COMMITTEE ON WAYS AND MEANS BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois E. CLAY SHAW, Jr., Florida NANCY L. JOHNSON, Connecticut AMO HOUGHTON, New York WALLY HERGER, California JIM MCCRERY, Louisiana DAVE CAMP, Michigan JIM RAMSTAD, Minnesota JIM NUSSLE, Iowa SAM JOHNSON, Texas JENNIFER DUNN, Washington MAC COLLINS, Georgia ROB PORTMAN, Ohio PHIL ENGLISH, Pennsylvania WES WATKINS, Oklahoma J. D. HAYWORTH, Arizona JERRY WELLER, Illinois KENNY C. HULSHOF, Missouri SCOTT MCINNIS, Colorado RON LEWIS, Kentucky MARK FOLEY, Florida KEVIN BRADY, Texas PAUL RYAN, Wisconsin	CHARLES B. RANGEL, New York FORTNEY PETE STARK, California ROBERT T. MATSUI, California WILLIAM J. COYNE, Pennsylvania SANDER M. LEVIN, Michigan BENJAMIN L. CARDIN, Maryland JIM MCDERMOTT, Washington GERALD D. KLECZKA, Wisconsin JOHN LEWIS, Georgia RICHARD E. NEAL, Massachusetts MICHAEL R. MCNULTY, New York WILLIAM J. JEFFERSON, Louisiana JOHN S. TANNER, Tennessee XAVIER BECERRA, California KAREN L. THURMAN, Florida LLOYD DOGGETT, Texas EARL POMEROY, North Dakota
Allison Giles, Chief of Staff Janice Mays, Minority Chief Counsel  SUBCOMMITTEE ON SOCIAL SECURITY E. CLAY SHAW, Florida, Chairman
SAM JOHNSON, Texas MAC COLLINS, Georgia J.D. HAYWORTH, Arizona KENNY C. HULSHOF, Missouri RON LEWIS, Kentucky KEVIN BRADY, Texas PAUL RYAN, Wisconsin	ROBERT T. MATSUI, California LLOYD DOGGETT, Texas BENJAMIN L. CARDIN, Maryland EARL POMEROY, North Dakota XAVIER BECERRA, California
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Ways and Means are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined.

Advisories announcing the hearing

U.S. General Accounting Office, Barbara D. Bovbjerg, Director, Education, Workforce, and Income Security Issues, accompanied by Kay Brown, Assistant Director

Social Security Administration, Atlanta, Georgia, Roland Maye, Special Agent-in-Charge, Atlanta Field Division, Office of Inspector General

Florida Office of the Attorney General, Cece Dykas

Florida Office of the Attorney General, 17th Judicial Circuit:

Lee Cohen
Anthangtha Guialdo

Palm Beach County, Florida, Sheriff's Office:

Hon. Ed Bieluch
Paul Rispoli

Tropepe, Lisa, Shalloway, Foy, Rayman & Newell Inc., accompanied by Tim Morell

United States Marshals Service, Anthony K. Ross

Alpert, Maisy, Plantation, FL, letter

PROTECTING THE PRIVACY OF SOCIAL SECURITY NUMBERS
AND PREVENTING IDENTITY THEFT

Monday, April 29, 2002

House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Lake Worth, Florida.

The Subcommittee met, pursuant to notice, at 2:15 p.m., in Commission Chambers, Lake Worth City Hall, Lake Worth, Florida, Hon. E. Clay Shaw, Jr., (Chairman of the Subcommittee) presiding.

[The advisory and revised advisory follow:]

Chairman SHAW. We will call the hearing to order. This is about Social Security Numbers (SSNs), and although they were created solely for the purpose of tracking workers' Social Security earnings, our culture is hooked on Social Security Numbers. Even the most trivial transactions require us to hand over our nine-digit ID before services can be rendered.

I phoned in just this weekend to renew my fishing license, and they wanted my Social Security Number, the State of Florida. I said, "Is it required?" They said, "No, but it would be nice if you give it." And I said, "I don't believe I will." So they took my driver's license number instead.

Our Social Security Number's the key that unlocks the door to your identity for any unscrupulous individual who gains access to it. Once the door is unlocked, the criminal or terrorist has at his fingertips all essential elements needed to carry out whatever dastardly act they can conceive of. Worse, we know that some terrorists involved on the September 11 attack illegally obtained Social Security Numbers and used them to steal identities and obtain false documents, thus enabling them to live within our borders and plan their heinous acts. Government and private industry must be vigilant to protect our identities. Safeguards to protect Social Security Numbers and prevent identity theft must be put in place now.

As a first step, I, along with several of my Committee on Ways and Means colleagues, including Mark Foley, introduced bipartisan legislation entitled, the Social Security Number Privacy and Identity Theft Prevention Act. The bill prohibits the sale and display of Social Security Numbers by Federal, State and local governments and restricts the sale and display of Social Security Numbers by the private sector and deters business from denying services when someone refuses to provide their number and increase fines and penalties for Social Security Number misuse.

Today, we will shine a bright light on the need to quickly bring comprehensive legislation to the House floor to keep Social Security Numbers private and protect citizens from identity theft. The time for action is long overdue.

Field hearings allow us the unique opportunity to get out of Washington and hear the real-life experience of our neighbors on the front lines of these important issues. I sincerely want to thank the City of Lake Worth for allowing us to hold this hearing in the Commission Chambers.

[The opening statement of Chairman Shaw follows:]

Chairman SHAW. Mark, I believe your political life started right here in this building.

Mr. FOLEY. In this very seat.

Chairman SHAW. Oh. Today we welcome a neighbor and former neighbor, Mrs. Tropepe and Mr. Ross, who will share their personal stories about the theft of their identities. In addition, Barbara Bovbjerg of the U.S. General Accounting Office will discuss government use of Social Security Numbers. We will also hear about the many challenges faced by law enforcement as they hunt down identity theft. We want to welcome representatives from the Office of the Attorney General, the State's Attorney's Office, we have the Sheriff of Palm Beach County, and we have also Mr. Maye of the Social Security Administration (SSA), Office of the Inspector General (OIG). I want to welcome all of you, and I will, at this time, yield to Mr. Foley for any comments that he might have.

Mr. FOLEY. Thank you very much, Clay. And, first, let me thank everybody. It is a delight and honor to be back in this seat, in this city, in the first political office I ever held, and I think longingly of those days when life was easy and we didn't have the problems we have today.

I am particularly pleased to see the number of panelists here. And, Lisa, specifically, thank you for joining us. You mentioned to me a few weeks ago the problems you had, and it was interesting because I had relayed a similar problem that I had where somebody took my Social Security Number and applied for credit. I got the first notice from Target Collection Agency that I had somehow charged $780 worth of goods and services. We got a copy of the application for credit. It showed my Social Security Number, said the person worked for the government. The only thing different was they used an address, Powerline Boulevard in Pompano Beach, Florida. So everything else they had on me. Target extended credit. That person walked away with $700-plus merchandise. I spent countless hours trying to reconcile this issue. It was horrific, and I felt if I had to go through so much trouble, imagine someone who may not have a phone that is able to reach during the day, who may not have the tenacity, who may be a single mother having to deal with kids and family all day long and then hustle up to try and see if they can get these collection agencies off their phones and off their backs. I felt violated. I couldn't believe it could occur, but as Congressman Shaw suggested, it is happening far too frequently.

I want to thank my colleague, because he had the bill long before I came involved with this, but when I heard the subject matter of the bill, I told him of my own experience and enthusiastically wanted to jump on board to see whatever we could do to eliminate this kind of problem, because it is, it is a sad commentary, it is a tragedy when you have to go through it, and so I joined together with my colleague hopefully getting something done on this issue. And thank you, Clay, for coming to Lake Worth -- your district, my old hometown.

Chairman SHAW. Thank you, Mark. Our first panel -- we will have two panels today. The first panel, Lisa Tropepe, who is the Partner at Shalloway, Foy, Rayman & Newell, Incorporated, West Palm Beach, Florida; accompanied by Tim Morell, attorney, West Palm Beach, Florida; Anthony Ross, who is a Federal Law Enforcement Officer, United States Marshals Service in Brunswick, Georgia; Cece Dykas, who is the Assistant Deputy Attorney General, Florida Office of the Attorney General, Palm Beach County; and Barbara Bovbjerg who is the Director of Education, Workforce and Income Security Issues, the U.S. General Accounting Office from Washington. She often appears before us in Washington. And Kay Brown, Assistant Director of Education, Workforce and Income Security Issues, the U.S. General Accounting Office, also in Washington.

