SAN DIEGO - Attorney General Edmund G. Brown Jr. today announced a $2.4 million settlement with the perpetrators of an illegal scheme that threatened thousands of companies throughout California with fines or even suspension of their right to conduct business if they failed to return official-looking but fraudulent forms along with a mandatory filing fee.
"These imposters used phony documents that appeared to originate from a government office to gain payment from law-abiding businesses," Brown said. "This settlement puts a stop to their scheme and secures restitution for the companies that were cheated."
The civil settlement filed in San Diego Superior Court names Annual Review Board, Inc.; Business Filings Division; Corpfilers.com, LLC; George Alan Miller; Rebecca J. Miller; Argishti Keshishyan, and Kristina Keshishyan. The settlement requires the defendants to make restitution of $1,750,000 to customers and pay an additional $650,000 in penalties and costs to the state.
To preserve the defendants' assets, the Attorney General moved successfully last year to freeze their bank accounts.
The bogus operation constitutes what is known as a corporate filing scheme. Solicited victims were told they had to pay a $195 filing fee accompanying return of the phony documents.
Brown's investigation found that the defendants, based in Los Angeles County, misled well over 5,000 customers into paying by utilizing phony forms that:
-Had an official looking seal
-Used a "control number"
-Had a "Corporation Number" or "LLC Number"
-Used official sounding titles and names, such as "Corporation Division", that implied a governmental connection
-Specified a "due date" and employed the phrase "Remit Immediately!"
-Described the payment as an annual fee
-Warned that failure to respond could lead to the recipient being suspended and losing its right to conduct business
The investigation was triggered by a flood of complaints to the Attorney General's office from businesses that had been victimized. The scheme flourished because the forms seemed routine and the payments demanded were small.
As part of the settlement, the defendants are permanently enjoined from making fraudulent representations. Brown urged businesses to be vigilant against similar scams.
Restitution will be handled by a claims administrator who will be named by the Attorney General's office. More information will be available on the Attorney General's website at http://ag.ca.gov/.
This is the latest settlement of eight actions the Attorney General has prosecuted against corporate filing schemes. In a case tried in San Diego Superior Court last year, Brown won a $1.2 million judgment against Gaston Muhammad and Ronna Green for running a corporate filing scheme that swindled California companies.
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