Class Action Claims Lack of Process for Dissolving LLCs Formed Via Identity Theft in New York Is Unconstitutional

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New York Secretary of State Rossana Rosado faces in her official capacity a proposed class action lawsuit that alleges the lack of an adequate procedure through which identity theft victims may dissolve a limited liability company (LLC) fraudulently formed in their name falls short of due process and associational freedom rights guaranteed by the state and federal constitutions. 

The plaintiff, a Richmond County, New York resident whose identity was stolen and used to form an LLC in her name, claims she sought to remedy the situation through the New York State Department of State; by filing a police report; and through the Manhattan District Attorney’s office “to no avail.” Per the case, the lack of an LLC dissolution process in the event a company is created fraudulently violates the First and Fourteenth Amendments of the United States Constitution and Article One Sections Six, Eight and Nine of the New York State Constitution. 

The lawsuit aims to represent all individuals who are listed in New York Department of State business records as affiliated with any company and who have, within the last three years, notified the NYDOS that they are listed in said records due to identity theft, or without having given authorization or consent to be listed, and nonetheless remained in the database. 

According to the 16-page lawsuit, the plaintiff noticed in November 2019 an unauthorized charge on her credit card, dated October 21. After investigating the purchase, the plaintiff learned the unauthorized charge was made on “incfile.com” as payment for the formation of an LLC, the case says. That same month, the plaintiff learned the name of the LLC, “27 Linden Smith LLC,” and the company’s address, the suit adds. 

New York’s Division of Corporations database lists the plaintiff as the only contact person for the LLC, the lawsuit says, asserting that the plaintiff neither formed the fraudulent company nor paid the formation fees or authorized anyone else to pay the money with her credit card. The woman states in the complaint that she has no connection with the company or its apparent on-record address or a “Lovette Dobson,” the real or assumed name of an individual associated with “Incfile.com LLC.” 

In a November 2019 email, the plaintiff informed the New York Department of State that her identity was stolen and an LLC was made without authorization in her name, providing the company’s name and DOS ID number and requesting the LLC be dissolved so as to not further damage her credit, the case goes on. In a November 14 response, the New York Department of State allegedly informed the plaintiff it has “no statutory authority to administratively dissolve the limited liability company” or place the LLC as inactive, the lawsuit says. In another email on the same day, the Department of State added that the plaintiff should contact her district attorney’s office, per the suit. 

Further calls with the New York Department of State, as well as attempts to address the theft of her identity with the Manhattan District Attorney’s Office Cybercrime Unit, Bank of America and the IRS, were unsuccessful, the plaintiff says. To date, the plaintiff has received no follow-up from the New York City Police Department, and the the New York State Division of Corporations database continues to list the fraudulent LLC as active and registered to the woman, according to the suit.

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