In Las Vegas, Nevada Secretary of State’s Office proves its incompetence yet again

An expose put online today by the Las Vegas Review-Journal describes how the Nevada Secretary of State’s Office does little to nothing to stop scamsters from making fake corporation filings with the agency to swindle folks out of property in Las Vegas and elsewhere. Even worse, the agency disclaims any responsibility. The story, by reporter Brian Joseph, says this lack of due diligence by the office has been a problem “for years.”

I’ll say. Way back in 1991, long before becoming New To Las Vegas, I wrote in Forbes about how the very same office accepted incorporation papers from a nonexistent company in a nonexistent country, both established by a sketchy, mysterious character who turned out to be a repeat conman still on parole. Even worse, agency officials said they were under no obligation to check anything–even after they got a warning from another Nevada agency.

It sounds like nothing has changed.

My 1991 story was part of my continuing efforts that year investigating a phony, self-proclaimed “ecclesiastical sovereignty” called the Dominion of Melchizedek supposedly based on an island in the South Pacific off Colombia. The creator was a fellow whose given name was Mark Logan Pedley, but who used other names including Branch Vinedresser and Tzemach Ben David Netzer Korem. The operation eventually came to be run out of an office on Lake Tahoe in Incline Village, Nev.

Vinedresser–to use one of his names–was a creative fellow who sold passports and corporate charters in the name of the Dominion. Some he kept for himself, including the grandly named Banco de Asia and International Auditors Ltd., which, not surprisingly, issued clean audit reports on other Vinedresser operations. He invented a phony legal tender–Equicurrency–that he managed to get listed, with exchange rates that varied daily, on reputable media outlets like Bloomberg, Reuters and the International Herald Tribune. Everything was a tool to further scams run by Vinedresser and others.

In the May 27, 1991, issue of Forbes, I wrote this:

Bad bank

The State of Nevada touts itself as the new Delaware, with a great business climate plus free and easy incorporation laws. How easy? Even phony companies with spurious credentials and dubious intentions can qualify to do business.

In March, the Secretary of State’s office granted Banco de Asia Ltd. permission to conduct business in the state even though the bank said it was incorporated in the Dominion of Melchizedek. Both the dominion and the bank are inventions of Branch Vinedresser. Banco de Asia, which seems to have no real net worth, “authenticates” various worthless securities.

Nevada’s Financial Institutions Division complained about the approval, but state incorporation officials said Nevada law does not require them to check if a company is charted in a real jurisdiction. Wonder what they’ll say after some Nevada residents get hosed.

Now mind you, the Nevada Secretary of State’s office gave Banco de Asia its blessing months after I had first identified it, and its chartering jurisdiction, as frauds.

Eventually, Vinedresser was unmasked as a conman who had been twice convicted in federal court and was still on parole. My stories sent him back into federal housing yet again to finish his sentence. In 2011 he returned to prison again for another fraud and served two years. It was at least his fourth conviction.

Nevada seems to believe in weak, ineffective government, and the Secretary of State’s Office proves it in spades. Last year, I wrote for The Nevada Independent about how the office ignores a state law requiring it to post on its website full financial statements of charities soliciting donations in Nevada. As a result, Nevadans who are solicited on the phone have great difficulty discerning which charities spend little of the money collected on good deeds. (You can read about some that have called me here, here, here, here and here.)

The Secretary of State is an elected statewide position. As it happens, this is an election year, and the incumbent, Barbara Cegavske, a Republican, is running. It’s normally a low-key race. But between the Review-Journal and me, voters now have lots of questions they can ask her–and any challengers–about what the proper role of the Secretary of State should be in protecting the public.

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