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COVID fraudsters easily exploited Secretary of State business licensing system

A former white-collar crime investigator told 9NEWS he isn’t surprised COVID-19 relief scams have involved the business licensing system on the Colorado Secretary of State’s website.

It’s a mystery where more than $2 million in COVID relief money went

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“I would say that in Colorado, it’s really, really easy to do. And it’s really easy to do if you tell a lie to a computer. Nobody checks,” said John Henderson who now runs a private investigation firm. 

Henderson worked as an investigator for more than 30 years in the federal government, including in the Department of Homeland Security. He took a look at 9Wants to Know findings related to a COVID-19 relief fraud case published on Wednesday. 

Colorado Secretary of State’s office plans to push for laws that stop business identity theft

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RELATED: 33 non-existent businesses tied to 1 Denver office got millions in COVID-19 relief money

“It looks typical of what I’ve seen before when companies were being open for no apparent, authentic, legitimate reason,” Henderson said of the 9Wants to Know investigation. 

On Wednesday, 9Wants to Know exposed how 33 bogus business entities were revived on paper to get approval for $2.3 million in COVID-19 relief loans. All the entities trace to one single office in Denver.





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Someone used the business licensing system on the Colorado Secretary of State’s website to renew expired business licenses. Soon after the licenses were renewed, Paycheck Protection Program loans were approved for the entities.

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“This is just the latest candy on the shelf. And the people who are committing fraud – they are ahead of the game on law enforcement,” Henderson said. 

Henderson added fraudsters can easily “hijack” expired business licenses through the website and renew them to make entities look legit and in “good standing,” as 9Wants to Know found. 

>Watch the original 9Wants to Know report below.

The IRS Criminal Investigation Division in Denver said it’s been common for COVID fraudsters to revive businesses on paper. 

“If a business unfortunately goes out of business for one reason or another and somebody wants to start it up again. You certainly can do that. So it doesn’t fall off the system completely, it can be revived,” Amanda Prestegard, the Assistant Special Agent in Charge said.

RELATED: Indictment: Colorado men created business on paper, got COVID relief funds

In a statement sent to 9NEWS, the Colorado Secretary of State’s office said there is a password system for business owners to use, but at their “discretion.” 

“The Department offers a Secure Business Filing option at the discretion of businesses making the filing which provides password protection for business accounts and offers proactive resources that businesses can use to protect themselves from business identity theft,” the statement said. 

A spokesperson for the Secretary of State’s office also wrote “we look forward to bringing legislation to the Colorado Assembly next session that further protects businesses that have fallen victim to business identity theft.” 

SUGGESTED VIDEOS: Investigations from 9Wants to Know

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Source: on 2021-08-26 20:45:00

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