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1 Investigation & Prosecution of Identity Crimes The Challenges and Opportunities of Federal, State and Local Coordination Executive Policy Forum on Cyber& Electronic Crime National Governors Association Center for Best Practices September 8, 2008 Arlington, Virginia

2 What is Identity Crime? The use of the means of identification of another person without lawful authority The use of false, fraudulent or fictitious identification documents The use of existing accounts, such as credit or other financial accounts, via access devices or other means The creation and use of synthetic identities.

3 Types of Identity Crime Classic Identity Theft Physical Impersonation Accidental Identity Theft Identity Brokers Synthetic Identity Theft Immigration-Related Identity Theft Terrorism-Related Identity Theft Identity Theft Related to Other Criminal Conduct.

4 Sources of Identity Information* Lost or stolen wallet, checkbook, credit card (33 %) Off-line transaction ti (23 %) Personal connection to identity thief (17%) Mail theft (6.0%) On-line identity theft (12 %) Data Breach (7%) Other (2%) Javelin Strategy & Research 2008 *Only 35 percent of victims knew the source of the compromise. Thus, these figures probably grossly under-represent represent online and data breach compromises.

5 What Are Identity Thieves Doing with the Identities? Charging merchandize to accounts Stealing money from existing accounts Obtaining new cellular or wireless service Account takeover Renting apartment Obtaining mortgages

6 What Are Identity Thieves Doing with the Identities? Qualifying for employment Obtaining medical services Evading prior criminal conduct Buying a car Opening financial accounts and passing bad checks Filing tax returns seeking refunds

7 So what? Consider the type of identity crime, the sources of identity information, and how it is being used. Some of it involves small local rings, some involves huge international rings. Some is limited to local victims and activity, some involves victims and activity it across many jurisdictions. Some of it generates small losses, some of it generates huge dollar losses. A lot of different agencies state and federal have jursidiction.

8 And? On the one hand, identity crime is tailor- made for turf battles, case sniping, and cases falling through the cracks. On the other hand, there are so many cases that there is plenty of work to go around, and plenty of options both for investigation and prosecution of deserving cases.

9 How to Address Identity Theft Requires a concerted effort the bad guys share information freely -- we need to follow suit. Requires the ability to move quickly to authorize, investigate and prosecute cases. Real Time Crimes Mobile Criminals Requires flexibility what works in one sort of identity theft case may not work in another.

10 Responding to the Challenge Recognizing that business as usual was insufficient to address identity theft, President Bush formed the President s s Identity Theft Task Force. Its mandate was to: Look at coordination issues Look at availability of Federal resources Develop recommendations for how to respond more effectively on a local, state and federal level.

11 President s s Identity Theft Task Force Strategic Plan Issued in April 2007 Recommended adoption of standard form FTC identity theft complaint form Recommended encouraging state prosecution of identity theft Recommended d targeting ti Health Care ID Theft, Document Fraud by Illegal Aliens and other specific initiatives. Recommended working more closely with financial institutions and other key players in the private sector.

12 President s Identity Theft Task Force Recommended closing statutory gaps as they are recognized. Aggravated Identity Theft Computer-Related Identity Theft Recommended extending victim enhancement in U.S. Sentencing Guidelines to victims who do not ultimately sustain a economic loss. Recommended Enhanced Training

13 President s s Identity Theft Task Force Recognized importance of coordination Recommended Appointment of Identity Theft Point of Contact in each Judicial District Recommended Creation of Identity Theft Task Forces or Working Groups in each Judicial District i t Recognized need for flexibility in prosecution decisions Recommended review and revision of prosecution guidelines

14 Maryland Identity Theft Working Group POC designated in mid-2006 First Meeting in October, 2006 Functions: Establishing relationships among state, federal and financial institution investigators and prosecutors Identifying most significant targets Providing a coordinated response to identity theft & fraud Aggressively prosecuting offenders

15 Maryland Identity Theft Working Group Federal Agencies U.S. Attorneys Office Federal Bureau of Investigation Postal Inspection Service Secret Service Immigration and Customs Enforcement Social Security Administration Diplomatic Security Service Department of Housing and Ub Urban Development - OIG Department of Transportation - OIG IRS Criminal Investigations

16 Maryland Identity Theft Working Group State and Local Agencies Motor Vehicle Administration Maryland State Police Baltimore City Police Baltimore County Police Howard County Police State s Attorney Office Maryland Department of Transportation Financial Institutions Citigroup American Express Bank of America Chase Wachovia M & T Bank Discover

17 Maryland Identity Theft Working Group Extremely inclusive. State and local investigators and prosecutors Financial Institutions Everybody eats! There is plenty to go around. (Cases, awards, press) Developed utility players Social Security MVA Financial Institution Fraud Investigators

18 Maryland Identity Theft Working Group Identify choke points and solve them. Information from SSA Information from Financial Institutions VIDEO!!! Make sure everybody knows everybody else. Assess weaknesses and strengths and divide id the work accordingly. State: Multi-jurisdictional issues, statutory gaps Feds: Jurisdictional issues, statutory gaps

