Document preparation services scrutinized by state

Clipboard in hand, Norma Ramirez went from business to business.

The compliance investigator with the Nevada secretary of state’s office didn’t have any luck in finding the owners at the first two businesses on her list, so she moved on to the next one.

Burnett Scribes LLC, on East Charleston Boulevard, was open on Wednesday.

“Come on to the back,” Joann Burnett, the daughter of the owner, told Ramirez after a brief greeting.

Ramirez was doing an inspection on the registered document preparation service to ensure it had made minor corrections, such as putting up signs saying the business doesn’t provide legal advice. The business can refer clients to a list of licensed attorneys.

Since a new law cracking down on businesses that provide legal services without authorization went into effect March 1, more than half of those audited by state investigators were found to be out of compliance. That law applies to a range of businesses, including tax preparers and document services that focus on divorce and naturalization.

The legal requirements for such providers are stringent, and officials work hard to enforce them, Secretary of State Ross Miller said. His office provided a grace period for businesses to register after the new law was enacted four months ago.

“We are now going to take a more aggressive approach,” he said last week.

The law requires those who provide document preparation services — known as “notarios” among Hispanics — to register with the secretary of state’s office and hold a $50,000 cash or surety bond.

The measure also allows consumers to seek assistance and file complaints with the secretary of state’s office.

Sponsor of the legislation, Assemblywoman Lucy Flores, D-Las Vegas, said in March, “The unauthorized practice of law is a pervasive problem in Nevada” and it mostly affects the immigrant community, which is vulnerable to scam artists.

Peter Ashman, a Las Vegas attorney and member of the American Immigration Lawyers Association, said he doesn’t see the issue as widespread, but immigrants do get scammed by people who over-promise to help fix their immigration status.

He’s aware of one case that resulted in deportation because a service provider failed to carefully analyze the client’s case.

“When it does become a problem, it’s usually a big problem,” he said last week.

Since March, there’s only been one complaint filed with the secretary of state’s office. An investigation found the issue was not serious, according to Catherine Lu, spokeswoman for the secretary of state’s office.

However, 40 provider applicants have been rejected. They didn’t pass the background check for various reasons that include having committed an act that involved theft, fraud or dishonesty in the past 10 years, according to Lu. Others didn’t pass the citizenship requirements, and some failed to submit fingerprints or a bond after applying online.

The secretary of state’s office can go after businesses’ bonds to recover money for clients, Ramirez said.

It’s possible that the office can also refer cases to the state’s attorney general’s office for prosecution, Miller said.

“It’s still early in the process, but I wouldn’t rule out referring cases to the AG’s office if we find that substantial violations have occurred,” he said.

In the four months that the law has been in effect, 13 of 20 inspected businesses were found to be out of compliance. Most of those businesses failed to meet other requirements, such as having clients sign written disclosures for the services provided and giving them written contracts, according to Lu.

Sixty-six applications have been approved, and 83 are currently under review, Lu said. Ninety applications are conditionally approved, awaiting their bonds.

Applicants have 60 days to secure a bond or their applications are rejected, Lu said.

The changes under the law are the best thing that could have happened for the community because people will have more protection, Malena Burnett, owner of Burnett Scribes said.

“I think the community has gained more assurance that the services will be provided by responsible providers or there will be recourse,” she said Wednesday.

Still, she said there will be some businesses that won’t follow the law.

“A lot of people are going underground,” she said.

Businesses not complying with the law could receive a visit from a state investigator soon and could face penalties, Miller said.

The law combats a well-known issue to the secretary of state’s office.

“We were getting so many complaints,” Lu said.

People were paying a substantial amount of money for services and were often given bad advice, Miller said.

“People oftentimes found themselves in a worse place than if they would have done it themselves,” he added.

Contact Yesenia Amaro at yamaro@reviewjournal.com or 702-383-0440. Find her on Twitter: @YeseniaAmaro.