On August 31, 2022, pursuant to Colorado Senate Bill 22-034, the first Fraudulent Business Filings Working Group—convened by the Colorado Secretary of State—met. Keating Wagner business litigation attorney Aaron Goldhamer was in attendance.
The Colorado Secretary of State maintains a variety of records for Colorado and out-of-state businesses doing business in Colorado. While there is a way to secure a business record on file with the Colorado Secretary of State, in many cases businesses have not secured their record account, which can lead to nefarious behavior that create problems for businesses.
For example, unsecured business accounts may have their address, their registered agent information, or other foundational documents (such as Articles of Organization) changed by unauthorized actors. These fraudulent changes could result in any number of issues as part of fraudulent schemes, from the loss of ability to obtain loans to impairment of credit ratings, to the use of personal information to create fraudulent businesses, to theft of assets, to attempts to co-opt the business in its entirety (i.e. “business identity theft”).
Recognizing this problem, in 2022 the Colorado General Assembly passed Senate Bill 22-034, which empowers the Colorado Attorney General and the Colorado Secretary of State to investigate and act to correct fraudulent business filings, effective February 1, 2023. Senate Bill 22-034 also provided for the creation of a Working Group to study potential measures to counteract and prevent fraudulent filings.
The Working Group’s inaugural meeting featured a variety of policy specialists, business and legal field leaders, and law enforcement officials (including representatives from the Colorado Bureau of Investigation and the Department of Homeland Security, due in part to the tendency for fraud to be financing terrorism).
As discussed at the Working Group, over 4,000 instances of fraudulent business filings occur in Colorado each year. If your business is a victim of a fraudulent business filing, contact one of our business litigation attorneys at 303.534.0401 to discuss your options.