{"id":17055,"date":"2008-06-02T06:00:32","date_gmt":"2008-06-02T11:00:32","guid":{"rendered":"http:\/\/www.sequenceinc.com\/fraudfiles\/?p=17055"},"modified":"2016-04-03T19:17:11","modified_gmt":"2016-04-04T00:17:11","slug":"own-a-business-be-vigilant-thieves-are-lurking","status":"publish","type":"post","link":"https:\/\/www.sequenceinc.com\/fraudfiles\/own-a-business-be-vigilant-thieves-are-lurking\/","title":{"rendered":"Own a Business? Be Vigilant, Thieves are Lurking"},"content":{"rendered":"

\"\"Las Vegas Sun<\/strong>
\nBy Abigail GoldmanNevada\u2019s corporate filing practices part of problem<\/em><\/p>\n

Richard M. Krawczyk is an expert in idle corporations, dusty businesses sitting on shelves in the secretary of state\u2019s office, maturing like fine wine, waiting for someone to want them.<\/span><\/p>\n

For a living, Krawczyk \u2014 his clients call him \u201cDr. Richard\u201d because of his Ph.D. in business \u2014 teaches people how to acquire these \u201cshelf corporations.\u201d Entrepreneurs want companies that are aged because they look good in the banks\u2019 eyes, and therefore, theoretically, are eligible for larger lines of credit. If you google \u201cbusiness credit expert,\u201d Krawczyk\u2019s is the first name that comes up. His is also the second, third and fourth names.<\/p>\n

He\u2019s the wrong person to steal a shelf corporation from.<\/p>\n

Corporate identity theft \u2014 stealing a business out from under its owner \u2014 is the criminal cousin of classic identity theft. There are endless variations, but many involve stealing someone\u2019s company by filing bogus paperwork.<\/p>\n

In Nevada, where we woo people to incorporate in our lax-tax, minimal-disclosure state, the problem is probably worse than elsewhere. The Nevada secretary of state\u2019s office doesn\u2019t track corporate identity theft, but with so many businesses incorporated here, it only makes sense more would be stolen here as well, spokesman Bob Walsh said.<\/p>\n

Nevada has more than 320,000 corporate filings, second only to Delaware in sheer number, Walsh said. He called our state\u2019s corporate filings a \u201cbig pool.\u201d<\/p>\n

And the bigger the pool, the more scum it grows.<\/p>\n

In 2006, Nevada was one of three states a congressional subcommittee criticized for lax corporate filing practices, arguing that the Silver State could be a haven for crime, money laundering and even terrorism, all because it\u2019s easy for a corporation to hide its principals.<\/p>\n

Here\u2019s what happened to Krawczyk: The Las Vegas businessman was doing a routine check of his more than 30 Nevada corporations, making sure his registrations were up to date and squared away \u2014 the mark of a man who makes a living instructing people on how to take care of their corporations.<\/p>\n

But when he went to look for one of his shelf corporations, a three-year-old entity called \u201cCorporate Business Services Inc.,\u201d he couldn\u2019t find it anywhere.<\/p>\n

He called the secretary of state and was informed that his company had been renamed \u201cChallenger Biz Services Inc.\u201d The list of corporate officers had also been changed. Instead of Krawczyk as president, it listed a California man named Ralph Rogue.<\/p>\n

Krawczyk called Rogue, who told him he bought the shelf corporation from a company in San Ramon, Calif., called \u201cCorporate Credit Association of America Inc.,\u201d for the asking price of $10,000.<\/p>\n

So what happened? As it turns out, it\u2019s easy to change a corporation\u2019s information \u2014 who its president is, who manages it, where it\u2019s located. All you have to do, really, is file some paperwork, either through the mail or online or by fax. The secretary of state is not in the business of overseeing who files what, or sniffing out scam artists, Walsh said. The office just collects the records.<\/p>\n

\u201cWe are essentially a big filing cabinet,\u201d he said. \u201cPeople can reach in and file things there, and people can reach in and take things out.\u201d<\/p>\n

