(The Center Square) – One man’s purchase of more than 15,000 business filings, all with one Colorado address, led to an investigation and lawsuit settled for $75,000.
When Colorado Democratic Secretary of State Jena Griswold reduced filing fees from $50 to $1 for new businesses, it gave Marcio Garcia Andrade an idea.
Between February 2022 and August 2023, Andrade submitted and paid for 15,433 business filings. Each one used a Northglenn residential address as the principal office address.
The large number of businesses at one address was detected by the secretary of state and Democratic Attorney General Phil Weiser investigated. They discovered nether the property owner nor the resident gave Andrade permission to use the address for the business filings.
“The fraudulent filings were detected in May 2023 when the secretary of state noticed an unusual and suspicious pattern: hundreds of new businesses were flooding into their system, often mere minutes apart, all claiming registered agents reachable at the Northglenn Address, and originating from foreign IP addresses – despite the businesses claiming domestic status,” according to Weiser’s complaint.
The investigation found Andrade wasn’t eligible to serve as a registered agent in the state because he didn’t have a primary residence or a usual place of business in Colorado.
Weiser described Andrade as a “self-styled serial entrepreneur.” Weiser’s complaint stated Andrade and several of his businesses, including Grand Teton Professionals, in 2019 were permanently banned in a $9.6 million settlement with the Federal Trade Commission for fraudulent credit service businesses. “Wholesale Shelf Corporations LLC” was part of Grand Teton Professionals and used the Northglenn address as its principal place of business, according to the complaint.
“Wholesale sells aged registered corporations, also known as shelf corporations,” according to the complaint. “Shelf corporations allow buyers to assume the identity of an older registered corporation in order to improve their likelihood of obtaining credit. Wholesale advertises to customers seeking eligibility for credit, the ability to bid on government contracts and credibility with customers through assuming the identity of aged shell corporations.”
Weiser claimed Andrade continued to sell the fraudulently created business licenses after taking action against him.
“Since the filing of the complaint in this case, defendants have transferred ownership of several fraudulent businesses to third parties,” according to the complaint. “Defendants have done so despite being on notice that the state considers these entities to be fraudulent, and despite knowing that the entities may be dissolved as a result of this litigation.”
The actions violated the Colorado Consumer Protection Act. Nearly all of the entities formed and owned by Andrade will be dissolved.
Andrade agreed to pay $75,000 to the attorney general, $20,000 in attorney fees, $20,000 as a penalty and $35,000 as disgorgement.
“Fraudulent business filings are dangerous tools in the hands of bad actors,” Weiser said in a statement. “Consumers might assume these companies are legitimate and get lured into making transactions – including extending credit to – with an illegitimate actor.”