From each one of you we have, I believe for all, if not most of you, your written statements which will be made a part of the record. You may proceed as you see fit.

Lisa?

STATEMENT OF LISA A. TROPEPE, PARTNER, SHALLOWAY, FOY, RAYMAN & NEWELL, INC., WEST PALM BEACH, FLORIDA, ACCOMPANIED BY TIM MORELL, ATTORNEY

Ms. TROPEPE. Thank you. For the record, I just wanted to let you know that Tim Morell is my attorney. My firm and I had to hire him when this was happening to me, and he is here on my behalf.

Dear Committee Members, good afternoon. My name is Lisa A. Tropepe, and I have been a victim of identity theft. I am beginning my testimony with a copy of a May 7, 1999, letter to Judge Oftedahl articulating the seriousness of the crimes against me and the importance of penalizing the imposter for all the crimes committed. The letter is dated May 7, 1999. It is in reference to the State of Florida v. Terkesha L. Lane.

"Dear Judge Oftedahl, Assistant State Attorney Chris Jette called to let me know that Terkesha L. Lane is scheduled for arraignment today. The crime against me was that the defendant, while working as a temporary receptionist at my office stole personal information about me and assumed my identity. She cleaned out my personal bank account and opened several credit card accounts where she charged up to thousands of dollars of merchandise.

Although I was initially advised by intake officer Brian Brennan, Esq., that the defendant would be charged with multiple counts of grand theft and counts relating to the fraudulent assumption of my identity, I am now advised that only one charge of theft has been made. My employers and I are concerned that the courts may not be well advised as to the personal seriousness and public danger this crime represents.

With those thoughts in mind, I feel compelled to write this letter in the hope of informing you of the impact of the crime of identity theft that was perpetrated upon me and, indirectly upon my firm by Ms. Lane.

This person stole approximately $20,000 from credit grantors and my personal bank account using my name. She applied and received a valid driver's license with her picture and my name, address, etc., on the license. She subsequently applied for credit cards, received temporary credit limits, and spent accordingly. She also entered my bank several times and withdrew $13,900 from my personal bank account. Now I am spending hundreds of frustrating hours dealing by phone and letters with collection companies, banks, credit reporting agencies, governmental agencies, (Division of Highway Safety and Motor Vehicles, Postal authorities, Social Security, etc.) and various other companies to convince them of the fraud, and to clean up the disaster affecting my credit and other aspects of my finances.

The out-of-pocket costs are substantial. However, far more devastating is learning that someone has invaded every aspect of my life and taken my identity. My credit is ruined, my good reputation is stolen and tarnished, my career and livelihood has been impaired, and I am subjected to possible further invasion in the future.

I will briefly outline several aspects of this nightmare.

My office and I have spent over 100 hours calling, filling out documentation, writing letters return receipt requested to banks, credit reporting agencies, governmental agencies, companies, utilities, credit grantors, etc., to inform them of the fraud in an attempt to prove my own innocence. The burden is on the victim to prove fraud since there is great suspicion by the credit grantors. In fact, since I put fraud alerts and new passwords on all my accounts, I have experienced extensive questioning and delays in dealing with the various banks and agencies. I am told by the Privacy Rights Clearinghouse and the Federal Trade Commission that my problems may go on for several years.

This has been a very frightening and invasive nightmare. I have had great difficulty sleeping and have woken in cold sweats worrying about what else I will find out. The impersonator was a temporary employee at my office. She was our temporary receptionist in charge of outgoing mail and phone messages. When I realized someone had taken my identity and was applying for credit cards in my name, I shared my problem with her. She subsequently hugged me and said everything will be okay. She never wavered in her demeanor. I truly believed that she was concerned. I was shocked to see her caught on tape withdrawing money from my bank account.

I have had nightmares seeing the defendant invading my home and hurting me physically. She lives in Riviera Beach, and I live in Palm Beach Shores (Singer Island), which is only 5 minutes away. She knows where I live.

Stealing my identity has made me feel very vulnerable and violated. It has been stressful and literally made me ill. I do not like to think of myself as a victim. I am a professional engineer and am responsible for multi-million dollar projects, handling many complex problems related to the health, safety and welfare of the public. Because of this, I thought at first that I could handle this stress without any help. However, I found it so overwhelming that I had to hire an attorney and am in the process of scheduling a meeting with a therapist.

I respectfully request that Your Honor consider the serious nature of these crimes.

I believe this defendant and other wrongdoers who might see this as an easy crime to commit with potentially big money to steal and no real punishment to face, learn that society will not tolerate this type of insidious crime. For that reason, I strongly urge that she experience jail time, not just a couple of months on probation.

I am concerned about of what she will do to me in the future. I trust you take this crime seriously. In that connection, I am also concerned that the charges being brought against this wrongdoer don't include charges for credit card theft and fraud under Florida Statute 817.

Thank you for your consideration. Sincerely, Lisa A. Tropepe."

It has been almost exactly 3 years since I sent the above May 7, 1999, letter to Judge Oftedahl. In 3 years, the following has occurred. One, Turkesha L. Lane never served a day in prison. Turkesha L. Lane still has my Social Security Number, my home address and workplace. If she has not moved, Turkesha L. Lane still lives 5 minutes away from my home. Two, my credit record will never be the same. Perpetual fraud alerts and annual credit bureau inquiries have been, and will be, a part of my life for the rest of my life. Three, a reoccurrence is always in the back of my mind. After 3 years, I still shutter at the thought of someone impersonating me. My summation of this incident can only be described in two words: electronic rape.

A part of me wants to thank you for giving me this opportunity to share my experience with all of you. However, a part of me is fearful that my testimony may call attention to other criminals regarding my vulnerability to be impersonated again. As lawmakers, I trust that you will provide the necessary laws needed to stop this awful crime.

[The prepared statement of Ms. Tropepe follows:]

Chairman SHAW. Thank you for that testimony. I think we are all vulnerable. Mr. Ross?

STATEMENT OF ANTHONY K. ROSS, FEDERAL LAW ENFORCEMENT OFFICER, UNITED STATES MARSHALS SERVICE, BRUNSWICK, GEORGIA

Mr. ROSS. Thank you. Good afternoon. My name is Anthony Ross, and I would like to thank the Honorable Clay Shaw, Social Security Subcommittee and the Social Security Administration Office of Inspector General for inviting me to testify to you today.

The illegal use of another's identity is a serious problem costing the American taxpayers and businesses billions of dollars. Additionally, it destroys the credit of a very large number of citizens daily. I am one of those citizens and also a Federal Law Enforcement Officer, the United States Marshals Service.

In April 2000, I became aware that I was a victim of identity theft when contacted by my banking institution. In a few days time, a person had assumed a false Florida driver's license with my name and information, cashed five checks for $995 each. I went through a few weeks of closing accounts and then finding that my accounts were now frozen and the monies transferred back to the original accounts. This occurred several times during approximately a 2-week period. Eventually, it was resolved when out of frustration I closed all the accounts and began banking with another institution.

Shortly thereafter, I was going to purchase a home subsequent to relocating from Florida to Georgia. The mortgage institution ran a credit check and inquired I had opened more than 25 revolving credit accounts in approximately a month's time. SunTrust was very professional, and they were quick in determining that I was not the cause of these accounts, and the purchase of my home went through without difficulty.

However, from that point on it has been a nightmare and that is because my identity was illegally used to obtain in excess of $50,000 worth of credit charges. I have contacted credit bureaus and established flags for being a victim of identity theft. I have contacted numerous credit card companies, spending extended lengths of time just trying to get through the computerized phone systems, and then to a living person and then transferred again to reach a person in the Fraud Investigations Department. I have struggled with trying to read or more likely decipher credit reports; they are not user-friendly.

I have contacted numerous creditors and filled out endless forms, filed affidavits, provided copies of driver's license, Social Security card to try to prove my innocence. That is right, the victim has to prove he is innocent. In many cases, I have received letters indicating that I have been cleared and credit bureaus that have been notified. However, and this is after looking up my most recent credit reports, the credit bureaus have not properly disclosed that information on my credit report.

In June 2000, I received a Notice of Court appearance to answer for charges regarding failure to redeliver a hired vehicle. Again, my identity information was misused, and now I face the possibility of being arrested. At the least, I was now, as a Law Enforcement Officer, on the wrong end of the judicial system. Again, I had to prove my innocence by providing photographs and fingerprint cards. Metro-Dade Police Identity Unit was very professional and prompt in assisting me with clearing up this situation, as well as the State Attorney's Office.

