ROCKPORT and DENVER, Colo. — A lawsuit alleging a $5 million theft via mail and wire fraud, racketeering and a shell company, filed in June against a Rockport couple, is in the beginning stages of the legal process in Colorado U.S. District Court.

Jason Throne previously worked as an in-house patent attorney for Hunter Douglas Inc. and his wife, Mary Throne, formed with her husband a corporation called Patent Service Group, according to court documents.

According to the lawsuit, Jason Throne is accused of stealing nearly $5 million dollars from Hunter Douglas and covering up the theft by submitting fraudulent billing statements from the Throne's company, Patent Service Group, "for the purpose of defrauding HDI."

The thefts are alleged to have occurred during the course of Throne's more than 20-year career with Hunter Douglas, a Delaware corporation with its principal place of business located in New York. The company makes window blinds, covering and architectural products.

In late 1999, the Thrones established and incorporated Patent Service Group Inc. with a mailing address in Boulder, Colo., and a principal place of business at 236 Union St. in Rockport. The court document also said that Patent Service Group Inc. was administratively dissolved in 2002, but is believed to still be operated by the Thrones in Maine.

"Unbeknownst to HDI until recently, PSG is an entity Mr. and Mrs. Throne established and directed for the sole purpose of falsely billing HDI for patent search services that were on information and belief never performed. Between the years 2000 and 2014, the Thrones used PSG to submit false and fraudulent invoices to HDI on a monthly basis," Hunter Davis said in the court documents.

According to the lawsuit, filed June 30, Jason Throne was a Hunter Douglas employee from Aug. 16, 1993 to June 12, 2014. Since 2001, Throne's title was Intellectual Property General Counsel and as the sole in-house dedicated patent counsel, he was considered a high-ranking member of the company's legal department.

That title, the company said, reflected Throne's "supervisory authority over HDI's intellectual property portfolio, most significant of which was the Company's patent-related matters." And as such, he was responsible for managing and overseeing patents for Hunter Douglas and its subsidiary and affiliate companies.

As part of the job, Throne was charged with preparing and filing various patent applications, or directing and managing others doing the work. His duties also involved working with the company's research and development and engineering personnel "to memorialize and assess new inventions for their patentability."

The company also said in the lawsuit that as part of the job of preparing patent applications, research and searches of the U.S. Patent and Trademark Office databases must be conducted to assess whether a similar patent has already been field or granted, among other things. Throne was involved with and/or oversaw routine patent searches on behalf of Hunter Douglas, as well as "state of the art" patent searches, patent infringement searches and patent validity searches.

In addition to supervising a company attorney or paralegal, Throne was also authorized to retain outside counsel to perform the tasks, the latter most often requiring a written contract, according to the court document.

Hunter Douglas also said that it "explicitly prohibits" its salaried employees from engaging in any outside employment or entering into any contracts that would create a conflict of interest without disclosure to and the written permission from appropriate company personnel.

According to the court document, the Thrones are alleged to have prepared invoices to Hunter Douglas on an "approximately" monthly basis from 2000 through April 2014, for "purported patent searches" conducted during the previous month. They submitted the invoices under the name of PSG. The invoices averaged between $30,000 and $40,000 per month, according to the law suit.

The PSG invoices would be sent to Hunter Douglas via fax machine to Jason Throne at a number connected to a Post Office box in Rockport.

"The Thrones faxed the invoices to Jason Throne at HDI with the specific, fraudulent intent of giving the invoices an air of legitimacy, making it appear as if PSG was a third party vendor, instead of the alter ego of Jason and Mary Throne," said Hunter Davis in the court document.

The Thrones also allegedly established and used a P.O. box in Boulder, Colo., for remittance of PSG bills. The PSG invoices directed Hunter Douglas to remit payment to that address.

"The Post Office box was established by the Thrones with the specific intent of fraudulently obtaining HDI funds through the mail," said the court document.

The company alleges that when Throne received the PSG invoices, he would approve them and add his initials. Each PSG invoice would be sent to the company's accounting department for payment, allegedly bypassing the company's established procedure for processing and approving "key outside legal vendor charges."

"... he never inputted the PSG expenses into the system or gave direction to anyone else to input PSG expenses," said the court document. "Mr. Throne intentionally failed to input PSG charges into the legal workflow system to further conceal the Defendants' fraud."

Between 2000 and 2014, Hunter Douglas paid Patent Service Group/the Thrones a total of $4,841,146.09.

2000 - $285,272.87
2001 - $374,068.64
2002 - $346,373.38
2003 - $276,167.41
2004 - $250,357.52
2005 - $237,355.84
2006 - $272,180.09
2007 - $306,216.81
2008 - $253,893.55
2009 - $341,821.78
2010 - $402,663.67
2011 - $419,761.30
2012 - $444,723.94
2013 - $476,716.63
2014 - $153,572.66

Hunter Douglas alleges then that Jason or Mary Throne would travel from Maine to Colorado, and physically obtain the company's checks mailed to Patent Service Group at the P.O. box in Boulder. From there, they would allegedly travel to Steamboat Springs to personally deposit the checks into a bank branch located in that city that was opened and controlled by the Thrones.

The lawsuit claims that the Thrones took steps to hide their involvement with Patent Service Group when it was initially discovered by Hunter Douglas staff.

According to the court document, a patent engineer at the company in November 2013 discovered substantial billing entries for PSG, a company the engineer allegedly had never heard of or witnessed any work product from.

