Report challenges IRS that it is not doing enough to protect taxpayers from identity theft

According to a recently released report by the Inspector General for Tax Administration, the IRS is falling behind on a problem that has increased almost 600 percent in the past five years, controlling the use of stolen identities to file tax returns.

Most of the identity theft referred to in this report is when someone's personal information is stolen to maintain employment.

Here is the synopsis from the report:

The IRS has not placed sufficient emphasis on employment-related and tax fraud identity theft strategies. Specifically, its prevention strategy does not include pursuing individuals using another person’s identity, unless their cases directly relate to a substantive tax or conspiracy violation. IRS policy is that the actual crime of identity theft will only be investigated by the Criminal Investigation Division if it is committed in conjunction with other criminal offenses having a large tax effect.

Here is how the Inspector General came up with these numbers:

During Calendar Years 2005 and 2006, the Federal Trade Commission received 92,570 taxpayer complaints related to employment-related and tax fraud identity theft. Due to the lack of IRS information related to identity theft, it is not clear whether the Criminal Investigation Division evaluated or investigated any of these complaints. According to the IRS, the Criminal Investigation Division does not use the Federal Trade Commission Identity Theft Clearinghouse data, and any identity theft prosecution recommendations would have been developed from other
sources.

The report goes on to say that in past two years out of the 92,570 cases reported only about 100 were prosecuted.

Another interesting aspect of the report is that only no match cases (where a name and SSN do not match) are reported to the employer:

Employers are notified of mismatches between names and Social Security Numbers. However, if both a taxpayer’s name and Social Security Number are used by another person, employers are not notified and no further action is taken to stop the continued unlawful use of the identity.

This ties in with the no match social security number legislation that the Department of Homeland Security is trying to enact. As of right now, anyone can use someone else's or even a made up social security number and remain employed. There are few to no consequences for the identity thief, or the employer, who chooses to look the other way.

The new law would force employers to take action, but has been held up in Federal court at the behest of several civil liberties groups. Ironically, many of the cases I've read about involved a citizen of Hispanic American heritiage having their identity stolen.

In August of last year, I wrote about a financial crimes detective, Adrian Flores having his identity stolen. Before clearing his good name, Detective Flores went through a lot of pain and suffering when the IRS came after him for back taxes. He also had to deal with a slew of collection agencies coming after him for unpaid debts using his stolen identity.

Sadly enough, it appears that the groups blocking this legislation don't take the victims rights into consideration (my opinion). I'm all for protecting individual rights, but we need to consider the people getting their identities stolen, also.

Who is protecting their civil liberties?

Most Americans have nothing against hard working immigrants, but many of us have become weary with all the crime that hides itself in it's mass. There isn't going to be an easy answer to this issue, but we need to remove the factors that enable crime to camouflage itself within the problem, too easily.

Full report by the Inspector General for Tax Administration, here.

Latest press release from DHS about the impending (highly controversial) law, here.

ICE nails foreign gang members in 19 States

(Map of arrest locations courtesy of the ICE website)

Recently, I wrote about how counterfeit documents enable all kinds of undesirable people to blend into our communities. The point of the article was that these documents are used by more than hard working illegal immigrants seeking a better life for themselves and their families.

ICE issued a press release, which shows how widespread the problem of undesirable people blending into our communities has become.

From the press release:

A comprehensive national law enforcement operation led by federal agents and officers of the Department of Homeland Security's U.S. Immigration and Customs Enforcement (ICE) resulted in the arrest of 1,313 violent street gang members, associates and illegal aliens in 23 cities across 19 states.

Many of these undesirable individuals are involved in narcotics, human smuggling, financial crimes and of course, crimes of a more violent nature.

MS13, which has been written about a lot was one of the targets. Other gangs were targets, also:

In addition to MS-13, targeted gangs included Surenos-13, 18th Street Gang, Latin Kings, Bloods, Crips, and Vatos Locos to name a few.

While this reflect the most recent statistics from ICE, Operation Community Shield in an ongoing operation and when you take a look at the big picture, the statistics are even larger:

During the last 27 months, Operation Community Shield has resulted in the arrest of more than 7,655 members and associates of approximately 700 different gangs and the seizure of 287 firearms. Of those arrested, 107 were gang leaders. Many of those arrested under Operation Community Shield are prosecuted criminally and eventually removed from the United States. To date, 2,444 have been charged criminally, while 5,211 have been charged with immigration violations and processed for removal.

