The following fact sheet was issued by the U.S. Department of Justice: Identity theft is a crime that victimizes people and businesses in every community from major cities to small towns, and robs victims of their individual freedoms. The Department of Justice is deeply committed to combating all forms of identity theft, through its use of investigative and prosecutorial resources to bring identity thieves to justice, and its support of outreach and prevention efforts to protect the public from identity theft.
Bringing Identity Thieves to Justice
The Department’s identity theft prosecutions have ranged from simple theft of financial data and documents to credit-card “skimming” operations and high- tech “phishing” schemes and schemes to use others’ online brokerage accounts to manipulate securities markets. As just one example of the Department’s robust efforts to prosecute identity thieves, the Department has made extensive use of the aggravated identity theft statute since it was enacted in 2004: in Fiscal Year 2006, the Department charged 507 defendants with aggravated identity theft, up from 226 defendants in Fiscal Year 2005. Additionally, in Fiscal Year 2006, the Department charged 1945 defendants in cases involving both identity theft and aggravated identity theft charges, up from 1571 defendants in Fiscal Year 2005. The following cases are just a few examples of the identity theft prosecutions brought across the country over the last year.
— FEMA Fraud (United States v. Williams, Southern District of Alabama) On January 24, 2007, a defendant was sentenced to 75 months imprisonment after pleading guilty to defrauding FEMA and aggravated identity theft following Hurricane Katrina. The defendant filed 28 fraudulent claims for disaster assistance she made to FEMA and, in many of those applications, the defendant used Social Security numbers of other people. With the money from FEMA, the defendant purchased real estate, a mobile home, several vehicles, home electronics, home furnishings, and other goods and services. As part of her plea agreement, the defendant agreed to forfeit to the United States the property she obtained with the FEMA money, and to pay full restitution for the money she received by fraud.
— “Phishing” Schemes (United States v. Dolan et al., District of Connecticut)
— On September 20, 2006, a federal grand jury returned an indictment charging six defendants for their participation in an elaborate Internet “phishing” scheme that targeted and victimized America Online (AOL) subscribers. According to the indictment, the defendants conspired to “harvest” e-mail addresses of AOL subscribers. The defendants then “spammed” thousands of AOL subscribers with counterfeit e-mails purporting, for example, to convey an electronic greeting card. If an AOL subscriber attempted to view the greeting card, the subscriber’s computer would be infected with a software trojan that prevented the subscriber from accessing AOL without entering information including the subscriber’s name, address, Social Security account number, credit card number, bank account number, and personal identification number. The defendants then used the information to produce counterfeit debit cards, which they used at ATM machines, online, and at retail outlets to obtain money, goods, and services.
— Skimming (United States v. Matuzovic et al., Central District of California)
On June 19, 2006, eight defendants were arrested for their alleged involvement in an identity theft ring that “skimmed” account information from debit cards used by more than 100 diners at area restaurants, and then used the information to steal money from the victims’ bank accounts. Federal investigators believe the scheme resulted in the theft of more than $1 million. According to the indictment, two of the defendants allegedly orchestrated the scheme and instructed complicit servers at three restaurants to steal account information from patrons’ debit cards. Armed with the stolen account information, those two defendants allegedly “re-stripped” their own debit cards with the stolen information, and then asked the banks to provide them with new PIN numbers for their cards. After receiving the new PIN numbers, the defendants allegedly used the cards to deposit counterfeit checks into the victims’ accounts and withdraw cash.
— “Hijacking” of Brokerage Accounts (United States v. Marimuthu et al., District of Nebraska)
On March 12, 2007, two residents of India and one resident of Malaysia were charged with conspiracy, fraud and aggravated identity theft stemming from an international fraud scheme designed to hijack online brokerage accounts. According to the indictment, the defendants hacked into online brokerage accounts of others using stolen usernames and passwords or established new brokerage accounts using stolen identities. The defendants then made scores of unauthorized purchases of the same stocks to drive up the market price. Once the share prices were artificially inflated, the defendants sold their own shares for a substantial profit. As part of this ongoing investigation, at least 60 customers and nine brokerage firms in the United States and elsewhere have been identified as victims, with one of the brokerage firms reporting more than $2 million in losses.
