Is Business Identity Theft Really a Thing?

In a word, yes. Business identity theft is definitely a thing. You wouldn’t be able to view this site if it wasn’t.

If you’re not aware, my name is Andy and I’m the founder of Company Alarm. I started this enterprise precisely because I was a victim of business identity theft.

In fact, I’m still a victim of business identity theft. Let me explain.

On December 31, 2015, someone logged onto the Nevada Secretary of State’s online business portal, SilverFlume, and filed a fraudulent business document for a company I used to hold a $5 million piece of land that I and dozens of investors had owned free and clear for more than a decade.

The fraudulent filing removed me as the company’s managing member and named someone else as being in charge of the company.

The Secretary of State accepted the illicit filing because it does not have the authority to verify the legitimacy of the documents it receives. It simply can determine whether forms have been filled out correctly. If they are, the Nevada Secretary of State has to accept them, with no questions asked.

Indeed, this is true for most states and it’s the basis for the business identity theft problem we have in America today.

Anyway, I didn’t find out that this unauthorized document had been filed for many months, which gave the identity thieves plenty of time to make mischief. First, they borrowed against the property, to the tune of $1.7 million. Then they transferred it into another LLC.

When I finally learned what had happened, I had to file a lawsuit immediately to try to get my land back. I’m still fighting today. So far, I’ve spent more than $350,000 in court fees.

That’s why Company Alarm offers immediate notifications whenever the information on file about your business is changed. I learned – the hard way – that you have to move quickly to stop identity thieves in their tracks.

But don't just take it from me

I know it could be easy to dismiss my story. I mean, after all, I’m just one man. How widespread could business identity theft be? Hardly anyone talks about it.

Well, I learned first hand that my experience is not unique, when the Las Vegas Review-Journal conducted an investigation into my case and the overall problem of business hijackings in Nevada.

You can read the Review-Journal’s story here. But I’ll summarize some of the key things it found.

First, the newspaper documented six other instances of business hijackings in Nevada, not including my own. (It documented a couple more potential cases in a follow-up story.) Then it reported that the state had received 173 complaints about unauthorized business filings from 2015 to 2017.

More eye opening, however, was the newspaper’s reporting about business identity theft in other states. The Review-Journal reported that the state of Colorado employs one of the nation’s only law enforcement units specifically dedicated to business identity theft. Since 2010, that unit has reviewed 1,326 incidents of business identity theft.

After I established Company Alarm, I recruited the leader of that unit, Agent Ralph Gagliardi, to serve as an advisor to us. He’s provided invaluable insights into monitoring businesses and authored several educational blog posts.

When the Review-Journal published its story, I suddenly knew I was not alone. But since then I’ve heard from even more business identity theft victims, including Kym Huntley, who told me how a company she had started was hijacked in 2014, and how it left her with nothing.

These experiences accumulated in my head. I began to think: If business identity theft is such a widespread problem, perhaps there is something I can do to stop it.

Here are the numbers

When I launched Company Alarm, one of the first things I had our new staff do is research the prevalence of business identity theft across the country. Not surprisingly, we found that there aren’t a lot of statistics out there about this growing crime. In fact, no one in government – or anywhere really – tracks it in a comprehensive manner.

But the statistics we did find were quite eye opening.

In 2015, the IRS discovered 350 fraudulent tax returns had been filed for businesses. A year later, that number jumped to 4,000. The following year: About 10,000.

In 2017, the Internal Revenue Service reported a 2,757 percent increase in fraudulent business returns from 2015 to 2017.

Along with the spike in incidents, the IRS saw a corresponding increase in potential losses: $122 million in 2015, $268 million in 2016 and $137 million in 2017.

A year later, Dun & Bradstreet, the commercial credit reporting agency based out of New Jersey, reported a major jump in business identity theft for the six-year period from 2007 to 2012. D&B saw the incidents of the crime decrease between 2013 and 2015, then jump again beginning in 2016.

In 2017, D&B saw incidents of business identity theft rise 46 percent, the largest increase of any year since it began tracking the crime in 2005.

The IRS and D&B are two of the only major, well-known institutions on top of business identity theft in America. And both say it is on the rise.

Frustrations abounds

So, yes, you may never have heard about business identity theft. You may think it sounds like a minor off-shoot of personal identity theft. You may figure because politicians and law enforcement aren’t talking about it that it’s not “really a thing.”

But it is. Oh yes, it definitely is.

And it can devastate your business – and your life. I promise you, these last few years fighting in court trying to get my land back have been the most grueling experience of my life. And I immigrated to the United States, from Vietnam, at age 12. I spent time on a rickety boat and on an island, as a refugee. I came to America without speaking English.

All of that, as bad as it was, is nothing compared to the frustration I’ve faced as a victim of identity theft.

The biggest problem, ironically, has been that the justice system and the legal system don’t understand what I’m facing. I haven’t been able to get anyone in law enforcement to look at the criminal nature of my case. And, obviously, I’ve been stuck in court for a long, long time.

You don’t want to face the same thing. That’s why I started Company Alarm, to protect you from my fate.