Company Defrauded Thousands of NY Small Businesses to Believe It Represented NY State Government, Duped Them into Paying for Worthless Document

NEW YORK - Attorney General Eric T. Schneiderman today filed a lawsuit against an Albany-based company that issued thousands of notices designed to look like they were from the New York government, and bilked thousands of New York businesses out of more than $1 million. By issuing solicitations designed to look like official government notices, Compliance Filings, LLC, which operates as Corporate Records Compliance Office, duped business owners across New York State into paying more than one hundred dollars for paperwork they were led to believe was required by state law, but was ultimately worthless.

“Small businesses are the backbone of our economy, and we cannot afford any scams that defraud them of their hard-earned money,” Attorney General Schneiderman said. “This office has zero tolerance for scam artists – especially those imitating government offices to prey on working men and women. Our message is clear: those who cheat New York’s small businesses will be brought to justice.”

Corporate Records Compliance Office sent mailings designed to look like official notices from the New York Department of State to hundreds of thousands of small New York businesses. The notices are sent shortly before the deadline for the business to submit its bi-annual registration form to the Department of State. The phony mailings, entitled “Notice of Annual Minutes Compliance,” included information such as a company’s incorporation date and Department of State identification number, and reference state laws requiring annual corporate meetings. It warns that “failure to comply” could subject the corporation’s owners and officers to personal liability for all debts of the company. The mailings included an invoice for preparation of “Certificate of Minutes” for the company’s annual board meeting at a cost of $120.

Many companies that receive the mailings mistakenly believed that they were sent from the state, and that to comply with the corporate meeting minutes requirement, they must return the form with a $120 payment. However, the “Certificate of Minutes” sold by Corporate Records Compliance Office is a worthless, boilerplate form that contains little information and does not meet the most minimal requirements for valid corporate meeting minutes. The Corporate Records Compliance Office has nothing to do with the Department of State, nor with compliance of New York State Law. Instead, it is owned in part by Barney Roland Freasier, Jr., a San Diego lawyer, and operates out of a one-person office located at 125 Wolf Road, Suite 306, in Albany.

The lawsuit seeks restitution for the more than 11,000 businesses defrauded in the scheme, and injunctive relief prohibiting the company and its owner from continuing to operate this scam, or from doing business in New York State until they file a $500,000 performance bond.

The case is being handled by Assistant Attorney General Keith H. Gordon under the supervision of Jeffrey K. Powell, Deputy Bureau Chief of the Bureau of Consumer Frauds and Protection.