Entity Fraud is the act of constructing a false business identity in code. The most visible form is Schema markup that claims a business is physically located in a city or region where it has no actual presence. Agencies do this to rank in markets they cannot legitimately serve.
It works because search engines treat structured data as a trusted signal. If a website's schema declares it is a LocalBusiness in Dublin, Virginia, that declaration carries weight in local search results until something contradicts it. Verifying every claim across millions of business listings is not realistic, so the system relies on the data being accurate.
Common patterns include:
Schema Spoofing. Embedding LocalBusiness markup with coordinates and city names for locations the business does not occupy. The agency may have no employees, no office, and no clients in that area.
False NAP data. Listing addresses that resolve to mail drops, virtual office services, or shared coworking spaces with no real operational presence. The address technically exists but the business does not function there.
Authority Leeching. Linking the fabricated location to legitimate civic resources, such as a Wikipedia entry for the city or county, in an attempt to inherit credibility from those associations.
Entity Fraud is harmful because it pushes legitimate local businesses down in search results and feeds prospects to operators who cannot deliver localized service in the area they claim. The customer thinks they are hiring someone local. They are hiring a script.
Search engines do correct for some of this over time, particularly through user behavior signals and manual reports from competitors. But the correction is slow, and damage to legitimate local businesses can accumulate before it happens.
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Pages engaging in Entity Fraud should be reported immediately https://search.google.com/search-console/report-spam