WASHINGTON -- (April 23, 2007) -- 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.
SOURCE: U.S. Department of Justice