During this ordeal, I attempted to get assistance through several law enforcement agencies. I would call and get transferred, received voice mail, and then when I did speak to a detective I was generally given very little positive indication that anything would be done other than establish a crime report. Some law enforcement indicated they were very overwhelmed with identity theft activity, and I was part of a long list.

Due to the abundance of identity theft and limited law enforcement resources, proper attention to my case was initially very poor. And that was until I contacted Special Agent Ray Llorca of the Social Security Administration. Special Agent Llorca promptly scheduled a meeting with me and obtained information and statements from me, and he was permitted to open an investigation. As a result, I testified in a State grand jury in July 2001. I was informed that six people were indicted in this scheme regarding identity theft and credit card/banking fraud.

As recently as March 2002, a collection agency provided me an offer to settle an account with a balance of over $4,000, and this was for a substantially reduced amount. They were actually going to let me make two payments for about, oh, $1,200 and change each. What a deal, okay? This was in regards to an account that was illegally opened using my identity. A recent credit report indicates that I have 38 serious delinquency in public record or collections filed, none of which are truly my responsibility, but I must deal with them until they are cleared.

The point I am trying to make is that even after crime, the investigation and to some extent the judicial proceedings, we, as victims of identity theft, are still trying to clear our names and restore our credit. Thank you.

[The prepared statement of Mr. Ross follows:]

Chairman SHAW. Mr. Dykas?

STATEMENT OF CECE DYKAS, ASSISTANT DEPUTY ATTORNEY GENERAL, FLORIDA OFFICE OF THE ATTORNEY GENERAL, PALM BEACH COUNTY OFFICE, FT. LAUDERDALE, FLORIDA

Mr. DYKAS. Good afternoon, Chairman, Congressman Foley. My name is Cece Dykas. I am the Assistant Deputy Attorney General for south Florida. Unfortunately, Florida finds itself on the forefront of identity theft issues, but hopefully we will also be on the forefront, along with the Federal Government, in trying to help stop these. In 1999, the Governor requested a Privacy and Technology Task Force. As a result of that task force and the testimony that was generated from that, a State grand jury was empanelled to deal with the variety of issues, including identity theft, along with the theft of driver's licenses.

The grand jury that was empanelled recently released their report in January 10, 2002. To date, there have been at least 56 defendants who have been charged with over 470 counts. There is a projected loss for the year 2005 that there will be a theft of $8 billion. They estimate that the average loss per person in an identity theft scheme is $17,000, as the other panelists, just through their own experience, have indicated. The average length of time between a theft occurring and a victim finding out that their identity has been stolen is generally 12.7 months. The average victim spends up to at least 3 months and over $800 of their money to try and clear their name.

Your Social Security, as the Chairman indicated when he was getting his fishing license, is on virtually everything. It is doctors' offices, video rentals, school applications. As a result of that, the Florida legislature, in the past several years, have passed Statutory Section 817.568, Subsection 8. It allows for the prosecution of identity theft based on the residency of the victim. In many ways, part of the problem in prosecuting identity theft was to be able to determine where the crime had occurred. That statute now allows for the place of resident of the victim to determine jurisdiction.

One of the recommendations or several of the recommendations of the task force were that they be established a nationally recognized identity theft prosecution unit within the Office of Statewide Prosecution, that there be a devotion of resources for the training of Florida prosecutors and law enforcement officers on issues related to the investigation and prosecution of identity theft, that the legislation appropriation of funds to study and report on design methods and procedures to make the Florida drivers' licenses and identification card more resistant to tampering and counterfeiting. There is also a request for a formation for a multi-disciplined focus group to study security features of the Florida driver's license and identification card to make it one of the most secure driver's licenses and ID cards in the country.

This past session, or should I say current session, that is going on in Tallahassee, has several bills before it dealing specifically with the issue of identity theft. Senate bill 140 criminalizes the use of any public record to commit a further crime. House bill 1673 makes Social Security Numbers in the hands of State agencies exempt from disclosure under chapter 119. House bill 1675 exempts bank account numbers or credit card charge or debit account numbers in the hands of State agencies from disclosure under chapter 119.

House bill 1679 sets up a study commission on how the State treats personal ID information in public hands, whether excessive or unnecessary information is collected. The impact of advanced technologies on full access to public records, whether to treat the public access to physical documents differently than public access to electronic documents and other issues that underline the balance between the two. Senate bill 1020, and the bill makes a non-criminal violation for merchants who accept payment by electronic payment cards to leave more than the last five digits of the customer's account number showing on any receipt.

And, finally, Senate bill 520, which provides an infrastructure and raises the standards for issuance of driver's license. It provides that a breeder document, those used to prove the identify of the applicant, be preserved by the Department, makes reciprocity and accepting out-of-State driver's licenses contingent on the other State having adopted standards as stringent as Florida's and provides that any driver's licenses used to a foreign national will not be valid for longer than a 2-year period of time.

Presently, those bills are before the legislature and have bipartisan support, so hopefully those will be passed this session. Thank you very much.

[The prepared statement of Mr. Dykas follows:]

Chairman SHAW. Thank you. Ms. Bovbjerg?

STATEMENT OF BARBARA D. BOVBJERG, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY KAY BROWN, ASSISTANT DIRECTOR

Ms. BOVBJERG. Thank you. Mr. Chairman, Mr. Foley, thank you very much for inviting me once again before the Subcommittee, and I am especially appreciative that you have chosen to meet in the beautiful Sunshine State. It is very nice to get away from Washington.

You have heard people talking about identity theft and the role of the Social Security Number in particular. And you have invited me today to discuss specifically government uses and protections of Social Security Numbers and the results of our ongoing work. I would like to focus first on uses and protections in the course of providing government benefits and services and then, second, on uses and protections in public records.

My testimony is based on surveys and site visits we conducted at Federal, State, and county government agencies in the past year. We are conducting this work at your request, Mr. Chairman, and we plan to issue our report next month.

Let me speak first about government uses in benefit and service provision. Federal, State and county agencies rely extensively on the Social Security Number, because SSNs provide a quick and efficient means of managing records and maintaining program integrity. The numbers are particularly useful when agencies share information with others to verify benefit eligibility or to collect outstanding debt. Most of this data sharing occurs between government agencies, but a significant percentage of agencies we surveyed told us they also share with other entities, such as contractors, credit bureaus, and insurance companies. Governments also use SSNs in their role as employers for wage reporting and benefit administration.

Although government agencies told us of various steps they take to safeguard the SSNs they use for these purposes, we found that certain key protections are not uniformly in place at any level of government. For example, when requesting SSNs, government agencies told us that they are not consistently providing individuals with key information mandated by Federal law. The Privacy Act requires that any Federal, State or local government agencies tell individuals who are asked to provide their SSNs whether the compliance is voluntary or mandatory and how the SSN will be used. This notification helps an individual make an informed decision and represents the first line of defense against improper use.

We also found that many government agencies occasionally display SSNs on documents that may be viewed by others who don't need this information. These documents include things like payroll and benefit checks, child care vouchers and official letters to program participants. In addition, some governments display employees' SSNs on employee badges and identification cards.

Responses to our surveys also showed potential weaknesses in information security. We asked agencies about eight practices commonly used in information security programs. Although many government agencies reported adopting some of the practices, none of the eight practices were uniformly adopted at any level of government.

Let me turn now to the topic of SSNs in public records. When I say public records, I mean records or documents routinely made available to the public for inspection, such as marriage licenses or property transactions. Some Federal agencies and many of the State and county agencies we surveyed, including courts at all three levels of government, told us they maintain public records that contain SSNs. Officials who maintain these records told us it is their responsibility to preserve the integrity of the record and to make it publicly available rather than to protect the privacy of the individual SSN holder. Nonetheless, we found examples of government entities trying innovative approaches to protect the SSNs in such records, including developing new forms that shield SSNs from public view by maintaining them separately or on the back of the rest of the record. These changes are most effective when the government agency prepares the documents itself, but they don't protect information on documents prepared and submitted by someone else nor do they limit the availability of SSNs on records filed prior to the change in form.

As a practical matter, as long as access to public records remains an in-person process, access will be somewhat limited. Where those wishing to view public records must visit a physical location and request information on a case-by-case basis, there is a measure of protection against widespread collection of personal information, like the SSN. However, several officials told us that thanks to the growth of electronic recordkeeping, they were considering making such records available on their web sites. Such actions would create new opportunities for gathering SSNs from public records on a broad scale.

In conclusion, governments use SSNs for many beneficial purposes but they do not always ensure that this personal information is protected. Although it is unclear whether these gaps in protection lead directly to identity theft, they represent a potential for SSN misuse. It will be important for governments at all levels to consider how best to protect SSNs and to take appropriate actions to improve the security of this information. Thank you, Mr. Chairman.

