Businesses be on a alert: Lax protection around business registration data in at least two states has enabled scam artists to swindle millions by creating fraudulent corporate identities.

Georgia is the second state this month--after Colorado--to disclose online scams in which false corporate identities were created to defraud banks or other financial institutions, reports Jaikumar Vijayan at ComputerWorld. Scam artists were able to alter business registration information in the Secretary of State's Office and use the data to set up merchant accounts, secure loans and open lines of credit.

According to a detective with the Duluth (Ga.) Police Department, two cases that have been prosecuted involved people associated with the music business. The loss to financial institutions, including SunTrust Bank and American Express, exceeded $6 million. In one case, prosecutors believe that the scammers used the identities of approximately 3900 businesses and individuals. 

The online business registration system in Georgia is considered rather slack.

"Here in Georgia, if I want to be the new CEO of Coca Cola, all I have to do is to go online to the Secretary of State's site to the section where you can change registration information," according to the detective in Duluth. "You change the information, pay $30 and then within a week you are the new owner of Coca Cola. There's no verification."

In Colorado, at least 35 businesses have had their identities used fraudulently, Vijayan reports.

For more:
- see Jaikumar Vijayan's article at ComputerWorld

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