And it seems (finally), ICE is gathering support from local law enforcement, who have been forced to stay away from this activity, mostly because of political mandates. Here is a quote from a Sheriff in Florida:

Collier County, Fla., Sheriff Don Hunter notes that, "Criminal illegal immigrants are committing crimes and victimizing our residents and it is our responsibility to investigate their immigration status thoroughly while investigating their other crimes. We have the resources and tools to do that now. It is part of our mission."

ICE press release, here.

A few days earlier, an extensive ICE operation in California netted a lot more of these undesirable foreign types, including a large number of them eating up tax dollars in local jails. What is amazing -- if you take the time to read this press release, are specific references to arrests of individuals (not only in the jails) --who had previously been convicted of serious crimes.

In other words, when they were picked up, they were running around in our neighborhoods.

Previous press release, here.

Here is the post, I mentioned in the first paragraph, which describes how a lot of these people blend (sneak) into our society:

Operation Paper Tiger - the true story, which reveals why our borders aren't very secure!

America is a land of immigrants, and should continue to be considered that. After all, a lot of us believe that this diversity is what has made this the greatest nation in the world.

Please note that there are a lot of legal immigrants, who earn the right to become citizens, also. We shouldn't be handing over the fruits of our society to anyone, who can sneak over the border. It simply isn't fair to the people, who follow the law and prove they have what it takes to uphold the best interests of our society.

Some of them value the right to be called an American so much that they are serving our country in Iraq and Afghanistan as I write this. By the way, this is nothing new, many citizens of our country have earned their right to be called an American by serving it.

The problem is all the illegal activity, which goes hand-in-hand with illegal immigration, enables a lot of undesirable people to blend into our society. These people are not making our society a better, or a safer place to live.

If we allow this to continue, we risk losing our status as the greatest nation in the world.

We need to remember that "We the People" are what made this nation great.

In closing, I've seen the folks at ICE bashed quite a bit this year for trying to make an impact on a serious problem. There are some of us -- who appreciate the fact that they are doing their jobs, and by doing so -- trying to make this country a safer place to live.

In my opinion, these fine citizens deserve to be commended instead of being picked apart by certain factions in the media.

Will Social Security number verification slow down illegal immigration?

Employers will soon have to take action against employees, who have a Social Security number that doesn't exist, or doesn't match the name associated with it. In the past, they were able to ignore the fact that these types of discrepancies existed.

With statistics showing that employee fraud and abuse cost corporations billions of dollars, it's amazing that employers would ignore that the person they have working for them might not be, who they claim they are.

DHS (Department of Homeland Security) has already provided a SSN validator for employers to use, which shows, whether or not the number was ever issued. The problem is that it doesn't show who the number belongs to.

As I blogged in a earlier post, this has led to more and more cases of illegal immigrants stealing real people's numbers to maintain their employment. The posts also explains how employers could already be doing more to verify, who their employees really are.

Over the weekend, the issue hit the news again.

Suzanne Gamboa and Anabelle Garay of the AP report:

WASHINGTON (AP) -- Employers across the country may have to fire workers with questionable Social Security numbers to avoid getting snagged in a Bush administration crackdown on illegal immigrants.

The Department of Homeland Security is expected to make public soon new rules for employers notified when a worker's name or Social Security number is flagged by the Social Security Administration.

The rule as drafted requires employers to fire people who can't be verified as a legal worker and can't resolve within 60 days why the name or Social Security number on their W-2 doesn't match the government's database.

Employers who don't comply could face fines of $250 to $10,000 per illegal worker and incident.

AP story, here.

We've already seen an increase in stories -- where someone goes to file their taxes, or find another job only to discover their Social Security number has been being used -- sometimes by more than one person.

Recently, the story of a financial crimes detective, Adrian Flores, who had his identity stolen was covered in the LA Times. It appears that more than one person used Detective Flores' number. Before he cleared his name, he went through a lot of grief from various private and government agencies, including the IRS.

What scared me the most about Detective Flores' story was that he is obviously of Hispanic descent. Does that mean that citizens with Hispanic surnames are going to be victimized because their names will be more considered more desirable?

This is a whole new take on the sometimes sensitive issue of "profiling."

Bob Sullivan (MSNBC) blogged about this issue extensively at the Red Tape Chronicles, here.

During the aftermath of the controversy surrounding the immigration bill -- Lou Dobbs interviewed Suad Leija, the stepdaughter of one of the main players in a organized crime family producing counterfeit documents -- who is assisting federal authorities in identifying members of the cartel. Suad aptly pointed out to Lou that if the bill passed, the counterfeit cartel's business would have exploded because dates could be fixed to reflect whatever date qualified a person for amnesty.

