Recently, individuals including prison inmates and members of antigovernment groups — some considered “domestic terrorists” by the Federal Bureau of Investigation — have been utilizing the relaxed filing requirements of the Uniform Commercial Code (UCC), Article 9, to file and record false UCC-1 financing statements against individuals, companies and law enforcement officials. See www.fbi.gov, “Domestic Terrorism, The Sovereign Citizen Movement,” Apr. 13, 2010; Peter A. Crusco, “Combating Inmates’ Use of Bogus UCC-1 Lien Notices,” N.Y. Law Journal, Apr. 26, 2011.
The filing of a bogus UCC-1 financing statement can disrupt an individual’s or company’s ability to obtain financing and cause the victim of the false lien scam to incur unnecessary expenses in order to clear the false lien. However, there are ways to recognize the false UCC-1 financing statement scheme and minimize the disruption and expense caused by bogus UCC-1 financing statements.
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