In re David N. Caracappa, Proc. No. D2015-37 (USPTO Dir. Jan. 5, 2016)

Michael E. McCabe, Jr.Criminal, USPTO

Disposition: Exclusion on consent from practice before the USPTO arising from practitioner’s involvement in a criminal conspiracy to defraud a patent client and engaging in money laundering.  Final decision here.

Related to USPTO Practice?  Yes

Related Case: United States v. Caracappa, No. 2:15-cr-00078-JHS (E.D. Pa. Mar. 3, 2015) (discussion here)

Summary: A patent attorney was excluded on consent following his plea of guilty in federal court for his role in a criminal conspiracy with another practitioner (an in-house attorney and client representative) to engage in fraudulent client billing, wire fraud, and money laundering for work he did not perform. The other practitioner performed the work ostensibly performed and billed by the practitioner, who would kick back most of the proceeds received from the client entity to the co-conspiring in-house counsel.

Facts: This case involved a criminal conspiracy between two registered practitioners regarding fraudulent invoices submitted to a client for attorney’s fees for work that was not done. In particular, between September 2008 and May 2013, Mr. Caracappa, a registered patent attorney, and Alexander Burke (another registered patent practitioner), engaged in a scheme to defraud Mr. Burke’s employer, Siemens Corporation. Mr. Burke was authorized in his position at Siemens to hire outside contractors to provide patent services on its behalf.

On multiple occasions between 2008 and 2013, Mr. Burke assigned patent application and prosecution work to Mr. Caracappa, but Mr. Burke would perform the work himself. Mr. Caracappa than billed the work that he did not perform to Siemens at Mr. Caracappa’s standard fees for the project assigned. Mr. Burke authorized payment from Siemens to Mr. Caracappa, and Siemens would pay Mr. Caracappa the amount invoiced. Mr. Caracappa then would reroute the majority of the payment to Mr. Burke.

In one example of the scheme, Mr. Caracappa billed Siemens $8,000 ostensibly to prepare a patent application that he did not prepare but which was prepared by Mr. Burke. When Mr. Caracappa received payment, he rerouted $7,000 of the payment back to Mr. Burke for the latter’s personal use and kept the remainder for himself.

Over the course of approximately five (5) years, Mr. Caracappa and Mr. Burke issued 588 fraudulent billings to Siemens in the total amount of approximately $2.4 million. The scheme continued until May 2013, when it was discovered by Siemens.

In March 2015, Mr. Caracappa was charged in the United States District Court for the Eastern District of Pennsylvania with one (1) felony count of conspiracy to commit wire fraud and one (1) felony count of conspiracy to commit money laundering. See United States v. Caracappa, No. 2:15-cr-00078-JHS (E.D. Pa. Mar. 3, 2015). He subsequently pled guilty. Sentencing has not yet been set by the Court. Separately, Mr. Burke also was charged and, to date, he has contested the allegations and seeks a trial, which has not yet been held. See United States v. Burke, No. 2:14-cr-00565-JHS (E.D. Pa. Oct. 16, 2014).

Mr. Caracappa was subsequently investigated by the OED, which was investigating the criminal conduct. Mr. Caracappa never responded to the OED’s Requests for Information. The OED filed disciplinary charges arising from the criminal conduct.

In December 2015, Mr. Caracappa agreed voluntarily to resign from the USPTO.