Man Prosecuted After Showing How Easy It Is To Create Bogus UK Companies

2013: the Daily Mirror reports on Kevin Brewer, who set up a firm called John Vincent Cable Services Limited to alert the UK government’s then-Business Secretary to how easy it is to create companies based on false information:

“Fraud is simple to perpetrate and anyone can form a new company in anyone else’s name,” said Kevin, managing director of National Business Register.

“Companies House now forms one third of all new companies and does not perform any identity checks.

“It forms limited companies for anyone worldwide who chooses to use any name they pluck out of the air.”

He wrote to Mr Cable: “To illustrate the point, we have formed a company in your name without your consent and could start trading using your identity.”

2018: A follow-up in The Times:

Kevin Brewer, 65, was ordered to pay £12,000 yesterday after he admitted giving false information to Companies House, having formed a company five years ago that wrongly claimed to be owned by Sir Vince Cable, the Liberal Democrat leader and former business secretary.

Brewer then set up another company in 2016 called Cleverly Clogs Ltd that named Baroness Neville-Rolfe, the government minister with responsibility for Companies House, as a director and shareholder, as well as James Cleverly, a Conservative MP. Brewer also created an entirely fictitious Israeli called Ibrahim Aman as a director and shareholder.

…”This prosecution shows the government will come down hard on people who knowingly break the law and file false information on the company registry,” Andrew Griffiths, the business minister, said.

A spokesman for Companies House said: “Deliberately filing false information on the register is a serious offence and people who have been found to have knowingly done this can face prosecution.”

Breaking the law in order to demonstrate a failure in enforcement may still be illegal, but Brewer’s stated purpose (which obviously is confirmed by the fact that he wrote to Cable) ought at least to have been mentioned in the Times article. Instead, the broadsheet has simply regurgitated government spin – the whole article is just a re-write of a Companies House press release.

Brewer was not “found” to have filed false information – he readily confessed to it, in order to prove a point. As such, the case falls far short of being evidence that “the government will come down hard on people who knowingly break the law and file false information on the company registry”. It was an anomaly, and the prosecution looks more like an instance of shooting the messenger.

Here’s the reality of the situation, as explained by Prem Sikka of the University of Essex in December:

Recently, journalists were moments away from registering company with 10 Downing Street, UK Prime Minister’s address, as its head office. The government’s response is that “Companies House does not have powers to verify the authenticity of company directors, secretaries and registered office addresses”.

Sikka’s emphasis here was on the potential for money laundering, but the broader point is that most people are under the misapprehension that registration with Companies House means that a company and its directors are thereby made accountable. This may influence potential partners or customers, or be useful in other ways for someone who wishes to misrepresent his or her public profile.

There are various ways in which Companies House records may be misleading, beyond blatant identity theft or creation. They include:

  • A director using variations of his or her real name, in order to obscure financial history or connections between companies;
  • A company having a listed address that used to be true, but that is now out of date;
  • A company listed with false address: this can be obscured by giving an address in a large office block, but not providing a suite number or similar that would confirm the specific location.

There is also little evidence that late or missing filings are actively pursued by Companies House, despite the power to levy fines.

The pursuit of Brewer does nothing to persuade that the system is not still unfit for purpose. Indeed, it is a distraction from the problem.

2 Responses

  1. Take a wander over to https://beta.companieshouse.gov.uk/company/11013087/filing-history and you’ll see one of the people at the centre of the Facebook/Cambridge Analytica scandal using a false name “Alexsandr Boris Spectre” as his name to register a company called Philometrics Ltd. Philometrics Ltd is solely owned by… Philometrics Inc which was setup by Dr Alexsandr Kogan in the US and another of the Cambridge crew Alexander Slinger. The same Kogan who changed his name for a while to Dr Spectre. Philometrics specialize in doing very similar stuff to Cambridge Analytica. Kogan has been claiming in the press that he’s a scapegoat for the scandal yet he’s deliberately setup companies to continue said conduct. Philometrics Inc cannot decide whether it’s in Delaware (according to company registration info in the States) or San Francisco according to it’s Facebook page. If you ever needed an example of how far too easy it is to setup companies then you only have to look at his particular case example – not surprising however when you see that it was setup by an online company creation mechanism (according to the Articles of Incorporation) …

  2. This happened to me years ago. I found a letter addressed to a ‘director’ of a company I had never heard of, using my address. I wrote to Companies House telling them that I had not heard of the company, or the director using my address as his own.

    They told me they take all information at face value, and said they were unable to change that information and remove my address.

    About two years after that I received a letter saying my company owed over £2000 in gas and other unpaid bills. It seems they had left without paying their bills, and as the ‘Director’ of the company, I was responsible.

    Companies House seems to prefer assisting criminals rather than making a few checks that the Directors of Companies do live at the addresses they give.

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