California Cracks Down on Scammers: How They Swindled Small Businesses

California businesses are the latest group to be targeted by scammers. This latest scam certainly shows us that: (a) there is no one that scammers won’t target, and (b) we must all be on high alert when it comes to giving or receiving any type of information or money.

$3 Million in Scams

The state of California is now in the process of suing six businesses and eight persons that are believed to have targeted and scammed business owners. The recently filed lawsuits, which were filed in the San Diego Superior Court, seek to recover more than $3 million dollars for the scammed businesses.

California Attorney General Edmund Brown Jr. explained that these scammers sent out official-looking documents to several California businesses that essentially convinced them to send money. Of course, these small businesses received nothing in return.

The Details of the California Scam

The lawsuits involve three separate cases, although all of the cases involved the same type of scam. The state of California accuses these six businesses and eight individuals of mailing solicitations to small business that appear to be government documents. The documents even included official-looking seals and citations to the Corporations Code. The letters stated that the businesses were in danger of losing their corporate or limited liability status unless they made a payment in a short period of time.

The first case against Anthony Williams and his fictitious company, the Compliance Annual Minutes Board, states that he sent out forms to businesses that demanded an annual fee of $150. The letters detailed that the businesses would risk losing their corporate status if they didn’t immediately send the fee.

The other cases were also similar in nature, as they demanded money and used scare tactics to get it. Some of the scammers convinced businesses that were in danger of receiving fines, penalties and suspension if the fees were not paid.

The California Attorney General’s Office is seeking civil penalties in all three cases, as well as injunction and other remedies and costs.

Since 2004, more than 5,000 complaints have been received the Attorney General’s Office regarding these type of business scams.

Protecting Your Business

As a business owner, it is up to you to always confirm the validity of any solicitation, emails, bills or correspondence if you don’t recognize it as a trusted source. If in doubt, contact your State Attorney General’s Office to check the validity of the correspondence and of the company.