19 FEDERAL PROSECUTION TOOLS Bread and Butter Bank Fraud (18 U.S.C. Statutes: 1344) Access Device Fraud (18 Federal statutes we use USC U.S.C. 1029) every day to prosecute Identity Theft (18 U.S.C. Financial Identity Theft 1028) Aggravated Identity Theft (18 U.S.C. 1028A) Possession of Stolen Mail (18 U.S.C. 1708) FalseUseofaSocial a Security Number (42 U.S.C. 408)

20 False Use of a Social Security Number (42 U.S.C. 408) Primary ID Theft Use: Use of a fraudulent SSN to obtain something of benefit such as employment, credit, or a license (ID) or for any other purpose. Can be a fake (non-existent) number, a fraudulently obtained number or another person s actual number Maximum penalty is 5 years in prison

21 False Claim of Citizenship (18 U.S.C. 911) Another great utility statute which can be used di in a variety of cases where no state t charges are available Any representation to be a US citizen including a citizen of Puerto Rico triggers the statute MVA application Job application Information to Law Enforcement Maximum penalty is three years in prison.

22 Passport Fraud (18 U.S.C & 1543) Primary ID Theft Use: Use of stolen identity to apply for U.S. passport or use of photo-subbed passport Maximum penalty ranges from 10 years to 25 years imprisonment Usually involves use of birth certificate Frequently associated with purchased identity Problematic victim issues Raises terrorism red flags.

23 Immigration Fraud Variety of statutes available Detention virtually assured often by consent Must move quickly to charge offender once ICE takes custody of them Often involves a document fraud as well

24 The Hammer: Aggravated Identity Theft 18 U.S.C. 1028A For offenses committed after July 15, 2004 Mandatory 2-year sentence for using, possessing, or transferring a means of identification of another person in connection with certain ID theft predicate crimes Sentence must be consecutive to any other sentence Two or more 1028A sentences may be stacked

25 The Hammer: Aggravated Identity Theft What is a means of identification? Defined in 18 U.S.C. 1028(d)(7): Any name or number that may be used, alone or in conjunction with any other information, to identify a specific individual, including any --

26 The Hammer: Aggravated Identity Theft (a) name, social security number, date of birth, official State or government issued driver s license or identification number, alien registration number, government passport number, employer or taxpayer identification number, (b) unique biometric data..., [or] (c) unique electronic identification number, address, or routing code

27 The Hammer: Aggravated Identity Theft What are Aggravated Identity Theft Predicates? Bank Fraud, Access Device Fraud, Identity Theft, and False Use of a SSN Plus: (everything discussed here except possession of stolen mail) Visa ( green card ) fraud, immigration offenses, mail fraud, and wire fraud

28 The Hammer: Aggravated Identity Theft Definition of means of identification for charging Aggravated Identity Theft is very broad but note: There is a split in the circuits its concerning whether the defendant must know that the means of identification he is using belongs to another actual person. RESULT: 1028A is a VERY powerful tool for prosecution of Identity Theft There are gaps which prevent it from being a complete solution

29 Gaps in Aggravated ID Theft Circuits are split on whether the ID thief must know the identity belongs to a real person Mail theft, tax fraud, uttering counterfeit securities, forging endorsement on a Treasury check, credit union embezzlement, and some other predicates notably missing i Aggravated ID Theft doesn t cover corporations.

30 Making a Federal Case Out of It: ID Theft Prosecution Criteria i Referrals for federal prosecution: From other law enforcement agencies From State, t County, or City prosecuting authorities From Partner Financial Institutions From individual victims Arises out of other cases, including non- financial case

31 Making a Federal Case Out of It: ID Theft Prosecution Criteria i Case Criteria What cases will we take federally? Criteria are intended to be flexible no hard and fast rules Must be a violation of a federal statute Any of the statutes discussed here today Others we have not had time to discuss.

32 Making a Federal Case Out of It: ID Theft Prosecution Criteria Federal Prosecution Guidelines generally will take the following into account:* Loss Number of victims Ability to charge 1028A Size, sophistication and cross- jurisdictional nature of organization Corruption (MVA, SSA, other insider) id Impact on victims Association with other crimes *Your mileage may vary.

33 Some success stories United States v. Pope The Maryland Takeout case Began as a state prosecution Referred to Feds due to multi-jurisdictional nature of the case and victim related issues Further investigation identified a sub- scheme which was solely within one county and referred back there Successful state and federal prosecutions.

34 Some success stories The Bulgarian Skimmer case Began as two state investigations s and prosecutions in different counties Referred to Feds due to multi-jurisdictional nature of the case and imminent release Defendants were released on bond and fled jurisdiction Because there is a federal indictment we can more easily access international resources to locate and extradite them Have left the state bonds in place to benefit the state and give incentive to bail bondsmen.

35 On the Horizon Synthetic ti Identity Theft Sanitizing a Credit History Corporate Identity Theft

36 The Next New Thing Whatever comes next, you can be certain These esec criminals asae are very eys smart. at These guys talk to each other, share information, and pass on techniques which are working. They will never stop. Law enforcement must be equally intelligent, t, equally coordinated, and equally relentless. We can only do that if we pool our resources and work together.

37 Contact Information Contact Information: Assistant U.S. Attorney (AUSA) Tamera Fine (work) (cell)