Old scam reappears in O.C.

March 29th, 2009, 4:00 am · 14 Comments · posted by Jan Norman, small-business columnist

Some Orange County business owners have received official-looking notices about phony annual filings and fees, says Fountain Valley enrolled agent and tax specialist Judee Slack of SlackTax Inc.

Her clients recently received notices that they owe a filing fee of $125 to the “Department of Business Minutes” indicating the recipient’s limited liability company must file its annual minutes with the government. In reality these businesses must merely make sure to have these minutes on hand, Slack notes.

A little digging - isn’t the Internet grand? - turned up similar bogus “invoice” schemes from a variety of official-sounding senders over several years not just in California, and a warning from California Secretary of State’s office about this latest run at small-business pocketbooks.

The letters seek payment of $100 to $300 or so. If you’ve received such a notice, look for fine print somewhere near the bottom that this is not from a government agency and not a bill but a solicitation.

Here’s what the Secretary of State says:

The Secretary of State’s office has been advised that solicitation letters are being sent to California businesses encouraging them to comply with their California Corporations Code filing obligations by submitting fees and documents to a third party rather than by filing directly with the Secretary of State’s office.

The solicitations request that a fee and a completed form be submitted in order for the business to comply with applicable California or other law.

These solicitations are not being made by the California Secretary of State’s office and are not being made by or on behalf of any governmental entity.

Burbank attorney Jonas Grant gives a good explanation of the law on his California Business Law Blog, based on problems his clients reported to him in 2007. The post has gotten dozens of comments from people who received these solicitations, some from other states.

(One even accuses Grant of sending the letters, thus the red-letter disclaimer at the top of his post. Talk about shooting the messenger.)

An Oregon blogger reported a similar push in that state in 2005.

Scam.com also reports a 2008 version of this mailing in California with a dozen comments from other recipients.

Here’s what to look for if your business receives such a letter, according to the Secretary of State:

Appear similar to a Secretary of State form (generally the 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 quotes 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.

Click here to read the entire letter.

The U.S. Postal Services wants to hear from people who actually filed or paid for these services. Contact Mike McCarthy, postal inspector, U.S. Postal Service, 281 E. Colorado Blvd., Pasadena, CA 91101

You can also file a complaint with the California Attorney General Office, California Department of Justice, Attention: Public Inquiry Unit, P.O. Box 944255, Sacramento, CA 94244.

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Bill says:

March 29, 2009 at 8:17 am

When I get these scams, I send them what they want, including a check payment. The check is a laser-generated fake check. Legit bank, routing number, etc., but not connected to my business at all. The scammer deposits the check, and it bounces. The scammer gets hit with a bounced check fee. My personal way of getting back. It’s a hobby for me.

owned_by_home says:

March 29, 2009 at 1:55 pm

Use the tracking number and account from a US treasury account!

in8chro says:

March 29, 2009 at 2:50 pm

i have received these every year for the past 5 years. i knew it was a scam from the get go. its pretty obvious if you read through it. i always just send them monopoly money and fill out weird names. i get a kick out of it.

John Coktostone says:

March 29, 2009 at 3:00 pm

Bill, I like it. Well done.

Jeff says:

March 29, 2009 at 3:22 pm

Hmm.. not a wise idea. That is a felony.

T.O. Jason says:

March 29, 2009 at 3:30 pm

Your next hobby might be making license plates if you admit publicly to writing bogus checks drawn against banks where you have no account. You are defrauding one or two banks which have nothing to do with these companies.
.
Anyway, these scams are misleading, but usually not illegal. An “official-looking” seal is just that, and a dead giveaway.

March 29, 2009 at 3:49 pm

No bank is defrauded.

bkkroeli says:

March 29, 2009 at 5:16 pm

Old scams recirculating, I just ignore them, it takes less energy.

glow22 says:

March 29, 2009 at 9:14 pm

These have been sent to us in Santa Ana for years. First tip-off is always the lack of first class postage.

J Nguyen says:

March 29, 2009 at 11:21 pm

I don’t why California Attorney general does not look into
this kind of scam and prosecute them ?Or, he is busy to run the campaign for the next office ?

Miguel says:

March 30, 2009 at 8:53 am

TO Jason is right. These companies are engaging in unfair business practices, but sending them a bogus check is a crime, and if you mail it, it’s mail fraud. Check out the sentences a first-time offender can get for mail fraud and ask yourself if it’s worth it.

Mike McCarthy says:

March 30, 2009 at 10:58 am

Customers who receive official-looking solicitations described in the above article, i.e. corporate minutes, are under no obligation to respond or send a fee. PLEASE READ THE FINE PRINT. If you have concerns contact the Postal Inspection Service at 877-876-2455.
Creating & mailing fictitious or bogus checks, even as a joke, could be a violation of the federeal Mail Fraud statute, a felony (Title 18, US Code, Section 1341). Conviction can result in imprisonment and a fine for each mailing. Furthermore, if those routing and account numbers belong to an innocent account holder it is that person who may get charged the bounced check fee,. They may also believe their identity was stolen, and the person who created the fake checks as a joke could also face severe civil penalties.

March 30, 2009 at 11:59 am

Wow. Pretty heavy. But I must say that I am pretty good at it since I am still at it. If not, I would have been caught, charged, prosecuted, and sent away as a criminal.

Cindy Logan says:

April 1, 2009 at 7:48 am

In this economic environment, scams tend to be up because people are more desparate, the want to believe it’s true. Thanks, Jan, for keeping us abreast.

Orange County Register