[The prepared statement of Ms. Bovbjerg follows:]

Chairman SHAW. Thank you. Ms. Brown?

Ms. BROWN. I am here to answer --

Chairman SHAW. You are with Barbara Bovbjerg.

Ms. BROWN. Yes.

Ms. BOVBJERG. I brought reinforcements today.

Chairman SHAW. Good for you. We are delighted to have in you in Florida.

Ms. BOVBJERG. Thank you for inviting me.

Chairman SHAW. Lisa, you told a very compelling story with regard to your 3-year struggle. Has the defendant been adjudicated guilty or what has happened to the case?

Ms. TROPEPE. She received 4 months of in-house arrest, probation time, and community service.

Chairman SHAW. How about restitution?

Ms. TROPEPE. She surrendered the $10,000 cashier's checks that she got from my bank account, and the balance of the monies were never -- there was no restitution, none that I am aware of.

Mr. MORELL. I can give you a little bit of a backup on this, and we can --

Chairman SHAW. Excuse me, for the record, this is Mr. Tim Morell.

Mr. MORELL. Tim Morell, right. I am also the current co-Vice Chairman of the Computer Law Committee of the Florida bar, and we have been actively supporting and helping to get publicity for your bill, as you know from a year or two ago when I was in Del Ray helping out and trying to find out some information on this.

We were unable to get much of the prosecution at the State court level. It turned out that the only thing we could do was go to U.S. Attorney's Office. We were told that the amount of money involved, unless it was more than $100,000, wasn't going to get anybody's interest, so we ended up going to the media. We went to Channel 12, and we went to the Palm Beach Post. Once that was exposed, then the U.S. Attorney's Office took the case, and I have a copy of a Palm Beach Post summary that we can put into the record of what actually ended up happening. And I will read it if you would like to have that into the record.

Chairman SHAW. Without objection, I will place the entire Palm Beach Post article that you are holding into the record.

[The article follows:]

Palm Beach Post
West Palm Beach, Florida

WEST PALM BEACH -- A temporary worker who stole the identity of a woman in her office, took $13,000 from her bank account and ran up $5,000 in credit card charges in her name was sentenced Friday to four years' probation and 150 hours of community service. Terkesha Lane 21, of Riviera Beach, faced up to three years in prison, a $25,000 fine and restitution.  U.S. District Court Judge Daniel T.K. Hurley took note of Lane's age, her clean record and that she has a 2-year-old child. She also helped authorities track down a $10,000 cashier's check. "I think you earned this by everything else you have done in your life," the judge said. Lane who will be on home detention for the first four months of the probation and pay $100, apologized for the elaborate scheme in which she managed to obtain a driver's license in the name of Lisa Tropepe, withdrew money from Tropepe's bank account and ran up credit card charges in Tropepe's name. The bank reimbursed Tropepe and she restored her credit after hiring a lawyer.

Mr. MORELL. She was given, in summary, just 4 years probation and 150 hours of community service. There were some other monetary amounts here that we don't think will ever be collectable, but we will put this into evidence.

Chairman SHAW. Thank you. Mr. Ross, we will make available to you and Ms. Tropepe a transcript of this particular hearing that you can go in and show your creditors.

Mr. ROSS. Thank you.

Chairman SHAW. That you have appeared before a congressional committee who is studying the tragedy of identity theft. Mark?

Mr. FOLEY. Well, I think this illuminates the problem. In addition to having to go through hours, now we have got a lawyer and an engineer, both professionals who have both competence and ability to probably pursue this. Think about a poor person who is just struggling?

Ms. TROPEPE. That is right.

Mr. FOLEY. And this is outrageous. And 4 years probation to steal how much, $40,000?

Ms. TROPEPE. Over $20,000.

Mr. FOLEY. Plus, plus.

Ms. TROPEPE. Plus, plus.

Mr. FOLEY. I mean with credit damage and all.

Ms. TROPEPE. That is not including the cost to the firm, myself, the cost to hire Tim Morell to clear my name. It is not including all that.

Chairman SHAW. But the bank they made good on your account, didn't they?

Ms. TROPEPE. The bank made good on the account, and the credit cards that she received or the instant credit that she received, the credit companies, they paid for that as well. So there was no out-of-pocket money, but all the other -- the attorney and the time and the grief that it has caused my office. I was in the process of becoming a partner, and checking my billable time was slowly declining every day, and I just wasn't functioning right. And then we finally hired an attorney that helped alleviate that, but I can tell you that there isn't a day that doesn't go by that I don't think about the fact that there is somebody around that is right up the street from me that can do it again. And if she doesn't do it, she has the information still to this day to give it to somebody else. It just doesn't seem to me -- the punishment, without a doubt, does not fit the crime.

Mr. FOLEY. That is where I see we have two problems. We have, one, punishment, because if you can get away with the kind of larceny that has occurred with that minimal sentence, it encourages people to go ahead and try. Secondly, if you can't protect the Social Security Numbers, it is a catch-22.

Ms. TROPEPE. Right.

Mr. FOLEY. So you are around and around in circles on this issue.

Mr. MORELL. This file represents a lot of effort here to try to keep Lisa's credit in decent shape. She continues to have -- a lot of the times we try to keep this so that it doesn't bother her, but as recently as 6 months ago her identity was compromised in, what was it, Ireland or somewhere in the British Isles. Somebody had compromised her identity mostly because once it happens once and you are out there, then there is almost like the reasonable doubt, it would be hard to prove who the criminal was after that. And so they go for you. And that was one of the reasons why we were very nervous about even coming here today. The thing keeps coming back, and the nature of computers is such that once the record is out there somebody inadvertently enters it again or it comes back up in 6 months, and it is all right back like it never left. And it has been a constant struggle to try to keep after those credit bureaus, to keep telling them Lisa is not the perpetrator.

Mr. FOLEY. The other problem is the credit reporting. When you go now to a store you -- and I probably can't take advantage of these instant credit opportunities --

Ms. TROPEPE. Never again.

Mr. FOLEY. Because we will always be --

Ms. TROPEPE. Right.

Mr. FOLEY. On somebody's list that they have to flag, that they have to check, that they have to make sure you are who you are for our safeguard, but nonetheless it inconveniences us.

Ms. TROPEPE. Right. Well, there is a fraud alert on my name, so I will never be able to get instant credit again. I will have to go through the longer process in order to obtain a credit card for the rest of my life. And this all started with her getting my Social Security Number on the Internet.

Chairman SHAW. Did she get it out of the payroll records of the company or --

Ms. TROPEPE. No. She told me that her cousin in Miami helped her get it off the computer.

Chairman SHAW. Oh, you talked to her about it since she was charged.

Ms. TROPEPE. Well, I am the one who solved the crime. I went to my ATM machine and sometimes you can't tell when a couple dollars are missing, okay? But it was $13,000 subtracted out of my account, which alerted me that night. So the very next day I called up First Union and said, "What is happening to my account?" Meanwhile, I am getting every day credit card bills in the mail on a daily basis that I knew nothing about. They told me that I withdrew a $10,000 cashier's check 2 days prior at the Okeechobee Boulevard branch in West Palm Beach, and I said I have never been to the Okeechobee Boulevard branch in West Palm Beach. I drove over there and they replayed the tapes from the bank, and I identified her on those bank tapes. If she had not gone to the bank and started withdrawing cash from my account, I would have never found out who the perpetrator was.

And then after that she said to me that she also did -- you know, you kind of figure that, okay, since she has taken money out of my account she is probably doing the credit cards too. And I asked her and she said, "Yes, I did that too." "And how did you do it?" "I got your Social Security Number from my cousin in Miami who looked it up on the Internet."

Chairman SHAW. What site?

Ms. TROPEPE. So that is how it started. And then once she had that, she had my home address because she was our receptionist. She took those two pieces of information to DMV, the Division of Motor Vehicles, received a driver's license with my name, address, and information and her picture.

Mr. MORELL. That is what I wanted to follow up with. By having the Social Security Number, she was able to get a duplicate driver's license, although our system in Florida has a picture ID. They could have clearly seen the woman who impersonated her looks nothing like Lisa, nothing at all physically. But they had her picture there, but it didn't matter what the picture was. Because the woman had Lisa's Social Security, they gave this woman a driver's license and that became the key to everything.

Ms. TROPEPE. And the Division of Motor Vehicles did have my picture on file because, as you both probably know, I was a Broward County resident until about 4 years ago. I went to the Division of Motor Vehicles, got a new driver's license, so my picture was on file in Palm Beach County. They just never bothered to look at my picture when they gave her the duplicate driver's license.

