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Businesses deceived into paying three times the cost to file standard state annual reports
SEATTLE — Attorney General Bob Ferguson announced today he won a court order to shut down the websites and suspend the internet domains of two businesses and their owner that sent hundreds of thousands of deceptive texts and emails targeting Washington businesses and nonprofits. Ferguson filed a lawsuit against the businesses in May as part of his Small Business Protection Initiative.
The large-scale, lucrative text and email scheme cost Washington businesses at least $228,000.
The messages directed businesses to a website link where they were charged $200 to file annual reports with the Secretary of State. The websites did not disclose that businesses can file required annual reports directly with the Secretary of State’s Office for $60. For nonprofits, the cost is between $20 and $60, depending on the nonprofit’s revenue.
Other solicitations demanded between $150 and $175 to file annual meeting minutes. Washington state does not require businesses to file annual meeting minutes.
Ferguson’s lawsuit, filed in King County Superior Court, asserts the Wyoming companies and their owner, Cameron Groom, sent deceptive solicitations that were designed to appear as though they were sent by the Secretary of State. Ferguson won a temporary restraining order and preliminary injunction barring Groom and his businesses from continuing to send the deceptive messages.
Groom has not responded to Ferguson’s lawsuit, and has continued to message Washington businesses despite the court’s orders. As a result, the Attorney General’s Office sought a court order to shut down his websites and internet domains.
“Scammers like to target small businesses, which is why I launched my Small Business Initiative to serve as a watchdog,” Ferguson said. “My legal team and I will do what’s necessary to protect Washington small businesses from scammers. We will hold this scammer accountable.”
Case background
Beginning in January 2022, the companies sent unsolicited deceptive spam text messages and emails to Washington businesses and nonprofits after obtaining their information through publicly available sources.
In just over a year, EFile Business Inc. and Online Filing LLC sent more than 147,000 deceptive text messages to Washington businesses and nonprofits. More than 1,100 Washington companies paid EFile and Online Filing to submit annual reports at more than three times what it would have cost them to file the reports themselves. Ferguson suspects there are even more businesses that were deceived by EFile and Online Filing.
The Attorney General’s Office has received more than 70 complaints about the businesses, and the Secretary of State received complaints, as well. The complaints prompted an Attorney General’s Office investigation beginning in May 2022. The Secretary of State also posted a notice warning about the deceptive solicitations.
In a complaint to the Attorney General’s Office, a Bellevue business owner wrote: “I thought this was a text from the state government as a reminder for me to file my annual report. So I clicked the link and paid them $200 dollars to file my annual report. (We moved here last year, so I had no idea annual filing is only $60.) I received the text on Monday June 6th, I filed on their website the same night. On June 8th Wednesday, I received email from sos.wa.gov saying I have successfully filed my annual report. A person named Cameron Groom used their American Express card and paid for the $60 filing fee. This is when I realized I was scammed.”
A Snohomish business owner said in his complaint: “It looked very official and I bought their service. Within a few minutes, I had a bad feeling that I had just been defrauded and went back to cancel my order. There was no one to contact and no response to a complaint I filed through their website. … I feel suckered and can’t believe I fell for this scam.”
Ferguson’s lawsuit asserts that the scheme is an unfair or deceptive practice under the Washington Consumer Protection Act. It also violates the state’s Commercial Electronic Mail Act and the Uniform Business Organizations Code.
In addition to stopping the companies’ illegal conduct, Ferguson’s lawsuit seeks restitution for impacted businesses and nonprofits, plus annual interest, in addition to civil penalties. The Consumer Protection Act allows for penalties of up to $7,500 per violation.
Assistant Attorneys General Shidon Aflatooni and Gardner Reed, Investigator Scott Henderson, Paralegals Jennifer Marin, Matt Hehemann and Khalid Ali, and Legal Assistant Luis Oida are handling the case for Washington.
What businesses are required to file, and where to find more information
Washington businesses and nonprofits are required to file an annual report each year by the last day of the month in which they originally formed. Prior to that date, the Washington Secretary of State notifies the business by mail or email. The Secretary of State does not send text solicitations.
The letter or email from the Secretary of State will detail the annual report filing deadline, renewal fee and the process for filing the report. Businesses can either file online, or complete paper annual reports and return them by mail.
Businesses and nonprofits are not required to submit annual meeting minutes to the state.
The Secretary of State offers comprehensive guides for small business and nonprofits, which include information on annual reports.
There is also an annual reports page on the Secretary of State’s website that includes a link to the Washington Corporations and Charities Filing System where businesses and nonprofits can file their annual reports online. There are also links to business and nonprofit annual report forms, including instructions, which can be downloaded, printed and submitted by mail.
Any business or nonprofit that believes it may be the target of a scam should file a complaint with the Attorney General’s Office.
Ferguson’s prior enforcement actions standing up for small business owners targeted in scams
In November 2022, as a result of a lawsuit filed by Ferguson, a King County Superior Court judge ordered CA Certificate Service and Labor Poster Compliance and their owners to pay more than $24.8 million for their unlawful conduct targeting small business owners. The companies sent hundreds of thousands of letters to Washington business owners that deceptively appeared to originate from the government. The letters demanded payments for posters or certificates that they deceptively implied were required to purchase. The certificate is not mandatory and available from the state for a fraction of the cost that CA Certificate Service demanded. The posters are available from state and federal agencies for free.
In March 2016, a King County Superior Court judge ordered civil penalties and restitution of $1.15 million in Ferguson’s lawsuit against Mandatory Poster Agency. The judgment included $793,540 in civil penalties and up to $362,625 in restitution for victims. The Michigan-based company duped thousands of Washington small businesses into paying for documents many Washingtonians thought were coming from a state agency. The judge found Mandatory Poster Agency violated the state Consumer Protection Act 79,354 times.
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Washington’s Attorney General serves the people and the state of Washington. As the state’s largest law firm, the Attorney General’s Office provides legal representation to every state agency, board, and commission in Washington. Additionally, the Office serves the people directly by enforcing consumer protection, civil rights, and environmental protection laws. The Office also prosecutes elder abuse, Medicaid fraud, and handles sexually violent predator cases in 38 of Washington’s 39 counties. Visit www.atg.wa.gov to learn more.
Media Contact:
Brionna Aho, Communications Director, (360) 753-2727; Brionna.aho@atg.wa.gov
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