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Nevada Secretary of State Barbara Cegavske’s No Good, Very Bad Month

It was one rough month for Nevada’s Republican Secretary of State Barbara Cegavske. From being called out for multiple problems with her office’s website being vulnerable to hackers, to letting Nevadans be scammed, to a second horrible fundraising period, it was an embarrassing May for the embattled secretary of state.

Here’s a quick recap:

Cegavske is caught sitting by while scammers take advantage of working Nevadans and local businesses.

Las Vegas Review-Journal: Weak safeguards make Nevada companies easy targets for fraud:

  • For as little as $150, anyone can submit records online or in person naming themselves directors or managers of whatever Nevada company they choose — and the secretary of state’s office will accept them, no questions asked.

  • Once the records are changed, scammers can exploit the credit and assets of the companies. Cases in Nevada and other states show how alleged thieves used phony business ownerships to buy cellphones and luxury vehicles en masse and sold off land. These scams rely in part on lazy lenders who give credit applications and other financial transactions little scrutiny.

  • By the time the rightful business owners realize what happened, it can be too late, and they’re saddled with bad credit or have to fight to get their property back.

  • The lack of safeguards poses hidden risks in Nevada, one of the most popular states to register companies because of its friendly business laws and low taxes. Secretary of State Barbara Cegavske’s efforts to recruit businesses to Nevada help generate about $180 million in filing fees for the state each year. More than 1.1 million active and inactive business entities are on the secretary of state’s books — and all of them are susceptible to fraud.

AP: Weak Safeguards Make Nevada Businesses Targets for Fraud:

  • Scammers have exploited a number of Nevada businesses by taking advantage of a filing system allowed by the secretary of state’s office, state lawmakers said.

  • For as little as $150 and without facing any questions from the state agency, anyone can submit records online or in person to name themselves directors or managers of any company in Nevada, the Las Vegas Review-Journal reported.

  • Once the records are changed, scammers can exploit the credit and assets of the companies. Cases in Nevada and other states show how thieves used phony business ownerships to buy cellphones and luxury vehicles and sold off land.

  • “It’s a serious issue,” said Jodi Grover, president of Southern Nevada operations for Ticor Title of Nevada.

Then, Cegavske was called out by Nevada lawmakers for doing absolutely nothing to stop the problem.

Las Vegas Review-Journal: Nevada lawmakers react to secretary of state’s weak business safeguards:

  • State lawmakers want to take action to combat the filing of fake business documents with the Nevada secretary of state in response to a Las Vegas Review-Journal investigation that found the agency’s weak safeguards allow scammers to take over businesses and exploit their assets.

  • Assemblywoman Maggie Carlton, D-Las Vegas, agreed that the Legislature should act. She questioned why the secretary of state has not implemented password protections to prevent fraudsters from gaining access to business filings.

  • “I would think since someone has identified the problem we should fix it,” said Carlton, the vice chair of the Assembly Commerce and Labor Committee.

And by the Las Vegas Review-Journal’s editorial board  

Las Vegas Review-Journal: EDITORIAL: Nevada’s corporate filing system is susceptible to fraud and abuse:

  • Nevada is one of the most popular states for business registration — and that’s no accident. The state has set up a filing system intended to attract entities from around the country. The fees generate $180 million a year.

  • But the Review-Journal’s Brian Joseph reported last Sunday that the system is susceptible to fraud and abuse. “For as little as $150,” he wrote, “anyone can submit records online or in person naming themselves directors or managers of whatever Nevada company they choose — and the secretary of state’s office will accept them, no questions asked.”

  • Ms. Cegavske must make this an immediate priority.

  • For instance, the secretary of state could improve the alert system that warns businesses when someone revises documents already on file. More detailed alerts — notices that specify what information was added or changed — would help. In addition, Ms. Cegavske’s office should implement a system that allows businesses to set up passwords or personal identification numbers, making it more difficult for wrongdoers to access the system.

If that wasn’t already bad enough, turns out Cegavske’s office has done nothing while knowing that the State’s SOS website is hackable.

FiveThirtyEight: State Websites Are Hackable — And That Could Compromise Election Security:

  • After receiving a tip from a small cyber firm called Appsecuri, FiveThirtyEight has confirmed that two states, Alabama and Nevada, had vulnerabilities that left them open to potential compromises of their state web presences.

  • Nevada has acknowledged that a state site has a vulnerability identified by Appsecuri but disputes Appsecuri’s allegation that the weakness poses a risk to the state’s election system. Officials from both states said the flaws did not have the potential to allow the posting of erroneous vote counts to official pages. But outside experts suggested that there’s still reason to be concerned.

  • Nevada officials said that of the vulnerabilities outlined by Appsecuri, they already knew of one affecting the state’s business website, an online home for business document filings, but it had not been rated a high enough risk to fix immediately.

  • Wayne Thorley, Nevada’s deputy secretary of state for elections, said that the state had yet to fix the glitch — which he said was first discovered by an internal state scan in December — because of budgetary concerns.

  • Appsecuri also claimed that login pages for the state secretary of state’s office were susceptible to the theft of usernames and passwords. But Thorley said the pages in question had “no functionality.” “Those URLs, they don’t work, they don’t do anything,” Thorley said. “They’re just pages that mirror our actual single sign-on.” When asked by FiveThirtyEight what purpose the pages serve, Thorley answered, “I don’t know why they exist.”

  • When FiveThirtyEight asked Hursti about Nevada’s stance, he saw a red flag. “Why would you even let people see that login environment?” Hursti said. “People can get ideas, and also people can take a look on that page and analyze it and gather intel for an attack.”

Oh! And let’s not forget, Cegavske was outraised by Democrats for the second reporting period in a row.

Las Vegas Review-Journal:

  • Democrats hauled in much more cash than their Republican rivals in most state constitutional races, and nowhere was that more evident than in Nevada’s Secretary of State race, where Assemblyman Nelson Araujo, D-Las Vegas, is trying to upend Republican incumbent Barbara Cegavske.

  • The campaign for Araujo, who was first elected to the Assembly in 2014, reported raising just under $180,000 from Jan. 1 to May 18, campaign finance reports show.

  • That’s nearly three times the total $63,075 Cegavske raised in the same time frame.

 

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