Mr. FOLEY. Anthony, why don't you tell us about some of the late night calls during these periods after your credit has been run up.

Mr. ROSS. Late night calls?

Mr. FOLEY. Collection agencies, people. I mean this is the other side of it you don't realize.

Mr. ROSS. Well, as a Federal Law Enforcement Officer and I teach at the Federal Law Enforcement Training Center in Brunswick, Georgia, and we are on a 6-day work week right now. And that and family obligations and just trying to live on that extra day I get off and deal with these has just been a nightmare. And what happens is you receive -- if you send in the proper paperwork to try to get this cleared with a creditor, they have a certain number of days that they are looking to have you respond in. And that is not always necessarily possible, especially traveling and other things that do occur within the job. So then you get another letter saying, "Well, it appears since you have not sent the paperwork in that you no longer want to pursue this and that you are the person that has made these charges, and now this bill is yours, basically."

Now you have to go back and call, "I do want to pursue this. I am just not able to do it in your time requirements, and now we are starting all over again." Or I have had instances where they have closed it out and I will say, "I haven't received anything more on this." "Well, we didn't get that back in time." Or I have had situations where you may have certain stores that use one banking institution or credit company that supplies credit for all of them. Now you have three different -- in this case, I have three different fraudulent accounts, but it was backed by one creditor. Rather than them combining that as one fraudulent account, I had to submit documents individually for each one, and then they assigned them to three different fraud investigators within this one company. So instead of dealing with it one time, I had to deal with it multiple times.

One of the other problems that I came into, and this is a situation within the prison system is that the actual main person involved in this case that was orchestrating the fraud was already in custody, and he was using other family members and giving them the information on how to proceed along the fraud.

Mr. FOLEY. So he is inside working outside.

Mr. ROSS. Right.

Chairman SHAW. Absolutely amazing. I will share with you a story that we had in Washington. One of the Members of the Committee on Way and Means, Sam Johnson, who was a prisoner of war for, I think, 7 or 8 years at the Hanoi Hilton in Vietnam, and I had to tell him that -- I said, "Your serial number and rank and those things that you give as a prisoner of war, your serial number is your Social Security Number, and we are trying to get away from that." I said, "All those people that were looking over you in prison have your Social Security Number." But I think our military is backing away from that too, and we have got to be terribly careful.

And then we had a colonel who testified before us, and he was cashing a check at the PX, and he had to put his ID number on it and that was his Social Security Number, and that is where they picked his up. But you, you were quite correct to say that if you know how to find it, you can find it on a computer and people are -- there is trafficking in these numbers. And that is what we have got to -- that is what we have really got to stop.

It is not all together when you think that the logic of this thing is to get rid of it, but there is a number of organizations that are not in favor of this type of legislation, who deal in identities, whether they be private detectives or whatever, but the type of legislation that we are trying to develop is one that preserves the legitimate government use of the Social Security Number. It was never meant to be a national ID number, but it has sort of risen to that, and it is done without adequate protection. And this is what you people have run into.

And I am quite impressed with what the State of Florida has done in this regard. We are trying to move this legislation through several committees. We moved it through the Committee on Ways and Means in the last Congress but it got stuck in a couple of other committees with jurisdiction. We are trying to go back and maybe just work the bill so it is the jurisdiction of the Committee on Ways and Means so we can go ahead and pass it and then if they want to go forward with another bill, that they can do that or they can get moving and get the thing done on -- get it done on their own committee because this is terribly important that people like you go through this just because we, the people who issue the numbers, haven't put the proper safeguards in place in order to protect you from identity theft, when you have no choice but to go with a Social Security Number.

Also, as you did with the driver's license, we need to also put some type of a code as to someone's nationality. You come here as a citizen of another country, even if you don't have a work permit, if you have a bank account or if you are a student here on a student visa, you have to have a Social Security Number before you even open a bank account. Well, we need to put some identifier on that so that the Social Security Number that is given out will indicate that this person is not a citizen and this person is here on a certain kind of visa. And you can do it simply by just adding a letter from the alphabet on that, and that is another matter that we are looking into. Anything further, Mark?

Mr. FOLEY. I just wanted to thank Ms. Dykas for many things, obviously being here today and for your help on Good Sams St. Mary's for leading that effort and as well as Manora Gardens.

What is the State doing that you find successful as a mode for other States, and what do you think the Federal Government should do to help with this effort of identity theft?

Mr. DYKAS. I think that the State being on the forefront, unfortunately, of having probably one of the highest rates of identity theft and certainly post-September 11 issues empanelled a grand jury, as I indicated, that that grand jury was in place for well over 6 months and was able to take testimony similar to the panel today and get very real life experiences as well as talk with experts in terms of crafting some type of resolution. And the grand jury report that came out on January 10, if you split it in two categories, dealt largely with recommendations to Florida Department of Highway Safety and Motor Vehicle in terms of the driver's licenses, certainly being a port State that we have a large influx of people from other countries, and dealing with those issues that may be more unique to a Florida, California, Texas.

It is an issue that I think everybody recognizes is a problem. But if you identify what issues you can deal with, those issues that how do we help the victims after it has occurred, and I think the focus now with regard to the legislation is how do we prevent it from happening? And I think it is particularly tricky with all of the clerk's offices, for instance. Many of the lawyers that deal with them are all going to electronic filing, electronic posting, me being a State of Florida employee, all of my information is public record, including my Social Security Number. So they are working on getting those issues exempted out as well.

Mr. FOLEY. Thank you.

Chairman SHAW. You just said something that rings an alarm in my head that what can we do, the Federal Government, after you have been victimized to see that you don't go through this. The issuing new Social Security Numbers really isn't the answer, because that goes back and then some will have trouble with all the earnings that they have had. But that is something that we need to take up with the Social Security Administration -- what do you do once someone has been victimized? Because, Lisa, you are quite right, you are more vulnerable because you have been already violated, and it is important, I think, that we look into this and see what can be done. Ms. Bovbjerg just made a note, so that must mean I said something that she is going to look into, I hope.

Mr. DYKAS. Well, I will give you one. Having been in the Economic Crime Section here, it is very tough sometimes to get a second Social Security Number, because frequently that is what credit repair scams do. They suggest that you get a new Social Security Number if you were actually the one who truly did have a bad credit as a way to avoid any type of proper credit reporting. So you bump up against issues all along the way.

And one last comment I would suggest to this panel as well is we have heard individual stories but part of what was submitted from our office was also the cost to businesses, banking entities as well. Two items briefly: Visa, in 1997, had a total of $490 million in losses; Master Card, in 1997, had $407 million in losses. So it affects everyone.

Chairman SHAW. That was from identity theft?

Mr. DYKAS. Yes.

Chairman SHAW. Wow.

Mr. DYKAS. Yes.

Chairman SHAW. They are getting half a billion dollars. Thank you all. Thank this panel very much, and we very much appreciate you taking the time to come down here and share your experience with us.

Lee Cohen, the Assistant State Attorney in Charge, Misdemeanor Trial Unit, State Attorney's Office, 17th Judicial Circuit of Florida, Broward County, Florida. We have --

Ms. GUIALDO. Anthanagtha Guialdo.

Chairman SHAW. Thank you. Say it again for me, please.

Ms. GUIALDO. Anthanagtha Guialdo.

Chairman SHAW. Anthanagtha.

Ms. GUIALDO. Guialdo.

Chairman SHAW. Guialdo. Legal Assistant in Charge of Identity Theft Unit, the State Attorney's Office, also with the 17th Judicial District of Florida from Broward County; the Honorable Ed Bieluch, who is Sheriff with Palm Beach County, West Palm Beach, Florida; and Paul Rispoli, who is the Sergeant of Palm Beach County Sheriff's Office in West Palm Beach; and Roland Maye, Special Agent-in-Charge, Atlanta Field Division, the Office of Inspector General, the Social Security Administration in Atlanta, Georgia.

I want to thank all of you for being here. We have your written testimony. It has been submitted, it will be made a part of the record, and you may proceed as you see fit.

Mr. Cohen.

STATEMENT OF LEE COHEN, ASSISTANT STATE ATTORNEY IN CHARGE, MISDEMEANOR DIVISION, STATE ATTORNEY'S OFFICE, 17TH JUDICIAL CIRCUIT OF FLORIDA, BROWARD COUNTY, FLORIDA

Mr. COHEN. Good afternoon, Mr. Chairman, Congressman Foley. On behalf of Michael J. Satz, State Attorney, Broward County, I would like to thank you for inviting us to be here. I am the Assistant State Attorney in Charge of the Misdemeanor Division, and I have the pleasure of also supervising Ms. Guialdo, who is our Identity Theft Unit Legal Aide there in that unit. I would like to bring a little bit different perspective to your proceedings, because I am sure you have been inundated with stories, as we have heard today, about financial losses, economic fraud, identity theft, credit card scams and the like. In our unit, we handle things -- we have a little bit different twist on what happens with identity theft involving Social Security Numbers.

