Filing thieves

NEVADA is one of the most popular states for business registration — and that’s no accident. The state has set up a filing system intended to attract entities from around the country. The fees generate $180 million a year. But the Review-Journal’s Brian Joseph reported last Sunday that the system is susceptible to fraud and abuse. “For as little as $150,” he wrote, “anyone can submit records online or in person naming themselves directors or managers of whatever Nevada company they choose — and the secretary of state’s office will accept them, no questions asked.”

Thieves and scammers can exploit the lack of oversight by changing documents and taking advantage of the credit or assets of companies. The true owners or directors may have no way of discovering the deceit until the damage has been done. “It’s a serious issue,” a Las Vegas title company executive told Mr. Joseph.

Secretary of State Barbara Cegavske argues her office has limited authority to make changes (see her op-ed on the opposite page). In fact, however, Mr. Joseph reports that the law allows the secretary of state “to adopt regulations to prevent the filing of fraudulent records.” Ms. Cegavske must make this an immediate priority.

For instance, the secretary of state could improve the alert system that warns businesses when someone revises documents already on file. More detailed alerts — notices that specify what information was added or changed — would help. In addition, Ms. Cegavske’s office should implement a system that allows businesses to set up passwords or personal identification numbers, making it more difficult for wrongdoers to access the system.

State lawmakers should also investigate any statutory solutions during the 2019 session.

A few common-sense adjustments would discourage thieves. If Nevada officials hope to keep this lucrative revenue stream flowing, they need to take this problem seriously.