The Alaska Attorney General’s office filed suit Thursday against a California man accused of using a complicated web of shell companies to “steal” eight Alaska businesses.
The complaint, filed in Anchorage Superior Court, claims that Christopher Gabriel Webb of Aliso Viejo, California, filed documentation online for eight businesses already operating in Alaska, removing the names of the actual owners from their records and switching ownership to his shell companies. He falsely swore on the documents that he was authorized to make the changes, the complaint says.
Webb was able to do this because the online portal that allows Alaska business owners to register and make changes to their businesses has no verification process that requires users to prove their identities before they make a change, according to Assistant Attorney General Cynthia Franklin.
“It’s set up kind of as an honor system,” Franklin said.
Thieves who steal business identities can wreak all kinds of havoc, she said. They can apply for new lines of credit, conduct business transactions and apply for new licenses.
In this case, three of the businesses targeted were marijuana manufacturers, and as the new “owner” of the businesses, Webb was able to apply for a marijuana concentrate manufacturing facility license, the complaint alleges.
There is no evidence that Webb caused any financial harm to the victim businesses, but the statute he is being sued under doesn’t require the state to prove he caused damage, Franklin said. In total, he spent about $650 to file the fraudulent documents.
Even though the state is seeking $50,000 in civil penalties against Webb, he is not facing criminal charges because his violation was not legally a crime — it was a violation of Alaska’s Unfair Trade Practices and Consumer Protection Act, which is a civil statute, Franklin said.
Because Alaska has no mechanism that notifies owners when a change has been made to a business entity, victims can go years without realizing anything is wrong, she said. The state was able to determine something was amiss because when a cannabis business renews its license, the Alaska Alcohol and Marijuana Control Office is required to double check if the people currently listed as the owners are the same people who applied for the license the previous year.
Once the state Consumer Protection Unit looked into the issue, it found a complicated web of companies inter-owned by one another, something Franklin called “a red flag.”
Franklin called the incident a “black light” for the state Department of Commerce, which is now aware of the dangers of the system’s lack of notification. However, no plans are being made to make the online portal more secure or to require identity verification because doing so would be costly and slow down the business filing process, she said.
Franklin said business identity theft is uncommon enough that business owners don’t need to be unduly worried about it. They should, however, regularly check their entity records online to ensure that nothing is unusual, she said.
“Now that things are online, these scammers will find any way to take advantage,” she said.