The Texas Attorney General’s Office has charged two Californians with operating a fraudulent direct mail business that targeted mostly small businesses in an attempt to reap profits from bogus filing fees.
According to the AG’s Office, the defendants sent mailers that impersonated state agencies in an attempt to deceive business owners into paying the fraudulent fees.
A Harris County District Court issued a temporary restraining order instructing Selweyn Monarch and Gayle N. Stanford, who operate “Compliance Services,” to stop sending the fraudulent mailers to businesses.
The state’s enforcement action seeks restitution for businesses that paid the fraudulent fees to the unregistered business.
According to investigators, Selweyn and Stanford mailed a form they called “Annual Minutes Requirement Statement – Directors and Shareholders” in a scheme designed to mislead numerous Texas businesses. The letters, which appeared to originate from an “official” governmental source, instructed recipients to pay $125 in filing fees or risk violating state law.
Recipients were falsely told that their shareholders and directors meeting minutes must be filed with the Texas Secretary of State or the businesses could face serious penalties. Texas does not require corporations to file their minutes. State law only requires that corporations retain their minutes for one year.
The bogus forms’ seemingly official appearance and references to statutory authority, as well as statement about liability for failure to pay fees, misled some businesses into purchasing the company’s worthless services.
Selweyn and Stanford also deceived businesses by directing them to send these filing fees to “official” post office boxes in Austin. These boxes do not belong to official government offices but rather are boxes established by the defendants.
The Attorney General charged the defendants with violating the Texas Deceptive Trade Practices Act, which could result in civil penalties of up to $20,000 per violation.
