Legislator moving against false Nevada corporation filings

Monday, Feb. 12, 2001 | 11 a.m.

CARSON CITY -- Want to become chairman of IBM?

It's easy in Nevada.

An individual can go to the secretary of state's office and file a new list of officers of a corporation without producing any proof he is associated with or is authorized by the company.

And he can make himself president or chairman of the board just by presenting the change in the officer list filed with the Secretary of State's office.

The issue was raised by Sen. Ann O'Connell, R-Las Vegas, at a hearing of the Senate Government Affairs Committee Friday. She related the case where a "man's business was stolen" and he lost a $250,000 contract.

She said she has had several requests to tighten the law.

Secretary of State Dean Heller said his office runs into this problem "several times a year." His office, he said, has no authority to deny the filing. And he said he has no authority to investigate.

It happened recently at the Stewart Indian Museum, when a group came in and changed the corporate officers and tried to take over the operation. The dispute ended up in court, and the original group was put back in charge.

O'Connell suggested the person filing the change of officers be required to show the minutes of the corporation board meeting where the action was taken. Or the individual might be required to present some other proof.

Heller said his office files tens of thousands such documents every year, and he wondered about the amount of policing that would be required. "This is not a huge problem," he said, referring to the bogus officer lists filed.

If there is a suspicious filing, Heller said, his office turns the case over to the local district attorney. It is against the law to file false papers. He said he found it odd that the state Attorney General's Office does not handle prosecution rather than the local district attorney.

O'Connell said those who have had their corporate officers changed without their knowledge were told by state officials they could refile their corporations, but they had to pay a new fee.