Following enforcement action, Attorney General Neronha halts deceptive Certificate of Good Standing scheme targeting RI businesses and secures full restitution
PROVIDENCE, R.I. – Attorney General Peter F. Neronha announced today that the Office, following enforcement action, has halted a deceptive scheme that scammed more than 1,000 Rhode Island businesses and non-profit organizations and secured full restitution for those affected.
Following an agreement, approved in Rhode Island Superior Court on Tuesday, January 31, 2023, Centurion Filing Services (Centurion) is required to pay back businesses and non-profits who were illegally induced to pay them unnecessary fees up to $104,000 in restitution while paying the State a $25,000 civil penalty. Additionally, Centurion will also be forbidden from any future solicitation by mail in Rhode Island.
In February 2022, the Office of the Attorney General filed a lawsuit against Centurion Filing Services, LLC, d/b/a RI Certificate Services; Business Document Center, LLC; and Dean Marshlack, for perpetrating a deceptive scheme targeting Rhode Island businesses and non-profits throughout the state in violation of Rhode Island’s Deceptive Trade Practices Act (DTPA).
The scam
As described in the complaint filed in Rhode Island Superior Court, Centurion deceived new businesses and non-profits in Rhode Island into paying an exorbitant fee for a Certificate of Good Standing that they did not necessarily need and can be obtained directly from the Rhode Island Secretary of State at a significantly lower cost.
As alleged in the complaint, Centurion sent solicitations by mail to businesses appearing on a list of new entities registered with the Secretary of State’s Office that is published on its website on a weekly basis. The solicitations sent by the defendants to businesses appeared to be an official form stating that the entity only had “one step left” to complete the registration process: paying Centurion an $84.50 fee to secure the certificate. Once the defendants obtained payment from businesses, they submitted requests for certificates to the Secretary of State’s Office, which were then delivered to the businesses, while the defendants pocketed the difference.
In reality, Rhode Island businesses are not required to obtain a Certificate of Good Standing to complete official registration with the Secretary of State’s Office. A Certificate of Good Standing is a document issued by the Secretary of State’s Office to verify that a Rhode Island business entity is in good standing with the State that might be asked for by another state if an entity wishes to register to do business in that other state (or for other reasons). Certificates of Good Standing are readily obtainable from the Secretary of State’s website for $7.00 for nonprofit corporations or $22.00 for for-profit corporations.
“These defendants deceptively targeted local businesses and non-profit organizations during a time when many were struggling mightily with challenges brought on by the COVID-19 pandemic. Eager to comply with the law, hard-working Rhode Islanders were tricked into paying an outrageously marked up price for a service they may not have even needed. Because of the newly-strengthened Deceptive Trade Practices Act passed by the General Assembly at our urging in 2021, this Office was authorized to take legal action that put a stop to this practice and is making all of those affected businesses whole,” said Attorney General Neronha. “This Office is committed to ensuring a fair and honest marketplace for local businesses and consumers by going after businesses that don’t play by the rules and undermine fair competition for everyone else. I am grateful to Secretary of State Amore and former Secretary of State Gorbea and their teams for their continued partnership in this effort.”
The Office of the Attorney General will be mailing notices and restitution claim forms with detailed instructions to businesses and entities impacted by this scam to the address on file with the Secretary of State. To obtain a refund, the entity must fill out a claim form and return them to the Office by April 28, 2023, either by mail or email.
The Office of the Attorney General worked closely with the Rhode Island Secretary of State’s Office during its investigation into the allegations against the alleged perpetrators.
Deceptive Trade Practices Act
In 2021, Attorney General Neronha worked with the General Assembly to pass legislation that restored the authority of the Office of the Attorney General to protect Rhode Island consumers against violations of the DTPA. Other efforts led by the Attorney General under the newly-strengthened DTPA include lawsuits against auto dealers for allegedly unfair pricing practices and a suit against a contractor for allegedly unlawful behavior, as well as other investigations.
Special Assistant Attorney General Stephen Provazza, Chief of the Consumer & Economic Justice Unit, and Special Assistant Attorney General Etie-Lee Schaub handled the matter on behalf of the Office of the Attorney General with substantial assistance from Maureen Ewing and Jessica Cigna of the Secretary of State’s Business Services Division.
