R.I. attorney general’s lawsuit accuses businessman, 2 companies of scamming small businesses

ATTORNEY GENERAL PETER F. NERONHA filed a lawsuit Wednesday against two out-of-state companies and a Florida businessman who Neronha says tried to deceive newly formed companies in Rhode Island into paying a high fee for certificates of good standing. / PBN FILE PHOTO/RUPERT WHITELEY
RHODE ISLAND is one of three states challenging a federal ruling that R.I. Attorney General Peter F. Neronha says conflicts with state law and wrongfully denies coverage for mental health and substance use disorder treatment. / PBN FILE PHOTO/RUPERT WHITELEY

PROVIDENCE – Attorney General Peter F. Neronha is suing two businesses and a Florida businessman to stop them from conducting what Neronha says is a deceptive scheme targeting thousands of businesses and nonprofits in Rhode Island.

The lawsuit filed Wednesday in R.I. Superior Court against Centurion Filing Services LLC, Business Document Center LLC and Dean Marshlack accuses them of misleading new small businesses and nonprofits into paying high fees for needless “certificates of good standing.” Certificates can be obtained from the R.I. Department of State for a significantly lower fee.

Neronha is also seeking reimbursement for businesses that needlessly paid the fee and fines of $10,000 for each violation of Rhode Island’s Deceptive Trade Practices Act.

Several lawsuits alleging similar deceptive and predatory practices have been filed against Centurion and Marshlack in several states, including in Iowa, Michigan and Mississippi.

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Last spring, R.I. Secretary of State Nellie M. Gorbea warned of the practices of Marshlack and his business, Centurion – which is doing business in Rhode Island as RI Certificate Service – saying the company was sending letters to newly incorporated businesses, charging $84.50 to $87.25 for certificates of good standing. Gorbea’s office provides such certificates for $7 for nonprofits and $22 for for-profit corporations.

Neronha said his office has been investigating the scheme with Gorbea’s office for months.

Centurion is based in St. Petersburg, Fla. Business Document Center’s registered address is in Lewes, Del.

“For too long, the defendants … have deceived hard-working business owners out of money they could have instead used to operate their enterprises,” Neronha said in a statement. “Rhode Island business owners, who are anxious to comply with the law, have fallen victim to this scheme, and if the conduct is not swiftly stopped, I fear that many more will follow.”

The attorney general noted that a change in the state’s consumer protection law last year allowed his office to pursue fines on behalf of Rhode Island consumers.

State law requires all businesses, for-profit and nonprofit, doing business in the state of Rhode Island to register with the secretary of state’s office.

Neronha’s lawsuit accuses the defendants of mailing misleading letters to thousands of newly registered businesses claiming that they had to complete an additional step of securing a certificate of good standing to finalize their registration. The defendants’ solicitations invite businesses to pay $84.50 or $87.25.

Rhode Island businesses are not required to obtain the certificate to complete official registration. The certificate is a document issued by the secretary of state’s office to verify that a Rhode Island business entity is in good standing with the state and may be asked for by another state if an entity wishes to register to do business in that other state, or for other reasons.

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