Stolen names, stolen lives
Fake IDs helped the terrorists; but don't expect a quick fix for identity theft
Just weeks after Pennsylvania branded identity theft a crime last year, one of the legislators who wrote the new law, Rep. Matthew Baker of Wellsboro, discovered that someone had filched his identity. Baker's impostor racked up $10,000 in bank loans and credit card charges, and even managed to obtain Baker's birth certificate, Social Security card, and driver's license. "It's frightening to think that your identity could be stolen that quickly and easily," says Baker.
Frightening, but hardly surprising. Congress declared identity theft a federal crime in 1998, and since then the problem has gotten worse, as ID thieves have become ever more sophisticated in their efforts to pretend to be other people and to bilk banks and creditors--for hundreds of millions of dollars--in their name. The tragedy of September 11 underscores the gravity of the offense and the shortcomings of the nation's piecemeal identification system. All 19 of the hijackers that day used multiple aliases and assumed several identities, officials told Congress last week, and some of them even held more than one Social Security number. "We know now, without question," testified James Huse, the inspector general of the Social Security Administration, "that this illegal activity not only facilitates financial crimes but provides capability for organized criminal enterprises to sustain themselves while engaged in acts of terrorism." But just as Congress's last act failed to curb the problem, it's not clear that the solutions being considered in the wake of the terrorist attacks--including a controversial national identity card--will fix the ID mess.
"Information is the world's new currency," says Bruce Townsend, special agent in charge of the U.S. Secret Service's financial-crimes division. No wonder that it has become a lucrative business to use another person's identification--name, Social Security number, and date of birth--to open new lines of credit, tap existing bank accounts, apply for mortgages, lease cars, or get insurance. The thieves run up tabs on the accounts while the victims are left to dispute the bills and repair tarnished credit reports. While no single agency tracks identity fraud, the Secret Service says potential losses in its investigations jumped from $851 million in 1998 to $1.4 billion last year.
The greedy apparently have no scruples: Last month three people were indicted for using the identities of people who had perished in the World Trade Center terrorist attacks. "This is a new low," says Rep. Clay Shaw of Florida. In one of the cases, a limousine service owner in California is said to have gotten an American Express card and tried to obtain a $750,000 mortgage under the name of Daniel Brandhorst, a tax practitioner at PricewaterhouseCoopers in Los Angeles. Brandhorst was returning from vacation in Boston with his partner and son when United Airlines Flight 175 crashed into the World Trade Center.
The root of the identity theft problem is the lack of a formal, centralized identification system. The driver's license, originally intended to be nothing more than a permit to get behind the wheel, has evolved into the nation's de facto ID card. With a fake driver's permit, everyone from underage kids looking to buy a drink to terrorists looking to buy a plane ticket can pass for legitimate. The trouble is that authorities don't always verify the identity of the person they issue a document to, be it a birth certificate, passport, or license, according to Werner Raes, a detective and vice president of the International Association of Financial Crimes Investigators. In August, seven of the hijackers took advantage of a rule at the Virginia Department of Motor Vehicles allowing applicants to get others to vouch for their identity and residence. All they had to do was submit sworn affidavits. Now four locals face federal charges for helping the terrorists prepare the bogus statements. The department has since abandoned the practice.
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