[an error occurred while processing this directive]

I-Team: Company facing allegations of misleading businesses, nonprofits

Updated: Wednesday, November 27, 2013 |
I-Team: Company facing allegations of misleading businesses, nonprofits story image
LANSING, Mich. (NEWSCHANNEL 3) - An I-Team investigation finds a company based in Michigan is attracting national attention, but not the attention that most companies would want.

Victims say Corporate Records Service is misleading small businesses and nonprofits asking for money for a service that state regulators say may not be necessary.

34 states have put out warnings about the company.

We found Corporate Records Service does not make it easy to find its offices or talk to company management.

The I-Team's adventure to track down the company and the man listed with the Better Business Bureau as its Co-Owner Steve Fata took us across Lansing and to a lot of different addresses.

Kalamazoo non-profit Director Demarra Gardner  received one of their letters.

"It's just sickening to think people are out there finding any way that they can scam on individuals and organizations," says Garnder.

Gardner feels fortunate that as she was about to pay she had second thoughts and never sent money.

But other businesses and non-profits across the country getting the letters have not been so lucky.
The letters look official according to recipients who say they thought they were from a government agency. 

They ask for $125 "prepare and provide corporate records to meet the following requirements of Michigan law." They ask for the names of shareholders and corporate directors.

"Every one of these states has hundreds of thousands if not millions of businesses in them and if every one of them pay $125 dollars each to file these corporate minutes or corporate annual report kinds of things, that's a lot of money," says BBB Western Michigan President Phil Catlett.

The BBB  in West Michigan has been fielding the complaints from across the country.

The company shares a business address in Lansing with another business called "Labor Law Poster Service" which according to BBB records Fata also co-owns. A man there who identified himself as a manager told us no one could talk to us, but defended corporate records,

"It's not a scam, we provide a service, the same as an attorney or an accountant would provide," says the manager.

When we went to the address of another of Fata's businesses listed with the BBB, Vintage City Guitars, we instead found another Labor Law Poster Service office with a large call center but Fata wasn't there.

According to court records Fata's home address is this house in Lansing and we found he also has two boats and four cars registered to him with the state.

Fata later called Newschannel 3, and while he did not want to let us record an interview,  he did send written answers to our questions; he says,

"There is nothing misleading about our solicitation documents.  We make it perfectly clear that we are a private entity offering a service, for a fee, to meet the requirements of Michigan corporate law… the only way that anyone could be confused by our solicitation documents is if a person did not read them."

But in all 34 states have put out a warning about Corporate Records, many of those accuse the company of offering a service that may not be necessary… or that organizations can do themselves for free.

The warning from Michigan's Department of Licensing and Regulation says,"in Michigan corporations are not required by law to file corporate records…"

The I-team has also found out the Michigan Attorney General is now investigating the company and says Corporate Records agreed to stop sending its letters in Michigan during the investigation.

Fata says, “the Attorney General's office is investigating our company because of what we believe to be complaints made by, or instigated by, our competitors… as we have done nothing wrong, we are completely willing to cooperate." 

Read more of Fata’s answers to our questions below:


WWMT: The Michigan Attorney General’s office says it is investigating Corporate Records Service, can you tell us why they are investigating the company?  The AG’s office also says you’ve agreed not to send out letters in Michigan while the investigation is going on, can you say why you agreed to that?
RESPONSE: Like most States, Michigan has a law that requires corporations to prepare and maintain certain records on an annual basis.  Specifically, corporations are required to select a board of directors and to document the action taken.  Corporate Records Service offers corporations a cost effective and convenient  to meet this requirement.  This service has traditionally been provided by lawyers, accountants, or other business advisors.  Corporate Records Service offers a way to fulfill this requirement at a cost much lower than what has been traditionally charged by other providers.
In addition to the corporate records, corporations are also required to file with the State of Michigan an annual report document.  Corporate Records Service does not offer services to meet the annual report requirement.
The Attorney General’s Office is investigating our company because of what we believe to be complaints made by, or instigated by, our competitors.  The Michigan Attorney General’s Office had concern that we were offering to file the annual reports with the State of Michigan and not following through.  On the contrary, we do not provide a service to fulfill the annual report requirement and, instead, our service is limited to the annual corporate records.
As we have done nothing wrong, we are completely willing to cooperate with the Attorney General’s Office to resolve any concerns.  We agreed to suspend solicitations on a temporary basis while we work with the Attorney General’s Office.