Just a little background. Before I came to my current position, which I have had for about 5 years, I was a Prosecutor in our Elder Abuse and Exploitation Unit. And there I was charged with dealing with crimes against the elderly and the senior citizens of Broward County involving fraud and exploitation. Most of the cases I dealt with were caregiver type of relationships, between caregivers and the seniors they were supposed to be caring for. It was very common at that time for me to have cases where credit card applications were redirected or intercepted by the caregivers. And I think that puts them in a key position for this type of identity theft above and beyond your normal relationship or normal mail situation.

Most people do get their mail. The seniors that are being cared for by the caregivers are having their mail intercepted. So I was having cases where the caregiver would get the application, fill out the application, get the credit cards or add their names to other people's credit cards, and continue on this type of fraud on and on for a very long period of time without detection because the senior citizen was not getting their mail. It wasn't until years later sometimes where family members got involved where this was detected. So I would like you to consider in your deliberations the effect that the elderly have because of their having to rely on others for their mail which is their main line of communication.

One of the recommendations I had at various hearings and meetings with different participants from the security agencies of the financial institutions was to advocate and strengthen the fraud alerts on the accounts as well as putting certain restrictions on the accounts where you can call the bank and say, "I do not want anybody adding their name to my account. I do not want any changes to the account without a personal contact to me over the telephone with certain information provided." I think that would be helpful, and I always advocate that the victims I dealt with were citizens that I spoke to to do such a thing. And I think also any -- obviously, I know that restricting the mailing out of applications and offers is a controversial issue, but I think that whatever can be done I that would be helpful.

The Identity Theft Unit that we have in the County Court Division is a very unique but, believe it or not, longstanding division that Mr. Satz has had since approximately 1978. There we have a unit that is devoted to what we used to call, or still called by many, the "not me" cases, where somebody is charged with a crime or a person is charged with a crime, a name is charged with a crime. The person comes to court and they say to the judge or they say to their attorney or they say to the prosecutor, "That wasn't me." And of course the response is, "Yes, sure. Tell it to the judge or tell it to the lawyer."

But these are not cases of mistaken identity like, "I was at home eating mashed potatoes with my wife." These are cases where this is not the person that the police intended to arrest or intended to bring into the system. Somebody else has used their name during an encounter with law enforcement which has caused the innocent person to now be charged with a crime or dealing with the criminal justice system.

And Ms. Guialdo is here to tell you a little bit about how she deals with those cases. She deals with a large number of those cases per year, most of the time dealing with driver's license and driving offenses. Thank you.

STATEMENT OF ANTHANAGTHA GUIALDO, LEGAL ASSISTANT, IDENTITY THEFT UNIT, COUNTY COURT DIVISION, STATE ATTORNEY'S OFFICE, 17TH JUDICIAL CIRCUIT OF FLORIDA, BROWARD COUNTY, FLORIDA

Ms. GUIALDO. Hello, Mr. Chairman, Mr. Foley, nice to meet you. My name is Ann Guialdo. I am a Legal Assistant with the 17th Judicial Circuit, the Identity Theft Unit. As Mr. Cohen stated again, our unit deals basically with an accused victim who may or may not have been arrested but an original arrest was made by somebody using their names or they were booked using that person's name but the accused was arrested.

So my job is to go back within the file and check the original arrest, fingerprints if there are any, booking photos if there are any, and clear up the accused's name. Most of the time it is a notice to appear where John Brown gives Tom Brown's name and says Tom Brown's Social Security. He might know it from speaking with Tom Brown is related to Tom Brown. So there that Social Security problem comes in where we have to go in and clean up Tom Brown's Social Security and personal information from John Brown's name. So it becomes a big issue all the time, because when someone is arrested their Social Security automatically is put on the probably cause affidavit. So we always come into that Social Security problem used as an identifier.

My duties include determining whether this office charges the right person by initiating an investigation into prosecuting those who unlawfully use the identities of others. The most prevalent cases I deal with are driving offenses wherein a suspect comes to the unit claiming that they hadn't received a citation but that somebody else did. It is our job to look into it, be it by signatures or identifiers from a driver's license that doesn't match that of the accused and find out really who did it.

We also have felony cases where somebody is incarcerated under my name. It is my job now, because this person is already in the prison systems, to correct that information so by the time this person gets paroled that he will come out in his own name and not that of the accused. So we have a big process in investigating that with fingerprints, Florida Department of Law Enforcement (FDLE), the Federal Bureau of Investigation, and the prison system in just trying to correct identifiers.

A lot of times we have cases where I go in for a background check and because somebody used my name or somehow the Social Security Number the imposter gave was wrong, it becomes my problem because it was my Social Security Number. And my name is now on their criminal history. So it becomes a problem trying to clear all of that off and putting it on the right person. I had placed into evidence exhibits, so those are basically the things -- it is a process. We have walk-in complaints, phone calls and mail from all over the country.

My, not really recommendation, but fingerprints and Social Security should kind of go hand in hand as identifiers. There should be a way where a fingerprint could match a Social Security Number or something, because, you know, criminals are out there, and they do it every day. I had a lady call in, I was trying to help her. She came in, filled out her paperwork and everything, and she called the imposter's job, said she was me, and the only way to distinguish that it wasn't me is you can notice my name, and she couldn't spell it.

Chairman SHAW. I couldn't pronounce it.

[Laughter.]

Ms. GUIALDO. It is hard. So, you know, it becomes a problem for everybody. Lately, I have been having a lot of Social Security calls. Mothers call up and say, "My son is going to go to school in September. I need to get a Social Security Number. Well, I went to the Social Security Administration, they told me he already has a Social Security Number." And they do a printout and here it is. Well, the father is using the Social Security -- received a Social Security Number in the child's name. So now she has to do whatever to try to straighten that out.

Chairman SHAW. Yes, but I think you have to do it in the hospitals now.

Ms. GUIALDO. Right. So the father is using it, so it becomes a whole problem for this child. It is very difficult. I have had -- my brother's name is similar to mine, we are a number off, so that becomes a problem also, because when law enforcement is putting it in their system, somebody is manually putting them in. A number is off. It automatically becomes my problem. So it a catch-22 issue. Thank you.

[The prepared statement of Ms. Guialdo follows:]

Chairman SHAW. Thank you. Sheriff?

STATEMENT OF THE HON. ED BIELUCH, SHERIFF, PALM BEACH COUNTY, WEST PALM BEACH, FLORIDA

Mr. BIELUCH. Good afternoon. Let me preface this by saying that I am not an expert in identity theft; however, it has been around longer than I have been in law enforcement, as Ms. Guialdo stated, particularly with drivers' licenses, and we have had to deal with that over the years many, many, many times, and what we do is if we have someone that is driving with no identification, then we take a thumbprint on a special piece of paper and attach it to the citation so that they can be identified later in court should somebody show up and say, "It wasn't me."

It seems like that would be impractical in dealing with a Social Security card unless there was some type of electronic reader that could do the reading and compare them, which I suppose there is. I mean there is all kinds of identifiers out there -- iris identifiers and that type of thing -- which will probably help at some point when we get to that technology. I mean technology is kind of the catalyst here. Technology has allowed identity theft to really, really grow, and it is probably going to be the way that we have to solve it.

Couple points I will make on what Mr. Morell said earlier, that the amount of money seeming to stymie the investigation, and I think that is very true, that $20,000 in the overall scheme of things isn't a lot of money but really it is. And, you know, we look at these at property crimes as opposed to person crimes where somebody is injured, but in many cases I believe that these are almost life threatening because some people just can't afford to lose $20,000. I mean to some people it is a drop in the bucket, but others that is their life, and that is their college money, that is their retirement money, it is whatever they have been saving up for for dozens and dozens of years. And it is almost a life threatening crime to them, and I think we need to approach it on a more serious level regardless of the amount.

And one of the other problems is when we talk about trying to get people back on track and get back in the system, and it seems like a lot of red tape, and I am sure it is, but there are thousands, millions of people out there who are genuine bad guys. They are ripping off stores with credit cards and that type of thing, so I mean the other side of the coin is that that is what they are up against when they go to have their credit restored is the fact that there are lots of bad people out there and they just don't believe their story. But I am going to let Sergeant Rispoli talk because he is our expert on identity theft.

