Sophia Voravong, writing for the Lafayette Journal & Courier had an article on the passage of HB 1054 which allows the Secretary of State to reject certain filings if the Secretary of State has probable cause to believe the filing is materially false or fraudulent. These include, financing statements where 1) the same name is listed as both debtor and secured party; 2) the debtor is identified as a “transmitting utility”; 3) the statement appears to be for the purpose of harassment; or 4) the instrument is forged.
The measure specifies that Secretary of State does not have a duty to investigate the legitimacy of any particular finding — thereby presumably helping it avoid lawsuits by people who are unhappy that the office has the discretion to reject filings but did not do so in a particular case. Individuals who believe that a filing was fraudulent are given the opportunity for judicial review of a filing with an award of attorney’s fees if they are successful. (I wonder if this might inhibit filing by legitimately secured parties for fear of lawsuits or counterclaims if/when the transaction goes bad.)
I do not see anything that gives a filer who has a filing rejected any explicit appeal options. But, maybe that’s elsewhere in the statute or can be accomplished by a suit for injunctive relief.
The Journal & Courier story points out that the goal of the legislation is to curtail nonsense and abusive filings by “sovereign citizens.” (See, e.g. my Redemption Song post from three years ago with discussion of one flavor of these nutjobs and their misguided attempts at using legal word salad because they don’t like complying with their obligations.)
I have heard of this “secured transaction” fraud. I recall that one of Ron Paul’s websites’ had a link to this fraud. Real leadership material.