— “Carding” (United States v. Roberts, Eastern District of Virginia)
On February 9, 2007, a defendant was sentenced to 94 months in federal prison for aggravated identity theft, access device fraud, and conspiracy to commit bank fraud. The defendant received e-mails or instant messages containing hundreds of stolen credit card numbers, usually obtained through “phishing” schemes or network intrusions, from “vendors” who were located in Russia and Romania. In his role as a “cashier” of these stolen credit card numbers, the defendant then electronically encoded these numbers to plastic bank cards, made ATM withdrawals, and returned a portion to the vendors. Computers seized from the defendant revealed over 4,300 compromised account numbers and full identity information for more than 1,600 individual victims.
— Misuse Of Social Security Numbers (United States v. Wagner, Northern District of California)
On January 12, 2007, in connection with the Hewlett-Packard pretexting investigation, a defendant pleaded guilty to two identity theft-related counts. The defendant admitted that he was paid as part of a conspiracy that made fraudulent use of Social Security numbers and other confidential information to obtain the personal phone records of reporters and HP officials, as well as the personal records of these individuals’ family members.
— Medicare Fraud (United States v. Ferrer, Southern District of Florida)
On January 24, 2007, a federal jury convicted a defendant in a case involving the theft and transfer of Medicare patient information from the Cleveland Clinic in Weston, Florida. The defendant purchased the patient information from a co-defendant, a former Cleveland Clinic employee, who pled guilty on January 12, 2007 and testified against the defendant at trial. The theft resulted in the submission of more than $7 million in fraudulent Medicare claims, with approximately $2.5 million paid to providers and suppliers.
— ATM Fraud (United States v. Potupa, Southern District of New York) On March 14, 2007, a defendant was sentenced in absentia to 90 months in prison for using stolen account information to fraudulently withdraw hundreds of thousands of dollars from ATMs located in New York City, New Jersey, and Philadelphia. During his fraud scheme, the defendant bought account information and corresponding personal identification numbers from an associate over the Internet, and then electronically encoded this information onto blank ATM-type cards. He then used these cards to withdraw cash from ATM machines and, as a result, stole or attempted to steal at least $960,000 between 2004 and February 16, 2006. A search of the defendant at the time of his arrest revealed that he was carrying approximately 50 plain, grey-colored ATM cards and approximately $7,500 in crisp twenty dollar bills.
— Sale of Personal Information (United States v. Giannone, District of South Carolina)
On February 8, 2007, a jury convicted a defendant of fraud and identity theft for selling over the internet debit card numbers and other personal information. The defendant was caught in an undercover online investigation run by the United States Secret Service. In May, 2005, the defendant used online chat rooms to contact an individual who had previously developed a highly recognized name among people involved in credit card fraud and identity theft. This individual was working undercover with the Secret Service. Over the course of chats, the defendant downloaded information on 29 debit card accounts to the individual.
— Bank Fraud (United States v. Nguyen et al., Western District of Washington)
On June 2 and September 6, 2006, two defendants were sentenced to 54 months and 78 months in prison and ordered to pay restitution in excess of $1 million for their role in a ring that committed more than $1.6 million in bank fraud using the stolen identities and bank account numbers of 90 different individuals. Using the personal information, the ringleader would obtain fake IDs and create phony checks. The imposters would cash or deposit the phony checks into the accounts and then withdraw the funds, essentially raiding the accounts.
— Immigration Fraud (Operation Wagon Train)
Federal identity theft charges were brought against over 140 illegal aliens accused of stealing the identities of lawful U.S. citizens in order to gain legal employment. Agents executed civil search warrants on December 12, 2006, at six meat processing plants owned by one of the nation’s largest processors of fresh pork and beef. Many of the names and Social Security numbers being used at the meat processing plants were reported stolen by identity theft victims to the Federal Trade Commission. In many cases, victims indicated that they received letters from the Internal Revenue Service demanding back taxes for income they had not reported because it was earned by someone working under their name. Other victims were denied driver’s licenses, credit, or even medical services because someone had improperly used their personal information before.
