DENVER — A week after 9Wants to Know exposed how 33 bogus businesses were approved for $2.3 million in COVID relief, Colorado Attorney General Phil Weiser said Colorado needs to bolster laws to incentivize whistleblowers.
9Wants to Know discovered someone revived more than 30 dormant business licenses through the Colorado Secretary of State’s website to make them appear in “good standing.” Days later, the entities were approved for $2.3 million in Paycheck Protection Program funds. The money should have gone to small businesses during the pandemic to help make payroll.
“If you go into a government database, and you engage in fraudulent behavior, applying for a business in the name of somebody else, without really an ability to operate it, that's fraud. That's fraud that we can prosecute civilly and criminally,” Weiser said.
During an interview with 9NEWS, Weiser also called for a state-level false claims act, which would give private citizens more power and protections to report fraud.
The federal government and some states have such false claim laws that allow citizens to file suit if they discover fraud. Citizens can collect a reward as a result of successful lawsuits.
“We need a remedy to make people pay literally and figuratively, and we need an incentive,” Weiser said. “We don't have one here in Colorado.”
The focus of the 9Wants to Know investigation into the 33 bogus businesses revealed the culprit manipulated the state’s online business licensing system to make defunct businesses appear in good standing.
John Henderson, a white-collar crime investigator, told 9Wants to Know he often found fictitious businesses in the state’s business licensing database.
“What I found were thousands of companies that had been opened in Colorado, which had no verifiable authenticity,” Henderson said, adding it’s easy for scammers to hijack old business licenses.
When asked if Weiser’s office would investigate the findings exposed by 9Wants to Know, he hinted it would be difficult to track suspects.
“When you and others surface cases of fraud, we absolutely want to know about it. One of the challenges we're always going to have is, can we find the perpetrator? Sometimes in some of the frauds, it's someone from abroad,” Weiser said.
If you have any tips about fraud, you can email firstname.lastname@example.org.
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