Could the same groups be preparing to provide their own version of Real ID to the millions of people illegally living in this country?

According to Suad, the fake documents are as "good as anything you have in your pocket."

If you go to Suad's Paper Weapons


Suad's interview with Lou, here.

Exactly, how the rules will change remains to be seen. What worries me is the organized crime machine behind providing the documents and identities always seem to stay one step ahead of the authorities.

Getting stolen identities shouldn't present too much of a challenge to the groups counterfeiting documents. There already is an underground market selling this information, also.

This could translate into more people having their identities abused than ever before.

As long as the consequences for stealing identities are viewed as a not very serious crime, the problem will continue.

There are no easy answers to this problem -- but perhaps if there were harsher consequences for counterfeiting, the use of counterfeit documents and stealing identities -- the problem would be easier to deal with.

As long as employers are taking advantage of cheap labor, which is the reason most of these people are coming here, the solution isn't going to be an easy one.

We have to ask ourselves at what cost will this be allowed to continue?

More arrests made by ICE as a result of the Swift raids

Here is an example, where some of the people enabling illegal immigration are being held accountable for their actions.

Last December, ICE (U.S. Immigration and Customs Enforcement) made a series of raids at Swift plants. At the time, they maintained the raids were part of a larger investigation.

The investigation continued and more arrests have been made. Most of the current arrests consist of people, who are not illegal immigrants.

From the ICE press release:

U.S. Immigration and Customs Enforcement (ICE) agents Tuesday arrested 20 employees of Swift & Company (Swift), one of the nation's largest processors of pork and beef, after executing federal and state warrants in six states. The arrests included a human resources employee, a union official, and current or former Swift employees identified by the Federal Trade Commission (FTC) as suspected identity thieves.

"The criminal arrests tied to the Swift case demonstrate how entering the country illegally can serve as a gateway to other crimes including identity theft and document fraud," said Homeland Security Secretary Michael Chertoff. "We take these crimes seriously and will continue to seek out and arrest those who break the law." ICE agents made the arrests in Marshalltown, Iowa; Grand Island, Neb.; Worthington, Minn.; Greeley, Colo.; Hyrum, Utah; and Cactus, Texas.

Of those apprehended, 18 were arrested for charges relating to identity theft and administrative immigration violations. Chris Lamb, a human resources employee, and Braulio Pereyra, a union official who represents Swift employees, were arrested in Marshalltown and are charged with harboring illegal aliens. Lamb, a 17-year Swift employee, is also charged with misprision of a felony. The charge for harboring illegal aliens carries a five-year maximum prison sentence. The misprision offense is punishable by up to three years in prison.

ICE press release with more information, here.

Apparently, the powers that be at Swift must have been pretty cooperative in the investigation:

Swift is to be commended not only for its cooperation during yesterday's enforcement action, but for its continuing efforts to improve its hiring practices in order to ensure a legal workforce," said ICE Assistant Secretary Julie L. Myers. "The vast majority of companies want to do the right thing. When they do, ICE can focus our resources on the worst of the worst - those who've used stolen identities or aided illegal aliens in using stolen identities and victimized the unsuspecting public."

It will be interesting to see how this plays out and what message it sends to other people involved in this activity.

Founded in 2003, ICE is in charge of investigating issues a lot of issues besides illegal immigrants. A full description of what they do is on their site, which can be seen, here.

Suspicious activity can be reported to them at 1-866-347-2423.

For more posts from this blog about the Swift raids, or referencing it, click here.

Will stricter enforcement cause more illegal immigrants to assume real people's social security numbers?

Will a crackdown on illegal immigration mean that 13 - 20 million people will need to use legitimate social security numbers to work? In response to increasing concerns about illegal immigration, the Department of Homeland Security provides what is known as the Basic Pilot Program (web based), which verifies the validity of a social security number.

The problem is that it only verifies, whether or not the number is good (matches). It doesn't show if the number is stolen, or even if the name matches the number.

Please note that this program is a great tool, but it isn't the only tool that should be used when verifying a person's identity. Even DHS is quick to point this out in the article I cite further down in this post.

You would think it would be in an employer's best interests to do a thorough background check. Employee fraud and abuse can cost them a lot of their hard-earned profits!

If certain employers use this tool and this tool alone will 13-20 million immigrants use 13-20 million legal citizens' social security numbers to obtain employment?