— New Account Fraud (United States v. Mored and Nissen, Western District of Washington)
According to the indictment, one of two named defendants was employed at a janitorial company and worked at night in a U.S. Bank branch. He joined with other conspirators to steal information on more than 200 bank customers. Using that information, the two defendants opened credit accounts in the customers names and used those accounts to purchase expensive items such as laptop computers, flat screen televisions, and airline tickets. In addition, they signed up for on-line banking for accounts that had not previously had on-line banking and then used those accounts to pay their own bills and transfer funds to other checking accounts that they then drained. The indictment charged them with more than $200,000 in fraud against dozens of victims.
— Trafficking of Stolen Personal Information (United States v. Mantovani et al., District of New Jersey)
On June 28 and 29, 2006, four defendants were sentenced for their involvement in the Shadowcrew international criminal organization. Using a Web site, the Shadowcrew organization had thousands of members engaged in the online trafficking of stolen identity information and documents, such as drivers’ licenses, passports, and Social Security cards, as well as stolen credit card, debit card, and bank account numbers. The Shadowcrew members trafficked in at least 1.7 million stolen credit card numbers and caused total losses in excess of $4 million dollars. The Secret Service successfully shut down the Web site in October 2004.
Outreach and Prevention
The Office of Justice Programs (OJP) at the Justice Department provides funding and training for victim service programs and victim service providers at the federal, state, local and tribal levels; funding for law enforcement’s, prosecutors’ and crime prevention experts’ efforts to address identity theft through the Bureau of Justice Assistance; research and program evaluation concerning identity theft through the National Institute of Justice; and data collection for policymakers on identity theft through the Bureau of Justice Statistics. Anyone wishing to ask a question about identity theft or to report identity theft may call 1-877-ID-THEFT, or visit http://www.ftc.gov/idtheft. Other resources are available on the Office for Victims of Crime identity-theft resource Web page at http://www.ojp.usdoj.gov/ovc/publications/infores/focuson2005/ identitytheft/welcome.html, and on the Department’s identity-theft Web site at http://www.usdoj.gov/criminal/fraud/idtheft.html.
Transcript of Attorney General Alberto R. Gonzales and FTC Chairman Deborah Platt Majoras Announcing the Release of the President’s Identity Theft Task Force
ATTORNEY GENERAL ALBERTO R. GONZALES: Good afternoon. I am pleased to be here with Deborah Platt Majoras, chairman of the Federal Trade Commission, for this announcement. On April 11th, the Identity Theft Task Force, which Deborah and I co-chair, delivered to the president its comprehensive plan to fight identity theft, which is a serious problem in our country.
This crime affects millions of Americans every year, costing billions of dollars, but it really goes far beyond the loss of money or property. It is a personal invasion, done in secret, that can rob innocent men and women of their good names. A victim can spend months or years rebuilding a damaged credit history and cleaning up the bewildering damage caused by the thief.
Now we have already acknowledged that this is not a new problem, and our report builds upon many years of effort by our federal, state and local partners, as well as the private sector and nonprofit organizations.
Much has been accomplished, and there are more protections in place now than ever before. But the president and the task force recognize that we need to do more. And this new plan represents an important step forward in America’s efforts to fight back against identity theft.
The recently reported public exposure of Social Security numbers by a federal agency is problematic and does serve as a timely reminder that all of us, including the government, must be careful when handling people’s personal information. This is exactly the type of vulnerability that the task force’s recommendations are designed to help identify and to prevent. The recommendations are a strategic effort to fight this crime, protect consumers and help victims put their lives back together. Now several of these points were announced last September as interim recommendations, and I am pleased that all of those have already been implemented or in the process of being implemented.
Preventing identify theft is about more than just protecting businesses and consumers. It also about national security. And one of the task force’s primary recommendations is the federal government establish a national identity theft law enforcement center. This effort will increase our ability to analyze ID theft, complaint data, and other intelligence from the public and private sectors, and to make that information available to our law enforcement partners at all levels.
Identity thieves as we all know, do not respect jurisdictional boundaries. In allowing agents and officers across the country to share information, will help them connect the dots between seemingly unrelated investigations.