When the employee questioned Throne, he allegedly represented that the company was a patent search vendor that he used and that "the expenses are approved."

"He then emailed to her a response reiterating that PSG was 'a patent search service I use that tracks a number of different developments throughout the organization," according to the court document.

In addition to those allegations, Hunter Douglas claims that Patent Service Group "did not provide any material work product to HDI."

The company claims there is no written agreement that documents the business relationship between the companies, and that Hunter Douglas has no itemized billing, work files or reports from Patent Service Group and no email related to PSG.

"To the extent HDI can detect any services provided by PSG, the services are indistinguishable from the employment services for which HDI employed and paid Jason Throne," said Hunter Douglas in the court document.

The lawsuit claims that Mary Throne is not and has never been an attorney, and that there is no evidence she has obtained any degrees or certification related to intellectual property.

"On information and belief, Ms. Throne was previously employed as an aquatic aerobics instructor," said the court document.

The lawsuit said that Patent Service Group's billing rate for Hunter Douglas searches was $125 per hour, and that Jason Throne allegedly approved PSG's rate eventually increasing to $300 per hour.

In the year 2000, PSG billed $285,272.87 at a purported rate of $125 per hour. That would mean, the company surmised, that PSG worked nearly 2,300 hours during the year performing patent search services "solely for HDI." That equates to nearly 9.5 hours per day for each non-holiday work day during that year, the lawsuit said.

In 2001, PSG billed $374,068.64, also at the purported rate of $125 per hour. That would equate to 3,000 hours of work during the year, or 12 hours a day for each non-holiday work day during that year.

"Despite demands by HDI to do so, Mr. Throne has not produced any evidence of independent PSG work product or searches," said Hunter Douglas in the lawsuit.

Throne is also alleged to have failed to make his employer aware that PSG was providing services to Hunter Douglas until questioned about it by the patent engineer in November 2013. He also failed to make them aware that his wife or anyone else was acting on behalf of Patent Services Group or the nature of his relationship with PSG, as it pertained to Hunter Douglas, "including the conflict of interest that existed based on his interest in PSG."

Records filed with the lawsuit purport to show that Throne had signed the company's ethics policy against conflicts of interest and also certified he had no outside employment.

In addition to not being authorized by Hunter Douglas to conduct work for Patent Service Group, if he did, and based on his representations in writing that he was not working in any capacity other than as an employee of Hunter Douglas, the lawsuit alleged that: " To the extent PSG provided any actual services, HDI never approved the use of PSG nor waived the conflict that existed based on Jason Throne's interest in PSG. Mr. Throne was not authorized to approve a conflict involving himself, contract with PSG or approve payments to PSG on HDI's behalf. Mr. Throne was also not authorized to approve any rate increases to PSG on HDI's behalf."

Hunter Douglas alleges that homes the Thrones purchased in Rockport and in Steamboat Springs, Colo., as well as automobiles, a boat and other "significant" person property, were purchased with Hunter Douglas funds.

The company alleges that the Thrones engaged in a pattern of continuous racketeering activities by engaging in mail and wire fraud.

"The Thrones conducted the business of PSG entirely through the predicate acts of mail fraud and wire fraud. PSG was established and operated by the Thrones for the purposes of fraudulently obtaining funds from HDI using Mr. Throne's approval authority. The Thrones conducted the business of PSG through mail and wire communications, and they used mail and wire communications to shield their involvement with PSG by setting up the Boulder Post Office Box and using PSG as a front to obtain funds from HDI.

"The Thrones were engaged in interstate commerce. Jason Throne worked for HDI in its Broomfield office and out of his home residence in Maine. Jason Throne created PSG's invoices and sent them by facsimile from Maine to HDI's office in Colorado. The Thrones induced HDI to mail payments to PSG in Colorado. The Thrones deposited payment checks from HDI to PSG in a Colorado bank account and, upon information and belief, accessed those funds from Maine."

Hunter Douglas has accused the Thrones of violations of the Racketeer Influenced and Corrupt Organization Act and of the Colorado Organized Crime Control Act. They are accusing the Thrones and Patent Service Group of conspiracy, civil theft and rights in stolen property, unjust enrichment, imposition of constructive trust and conversion. HDI is claiming fraudulent concealment, fraudulent inducement, breach of fiduciary duty and breach of contract against Jason Throne, and breach of contracts against both Thrones. Mary Throne is accused of aiding and abetting breach of fiduciary duty

Hunter Douglas, according to the court document, is seeking a jury trial and damages, including three times the actual damages incurred, as well as court costs and attorney fees.

According to the Rockport town website, the Throne's waterfront home on Pandion Lane, across the street from the Farmstead, is valued for tax purposes at $1.9 million, of which $646,900 is for the land. They also own a nearby parcel of 1.01 acres valued at $114,200. Both parcels were purchased in 2006 for $975,000, according to the property record cards on file with the town.

The Thrones sold their Steamboat Springs home, which they built in 1999, for $1.125 million in 2007 for $1.125 million, according to SteamboatToday.com. It was also reported that the Thrones former home sold again in 2013, but for $693,500. According to the Routt County Assessor's website, the Thrones still own 35 acres of land within a 10-mile radius outside the Steamboat Springs city limit.

Editorial Director Holly S. Edwards can be reached at hollyedwards@penbaypilot.com or 706-6655.