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ID Theft - Real Cases
Part 1
by Mary Beth Guard
The PATRIOT Act's Customer Identification Program requirements may be designed to deter and detect money laundering and possible terrorist activity, but it's likely they will also have a significant impact on identity theft as well, as criminals will find it tougher to establish deposit accounts and obtain credit with stolen identities.
If you're not convinced new identity verification methods are necessary, consider the variety of ways con artists have stolen personal information and used it to commit fraud, as described in the true cases summarized below.
Social engineering
Crooks try to gain access or information by impersonating someone who is entitled to it. In this multi-million dollar credit card conspiracy one of the co-conspirators posed as a computer technician for a computer company that serviced various restaurants. In that guise, he obtained credit card account numbers of more than 12,000 patrons of various restaurants and distributed the card numbers to others for further illegal use.
http://www.usdoj.gov/usao/fls/Prouty2.html
Crooked Employees
Crooked bookkeepers have kept check fraud investigators busy for years. Now, however, rather than stealing money from their employers, some individuals are stealing information -- and using the information to commit ID theft and other crimes. Here are several examples of the types of workers that give you nightmares:
The identity theft underlying this court case occurred when a receptionist in a doctor's office copied a form listing a patient's name, Social Security number, and other basic information. The receptionist moved to Las Vegas and attempted to open credit accounts using the patient's Social Security number and her own last name and address.
http://laws.findlaw.com/us/000/00-1045.html
Police charged a 38-year-old female employee of the New York State Insurance Fund with taking personal data from office files and then using the stolen identities to obtain goods and services on credit. The clerical worker had access to the personal identifying information of thousands of state employees and other citizens who dealt with the Insurance Fund. She allegedly secretly misappropriated this information - including names, addresses, telephone and social security numbers of individuals across the state - and then used the information to obtain goods and services from a variety of consumer product companies. She apparently even used her work computer to apply for credit and order goods in the identities she stole.
In addition to using the pilfered information for her personal gain, the employee reportedly sold the information to accomplices who also exploited the stolen identities.
http://www.oag.state.ny.us/press/2001/jul/jul17a_01.html
"Divide and conquer" may have been the mantra for another set of thieves. One worked for a bank. The other for a medical facility. According to the federal grand jury indictment, they conspired to steal personal identifying information on individuals from the records of their employers and use it to defraud. http://www.usdoj.gov/usao/az/azpress/2002-115.pdf
When the crooked employee is in a position to obtain official identification documents, the fraud is even easier.
An employee of the Massachusetts Registry of Motor Vehicles provided two driver's licenses bearing stolen identities to an acquaintance, who then used the IDs to cash counterfeit checks, obtain charge cards, and make purchases.
http://www.usdoj.gov/usao/ma/presspage/July2002/Evelyn-Margot-sentencing.htm
Even worse is a situation where the thief is employed by a financial institution and has direct access to customer information.
An individual was hired by a bank as a contract worker to sell financial products and services to existing bank customers. In connection with those duties, he had access to account profiles of existing bank customers. Those account profiles included personal identifying information.
He was arrested after authorities allege he provided at least 8 to 10 account profiles of bank customers (all of whom had balances exceeding $100,000) to conspirators. The Complaint alleges the conspirators obtained counterfeit identification documents matching the victims' identity information and then used the counterfeit identification documents to cash counterfeit checks drawn on the bank accounts that had been compromised in amounts such as $5,000 per transaction.
http://www.njusao.org/files/by0502_r.htm
More Identities, More Fun
Often, a thief will steal multiple identities in order to conduct his fraudulent schemes, such as in this case. Defendant Alawode allegedly stole the identities of several individuals. He used the names of victims and their personal information to obtain checks which allowed him to withdraw funds from the victims' accounts. Next, he established investment accounts using other stolen identities. He deposited stolen credit card convenience checks into the investment accounts, waited for them to clear, then wrote checks on the investment accounts, making the checks payable to another one of the stolen identities he was using and depositing them into other accounts he had fraudulently established.
http://www.usdoj.gov/usao/ma/presspage/May2002/Alawode-Akinole-plea.htm
Nothing is Sacred
Even the dearly departed aren't immune from victimization by the low-lifes that commit identity theft.
Take the name of a recently deceased individual - perhaps from the obituary column. Go to one of the sites on the Internet that allows you to access the Social Security Master Death Index. (like this one: http://ssdi.rootsweb.com/) Type in the individual's name and the Index will provide you their date of birth, date of death, and Social Security number. Apparently, that's the technique these defendants may have used. Once they obtained the names and SSNs of recently deceased individuals from the Internet, they would apply for credit in the names of those individuals, make charges, and also use the credit card convenience checks. They also reportedly would obtain credit reports on those individuals in order to keep track of the accounts, as well as to obtain additional information about them in order to obtain even more credit.
http://www.usdoj.gov/usao/az/azpress/2002-005.pdf
Long term ID theft
Think you know your customer? Maybe not. Just because they've been doing business with you for several years is no guarantee they are who they say they are. The cases below provide support for the notion of verifying identity of existing customers.
One woman allegedly assumed the identity and Social Security number of her former sister-in-law more than 30 years ago. Over the course of three decades, she used the stolen identity to obtain credit cards and even receive Social Security disability benefits. Social Security investigators eventually unmasked her fraud and the woman admitted to stealing her former relative's identity.
http://www.usdoj.gov/usao/az/azpress/2002-056.pdf
Need more convincing? Try this one. June Anne Hooper, a Canadian citizen, admitted that since 1982 she had been using a social security number assigned to another individual for the purpose of concealing her true identity and obtaining credit. By the time she was caught, there was an outstanding credit balance of $170,000.00 against the fraudulently used social security number. For 20 years, Hooper had used the stolen identity. With it, she obtained an Arizona Driver's License, filed for bankruptcy in Oklahoma, and even got arrested.
http://www.usdoj.gov/usao/az/azpress/2002-079.pdf
 Learn more about the steps you can take to avoid facilitating ID fraud at your institution.
Order the ID Fraud Facts training program in the Banker Store -- available on the Web or audiotape or view a sample of the content.
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Copyright, Bankers Online, 2002. First published on BankersOnline.com 10/8/02.
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