (and seen by WTR), a Logo Iconix employee made a number of increasingly personal claims. At first, they focused on their own life, claiming their family and kids “would suffer” if the money wasn’t paid. A lawsuit was then threatened, claiming Logo Iconix “wish to drag you and your [partner] to the court”. What followed were more desperate pleas and a vague threat, with the representative saying they “will make sure that you would not have an easy escape from this”.

Following the texts, the small business owner received a legal letter claiming to be from a New York-based law firm, warning that litigation will ensue should the patent-related fees not be paid. WTR contacted the law firm, who confirmed no such letter was sent by them and denied that Logo Iconix was a client. “We did not issue the breach of contract notice,” a firm attorney said. “We have contacted our local prosecutor regarding the impersonation of our firm.”

For over a year, the small business owner had hidden the mounting costs from their partner – and only revealed it to them when the scam became apparent. On admitting to being a victim of fraud, the partner believed the loss was related to the initial fee for the new website. “I said, ‘well we’re out $3,400’, and they told me, ‘no, we’re out a whole lot more money than that’,” the partner explained. “I felt violated that my partner had let these people into our lives. It’s scary now; we’ve lost money, yes, but I feel like we’ve got a target on our back because they are demanding more money too. I don’t know what they are capable of. My main concern is the kids – I want to make sure that we are safe. “

Feeling helpless

At this point, the couple sat down to plan next steps. The first move was to reach out to Logo Iconix’s US bank, Chase, to explain the fraud and request a refund. In response. Chase recommended they email Logo Iconix to ask them for a full refund and to stop all related activity. With that correspondence, the couple were able to file a dispute with the bank. That dispute is ongoing.

Elsewhere, the couple has also filed a report with the FBI, the USPTO, the Federal Trademark Commission (FTC), and the Better Business Bureau (BBB). The FTC responded by stating that it cannot cannot take action against such entities, while the BBB claimed to be powerless as Logo Iconix is not accredited with them. Furthermore, the pair have spoken with two lawyers that want to file lawsuits. However, with the amount of money already lost, they are concerned about the additional cost of legal action – and hope a government agency may step up to take action.

Unfortunately, experts we spoke with claim that attempts to recoup the money will be challenging. “Recourse after the fact will be quite difficult, unless one of the federal agencies decides to make this a cause celebre,” suggests Ryan Bethell, managing partner at The Ideas Law Firm.

A massive operation

Further investigation finds that others have had bad experiences with Logo Iconix. On consumer review website Trust Mamma, the terms ‘scam’ and ‘fraud’ are used 12 times on 22 mostly negative reviews. The activities described by some users are startlingly similar to those described by the couple – payment for a single cheap service followed by aggressive up-selling. “This company preys on small businesses without too much knowledge of business law,” one user stated. “Little do they know it’s just a scam to keep taking money from you. Something needs to be done to avoid other small businesses like me losing over $1,000 and hours of time and stress.”

A reverse domain search of ‘logoiconix.com’ reveals dozens of similar websites hosted on the same server that offer services including logo design, ghostwriting, illustration, animation, and Wikipedia article writing (a full list can be viewed here). When it comes to the logo design websites on that list, many have startling similarities – for example, Logo Iconix shares the same ‘About Us’ text as Logo Myth and Logo Vizio, while Logo Iconix shares the same ‘client list’ as Logo Motix (eg, Entrepreneur, IBM, P&G, Mashable, IBM, Teamwork, Nintendo).

A key question, then, is what parent company operates these websites? Evidence seen by WTR suggests that bank payments from Logo Iconix to customers in the US are listed as ‘360 Digital Marketing’. WTR called Logo Iconix to ask for information on its services, refund policy, and place of business – in reply, the representative said they would ask the company to respond. When asked if that ‘company’ was ‘360 Digital Marketing’, the Logo Iconix representative said ‘yes’. We got no response from that call or numerous enquiries by email and social media.

On its website, 360 Digital Marketing has no information on the websites it operates. On its About Us page, it claims to be based in Texas and boasts clients including Disney, Spectrum, and Harvard University. Interestingly, 360 Digital Marketing (along with some of its websites, including Trademark Terminal and Wiki Professionals Inc) were involved in a lawsuit last year at a California district court. The case was not for fraud, however, but for making unwanted telemarketing calls. It was voluntarily dismissed a few months later. In another lawsuit in 2017, 360 Digital Marketing (along with its websites Animation Sharks and Logo Cubix) was accused of sending “unsolicited fax advertising” to over 40 people that “caused wear and tear on fax machines”. In that case, 360 Digital Marketing was ordered to pay $1,500 in damages.

