Senate Passes Bill to Crack Down on LLC Fraud Tied to Wyoming’s Booming Incorporation Industry

The Wyoming Senate passed a bill Wednesday aimed at curbing fraud connected to the state’s massive limited liability company industry, voting 23-8 to require registered agents to collect and maintain the names and addresses of every LLC owner they represent. The measure now heads to the House.

The debate was sparked by stories like that of an 80-year-old Lander woman who received unexplained mail at her home address—which had been listed on official state filings for an LLC she’d never heard of. Sen. Cale Case, R-Lander, told colleagues the woman was “so upset when she thought everybody was after her because she had some business, and she couldn’t figure it out.” He estimated he could name 10 similar cases in his community alone.

Senate File 82, sponsored by Sen. Barry Crago, R-Buffalo, targets a gap in current law: registered agents representing hundreds of thousands of clients face no requirement to verify who’s behind the companies they form. “We show up, we say we need this information, and they either say we’re not giving it to you, or we are not required to hold that information,” Crago said. “This actually would figure out who’s behind the companies.”

The bill’s passage follows Wyoming’s emergence as a national leader in business incorporations, surpassing Delaware on a per-capita basis. Registration fees and related business bring the state an estimated $50 million to $60 million annually. But that success has drawn bad actors exploiting Wyoming’s business-friendly laws.

Sen. Charlie Scott, R-Casper, who helped rewrite Wyoming’s corporate laws decades ago, acknowledged the fraud problem but voted no, arguing the bill wouldn’t solve it. “It was just asking the registered agents to accumulate more information, which will be a burden on most of the incorporators, who are basically honest and just looking for some privacy, and won’t do a thing about the bad actors who are concealing who they are.”

Sen. Chris Rothfuss, D-Laramie, delivered the sharpest opposition, arguing the bill erodes the privacy that made Wyoming attractive without stopping fraud. “Bad actors are going to keep being bad actors with zero change on fraud,” he said. “But good actors might look at the state of Wyoming … and say, ‘I think I’ll choose a different state.'”

Supporters framed it as an anti-crime measure. “This is a business-friendly bill. This is an anti-crime bill,” said Sen. Gary Crum, R-Laramie. “We’re open for people to come here and do business, but we’re not for fraud.”

Sen. Cheri Steinmetz, R-Lingle, added: “We can’t be so business friendly that we expose our citizens to fraud and abuse in our state.”

The bill now awaits House consideration.