WWMT: Do you consider the letters you send to businesses misleading, what would you say the purpose of those letters is?
RESPONSE: There is nothing misleading about our solicitation documents.  We make it perfectly clear that we are a private entity offering a service, for a fee, to meet the requirements of Michigan corporate law.  We indicate in our materials that customers are not required to use our service and, instead, the corporate records can be prepared by the customers themselves, by lawyers, accountants or other business services.  The only way that anyone could be confused by our solicitation documents is if a person did not read them.
WWMT: The States that have put out warnings about the company all say you are offering a service that isn’t needed in those States and Michigan says it doesn’t require minutes to be sent in, so why are you asking for money to do that?
RESPONSE: We believe that the State’s warning creates confusion rather than providing clarification.  It is true that the corporate records do not need to be sent into the State of Michigan, but we never say that they do.  On the other hand, there is no question that Michigan law requires that corporations prepare and maintain annual corporate records.  We provide a service to meet that requirement that is both cost effective and convenient. Our customers are very satisfied with what they receive and appreciate the value in what we offer.
WWMT: What do you do with information that companies do send to you, do you send it to the State?
RESPONSE: In order to prepare the documents that fulfill the corporate record requirements, we obtain from our customers information regarding the shareholders of the corporation, its board of directors, and its officers.  With this information, we prepare documents that meet the requirements of State corporate law.
WWMT: Why do you think so many States have put out warnings about you or taken the company to court?  Are all of them wrong about your services?
RESPONSE: We believe that most, if not all, of the complaints are instigated by our competitors, who usually charge two or three times more than us, or even more.  We offer our customers an unconditional 100% money back guarantee.  Thus, the people who have lodged complaints are not our customers and, instead, are people who have been told by our competitors that we do not offer a valuable service.
comments powered by Disqus

What do you want to see?

If you have a story idea for the I-Team, you can contact us using the form below or by calling 269-388-4612.
Please re-enter the code shown in the image below.

Business News

Last Update on October 06, 2015 17:15 GMT


WASHINGTON (AP) -- The U.S. trade deficit jumped sharply in August as exports fell to the lowest level in nearly three years while imports increased, led by a surge in shipments of cell phones from China.

The Commerce Department says the deficit increased 15.6 percent to $48.3 billion, the biggest deficit since March. Exports of goods and services dropped 2 percent to $185.1 billion, the lowest level since October 2012, while imports rose 1.2 percent to $233.4 billion.

Exports have been hurt this year by the rising value of the dollar, which makes U.S. goods less competitive on overseas markets, and weaker economic growth in China and other major export markets. Economists say these trends will combine to push the deficit higher and make trade a drag on overall growth this year.


WASHINGTON (AP) -- President Barack Obama is touting a new trade agreement between the U.S. and 11 other countries, saying it will provide American businesses and workers with access to new, fast-growing markets.

He says the deal will provide a fair shot and level the playing field.

But the pact still has to clear Congress.

A vote isn't expected until next year. Opponents will have plenty of time to lobby against an accord that Obama says will eliminate some 18,000 taxes on U.S. goods.

Labor unions represent the biggest obstacle Obama must overcome. Many Democratic lawmakers are also against the Trans-Pacific Partnership, while Republicans generally are more supportive.

The president spoke to reporters at the Agriculture Department, where he met with agriculture and business leaders.


WASHINGTON (AP) -- The International Monetary Fund is downgrading its forecast for global economic growth and says falling commodity prices and jumpy financial markets have raised global risks.

The IMF says the world economy will grow 3.1 percent this year, down from a July forecast of 3.3 percent and the slowest pace since the recession year 2009. The report is being released in advance of the IMF-World Bank annual meetings this week in Lima, Peru.

The report predicts the United States will grow 2.6 percent this year, up from a July forecast of 2.5 percent. Emerging market economies, hurt by tumbling raw materials prices, will grow 4 percent.

The IMF left unchanged its forecasts for growth in the 19 countries that share the euro currency (1.5 percent) and China (6.8 percent).


LUXEMBOURG (AP) -- The European Union's 28 finance ministers have agreed to share details of tax deals their countries reach with big multinational companies, in a move they hope will clamp down on aggressive tax avoidance.

Pierre Gramegna, the finance minister of Luxembourg, which is currently chairing the EU, said Tuesday that the political agreement means the European Commission can get a directive ready by the end of the year. The rule would be enacted across the 28 member states by the start of 2017.

He hoped the deal will mean companies pay their fair share of taxes.

Many companies, such as Amazon and Starbucks, have struck deals with certain European countries in recent years that have allowed them to pay little tax.


DETROIT (AP) -- The United Auto Workers union is threatening to go on strike against Fiat Chrysler.

The company says in a statement that it received a strike notice from the union and it continues to work toward reaching an agreement.

A letter to Fiat Chrysler that was posted on the UAW website says the union is terminating its contract with FCA at 11:59 p.m. Wednesday.