That same level of cooperation is necessary with our foreign law enforcement partners as well. A national identity theft law enforcement center will make a real difference in our ability to investigate, prosecute and punish identity thieves.
The task force also recognized that many of our current criminal statutes have not been updated to allow law enforcement to keep pace with new and developing methods used by identify thieves. We therefore are recommending a variety of legislative proposals aimed at strengthening identity theft enforcement, including ways to close loopholes in existing laws so that prosecutors have the appropriate tools for charging these crimes.
These legislative proposals include amendments to the restitution statutes, to enable victims to recover the value of time spent attempting to make themselves whole. And they include important measures to assure federal authority to prosecute the use of malicious spyware, to broaden the statutes to criminalize the theft of electronic data, and to permit prosecutors to charge aggravated identity theft, which carries a mandatory two-year prison term in a larger number of cases.
When the president established this task force last May, he met with victims of identity theft. He heard their voices, and he asked the task force to step up and make a difference. With this report, we have made good on that promise.
I’d like to thank the many law enforcement and victims’ rights groups here today who will be instrumental in implementing the plan, including the National District Attorneys Association, the National Association of Attorneys General, the Fraternal Order of Police, the International Association of Chiefs of Police, the National Center for Victims of Crime, and the Police Executive Research Forum.
Now we will hear from Chairman Majoras before taking your questions. CHAIRMAN DEBORAH PLATT MAJORAS: Thank you very much, General Gonzales. Today we take another important step forward in our efforts to combat identity theft, recognizing that this is part of a continuing process and not a one-time event.
Identity theft is the misuse of another individual’s personal information to commit fraud. It is a blight on America’s privacy and security landscape. It robs consumers of their time and money. It drains businesses of finances and efficiency, and it erodes a critical element of our economy — trust in a person’s good name and credit. A recent survey conducted by Zogby Interactive revealed that 91 percent of respondents worry about ID theft. Protecting the privacy and identity of consumers has long been a priority at the Federal Trade Commission, and we continue to receive 15 to 20 thousand consumer communications about identity theft every week.
More than 1,500 law enforcement agencies now have access to the FTC’s identity theft data clearinghouse, a central database of more than one million victim complaints. And as we continue to learn from our work, one thing is clear: only a coordinated approach will have the reach and impact necessary to effectively attack this crime.
Less than one year ago, General Gonzales and I accepted the president’s assignment to lead the development of a strategic plan to combat identity theft and to recommend ways to improve the effectiveness and the efficiency of the federal government’s activities in the areas of awareness, prevention, detection and prosecution of this crime.
The Department of Justice, the FTC and 15 additional federal departments and agencies have worked together since then to meet the president’s challenge. Each of the task force member agencies and departments has played an important role in developing this strategic plan, but real work remains not only for the task force members, but for the entire federal government and state and local government partners, for the entire private sector, and for each and every one of our citizens. While we as a nation have eagerly embraced new technologies and modes of communication in this Information Age, we were perhaps slower to grasp how adeptly criminals also would adopt these same avenues to seal personal information.
We are catching up. Many federal agencies, businesses and other organizations have increased their efforts to safeguard sensitive data. Consumers have been better educated about how to guard against and then how to respond to ID theft.
As the Attorney General has remarked, of course, strong criminal enforcement is key in these efforts, and it has been increasing. But we are not yet satisfied. Data security breaches remain too common, and schemes for committing ID theft are growing more sophisticated.
Protecting the security of consumers’ personal data cannot be an afterthought. It must be organically incorporated into every organization’s procedures and into every American’s habits.
The strategic plan we are releasing today recommends 31 measures containing scores of more specific recommendations. Some are already in place, others we will implement within the next year. The recommendations span all sectors of the economy, and they target the entire life cycle of identity theft, from access to sensitive consumer data, to its acquisition, to its misuse, to the investigation and prosecution of the criminals, and to the victims’ recovery.
