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California Sues Small Business Scammers

By Neetal Parekh on October 08, 2009 | Last updated on March 21, 2019

As a small business owner, you wear many hats and shake a number of hands in an average day... you don't have time to get duped by scams.  And the state of California agrees.  As the Central Valley Business Times reports, the state is suing 8 individuals and 6 businesses for orchestrating scams targeting small business owners.

What did they do?

The scams all involved mailed solicitations that were made to resemble government documents, complete with a seal, citations to state code, and drop date to reply by.  The letters threatened revocation of the small business's corporate or limited liability status for non-payment of a "required" fee.  In return for the "fee",  some of the scams promised corporate minutes.

Below are 3 of the company defendants named in the lawsuits.  The individuals running these companies were also sued.

  • Compliance Annual Minutes: reportedly mailed forms demanding "annual fee" of $150, else loss of corporate status.  The letter said that corporate minutes would be provided in exchange for payment.  The minutes that were sent were fictitious.
  • Annual Review Board Inc.: official-looking forms were mailed to limited liability companies demanding payments from $195-$239 or risk penalties, fines, or suspension.
  • Business Filings Division and LLC: mailed forms entitled "Annual Minutes Disclosure Statement" suggesting that recipient businesses had to pay an "annual fee" of $175 or risk loss of corporate status.

The cases were filed this week in the San Diego Superior Court and seek civil penalties, injunction, and other remedies.

If you come across any official-looking mail requesting fee amounts you are unfamiliar with, you are advised to follow up with your local city council or government organization to verify the sender and content of the mailing.

Be vigilant, and don't let your business be caught in one of these scams.


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