The LA Times did a story about a LA County financial crimes detective, who had his own identity stolen by illegal immigrant(s). The investigation of financial crimes normally involves investigating a lot of identity theft.

The victim in this case, Detective Flores eventually confirmed that at least one of the people using his identity had been picked up in the Swift raids, which occurred late last year.

Anna Gorman (LA Times) wrote:

Under pressure from federal authorities to verify their workers' legal status, more employers are checking the validity of Social Security numbers, and that has caused many illegal immigrants to use stolen rather than made-up numbers to get jobs, immigration officials said.

"It used to be that we would only see people come in with purely bogus documents," said Julie L. Myers, assistant secretary for U.S. Immigration and Customs Enforcement. "More and more we are seeing real people, real victims."

Although the agency does not break out identity theft statistics, Myers said, "we are definitely seeing a trend."

To better protect their businesses, more employers are using the Department of Homeland Security's Basic Pilot program, which enables them to check the validity of Social Security numbers online. But Basic Pilot doesn't detect identity theft. As long as the name and Social Security number are legitimate, the online system will indicate the person using them is authorized to work.

Word of this weakness in the system has spread quickly among illegal immigrants and the document theft rings that cater to them. Thieves will dig through trash cans or scan the Internet looking for Social Security numbers. Sometimes, criminals or homeless people are willing to sell their identity documents, Myers said.

There also have been cases in which employers provide their workers with stolen numbers, Homeland Security authorities said.

Detective Flores didn't lose any money, but was threatened by collection agencies and the IRS. Like the many other victims of identity theft, he probably went through a lot of pain and suffering and spent countless hours clearing his name.

Trying to do the right thing, Detective Flores tried to have his social security number changed, but his request was refused.

If employers aren't checking very carefully and only using the Department of Homeland Security's Basic Pilot System, the background checks aren't likely to be very effective.

The trick would be to run Social Security Numbers verifying some minor details, which might include:

• Multiple names coming back to the same SSN (common).
• Geographical areas that don't match the stated history on the employment application.
• Discrepancies in ages, or where the social security number was issued.

This can be accomplished pretty easily by any employer. Even if an employer doesn't run a credit check, where discrepancies would normally surface, social security number traces are available from any of the major credit bureaus.

A social trace shows the name and address information, without the financial track record of the person.

There are privacy laws to protect this information -- but just about any legitimate employer can access this information, if they really want to -- and do so, legally. In most cases, a release form signed by the applicant is all that is needed. It isn't very hard to get someone to sign a release form, if they want a job.

Data brokers sell services to businesses, where social security numbers are easily run, also. If someone knows how to read these reports (they aren't difficult), it normally isn't very hard to find the real person (identity theft victim), when questionable activity is present. They are normally listed right on the report.

Besides performing background checks, social security traces are used to find people by law enforcement, collectors and private investigators. Financial crimes investigators (like Detective Flores) use them to find the people being impersonated by identity thieves, frequently.

A simple Google search on social security traces reveals how many vendors offer this service, here.

If illegal immigrants were using totally bogus social security numbers before, it isn't going to be hard for them to get real ones. This information is sold all over the place, including the Internet.

Organized criminal groups market both the information and documents on an economy of scale, which assures that their services are available to just about anyone for a nominal charge.

The bottom line is that it isn't hard for an employer to do an effective background, especially given the tools provided in the information age. In fact, a lot (most) of them already do this. As I stated earlier, employee fraud and abuse can be pretty detrimental to a company's bottom line.

As long as the jobs are available, illegal immigration will continue to be a big problem. If labor is needed and people want to realize the American dream, the people seeking the dream and those providing the jobs, need to accomplish their goals in a legal manner.

It isn't fair for them to accomplish their needs and goals at the expense (pain and suffering) of other people, who are following the law.

LA Times article, here.

Lou Dobbs discusses a holistic (common sense) approach to this problem on his television show and website. He also provides links to where all of us can let our politicians know how we feel about this problem.

Recently, the voice of the nation let them know exactly how we feel about this matter.

In the end, illegal immigrants might be the least of our worries. Activity like this shows how easily terrorists and criminals can operate inside our borders, also. This is probably the best argument (I know of) for why we can no longer afford to let criminals control our borders.