STATEMENT OF PAUL RISPOLI, SERGEANT, PALM BEACH COUNTY SHERIFF'S OFFICE, FINANCIAL CRIMES UNIT, WEST PALM BEACH, FLORIDA

Mr. RISPOLI. Good afternoon, Mr. Chairman, Mr. Foley. On behalf of Sheriff Bieluch and the entire Palm Beach County Sheriff's Office Financial Crime Unit, I want to thank you for inviting us today. My name is Sergeant Paul Rispoli. I am currently in charge of the Palm Beach County Sheriff's Office Financial Crime Unit. Also here with me today is my Captain, Captain Simon Barnes from the Detective Bureau, along with two detectives from the unit: Detective Alice Gold and Pete Palenzuela. Any questions I can't answer they will be able to answer.

Detectives in the Financial Crime --

Chairman SHAW. But they are sitting in the back and said you are on your own.

[Laughter.]

Mr. RISPOLI. I didn't see the door shut, so I know they are still here. Detectives in the unit are responsible for the investigation of white collar crimes, specifically responsible for investigating exploitation of the elderly, corporate embezzlement, identity theft, credit card fraud, counterfeiting and computer Internet fraud. This six-person unit shares a combined 100 years experience in law enforcement. During this time, we have been assigned to road patrol, different units within the Detective Bureau, along with money laundering.

Of all the crimes I have investigated personally, identity theft cases are one of the most difficult. They are difficult in identifying the suspects, difficult to get financial institutions to cooperate, difficult to prosecute and difficult to have the guilty parties receive sentences that would deter committing identity theft again. Over the past 5 years, there has been a significant increase in crimes where criminals compromise personal identification data of victims in order to commit identity theft. The information falling into criminal hands includes name, date of birth, Social Security Number, banking account numbers, and other financial information.

The victims of identity theft, like other crimes, are made to feel personally responsible. This is especially true in light of the vicious cycle of events following the circumstances of the crime. Imagine for a moment, which Mr. Foley has already run into, you go to a car dealer to buy a new car only to be denied because of a negative payment on your credit report -- information that you had no knowledge of. The trauma this type of fraud causes its innocent victims is inconceivable, as victims are usually left to fix the problem.

I will explain some of the difficult areas involved with investigating identity theft. Identifying the suspect. Technology, as the Sheriff has said, has improved a thief's chances of getting away with crime. A thief doesn't need a gun or a mask to commit a crime. Today's gun is a keyboard and the mask is a computer with Internet access. You can apply for loans, credit cards, bank accounts online. You can purchase items with a click of a button and have them shipped all over the world. The thief is never seen. The credit cards and the merchandise is delivered to an empty apartment in the thief's building or neighborhood or a post office box under the victim's name. Most financial institutions and credit card companies fail to check or question why the applicant's address is different than the address listed in the credit report.

Most of our complaints come from victims who are local and the thief is in another country, State, or county. Florida has a statute dealing with this crime. The statute allows for a venue for the prosecution and trial of violations to be commenced and maintained in any county in which an element of the offense occurred, including the county where the victim generally resides. The local law enforcement agency where the victim resides does not normally have the ability and resources to investigate the offense when it occurs in another county or State.

Financial institutions' and credit card companies' cooperation -- most financial institutions and credit card companies are reluctant to cooperate during an investigation, because it generate negative publicity, and the loss amount on one case is usually not enough to begin an investigation. It costs more to investigate the case than write off the loss. That is what I have been told.

Prosecution and sentencing. Even when a thief is identified and there is probable cause for arrest, some prosecutors tend to plead a case out prior to trial. This plea agreement is usually probation and restitution. When criminals have been found guilty in court, they rarely see any jail time. Most are sentenced to probation and restitution anyway, so there is no deterrence to committing this crime.

Financial and white collar crime has always been viewed as a lesser threat than a burglary or a robbery. Common consensus is no one is hurt. Ask a victim of identity theft is they feel any less violated than a robbery victim or a burglary victim. Victims have been refused employment, loans, some victims have actually been arrested for crimes that the identity thief has committed. Victim lives have been destroyed in this crime. In light of the events of September 11, 2001, one should be aware that identity theft in Florida played an important role in a terrorist being able to carry out their objectives. Identity theft does hurt people.

Some recommendations suggested by the Palm Beach County Sheriff's Office Financial Crime Unit: An increase in public education about identity theft, which this is part of, the media is all gone now but at least they were here; increased law enforcement education and interagency cooperation. Victims should not be turned away; a report must be taken. The current identity theft statute needs to be updated with enhanced penalties for this crime. This will make the crime less attractive for a thief.

Credit cards and financial institutions should be held responsible for indiscriminate issuing of credit to unauthorized persons, i.e, mass mailing pre-approved credit applications. Credit bureaus must take a more active role in ensuring security of one's credit. This may involve notifying a person that their credit has been checked. Also, I heard, I am not sure which panelist it was, said about the fraud alert. That doesn't live with you the rest of your life unless you keep on calling. After a certain amount of time, each credit bureau can shut that off.

Require any web-based company or company taking credit applications over the Internet to maintain detailed records of their transactions. Posting of Social Security Numbers on the Internet should be prohibited. Entities having access to a consumer's personal identifying information should be strictly accountable as to whom they provide such information to and the purpose the information is being provided for.

We believe if there were an enhancement to the penalties for identity theft, the criminal element would less likely attempt to commit this crime.

In closing, we would like to thank you, Congressman Shaw and Mr. Foley, for giving law enforcement an opportunity to offer input into this matter. Additionally, we would ask that this Committee consider the massive impact identity theft has had on our society. Thank you.

[The prepared statement of Mr. Rispoli follows:]

Chairman SHAW. Thank you. Mr. Maye?

STATEMENT OF ROLAND MAYE, SPECIAL AGENT-IN-CHARGE, ATLANTA FIELD DIVISION, OFFICE OF THE INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION, ATLANTA, GEORGIA

Mr. MAYE. Good afternoon, Congressman Shaw and Congressman Foley, and thank you for inviting the Office of the Inspector General, the Social Security Administration to testify today. My name is Roland Maye, and I am the Special Agent-in-Charge of the Criminal Investigative Activities for this region.

As you noted in your opening remarks, the misuse of Social Security Numbers plays an increasingly large role in two issues currently plaguing American society. Identity theft victimizes thousands of Americans every year, and the number of identity theft crimes continues to grow. This crime begins, in many cases, with the misuse of a Social Security Number. And Homeland Security has become an even greater focus for all Americans. We have learned over the past 7 months that protecting a Social Security Number and preventing identity fraud is not only a criminal justice issue, but a Homeland Security challenge.

On behalf of the Inspector General, who could not be here today, I would like to touch briefly on each of these issues, starting with identity theft.

As you know, the Social Security Number was never intended to be a national identification number, but we can longer pretend otherwise. A vital part of commercial transactions of every kind, the SSN is as much a part of our identity as our own name. Indeed, the SSN is a more unique identifier -- many people share common names, but an SSN is issued only once. For this reason, a valid SSN is an almost priceless tool for identity thieves. With an SSN in hand, unscrupulous individuals can apply for credit cards, open bank accounts, take out loans, apply for government benefits, obtain jobs, and do the many things all of us do every day, but these unscrupulous individuals do so fraudulently under an assumed identity.

In fiscal year 2000, more than half of the 92,000 allegations received by our fraud hotline were allegations of SSN misuse. The victims of identity crimes face situations similar to those described by the witnesses here today -- feelings of violation and helplessness, and a long, difficult road to financial recovery. We have made some progress. Certainly the public is more aware of identity theft, and of the importance of protecting their SSN and other personal information than, they have ever been. And the Social Security Administration, which has adopted some of the recommendations made in our audit report, has taken important steps in tightening the process by which Social Security Numbers are issued and used.

On the investigative side, we see more and more indictments and convictions for identity theft crimes around the country. Right here in Florida, agents from my office, working with the Florida Department of Law Enforcement, brought the very first case indicted by Governor Bush's 16th State-wide Grand Jury for the Purpose of Investigating Identity Theft, resulting in the indictment of six individuals with multiple counts of identity theft. Around the country, similar efforts have ensured that while identity theft may not be a difficult crime to commit, the prosecution of those who commit identity theft is now more of a priority for law enforcement agencies.

As great a challenge as identity theft has become, the true severity of the larger SSN misuse problem became horribly apparent after the attack of September 11. We have come to learn in the 7½ months since that day just how critical it is that we protect the integrity of the Social Security Number. We knew that our credit rating depended on it; we know now that our lives may depend on it.

