What the fraud? New Wyoming ranking causes concern

Here’s one statistic Wyoming should seek to shed: being first in the Mountain West in Small Business Administration (SBA) pandemic loan fraud on a per capita basis. On September 14th the SBA announced that it had suspended 870,000 borrowers associated with $39 billion in alleged fraudulent Paycheck Protection Program and Economic Injury Disaster Loan activity throughout 45 states, six territories, and Washington, D.C.

The nation’s capital “won” the entire per capita fraud contest by a landslide at $308.26 per person, with second place New York stealing $248.57 per person. Wyoming rounded out the top ten at $156.71 absconded per person, with a total of $92,265,052 potentially stolen from taxpayers. (California, Ohio, Minnesota, Maine, and Wisconsin were not part of the list.)  No other states in the Mountain West made the top 10.

How did tiny Wyoming earn its title? One explanation could be that the state has long been a haven for corporate secrecy. It is one of four states – Delaware, Nevada, and New Mexico are the others— that does not require limited liability corporations (LLCs) to report the identity of the owner in state filings.

Critics of the privacy law say the lack of transparency leads to fraud. The International Consortium of Investigative Journalists reported in March that fraud indictments stemming from the Paycheck Protection Program “add to growing evidence that Wyoming is a major new destination for people outside the state – including criminals, suspected North Korean sanctions evaders, and those with wealth of dubious origin – to incorporate secretive limited liability companies, or LLCs, and other entities to hold and move cash.”

These companies used other companies to register for them, which then reportedly used false names for officers and different addresses than those actually used by the corporations. Wired magazine reported that six fake names were used as officers for 887 businesses registered to one such business formation company called Registered Agents at 30 Gould St. in Sheridan. That one address accounts for 40 percent of new incorporations in Wyoming between 2019 and 2024.

Earlier this year, the Wyoming Senate debated SF 82, which would have reversed course and required names to be posted on business registration forms. It passed the Senate and afterwards died in a House committee, but focused public attention on the many instances of residents receiving mail related to businesses registered at their home addresses that were not related to them – and to the many businesses registered at 30 Gould St.

Deputy Secretary of State Colin Crossman has a different explanation. He said he was surprised there were so few loans (1,366) flagged for fraud in the state given the ease and affordability of registering a business in Wyoming compared to other states. He thinks removing privacy protections will “hurt normal people without harming the bad people.” He added, “The thing about fraudsters is – they lie. Fraud is possible everywhere.”

The better path forward, he said, would be to upgrade the Secretary of State’s software system to catch those who make false statements on registrations immediately rather than after they break the law. “It’s like free speech. You want to put things in place that make it harder to abuse the system without taking rights away,” he said.

The state now has new processes in place to address fraud as well. Starting last year, the Secretary of State gained the ability to dissolve fraudulent businesses after a 60-day investigative period. Crossman said due process is necessary, as sometimes there are legitimate mistakes on addresses and there have been instances where a former spouse has tried to maliciously terminate a business.

What should be abundantly clear, however, is that the state should not make Wyoming a target for abuse because of outdated software. The Wyoming Secretary of State’s office generated $50.5 million from 675,000 LLC filings in 2024 and $59.5 million from 830,000 LLC filings in 2025. The legislature should prioritize using some of that revenue to ensure that those who want to do business in the Cowboy State will uphold the laws of the Cowboy State and the United States.

In addition, those who register businesses for foreign LLCs have no incentive to ensure the businesses they represent are following the law. Registered agents should get ahead of the state by creating a rating system for all agents that shows how many of their businesses have been targeted for fraud by federal and state law enforcement agencies.