Synthetic Businesses: the New Billion-Dollar Fraud Machine

Weak State Controls and AI-Generated Documents Fuel Surge in Synthetic Entity Fraud Suparna Goswami (gsuparna) • December 9, 2025

Fraudsters are exploiting weak state registration controls in the United States to create synthetic businesses for less than $150, with potential payouts of more than $100,000 for each fake identity. Synthetic entity fraud has rapidly shifted from a niche threat to a mainstream risk, said Andrew La Marca, vice president of operations at Dun & Bradstreet.

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One of the major drivers of synthetic entities is the large number of outdated business registration systems that can't keep pace with the scale of the threat, which is now augmented by artificial intelligence tools.

"Many states still don't verify identities or confirm whether submitted addresses exist," La Marca said. Instead, fraudsters enjoy a nearly frictionless experience with state agencies by using ...