There is no greater issue in the Homeland Security arena than protecting the integrity of the Social Security Number. It is virtually impossible to operate in the United States without a Social Security Number. It stands to reason, then, that any enemy of the United States that wants to infiltrate our borders and live among us would need a Social Security Number in order to do so. The challenge before us is to find a way to allow legitimate commerce to continue using the SSN for legitimate purposes while making it less simple for both identity thieves and even more dangerous individuals to misuse SSNs.

Part of that solution lies with SSA and its OIG. Many of the recommendations we have made to improve the enumeration process are already in place or in the process of being implemented. For example, SSA's practice of issuing "non-work" SSNs to visitors to our country so that they may obtain drivers licenses has been discontinued. Development of a meaningful process for SSA to verify immigration documents with the Immigration and Naturalization before issuing an SSN has been expedited. And SSA appreciates the need to do all it can under current law and within the position of budgetary constraints to protect the SSN upon its issuance during the life of the number-holder, and upon the number-holder's death.

In OIG, we have worked around the clock since September 11, both in support of the investigation into the events of that day, and in furtherance of Federal efforts to prevent future acts. An example is our participation in Operation Tarmac in 12 major airports around the country. The most recent of these was in the Washington, DC, area, where last week, together with other Federal authorities, we arrested some 105 individuals suspected of providing false information -- including SSNs -- to obtain work in secure areas of Reagan National Airport, Dulles International Airport, and Baltimore-Washington International Airport. Again, working within the limitation of existing laws -- laws which were written for a time before identity theft and Homeland Security became the overarching issues they are today -- we have taken significant steps.

But we need the help of this Subcommittee and the Congress as a whole. Legislations must be enacted to close the gaps in the laws that govern the use of SSNs. Legislation like H.R. 2036, the Social Security Number Privacy and Identity Theft Protection Act of 2001, introduced by this Subcommittee, places meaningful restrictions on the use, display and sale of SSNs and provides new and important enforcement mechanisms for offenders. Such legislation represents an important step to reducing identity theft and making the SSN unavailable as a tool to those who commit or support acts of terror against the United States.

The Inspector General looks forward to working with this Subcommittee to ensure that we are doing all we can to stem the tide of SSN misuse. Thank you.

[The prepared statement of Ms. Maye follows:]

Chairman SHAW. Thank you. I would like to address this to anyone on the panel who has information, the question of repeat offenders.

Ms. GUIALDO. They are very common. It is every week the same person. It is a constant issue. Right now I have cases where a perpetrator used one person's name. We cleared that person's name. Well, he is also on two other person's cases.

Chairman SHAW. Has he been apprehended?

Ms. GUIALDO. We refiled charges against him, but the police department does not actively go out and pick you up. If he gets stopped using his own name, he will be apprehended for the new crimes. But if he is not, it doesn't happen.

Chairman SHAW. Is that the case up here, Sheriff? Are you talking about misdemeanors?

Ms. GUIALDO. Yes.

Mr. COHEN. Usually, they are misdemeanors. Usually just the plain using somebody else's name, unless it results in specified harm, it is a misdemeanor. If there is a certain harm --

Chairman SHAW. Well, if it is grand theft to -- identity theft, yes, the felony, I mean the felony they will go get them, won't they?

Mr. COHEN. That is probably a State-wide problem is basically the arrest on these warrants. I mean the police departments prioritize, you know, different degrees. They put different efforts into the fugitive squads of the different police departments. That is a constant resource issue, the apprehension of outstanding felons or outstanding fugitives.

Chairman SHAW. Sheriff?

Mr. BIELUCH. We probably have right now some 50 to 60,000 warrants just in our Palm Beach County database, and we don't actively go out after misdemeanants; however, perhaps we should in this case. I have made a note of it, and this obviously has the potential to become a serious felony. As we said, stated over and over again, because nobody gets hurt, because it is not a crime against person, these things tend not to be investigated as thoroughly. And when the warrants come out, sometimes they probably don't go pick them up as quickly as they could. But I am going to take note of that, and we definitely will be going after the misdemeanor identity theft cases.

Chairman SHAW. We heard two felony cases today --

Mr. BIELUCH. Right.

Chairman SHAW. From our witnesses. Also, you are quite right as to what a growing problem it is. This is the fastest growing crime in the United States today. Still what we are looking at today is probably a drop in the bucket compared to what it is going to be, and unless we start getting some vigorous law enforcement and some arrest, it will go even faster.

Mr. BIELUCH. Yes, I agree. But, you know, all criminals have MOs, and this is just the MO of the people that do identity theft. And burglars get out of jail, and they don't suddenly become car thieves. They go back to being burglars because that is kind of their trade, and the punishment is nil.

Mr. COHEN. But it is not just a crime. It really -- it is not just the crime, it is the means to a crime. It really is. And a lot of people say identity theft is a crime. I think that it really is -- it is just part of your grand theft, it is part of your credit card fraud, it is part of your forgeries. And that is all it is, is a tool. Instead of pushing them down and grabbing their purse and then using their credit card, they are just applying in the mail for one.

Mr. FOLEY. Identity theft is the getaway car, just one issue. Sergeant Rispoli, I appreciate, and all of your testimony I appreciate specifically, but you did a nice job of outlining what are good areas for us to look into: education, enhanced penalty, the companies themselves -- not a day goes by that I don't end up with something in my mailbox for a free teaser ad, get 1.5-percent interest rate for the next 30 hours, and then it goes to 19 percent.

Mr. RISPOLI. If you get to the mailbox first.

Mr. FOLEY. Right, exactly. And that is the problem. People are going into your mailbox and gaining some of this information. The web postings, these are all interesting suggestions.

Mr. Maye, as well, with the Social Security Administration, thank you for illuminating some of the problems we are facing relative to immigration. It is a whole other -- I talked to a person the other day, because I asked -- I know their status is illegal, I asked, "How you are able to work here?" They said, "Oh, five or six of us use the same person's Social Security Number." I said, "Five or six? Doesn't Social Security ever check how he has five or six jobs?" He said, "Oh, no. It has never happened to him yet." But I mean these things are going on, and so people are either using numbers collectively or gaining them illegally, and so it is a frightening aspect, because we all, again, feel very, very vulnerable.

Mr. MAYE. In some cases this is true, especially in the agricultural areas, the person employing the workers are the ones who don't do the necessary checks to ensure that each worker has a valid number. They are more concerned with gathering their crops, so they might look the other way. We have had several cases on some major producers that hired individuals without valid SSNs because they didn't do the proper checks to ensure that each individual they hired had a valid SSN.

Mr. FOLEY. No, but it is interesting, and I fault government a lot, and whether we fail to live up to technology we have to look at the problem. I mean I can use an ATM card in Europe. I can put it in a machine, it reads my bank account in the United States, determines if I have a balance and in about 15 seconds it sends me back cash in the denomination of the country I am in. Now Social Security, you would think, if somebody was an employer, they could call up and verify within 15 seconds whether the person presenting themselves had a valid Social Security Number and maybe some outliers, like they ask my grandmother's maiden name. If there was an ability to do that, then I would shoulder the responsibility mostly on the employer community. But I don't know who they call today, and I don't know how long it would take.

Mr. MAYE. Social Security has such a system in place.

Mr. FOLEY. Is it?

Mr. MAYE. An employer can call and verify an SSN with SSA.

Mr. FOLEY. Quickly?

Mr. MAYE. Yes, expeditiously.

Mr. FOLEY. Well, then, God bless, we have gotten something going on, because that is a big concern.

Mr. MAYE. It is just a matter of getting employees oriented to contacting Social Security and verifying the employee's SSN.

Mr. FOLEY. Well, then we will work on that aspect of it. Because it was one of the concerns that I had that we didn't have enough means in which to determine. And then fraudulent documents are a problem as well for employers. There is a lot of things that go on. Thank you.

Chairman SHAW. I would like to thank you all. I think we always learn something from a field hearing, and this has been very helpful to us to see the frustrations of prosecution and law enforcement and trying to get these things done.

The bill that we have filed that we are working on would have penalties up to 5 years in jail for people that were trapped in these numbers. So the identity theft would become -- would also become a felony, not just a misdemeanor under what we are proposing. So we still have some work to do, but we will look into it, and I think we will be able to use your experience in developing this legislation as we see it through. I am hopeful that we can get the bill passed in short order to get this thing moving. What happens over in the Senate, which is the graveyard of legislation, I have no idea, but we will do our part.

Thank you all for being here. Say hello to Mike for me. We go back 30-some years. Thank you.

[Whereupon, at 3:45 p.m., the hearing was adjourned.]
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