Further investigation finds that 360 Digital Marketing appears to be operated by Pakistan IT company Abtach (which records its main office as being in Karachi on its About Us page, and lists ‘360 Digital Marketing’ as its subsidiary name in Canada and the US). That company hit the headlines in April when news articles reported on Pakistan Federal Investigation Agency deputy director Abdul Ghaffar was arrested for “allegedly extending undue favours” to employees of Abtach in return for a bribe of 14 million rupees ($87,000). It is understood that the bribe occurred during an investigation into Abtach for alleged money laundering. He is currently on bail.

WTR has reached out repeatedly to representatives at Abtach, 360 Digital Marketing, Logo Iconix and Trademark Terminal for comment. We will update this article if they respond.

What next?

Where users are being mis-sold, pressured to an unreasonable level or outright scammed by online platforms, Bethell claims that the USPTO needs to take action, adding: “I don’t think it particularly matters that they are in Pakistan, the USPTO has a duty to its patrons and the taxpayer. Whether the fraud is located domestically or internationally, the USPTO is in the best position of anyone to prevent this sort of abuse.”

However, the USPTO has limited power in what it can do – even if instances of agency impersonation exist (such as those reported to the registry by the couple). In comments to WTR, USPTO trademark commissioner David Gooder states: “We at the USPTO are frustrated by these scammers as much as anyone – if not more so. As trademark applications have surged, so too have scammers looking to take advantage of our customers. We recognise the problems they cause and we take these issues very seriously. And while we are not an enforcement agency who can provide assistance with seeking restitution or criminal penalties, we can actively provide guidance, information, and awareness, always to the best of our ability, and within the limits of our legal authority.”

Asked on specific measures that the USPTO has adopted to combat fraud targeting US citizens from entities located abroad, Gooder revealed a number of tools and strategies. “We have formed a team dedicated to investigating bad actors who try to circumvent US rules, and where the conduct appears to be criminal in nature, we refer that conduct to law enforcement,” he explained. “We also post the names of potential scam companies flagged by our customers, in addition to the names of bad actors and companies that the USPTO is investigating or has sanctioned. We also provide a checklist for how to prevent being scammed and what to do if you believe you are a victim. Finally, we always encourage victims to reach out to law enforcement and consumer protection authorities – and when the scam involves a US trademark application or registration, customers can reach out to us via ‘[email protected]’ and we will review those emails to determine if and how we can provide assistance.”

Ultimately, Gooder concluded, “everyone in the trademark ecosystem has an important role to play to help ensure this fraudulent activity does not continue” – including helping to raise awareness to those most at risk of fraud, such as small business owners.

Another key player to combat fraud, says Bethell, are search engines. As WTR investigated in May, suspicious low cost filing platforms dominate paid Google search results on trademark-related keywords, with many ads including misleading claims and ‘too-good-to-be-true’ pricing. Further analysis reveals that various Abtach websites are spending thousands of dollars a month on Google Ads, including Logo Iconix spending an estimated $33,000 a month on logo-related keywords. “If the USPTO knows a site is impersonating a government agency, one would think they could get that website delisted from Google,” Bethell contends. “At the very least, Google could pull their paid ad campaign. Unfortunately, private individuals reporting the fraud, even with links to WTR’s coverage on the issue, was not enough to convince Google to stop aiding and abetting the fraud in May.”

WTR has reached out to Google, and was told: “Protecting consumers and credible businesses is a priority for us. We have several policies in place that prohibit misleading ads and ads that promote dishonest or fraudulent business practices. If we find ads that violate our policies, we remove them. Last year, we removed 3.1 billion bad ads from our platforms, of which more than 100 million were ads related to misrepresentation and dishonest behaviour.”

Looking ahead, it is unclear if the young family will be able to get their money back. While time will tell on that matter, the couple thinks more needs to be done to help current victims and to stop others falling prey to opportunists. “Ultimately, I think there needs to be more accountability on the internet,” the partner concluded. “I can’t believe that these websites can continue to operate after they’ve been deemed to be participating in fraudulent activity, and that there’s nowhere for us to report it with anyone that actually seems to care. Also, the fact that the major websites to review businesses can be so easily manipulated with fake reviews – how are we supposed to know if a platform is illegitimate?”

If any WTR readers can provide advice or assistance to the young family, you can contact us and we will forward all relevant emails on.

If you have been impacted by any of the issues raised in this article, contact senior reporter Tim Lince.