"Annual Minutes" Mail Fraud Scam Strikes Businesses Across America

If you have received mail from "Corporate Compliance Recorder" (or various other similar sounding company names. The one I received was from " California Corporate Headquarters") … BEWARE … THIS IS A SCAM!!!!

The Form
You can see a picture of the form and the envelope at the Hinessight blog. (I confess - when I figured out it was a scam, I tore my form up, so I had to find a picture of it on the Internet!!). They have been tracking this scam on their blog for over a year.

The official looking form contains your company's business information, and asks that you complete the form (listing your company's officers and directors) and return it to them, along with a fee which is usually about $175. In return, they claim they will send you a copy of your Corporate Annual Minutes! Now, anyone who is vaguely familiar with corporate governance knows that annual minutes are written by the corporation itself as part of the annual meeting. So what is it that they are sending you for $175? Who knows? If there is anyone out there who has actually been a victim of this mail fraud, who paid the fee and received a copy of their "annual minutes", please feel free to comment at the bottom of this article and let us know what you received. My guess is that you will receive a template of the minutes of an annual meeting, stating that the officers and directors (whose names you provided) have been "duly elected" to serve the corporation until such time as their successors are named.

Information from the Better Business Bureau

The Los Angeles Better Business Bureau posted their opinion about this scam in January 2005, stating, in part:

Corporate Compliance Recorder has been the subject of 14 complaints to the Bureau so far, all of them in 2004. None of the complainants lost any money to the Los Angeles company, and CCR has responded to 75 percent of the complaints we've presented to it. Why, then, do we give it failing marks for its business performance, and what makes it worthy of front-page space in the vehicle we use to alert you to problem companies? The answer is simple: its potential to deceive and thereby reap profits at the expense of unsuspecting businesses. The complainants against CCR are business men and women. They're not uneducated or inexperienced. Just the same, some say they were "almost tricked" into paying what CCR wanted and providing the information they asked. And, despite the fact that these complainants were not financial victims, we believe others undoubtedly have been, and that of those, many may still not even realize they have been victimized.

How does CCR trick, or almost trick, business people? The answer has to do with the look and sound of their solicitations and with the very fact that their solicitations don't appear to be solicitations at all. CCR sends corporations a "Disclosure Statement," complete with a seal encircled by the company's name in the left-hand corner. In bold print, near the top, it states a fee of $125 for disclosure and processing, with an increased fee of $175 for "documents received after due date." It cites sections of the California Corporations Code, relating to the requirement for a corporation to keep adequate and correct books and records of account, minutes, and the names and addresses of its members, and to the right of any member to inspect and copy the record of members' names, addresses and voting rights. (It does not point out that the sections it quotes apply to nonprofit religious corporations.). The Disclosure Statement directs you to read their "Notification" before completing the form, and this Notification informs you that annual minutes are a statutory requirement. If you want your corporation to remain in good standing and to avoid "possible exposure and personal liability," you should complete the form and send your payment. Again it cites Code sections and concludes with a warning: "California courts are becoming increasingly intolerant on [sic] officers and directors who do not follow corporate procedure. Failure to comply with these measures could cause your corporation to lose its limited liability. Without corporate minute records, the system may possibly allow creditors, plaintiffs and other entities to sue you personally for debts and actions of the corporation."

A Lawsuit in Texas

They have been sued in Texas, so you can see that the scam is spreading nationwide. You can see the Texas petition here. It is great that some people are able to take these crooks on in a court of law. That may be the only way we can ever dissuade such illegal activities. Unfortunately, most companies cannot afford the time or the expense to pursue these crooks in a legal arena.

Reporting Mail Fraud

If your company has received this, or any other piece of mail which you believe is mail fraud, you should report it to the United States Post Office.

The Final Word

Bottom line, this company has the potential to make millions off of unsuspecting businesses by fooling them with their official looking correspondence. Do your part and forward this article on to every business owner (especially small business owners who may not be quite as savvy about such scams). Please feel free to post comments below if you have also received this form, or even if you have been taken in by this scam. We need to spread the word!