Thursday, December 30, 2010
A $2.4 million settlement was reached in San Diego with the perpetrators of a scheme that utilized phony documents appearing to originate from a government office to get money from law-abiding businesses.
According to the state Attorney General's office, thousands of companies throughout California were threatened with fines or even suspensions of their right to conduct business if they failed to return official-looking, but fraudulent forms along with a mandatory filing fee.
"This settlement puts a stop to their scheme and secures restitution for the companies that were cheated, said Attorney General and Gov.-elect Jerry Brown.
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 $1.75 million to customers and pay an additional $650,000 in penalties and costs to the state.
To preserve the defendants' assets, the Attorney General's Office moved successfully last year to freeze their bank accounts, Brown said.
In 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, according to Brown.
The investigation determined that the defendants, based in Los Angeles County, misled well over 5,000 customers into paying by utilizing phony forms that had official-looking names, seals, numbers and due dates.
The investigation was triggered by a flood of complaints to the Attorney General's Office from businesses that been victimized, Brown said. The scheme flourished because the forms seemed routine and the payments demanded were small, he said.
The settlement is the latest 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.