And to provide a few examples in general terms, the plan calls for us to reduce the unnecessary use of Social Security numbers in the public sector; to better protect data that must be held by federal government agencies; to establish national safeguards to require private sector entities to protect consumers’ personal data, and to notify consumers of certain breaches; implement a broader and better coordinated campaign to educate consumers, who are often the first line of defense; and the public and private sectors on how to deter, detect and defend against ID theft.
And finally, as Attorney General Gonzales mentioned, creating a national identity theft law enforcement center to allow more efficient and effective law enforcement against this crime.
I am proud to be a part of this comprehensive federal effort, and I am committed to continuing to work with my colleagues to implement the recommendations within the timeframes we have outlined.
Before we take your questions, I’d like to acknowledge and thank all of our task force colleagues. I also thank all of the stakeholders, including those the attorney general mentioned and also we heard from identity theft victims on this report, and they offered — they and other stakeholders offered very useful and productive suggestions for our plan.
And finally, but especially, I thank Ron Tenpas and Mythili Raman from the Department of Justice, and Lydia Parnes and Betsy Broder of the FTC for their tremendous efforts on this report.
QUESTION: Mr. Attorney General, we haven’t heard from you since your testimony on Thursday. Could we ask you —
ATTORNEY GENERAL GONZALES: Wasn’t that enough?
QUESTION: Well, several senators since have raised questions. Senator Specter said yesterday your testimony was very, very damaging to your credibility, and several senators have raised the question of whether you can be credible and whether or not you can be an effective attorney general. Do you still believe you can, and have you offered your resignation to the president?
ATTORNEY GENERAL GONZALES: No. I’m focused on making sure our kids are safe, making sure our neighborhoods are safe, making sure consumers are safe, and that’s one of the reasons I’m here today. So, you know, I’m focused on doing the job for the American people.
QUESTION: How long do you plan on staying at the Justice Department? Do you plan on staying throughout the rest of the term?
ATTORNEY GENERAL GONZALES: I will stay as long as I feel I can be effective, and I believe I can be effective. Obviously, we’ll be working with the Congress to reassure them that we’ve identified the mistakes that have been made here and that we are taking steps to address them. But I can’t just be focused on the U.S. Attorney situation. I’ve also got to be focused on what’s really important for the American people.
QUESTION: Judge, a question, please, sir. As my colleagues have said, you’ve lost the confidence of a lot of the people on Capitol Hill. Virtually nobody has defended you. At the Department of Justice, morale, by all accounts, is plummeting amongst career prosecutors and U.S. Attorneys. My question to you, sir, you seem like you’re disagreeing with me, but my question is, do you acknowledge that your continued leadership in the Department of Justice has been harmed or hurt its operations at such an important time when the Department is trying to keep us all safe?
ATTORNEY GENERAL GONZALES: Of course I — it’s something that I always take into consideration. I think a cabinet secretary or the head of an agency every day should wake up and ask themselves that question. Am I still effective in this position? I think that’s a question that all of us should ask every day. And as long as I think that I can be effective and the president believes that I should continue to be at the head of the Department of Justice, I’ll continue serving as the Attorney General.
QUESTION: Mr. Attorney General, in light of the tragedy at Virginia Tech, are you looking into whether state laws are effective enough in preventing the mentally ill from purchasing guns?
ATTORNEY GENERAL GONZALES: Well, what we’re looking at, Mike Leavitt is leading an effort to work with Margaret Spellings, the Education Secretary, Mike Leavitt being the Secretary of Health and Human Services. And from my perspective, what we’re looking at is to see whether or not this information, what information about mental health should law enforcement officials have, and what are the barriers that prevent law enforcement from having that information.
So, that’s what I will be looking at from the perspective of the Department of Justice, and of course, Secretary Leavitt will be looking at it from his vantage point, as will Secretary Spellings.
QUESTION: I’m asking you and the chairman on identity theft.
ATTORNEY GENERAL GONZALES: Good. Thank you.
QUESTION: Yes, exactly. But I think it deserves a lead story. A lot of the victims the president heard from had problems because their credit reports were disclosed to thieves who used their Social Security number. The states are coming up with a fairly clean solution to this called the Credit Freeze, to freeze the disclosure of a credit report.
