DENVER — It's relatively easy to register an LLC in Colorado, as the filing fee is only $50. That may be part of the reason the Colorado Secretary of State gets hundreds of complaints about fake LLCs -- and when a Coloradan starts getting suspicious mail addressed to an LLC, the investigation into what's happening can take months.
Kristen Speth called Steve On Your Side after getting three pieces of suspicious mail. Each envelope had her home address, but all three were addressed to an LLC.
"I reached out to the other people in my household and was like, 'Has anybody started a business here recently that nobody told me about?'" she laughed.
Nobody in her family had started HONLID Limited. So she decided to figure out who did.
"I did another search on the secretary of state's site for the person that started this business, and noticed that they had started, like, 12 to 13 other businesses at that point in time, using various addresses around the state of Colorado," Speth said.
The registered agent for HONLID Limited, Zongxing Hu, was pretty busy this spring, according to state records. They registered the LLC at Speth's house on May 14. A month before that, they registered GABOSLY Limited at a house in Colorado Springs. Then, on May 8, FIRIAM CO at a house in Fort Morgan. On May 28, EXINTOR CO at a house in Fort Collins.
Steve On Your Side found businesses registered by that agent at homes in Parker, Brighton, Lafayette and Littleton, too. The people who answered the phone at those addresses told us they too had gotten strange mail and had no idea what was going on.
Speth said some recipients may assume the envelopes are junk mail and not register a complaint.
However, Speth did register a complaint. She was blown away by the response she got from the secretary of state's office.
"I received the email back saying that they would look into it, but don't reach out to us unless you haven't heard from us in a year," Speth said.
Jack Todd, spokesperson for the secretary of state's office, said it's typically taking about six months to investigate a complaint. And he said there are a lot of them.
"Since we launched it in February of 2023, we've seen over 2,000 cases filed," Todd said. "700 of those have been resolved completely at this time."
Why might someone do this? No one really knows.
"A fraudulent business could try and pick up a line of credit. They could do things associated with the address and then not pay. You know, that kind of thing," Todd said.
As these investigations drag on, these businesses, that no one's ever heard of, remain listed in good standing on the secretary of state's website. Todd said they can't flag anything until the process has been completed.
"It feels like there's a giant hole in our system," Speth said. "And we're left to kind of just pick up the pieces."
Speth said she's left with no choice but to wait for the state and wonder why someone needed her home to build their business.
"I would love to know, really. What's the end game here?" she said. "Like, what are these people doing with these LLCs?"
A bill in the state legislature will require registered agents for businesses in Colorado to hold a valid Colorado ID. But that doesn't take effect until next summer.
The bill does send more resources to the secretary of state to investigate these cases, which could help with the backlog.
If you're getting strange mail at your home, or you have any other consumer problem, contact the Steve On Your Side team.