Illegal change of the CEO. The main fraudulent schemes. How to secure your company?

Jan, 09 2024


The General director is the highest head of an organization or enterprise who is responsible for production and economic activities. The list of its tasks includes making decisions on the effective use of property and improving production and financial indicators.

The imperfection of the adopted regulatory legal acts of the Russian Federation opens a number of opportunities for fraudsters to change company directors. Such persons pursue the goal of realizing their selfish plans by taking assets. In this article, we will take a detailed look at the most common fraud schemes in corporate law in the field of illegal change of business management.

Illegal change of CEO: how and why is this done?

Unfortunately, the practice of weaning business is a phenomenon not only of the 90s of the last century. Cases of illegal re-registration of enterprises are common even now. And this is not accidental. In modern times, the continuation of the criminal case is facilitated by new technologies.

The experience of conducting legal practice shows that there are two main schemes of illegal change of the CEO.

1. The first is to provide the tax authority with a fake protocol of the general meeting of the company’s participants, who allegedly spoke about the appointment of a new head. The main problem lies in the ease of its manufacture, since the notary and the Federal Tax Service are not authorized to verify the authenticity of the signatures of the participants.

2. The second method is to obtain a new electronic digital signature (EDS) by forging a power of attorney. Having an EDS on hand, a fraudster can apply for a change of manager. The implementation of such a scheme is possible through a certification center (CC), which has recently started work or is in a remote region of the country. It is not necessary to exclude the conspiracy of a fraudster and an employee of the center.

The consequences of implementing both schemes are identical. As a rule, the legitimate director is deprived of his powers in favor of a citizen with intent, and the new head gets access to the current account. Next, there may be two scenarios: the fraudster gets in touch and offers to buy out the company or cashes out a checking account.

The director was changed illegally: bad and good news

The illegal change of the CEO is fraught with serious problems for the company. The main ones are:

  • Cashing out the account. As a rule, scammers prefer to use illegal money withdrawal schemes, which are then difficult to return.
  • Long-term reinstatement of the present director. As a rule, with any scheme, the correction of the situation takes a long time, the loss of which is always fraught with embezzlement of funds from the company’s accounts.

The good news in the change of director may sound only for the management of a loss-making or problematic business. In this case, the scammers by their actions will only help to get out of such an enterprise.

What should I do if the illegal change of director has not yet been completed?

Usually, suspicious operations on the change of management can be suspected in a bank or a certification center. The first one can interrupt questionable transactions with the current account, the second one can notify the owner of the electronic signature about the creation of an EDS in another name and in another center.

If you have received a signal about questionable activities related to your company, you can take the following actions.

  1. Contact the bank that serves the company’s current account. As a rule, the financial institution receives papers on the change of the head. If you take the necessary measures in advance, there is a chance that the bank will block suspicious transactions or cashing out. Also, in the branch of a financial institution, you can write a fraud statement with the possibility of temporarily blocking the account.
  2. Contacting the police. Try to apply for a criminal case under Article 159 of the Criminal Code of the Russian Federation “Fraud” with the application of all available evidence.
  3. Monitoring in order to find other victims. As a rule, the same person registers several companies at once. There is a high probability that there will be several more companies with the same CEO in the Unified State Register of Legal Entities. In this case, you can contact the real director of the company in order to cooperate and write a collective statement to the police.
  4. Contact the tax inspectorate. If the participants of the legal entity remain the same, it is necessary to submit a new protocol on the change of the fraudulent CEO to the real head.

With the coherence of the work of the participants of the legal entity and the competent authorities, it is possible to prevent the procedure of changing the CEO. It is enough to wait for a notification from the tax service, with which you can go to the bank to restore access to the account.

Illegal change of the CEO in LLC has already happened: procedure

If an illegal change of ownership has already occurred, this complicates the process of returning the former owner, but does not make it impossible. In this case, we recommend following the same algorithm as in the situation with an incomplete change of director.

In particular, first of all, contact the bank servicing the current account. Upon application, the bank’s security service may block the transfer of funds until the circumstances are clarified.

Next, write a statement to law enforcement agencies and report fraudulent actions of third parties in relation to your business.

Then contact the Federal Tax Service to send a free-form letter about the current situation. You can also apply in the form of a standard sample for a change of manager.

It would be useful to contact the certification center in order to revoke a fraudulent electronic signature.

If an illegal director managed to cause financial damage to the company, for example, to take a loan, cash out money or pay something from the company’s account, then you should file a claim with the Arbitration Court.

How do acts of fraud occur?

The weak link in the system of registration and re-registration of companies is the certification centers that issue EDS. There is a possibility that the employees of some CC will not understand why there is a different name of the CEO in the Unified State Register of Legal Entities. After receiving the electronic key, where the fraudster’s data is already registered, the attacker uploads a falsified protocol and a statement to the tax website, which is certified using a new EDS.

Further, after updating the data in the Unified State Register of Legal Entities, the fraudster can get access to the current account in the bank.

How to protect the company from an illegal change of director in the future?

To implement a fraudulent scheme to change the head, a protocol of the general meeting of participants must be submitted to the notary office. As a rule, the articles of association of most companies do not provide for mandatory notarization of decisions taken. This is done to speed up business, which in turn simplifies the work of fraudsters – they only must forge the signature of the founder. According to the current legislation, the members of the company can independently choose the method of certification of the decisions taken. According to paragraph 3 of art . 67.1 of the Civil Code of the Russian Federation if the charter says that all protocols of the company are certified by a notary, then it will become more difficult to forge documents.

We recommend that our clients systematically check information about their company in the Unified State Register of Legal Entities – an open and free source of information about legal entities. The sooner you discover the actions of scammers, the more time you will have to protect your business.

VALEN’s lawyers have sufficient experience in combating corporate fraud. We will help restore both the honest name of your business and the legitimate director at his rightful place of work.

Author of the article
Illegal change of the CEO. The main fraudulent schemes. How to secure your company?
Valentina Khlavich
Managing Partner
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