My quick perusal of the report does not show that issue addressed, and I think that if you’re going to have a comprehensive solution, my question is, is that addressed in here? If not, why not? And, you know, shouldn’t that be something looked at and to have a policy position by the administration because the issue is going to be before Congress as well?
MS. MAJORAS: Well, we do address it in this way. You are right. States over time have been passing laws that permit consumers to put what’s called a credit freeze on their reports. Now they started doing that shortly after the FACT Act was signed at the end of 2003. The FACT Act, of course, put in place a lot of federal protections for consumers.
And so we’ve wanted to see, quite frankly, what’s working and what’s not. So what the report contains is a recommendation that we do a careful examination of what has happened in the states in which the credit freeze statutes have passed, how effective those have been, also looking at how effective the protections in the FACT Act have been, and then we can formulate a better position to assist Congress or any other policymaker.
QUESTION: Okay. Thank you.
ATTORNEY GENERAL GONZALES: And let me just emphasize, this is not the end of the analysis or the discussion. This is a serious problem. It’s a serious problem for consumers, it’s a serious problem for businesses, and I think this provides an important step forward, as I indicated in my remarks.
But I worry about this as Attorney General. I know the chairman is likewise very concerned about this issue. And we need to do more to educate the American public, the American consumer about the dangers of identity theft. It’s serious, it’s prevalent, and it’s increasing.
QUESTION: Going back to the Topic A. You used the word “effective.” How do measure if you’re effective? And how — what in your mind means “ineffective?”
ATTORNEY GENERAL GONZALES: Well, listen. What I’m — there are a series of priorities, a series of objectives that I want to see accomplished as attorney general. I think we’ve done a lot of good things in the last two years. And I think moving forward, the question is whether or not can those objectives be achieved. And I continue to believe that they can be achieved.
And we are working as hard as we can to achieve those objectives. Obviously, you know, as head as of an agency, like every head of an agency, you worry about questions about morale.
You address those specific concerns, and the way I do is by speaking directly to U.S. attorneys, by speaking directly to the component heads and talking about my vision for the department moving forward, and encouraging them to understand and realize the importance of staying focused on the mission.
That’s what the American people expect from the Department of Justice, to stay focused on the mission. Because what we do as a department is too important to ignore that. And so that’s the mission that I’m delivering to the folks in our department.
MODERATOR: We’ll take one more question.
QUESTION: Mr. Attorney General, can you list some of the priorities you want to carry out in your office, and how do you think — do you think you’ll be able to do them without the confidence of many in Congress or–
ATTORNEY GENERAL GONZALES: Well, sure. I’ll talk about the things that I worry about. I worry about protecting our kids from predators on the Internet. That’s something that I’m very concerned about — that we rolled out, Project Safe Childhood, to work with state and local partners to make parents, to make people in communities aware of the dangers of the Internet use, and that’s where many predators are targeting our kids.
I worry about the safety of our neighborhoods, particularly gangs, gun crimes, and drugs. I worry about public corruption. I think our record with respect to going after public corruption, those who breach the public trust, is outstanding.
I worry about the enforcement of civil rights. As a minority, I understand the importance of our civil rights laws and the importance of insuring that those laws are in fact enforced.
I worry, of course, about the safety of our country from terrorism. I receive intelligence briefings every morning. I realize that they’re still serious threats to our country. There are serious threats to our interests overseas. And so these are the issues that I’m focused on. I think we’ve made good progress on many of these issues in the past two years, and I’m confident we can continue to make progress.
QUESTION: Do you think you can — with Congress or the public?
ATTORNEY GENERAL GONZALES: Pardon me?
QUESTION: Can you make progress if Congress —
ATTORNEY GENERAL GONZALES: I’m intent on working with the Congress to reassure the Congress that we are identifying what happened here. We’re going to correct mistakes that have been made. I’ve accepted responsibility for the mistakes that I’ve made. And so, yes, I have an obligation to work with Congress, and I will continue to work with Congress like I have in the past two years.
QUESTION: Do you think the — was unfair, sir?
ATTORNEY GENERAL GONZALES: I’ve already said — indicated that I have made mistakes, and I accept responsibility for that.