Union members overwhelmingly rejected a tentative contract agreement with the company last week. Union leadership said they would go back to the bargaining table.

The union's four-year contract with FCA expired on Sept. 14 but workers have remained on the job under a contract extension.

A message was left Tuesday for a UAW spokesman.


WOLFSBURG, Germany (AP) -- Volkswagen's chief employee representative says that the emissions-rigging scandal won't have an effect on jobs for the time being.

Bernd Osterloh says it's not possible to say today "whether and how this wrongdoing could affect our jobs in the medium and long term." But he said for now there will be "no consequences for jobs," including those of temporary workers.

Osterloh acknowledges that recovering from the scandal won't be painless. But he says the employee council "will watch carefully that this crisis, which was caused by a circle of managers, is not settled on the backs of employees."

He adds that, "for reasons of decency," it's assumed the management board's bonus will fall "in the same way as the workforce's bonus."


CHARLESTON, W.Va. (AP) -- Patriot Coal says it expects to lay off more than 2,000 workers in West Virginia.

Patriot issued layoff warning notices in the counties of Boone and Kanawha this week.

Kanawha County Commission President Kent Carper says 1,065 workers in his county will lose their jobs. There will be 483 layoffs at Speed Mining LLC in Dawes, 288 at Wildcat Energy in Eskdale, 161 at Midland Trail Energy, 118 at Remington LLC in Eskdale and six at Little Creek Dock in Charleston.

Assistant Boone County administrator Pam White says 970 workers in her county will be affected.

Patriot filed for Chapter 11 bankruptcy in May.

Patriot says the warning notices are conditional because it doesn't yet know who will purchase its assets or what the purchaser's hiring plans will be.


WASHINGTON (AP) -- The government is proposing a record $1.9 million fine against an aerial photography company for flying drones in crowded New York and Chicago airspace without permission.

The Federal Aviation Administration says SkyPan International Inc. of Chicago operated 65 unauthorized flights between March 2012 and December 2014 in some of the nation's most congested airspace.

More than half the flights took place in heavily restricted areas of New York airspace without air traffic control clearance. Also, the drones weren't equipped with two-way radio, transponder and altitude-reporting equipment required of manned aircraft.

SkyPan has 30 days to respond to the FAA.

The fine announcement comes one day before an FAA official is expected to be face tough questioning at a House Transportation and Infrastructure Committee hearing on safety hazards created by drones.


HONG KONG (AP) -- A clothing and footwear industry group is calling for the U.S. government to put Chinese e-commerce giant Alibaba's Taobao site back on its list of "Notorious Markets" for counterfeit goods.

The American Apparel and Footwear Association said in a statement Tuesday that "counterfeits remain rampant" on Taobao three years after it was taken off the list.

The group urged the U.S. Trade Representative to return Alibaba to the list of online and physical marketplaces that reportedly engage in or facilitate substantial copyright piracy and trademark counterfeiting.

Fakes have been a long-running problem for Alibaba. Taobao was first added to the list in 2011 and removed a year later after the company worked with trademark owners to clean up the site.


PURCHASE, N.Y. (AP) -- PepsiCo has topped Wall Street expectations with its third-quarter profit.

The Purchase, New York-based company said it had a net income of $533 million or 36 cents per share. After adjustments, earnings were $1.35 per share, 9 cents better than analyst forecasts.

Higher prices and increasing volume pushed up snack sales for PepsiCo's North America division by 2 percent. The maker of Frito-Lay chips has been increasing options on sizes, offering Lay's potato chips in a bag that is two ounces smaller than the traditional 10-ounce bag.

PepsiCo's North American drinks business, which includes Gatorade and Aquafina water, saw volume rise 3 percent, while higher pricing pushed up revenue by 5 percent.

Soda sales continued to decline, reflecting a shift in the beverage industry toward non-carbonated drinks. CEO Indra Nooyi says focusing on just carbonated soft drinks has become "a thing of the past."


NEW YORK (AP) -- Cybercrime costs are climbing for companies both in the U.S. and overseas amid a slew of high-profile breaches.

A sixth-annual study conducted by the Ponemon Institute pegged the average annual cost of cybercrime per large U.S. company at $15 million. That's up 19 percent from $12.7 million a year ago.

It also represents an 82 percent jump from Ponemon's inaugural study six years ago.

The study examines the total cost of responding to cybercrime incidents, along with after-the-fact expenses designed to prevent additional costs stemming from the potential loss of business or customers.

The study, sponsored by HP Enterprise Security, looked at a sample of 58 large U.S. companies. Globally, the study analyzed data from 252 companies in seven countries.