Beware of Business Compliance Scams
Unfortunately, business owners are often targets of scams. And, many of the common scams involve phony state agency documents or postcards warning you of penalties if you don't order particular state documents. If you receive an official looking document or a postcard that demands you take action to preserve the good standing of your business, please review it carefully and read the small print. If you are not sure, please contact us and we will assist you.
Several States Warn Businesses of a Compliance Filing Solicitation Scam
Several states have identified a compliance filing solicitation scam perpetrated by companies identified by different official-sounding names, but the same basic ploy: to trick unwary business owners into spending money unnecessarily. The companies identified include: Division of Corporate Services (Texas and Pennsylvania); Corporate Records Service (Delaware and Alaska); Annual Business Services (Oregon).
These companies will send an official-looking form (often styled as an "Annual Minutes Form" or a postcard threatening fines if you don't have the company obtain a "Certificate of Existence" on your behalf.
States that have issued notifications about this scam include Colorado, Delaware, Louisiana, Massachusetts, Michigan, Nebraska, Nevada, New York, Oklahoma, Pennsylvania, Texas, Washington, and Wyoming. Links to these notices are listed below.
NRAI urges our clients to be aware of these and other fraudulent solicitations, and continue to rely on NRAI’s expertise to help you understand the compliance filing requirements specific to your entity type and location. If you believe your entity has been the victim of a fraudulent solicitation by Corporate Records Service, please contact the Office of the Attorney General in the respective state.
Links to state notifications about compliance scam:
Delaware: Secretary of State notification can be found here.
Louisiana: Department of State notification can be found here.
Massachusetts: Secretary of the Commonwealth notification can be found here.
Michigan: Department of Licensing and Regulatory Affairs notification can be found here.
Nebraska: Secretary of State notification can be found here.
New York: Attorney General notification can be found here.
Pennsylvania: Department of State notification can be found here.
Texas: Secretary of State notification can be found here.
Wyoming: Secretary of State notification can be found here.
Georgia Corporate Compliance Company
Many corporations registered in the State of Georgia recently received correspondence from a company called Georgia Corporate Compliance, which offers to complete corporation meeting minutes. The forms provided by Georgia Corporate Compliance are not required by the Office of the Secretary of State of Georgia and do not affect a company’s good standing. Due to confusion caused by this mailing, the Secretary of State’s office has issued a reminder that any official requests or statements will include a state seal and the name of Secretary of State Karen Handel.
Office of the Compliance Recorder Solicitations in Texas
Many Texas business entities recently received a solicitation for the Annual Minutes Disclosure Statement from a Los-Angeles based entity calling itself the “Office of the Compliance Recorder.” This solicitation implies that Texas businesses are required to complete the statement and pay a fee of $150. The forms provided in this solicitation are not required by the Texas Secretary of State and entities are not required to do business with the Office of the Compliance Recorder. Please click here for more information.
Please note that the correspondence from Georgia Corporate Compliance does include a disclaimer that the company is not affiliated or endorsed by a government agency.
Please click here for the Georgia Secretary of State’s announcement.
Illinois Compliance Scam
Non-governmental firms called "Illinois Corporate Compliance" or "Annual Corporate Compliance" are trying to collect a $150 fee to file corporate minutes. Please be advised that corporations are not required by law to file minutes with any government or private entity.
Misleading Compliance Solicitations in California
We are receiving an increasing number of inquiries regarding a recent solicitation that has been sent to many companies registered in California. The third party solicitations request that a fee and a completed form be submitted in order for the business to comply with applicable California or other law. The solicitations tend to have one or more of the following characteristics (See Sample A, Sample B or Sample C for examples of these mailings):
- Appear similar to a Secretary of State Statement of Information form;
- Contain an official-looking seal;
- Quote a specific statute or other law on the form to be filled out and returned;
- Imply that failing to return the form and pay the requested fee may place the entity in legal jeopardy, or might cause the entity's filings with the California Secretary of State to be in default or noncompliant status;
- Contain a reference to a "file number," "Corp Number," "Corporation Number," or "Control Number" that does not match the number assigned to the entity by the California Secretary of State;
- Reference or quote Corporations Code sections inapplicable to the type of entity being solicited, such as Code sections applicable to corporations when soliciting a limited liability company;
- Reference an "annual fee" or "annual payment" rather than a filing fee and that is in excess of the filing fee for a Statement of Information;
- Provide an estimated processing time for "minutes" to be prepared and mailed to the entity;
- Indicate the submitted information will be treated as private and confidential.