TSA loses 100,000 employee records and discloses the matter, immediately

For the first time, I can remember a data-breach is being reported the day after it was discovered by an agency entrusted to protect and serve the public at large. Here is part of the press release from the Transportation Security Agency (TSA):

Yesterday the Transportation Security Administration (TSA) became aware of a potential data security incident involving approximately 100,000 archived employment records of individuals employed by the agency from January 2002 until August 2005. An external hard drive containing personnel data (including name, social security number, date of birth, payroll information, bank account and routing information) was discovered missing from a controlled area at the TSA Headquarters Office of Human Capital. It is unclear at this stage whether the device is still within headquarters or was stolen. TSA immediately reported the incident to senior DHS and law enforcement officials and launched an investigation.

Of note, the information compromised here is everything an identity thief would need to completely assume another person's identity, sometimes referred to in carder forums as a "full."

Carder forums (chatrooms) are where a lot of stolen personal and financial information is sold, right over the Internet.

Their press release on this unfortunate matter states they have extensive data protection protocols, which I would hope include the fact that the data (stored on a portable device) was encrypted.

I'm sure some are going to try to bash TSA for this incident, however I am going to take a different stance, which is they appear to be handling the matter a lot more responsibly than many organizations that have breached, recently. In my humble opinion, the TSA is taking this seriously and handling this matter the best way possible. Data breaches embarrass a lot of organizations -- too many of them would rather avoid the negative publicity -- instead of doing the right thing to protect their (in this case OUR) most valuable asset, people.

I'm not thrilled with this data breach -- or that information continues to be left where it shouldn't be -- but disclosure (being more honest) goes a long way towards fixing the overall problem.

Recently, a TSA employee caught a culprit with 43 different driver's licenses and a lot of bogus payment devices. We need to remember that the people compromised by this, protect all of us!

I really liked their statement about what they intend to do about it - if wrongdoing is discovered:

TSA has extensive data protections protocols and training in place for its employees regarding data privacy. TSA has zero tolerance for employees not following policies on data protection and will take swift disciplinary action, including dismissal, against individuals found to be in violation of our procedures.

I'm not able to comment on TSA's data privacy procedures (never seen them), but one person with access, who violates any data privacy procedure can do a lot of damage.

If anyone knows something about this data-breach, information can be submitted to the FBI (investigating agency), here.

Data breaches have happened at a lot of places. If you are interested in reading more about them and where they occurred, the Privacy Rights Clearinghouse maintains a chronology, here.

A lot of data breaches occur when information is stored on portable (easily stolen) devices. Some claim that even if encryption is present on the device, the wrong person can still (sometimes) access the information.

The full press release can be read, here. They also link to the new government site on identity theft (worth a read if you haven't seen it yet), here.

Is Bashing DHS for the Swift Raids Fair?

Suad Leija (courtesy of YouTube)

Recently, there were a lot of people bashing DHS because of the raids at the Swift meat packing plants. There were allegations that only 65 of those "detained" were charged with crimes, and that everyone else was "hard working and innocent." Of note, the associated press just reported that this number is up to 220, and DHS is still investigating. Just being here "illegally" is considered an "administrative matter," and not a "crime."

AP update, here.

Could this mean that some of the "fake identification" is of such "high quality" that it's taking time to establish criminal activity? It also might point out that the rights of those being charged are being considered, carefully.

After all, we live in a country, where people have rights.

DHS has maintained that the raids were part of a much larger investigation into organized crime and the mass production of fake identification.

I've always taken the stance that I have nothing against hard working people trying to make a better life for themselves, but that we can no longer afford to let criminals control our borders.

And besides hard-working citizens having their identities stolen, and used for illegal purposes, we have to consider the threat to national security. In 9-11 - several of the terrorists involved - used forged documents to enter the country and obtain legitimate identification.

In July, I did a post about how organized the mass production of fake identification is. According to the stepdaughter of one of the ringleaders of the organized crime ring behind it - they consider terrorism an "American problem."

The stepdaughter (Suad Leija) is now making the "YouTube" arena, and you can hear what she has to say, here.

CNN also did an interesting story (available on YouTube), which shows how easy it is for "anyone" to get fraudulent identification, here.

Also included is a lot of evidence that some of this fake identification is so good, it easily passes muster at a border crossing, or airports. Of note - the video shows card reading technology used a liquor store - which catches a lot of these fakes and points out that it isn't in use at our airports, or borders?

Maybe this is something DHS could look into, further?

I also did a post - where a writer from Colorado - who is an identity theft victim wondered aloud - if she was one of the people arrested at Swift?

I wonder if any of the critics of the Swift raids has had their identity stolen, and if this became the case, they would be so quick to judge the actions of DHS?