So while Krawczyk wasn\u2019t looking, someone stole his company from under his nose. A simple switch-a-roo put a new name on the thing, and it was sold to somebody else. Krawczyk is all too familiar with this scam, being on the legitimate side of the same business for 15 years. He just never thought it would happen to him.<\/p>\n

Krawczyk offered Corporate Credit Association of America a deal: Pay me $25,000, and I\u2019ll go away quietly. His stolen company is worth something in the neighborhood of $12,000, Krawczyk says, adding that a business owner could obtain anywhere from $50,000 to $100,000 in credit through the shelf corporation.<\/p>\n

The California company didn\u2019t want to cough up the cash. Instead, Krawczyk says, he was told it bought his company from yet someone else, and was unaware it was stolen.<\/p>\n

Krawczyk doesn\u2019t buy the story and is now suing the company for unspecified damages.<\/p>\n

Corporate Credit Association of America representatives did not return calls for comment. The closest the California company has come to a rebuttal has been online, in response to a posting on RipoffReport.com, a Web site where consumers self-report sham businesses. Someone with the screen name \u201cfraud_alert\u201d called the company \u201cknown corporate identity thieves.\u201d<\/p>\n

The company responded, using the screen name \u201cPeace Maker,\u201d by calling Krawczyk\u2019s accusation a publicity stunt. \u201cFirst of all sir, we would like proof to be provided that our company did any wrong doings!,\u201d the Internet posting reads. \u201cWe would like to thank you for thinking to take the time to make up a false statements about our company \u2026 Please provide us with proof or facts to substantiate these allegations please sir!\u201d<\/p>\n

Krawczyk insists the Nevada secretary of state is able to track the changes back to their sources, back to the very computers that submitted the new information. Moreover, he says, the day after he called the company to complain, his corporate information and name were restored to exactly what they were before the theft. If Corporate Credit Association of America really got his company from someone else, Krawczyk says, then how would it have all that old information at its fingertips?<\/p>\n

Ralph Rogue told Krawczyk Corporate Credit Association of America is refusing to refund his $10,000. In fact, Rogue told Krawczyk, he bought six shelf companies from Corporate Credit Association of America and now fears they are all bogus. He didn\u2019t return calls for comment.<\/p>\n

Walsh, the secretary of state\u2019s office\u2019s spokesman, said he could not comment Krawczyk\u2019s case, but Tracy Coenen<\/strong>, a Chicago-based forensic accountant and expert on corporate fraud, said part of the problem is that government agencies and laws have not kept up with technology. If all it takes is a computer to change a corporation\u2019s owner, perhaps it\u2019s gotten too easy, Coenen said.<\/p>\n

The Nevada secretary of state\u2019s office is working on new regulations that will focus on bogus business filings. In legislative hearings on Assembly Bill 25, Secretary of State Records Division Deputy Scott Anderson told Nevada politicians that victims of false filings are left to their own devices when it comes to legal recourse.<\/p>\n

\u201cWe send them to their attorneys, or they try to figure it out on their own \u2014 how they might remedy some case of fraud in the filing of documents against their entity,\u201d Anderson said.<\/p>\n

With the new laws, which passed unanimously in the Senate, Nevada could follow the lead of other states, Anderson said, and set up a \u201csort of administrative procedure, including \u2026 an administrative hearing process, that we might be able to offer our customers in certain circumstances without having to send them through a costly and lengthy legal process.\u201d<\/p>\n

The proposed regulations are still stuck in hearings and workshops.<\/p>\n

In the meantime, it\u2019s up to corporations\u2019 owners to keep tabs on their latest filings, to be proactive as possible, instead of reactive, as corporate identity theft becomes more common, Coenen said.<\/p>\n

Coenen has never heard of a case like Krawczyk\u2019s, but acknowledged \u201cit might be pretty easy to get away with.\u201d<\/p>\n

Unless, of course, you steal that shelf company from the self-described \u201cguru of business credit,\u201d a meticulous man who calls the thieves rookies and vows revenge.<\/p>\n","protected":false},"excerpt":{"rendered":"

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