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Latest business scam warning: Cloning

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Michigan Attorney General Dana Nessel recently filed suit in the 6th Judicial Circuit Court in Oakland County to dissolve two business entities in response to their purported practice of ‘cloning’ legitimate businesses and procuring their organizations with the Michigan Department of Licensing and Regulatory Affairs (LARA) by fraud.

In filing to establish two Limited Liability Corporations (LLCs) with LARA, an operator using the alias Perry Davis, Jr. fraudulently procured the organizations using addresses and names identical or nearly identical to legitimate businesses. The lawsuit claims alias Perry Davis, Jr. intercepted checks made out to the legitimate, intended recipient businesses and attempted to deposit the funds into bank accounts established under the names of the fraudulent LLCs. The fraudster succeeded in this effort for one of the two attempts.

This is a known form of business identity theft called ‘cloning.’ As described in the lawsuit: “Cloning involves a fraudster creating a new legal entity with a name that is the same as, or very similar to, an existing company name. Depending on the nature of the scam, the fraudster might also use address, telephone number, or other information belonging to the legitimate business that has been cloned.”

Businesses and individuals alike who suspect they have been the victim of identity theft are encouraged to file a complaint with the Attorney General, or get additional information by contacting the Department’s Consumer Protection Team:

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Consumer Protection Team
P.O. Box 30213
Lansing, MI 48909
517-335-7599
Fax: 517-241-3771
Toll-free: 877-765-8388