Registering a limited company couldn’t be simpler. It costs just £12, no questions asked.
It’s a crook’s dream with no one checking if you’ve given correct basic information like your name or office address.
The result is that thousands of companies are being formed with blatantly faked details in what one expert on dirty money calls a scandal of epic proportions.
The scale of the fake company epidemic can be found in microcosm in one short street in South-East London.
In a mirror of what’s happening across the country, multiple residents in Ashmore Close in Peckham have found their addresses being used by companies and directors they’ve never heard of.
The worst hit is Holger Sell, who has had 20 companies registered at his home since late May.
“A lot of the post I get is from banks. These people are setting up companies and trying to get loans which could be secured against my house,” said Holger.
“When I complain to Companies House they want me to produce evidence that I am the owner of the property by seeing the land registration and deed to the house, plus a utility bill, yet they let anyone open a limited company by just paying a registration fee with no further proof of address or ID required.”
Holger, who’s originally from Frankfurt, has discovered 54 companies registered in this street of only 56 houses. “To set up a company in Germany you need to show bank statements, passport, utility bills and set out the nature of the business,” he said. “Here, there’s nothing.”
A string of the companies registered at his home have a director with the same name, Edward Solomon, but varying dates of birth. For Coding Bitcoinmining Ltd, Solomon was born in May 1985, according to the details filed at Companies House. For other companies, the records show that Solomon was born in May 1990, August 1990, May 1986, May 1990, July 1989 and July 1987.
Solomon also appears as the director of companies registered at other houses in Ashmore Close, again with varying dates of birth.
There are several possibilities here.
One is that by an amazing coincidence there are multiple people called Edward Solomon with different ages all with companies in the same South London street.
Or these are fake identities created by people with something to hide.
Holger has emailed Business Secretary Kwasi Kwarteng highlighting the “great distress” caused by the repeated unauthorised use of his address.
"We have been in touch with Companies House pretty much weekly, but we received no help, as we got told that there are currently no ways to stop this from happening," he wrote.
"My question to you is how is this even allowed in the first place?"
He received an unsigned reply from the Department for Business admitting that Companies House “does not currently have the legal power to verify or validate information filed”, though insisting that reforms were planned.
One of the companies registered at Holger Sell’s address is Whalestrade Limited. According to its website, it is an online investment platform with an affiliate programme offering a bonus of 10% of the deposits of anyone who existing investors can persuade to join.
“There is no greater approach to gaining credibility than doing business correctly and transparently,” Whalestrade boasts.
But there is nothing transparent about a company that has used a false address in South London, has a website registered in Iceland, a Telegram channel largely written in Arabic, and my email to them, which has not been answered, was opened in Belize.
Its website claims that someone called Alexey Kitaev is the chief executive but Companies House lists the sole director as the busy Edward Solomon.
The website also boasts “officially registered company” with a hyperlink to Companies House, obviously thinking this gives it credibility.
Sadly, it does. Many people here and abroad think that being a UK company confers legitimacy, unaware of how simple it is to incorporate a business with fake details.
This is why the same ploy is used by other companies abusing Holger's address, like Billionercyber.com, which boasts: "Billioner Cyber is an officially registered & licensed company. This ensures that consumers funds are in professional hands, safe and secure. It also proves the legitamacy of Billioner Cyber."
Growbits.org does the same, offering returns of 200% on cryptocurrency trading and stating: "We are certified United Kingdom company with Incorporation number 14230828, available for checking in the official UK Companies registrar here".
At the bottom of its homepage is Holger's home address.
It is not implausible to think that unhappy clients of these companies might one day come knocking on his door.
Just as it is no exaggeration to say that the failures of Companies House are putting innocent members of the public at risk.
Another resident in Ashmore Close, whose address has been used without permission, is Emma Jones, who last week received a debt collection demand for £703.10.
“As the enforcement agent in charge of your case, I have called today with the intention of removing goods in order to sell them at public auction and use the proceeds to pay the debt on your behalf,” it stated.
The demand is addressed to someone Emma has never heard of.
At least five other people unknown to her have used her address for limited companies - including, of course, Edward Solomon.
“It’s ridiculous that Companies House requires no proof of ID or residence,” she said.
“It would not take much to set up software to raise red flags like an unusual amount of registrations in one street in a short space of time.
“I have raised a complaint with them but feel powerless.”
The Government admits there are “gaps in the company law framework” and says it will reform Companies House.
“The Registrar of Companies’ powers will be broadened so that they become a more active gatekeeper over company creation, and custodian of more reliable data, including new powers to check, remove or decline information submitted to, or already on, the Company Register,” said a Companies House spokesperson.
“Identity verification will be introduced for people who manage, own and control companies and other UK registered entities.”
There is no timescale for when the changes will come into effect.
Dark money expert Graham Barrow describes the mass of companies being set up with fake details as “a national scandal of epic proportions”.
“You need more proof of ID to get a library card than to set up a company,” he said.
“About 16,000 new companies are registered every week, and I would say that around 3,000 of those will result in letters being sent by Companies House congratulating people on setting up a new company they know nothing about.
"Most people will just throw those letters in the bin, which could lead to problems down the line.
“These are burner companies and used by criminals just like burner phones.
“It costs £12 to set one up, and then if you can get an automatic business overdraft of £8,000, that’s a pretty good return on investment for the criminals.” Graham cautiously welcomed Government promises to reform Companies House in the forthcoming Economic Crime and Corporate Transparency Bill but fears that ID checks will not be enough to stop the criminals.
“At last we are going to require people to prove they are who they say they are, it’s a step in the right direction,” he said.
“But at present we allow anyone anywhere in the world to incorporate a company, so someone in the Donbas might register a UK company.
“Even if they provide ID verification, if the company turns out to be bogus, what are we going to do about it, go to the Donbas region and arrest them?
“We need a requirement for every UK company to have a person living in the UK at the address where they say they are living.
"It does not have to be made public but Companies House should have these details.”
Investigate@mirror.co.uk
