Minnesota Secretary Of State - Secretary of State Statement on Passage of H.F. 3400, Governing Fraudulent Business Filings
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Secretary of State Statement on Passage of H.F. 3400, Governing Fraudulent Business Filings

May 31, 2022

SAINT PAUL — Minnesota Secretary of State Steve Simon today issued the following statement upon passage by the Senate and House of H.F. 3400, which will provide a process for the Secretary of State’s Business Services Division to reject obviously invalid liens.

“Minnesotans shouldn’t have to endure the problems that come with phony liens,” said Secretary Simon. “Now our office has the authority to fight this fraud and prevent serious difficulties for these good people.”

“Spurious filings against individuals, particularly public officials, made only with the intent to harass, have been difficult and costly to unwind,” said Olmsted County Attorney Mark Ostrem and Nicollet County Attorney Michelle Zehnder Fischer. “This bill provides short-form relief for those sham filings.”

The “Bogus Filer” bill protects Minnesotans from fraudulent Uniform Commercial Code (UCC) lien filings that can be used for retaliation or harassment of citizens by providing the state with a critical fraud-fighting tool that 24 states already possess.

The office’s Business Services Division regularly files UCC liens, which are legal notices where the filer has a security interest against the debtor. Legitimate UCC liens are filed with the office on a regular basis, but unfortunately, the office also receives clearly fraudulent filings routinely. These fraudulent filings come in different forms but have common characteristics and are often retaliatory or harassment in nature - commonly filed against corrections officers, law enforcement, judges, and other public officials.

Starting on August 1, Office of Secretary of State staff can reject these filings that meet established parameters that identify them as fraudulent at the time of filing or after the fact. The bill also outlines an appeal process should a rejected filer believe they have a legitimate filing. Additionally, if a fraudulent filing does occur, the bill sets up an administrative process to remove the filing instead of the current requirement for a victim to go to court and seek an expungement.