Friday, September 14, 2012

Despite warnings, most states slow to confront corporate ID theft

Posted on September 13, 2012 by admin

IDG News Service ? How easy is it to steal the identity of a business? Just ask Roger Lee Shoss and Nicolette Loisel, two Houston-based attorneys who turned hijacking the identities of publicly traded companies into a cottage industry.

According to the Department of Justice, the two took advantage of loose public- and private filing systems for more than a year, fooling regulators in Ireland, the UK and the U.S. and stealthily taking control of dozens of dormant firms. The scam calls attention to a little-known, but growing problem in the U.S. and elsewhere: business identity theft, and the way that lax business filing systems aid would-be thieves.

By all accounts, Shoss and Loisel were masters of the art of corporate identity theft. According to a federal indictment, the two were part of a three person legal team operating within an octopus-like international conspiracy spanning the U.S., U.K. and Spain. After using online business registries to identify dormant, publicly-traded companies in the U.S., Shoss and Loisel would resurrect the firms: filing certificates of amendment for the firms? articles of incorporation that folded the existing, publicly traded firm into sham shell companies they had set up.

By manipulating business registration systems in Florida and Delaware as well as filing systems at organizations like NASDAQ and the SEC, the scammers took control of the companies and then obtained legitimate CUSIP numbers and stock trading symbols that were then used to push the worthless stock on unsuspecting investors. In all, the scheme raked in close to $100 million through bogus stock sales of 54 separate firms to gullible investors, mostly in the UK, before regulators and law enforcement got wise to it.

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The scheme was larger in scope than similar business identity theft operations, but not unusual in its details. The success of the perpetrators underscores the gulf in awareness that exists between the well-known problem of consumer identity theft, and the lesser known problem of business (or corporate) identity theft, according to experts interviewed by ITworld. ?This is something that goes on quite regularly,? said Ricky Harper, the Director of Florida?s Division of Corporations.

Tags: Corporate Identity Theft, Crime, Finance, Identity Fraud, Identity Theft, Law Enforcement, Risk Management, SEC


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