Government

Attorney General Abbott Files Suit to Halt Deceptive Business Masquerading As State Agency

Similar ‘Corporate Compliance’ scam already kicked out of Florida

By Greg Abbott, Attorney General of Texas

August 26, 2005

Businesses are told they must send a $125 fee within “10 business days” to Texas Corporate Compliance, purportedly to ensure businesses have attained state corporate reporting requirements by filing minutes of meetings of shareholders and directors. Neither the Texas Secretary of State’s Office, which this deceptive business attempts to mimic in its correspondence, nor state law require disclosures of this kind. Corporations are required only to retain annual minutes.

“This deceptive operation is merely trying to scare businesses into paying for its services,” said Attorney General Abbott. “My office took quick action to shut down this operation before Texas businesses lost money.”

Attorney General Abbott urged all Texas businesses to review any recently mailed solicitations involving “disclosure statements.” Texas Corporate Compliance, which is run by Thomas Litchfield, even goes so far as to include the use of an icon that resembles the state seal of Texas, similar to the logo the Secretary of State uses in its official correspondence.

The solicitation form falsely warns businesses that failure to complete the information and return it as directed could result in personal liability of a corporation’s officers and directors. The Texas Business Corporation Act cited in the fraudulent solicitation letter does not place personal liability upon corporate officers for failure to file annual minutes.

In addition, Texas Corporate Compliance warns that failure to file annual minutes can result in possible loss of the corporation’s limited liability status, which is also false. Texas Corporate Compliance offers as one of its “services” the filing of a corporation’s annual minutes, which it contends must disclose certain information about the business.

Texas Corporate Compliance, registered under the corporate name of Renewal Services Inc., faces civil penalties, attorneys’ fees and restitution to any Texas business that has paid this fraudulent fee. The Attorney General filed the suit after learning of similar schemes in Florida and Arizona, where the company operated under the name Corporate Compliance Center.

Consumers may report fraudulent solicitations by contacting the Office of Attorney General at (800) 252-8011 or by visiting the agency’s Web site at www.oag.state.tx.us