The above is only a portion of the information available on the California Secretary of State website. Click here to learn more.
Scams Civil Suit in California
The Office of the Attorney General for the State of California filed suit against eight individuals and six businesses for three scams that targeted small businesses. The lawsuits seek to recover more than $3 million.
These lawsuits involve three different scams that included mailing solicitations to small businesses. These solicitations resembled government documents, featured official-looking seals, official-sounding names, citations to the Corporate Code and a reply by date. The forms claimed that the businesses were in danger of losing their corporate or limited liability status if payment was not made.
Compliance Annual Minutes Board Scam
Small businesses in California received official-looking forms from the Compliance Annual Minutes Board. These forms demanded an “Annual Fee” payment of $150 or warned that companies would lose corporate status. In exchange for payment, the Compliance Annual Minutes Board promised to provide corporate minutes. Instead, generic minutes were distributed.
Annual Review Board Inc., Business Filings Division and Corpfilers.com, LLC Scams
Solicitations were sent to California businesses instructing recipients to complete and return the form along with a fee or risk penalties, fines and suspension. The fees ranged from $195-$239. All documents resembled official-looking forms.
Corporate Filings Division and Corporate Compliance Filings, Inc. Scams
An official-looking form called the “Annual Meetings Disclosure Statement” was mailed to California businesses. This form implied that the recipient was obligated to complete and return it along with an annual fee payment of $175 or risk corporate status. Corporate minutes were promised in exchange for payment, but fictitious minutes were used instead.
For more information on these scams, click here. For a sample of the scam mailings, click here or refer to the California Scam information posted above.
Mail Scams Target Business Corporations in Indiana
Scams directed at business corporations continue to be an ongoing problem, particularly in the current economic market. These scams can take the form of solicitations that appear to come from a government agency, but do not, and offer assistance in performing non-existent or non-required services.
In 2009, the Indiana Secretary of State claimed to have tracked down the individuals behind such letters, at least those directed to Indiana corporations. The letters that purportedly came from the "Indiana Corporate Compliance Business Division" were perpetrated by two individuals, Aaron Williams of Las Vegas and Lisa Diane Brown of California. Based on the Indiana Secretary of State's investigation, in cooperation with other states whose corporations were victimized by similar scams, the Indiana Attorney General filed a complaint against Williams, Brown and their businesses. It is still not known if others are perpetrating similar scams.
If you have questions about a solicitation you receive from a government agency, please contact your Corporate Service Representative. Click here to view a sample of the document sent by the "Indiana Corporate Compliance Company."
Corporate Filing Unit
A California company called Corporate Filing Unit is sending out solicitations for filing a Statement of Information or claiming your Statement of Information is late. These communications resemble invoices, but if you read it closely, it should state this company is not affiliated with any state agency.
California Business Collector
A company by the name of California Business Collector (CBC) is sending out mailers asking businesses to complete a Disclosure Form of Directors and Shareholders and submit a fee. This organization is not affiliated with the State of California. The fine print on the document states that this is a solicitation and not a bill. Please see the sample document for more information.
Compliance Services Annual Minutes Scam in Florida
An entity called Compliance Services is requesting the completion and submittal of an Annual Minutes Requirements Statement along with payment of $125. Compliance Services is not affiliated with the State of Florida. A warning about this scam was posted on the Florida Division of Corporations Website. Please click here to view a sample document from this scam.
Compliance Services Annual Minutes Scam in Massachusetts and California
This scam is similar to one listed above for the State of Florida. An entity called Compliance Services is requesting the completion and submittal of an Annual Minutes Requirements Statement along with payment of $125. Please note this company is not affiliated with a government agency. Please click here to view a sample document from this scam.
Corporate Controllers Unit in Colorado
An organization called Corporate Controllers Unit is sending solicitations for a Periodic Report to Colorado entities. The solicitation offers to process the Period Report for a $225 fee. Businesses who are required to file a Periodic Report can do so through the Colorado Secretary of State's website and generally for a fee of $10. The Colorado Secretary of State has posted a warning about this scam on the state's website. Please click here to learn more.