Weak safeguards make Nevada businesses targets for fraud
LAS VEGAS — Scammers have exploited a number of Nevada businesses by taking advantage of a filing system allowed by the secretary of state’s office, state lawmakers said.
For as little as $150 and without facing any questions from the state agency, anyone can submit records online or in person to name themselves directors or managers of any company in Nevada, the Las Vegas Review-Journal reported .
Once the records are changed, scammers can exploit the credit and assets of the companies. Cases in Nevada and other states show how thieves used phony business ownerships to buy cellphones and luxury vehicles and sold off land.
“It’s a serious issue,” said Jodi Grover, president of Southern Nevada operations for Ticor Title of Nevada.
Title companies like Grover’s are responsible for vetting real estate transactions and verifying property ownership, so she warned her employees about this problem when she learned about it more than a year and a half ago.
“If you own your property in an LLC and then somebody fraudulently puts their name as the managing member, that would give them the authority — fraudulently — to sell your property,” she said.
State lawmakers now want to take action to combat the filing of fake business documents with the Nevada secretary of state.
“This is a perfect example of something that shouldn’t happen and there should be protections in place,” said Assemblywoman Shannon Bilbray-Axelrod, D-Las Vegas, a member of the Assembly Government Affairs Committee.
She said she is considering a bill during the next legislative session to address the issues, but she needs to study the issue more before specifying a reform plan.
Secretary of State Barbara Cegavske’s office said in a statement Tuesday that it “will continue to discuss the laws and processes relating to this office with the business community, the Business Law Section of the State Bar Association, the Nevada Registered Agents Association and legislators in preparation for the Legislative Session as we have done in previous sessions.”
Many of the safeguards reported are part of an updated Commercial Recordings filing system that is currently under development, Cegavske added.
The secretary of state’s statement also noted that it is a category C felony in Nevada to file a false or fraudulent business document and that state law allows scammers to face civil penalties.