208 Fake Business Complaints Filed in Arizona Last September
Fraudsters are registering limited liability companies using random residents' names and addresses, a process that currently requires no photo ID verification.
By Andrew Bennett ·
Arizona state records show 208 complaints regarding fraudulent limited liability companies were filed in September 2025. The number of reports dipped after a new system launched in early 2026, but climbed back to 180 by May of this year. These complaints involve individuals who have businesses registered in their names without their knowledge or consent.
Morgan Johnson learned she was a victim after receiving mail about credit accounts she never opened. In the past year, someone created three separate LLCs in her name at her Phoenix address. One of these entities was a furniture store, and another was a toy wholesaler. Johnson said the intrusion was startling. “I freaked out a little bit about it because it felt so intrusive,” she told On Your Side. Fraudsters often create these shell companies to pass bad checks or secure lines of credit they intend to default on.
Tanya Gibson, director of the Corporations Division at the Arizona Corporation Commission, described the issue as a major problem. “The bottom line is it’s not for a good reason,” Gibson said. “It’s a huge problem.” Currently, anyone can file for an LLC online using only a name and address. The state does not require a photo ID or proof that the person has the right to use that address. “We have no way to verify if that person has the ability to use an address,” Gibson explained.
To tighten the rules, the state is implementing new online ID verification requirements by July 1. Filers will need to upload a photo ID and a selfie. Software will then check this information against multiple databases. If the data matches, the filer receives a verified stamp and can proceed. If the verification fails, the filer must visit a physical office to complete the process. Gibson wants the law changed to give the division more power to deny filings when fraud is suspected.
When the state receives a complaint, it takes months to fully dissolve a fake LLC. During that waiting period, the division marks the business status as pending inactive and not in good standing. They also flag the address as undeliverable to warn banks and credit agencies. Gibson noted that the state cannot stop all fraud. “We’re trying to throw as many hurdles in place as we can,” she said.
Johnson believes the current flagging process is insufficient. “We need to do a lot more,” she said. Gibson added that the agency often sees clusters of complaints from specific addresses. This pattern suggests fraudsters are pulling random lists of names and addresses rather than targeting specific individuals. Residents are advised to check their own address for unauthorized filings and report any issues to their secretary of state’s office.
