Expecting the Unexpected: Important Identity Theft Factors for State and Local Law Enforcement Donald Rebovich, Ph.D. Executive Director Center for Identity Management and Information Protection, Utica College 2008 Economic Crime Institute Conference October 23, 2008

Center For Identity Management And Information Protection Research goals: Trends, causes, early detection, and prevention of identity fraud and theft Trends, causes, early detection, and prevention of identity fraud and theft Impact of policy decisions, legislation, and regulatory actions Impact of policy decisions, legislation, and regulatory actions Improved identity authentication systems Improved identity authentication systems

Center for Identity Management and Information Protection Recent Research Recent Research Bureau of Justice Assistance (BJA) – United States Secret Service Study Quantitative and qualitative analysis of a sample of closed Secret Service criminal cases ( ) to detect and synthesize patterns as they relate to identity fraud and theft. Results released in October, 2007

“Identity” – What is it? “Identity” – What is it? Do you “know” who your are?Do you “know” who your are? Do we “know” who you are?Do we “know” who you are? Do we sufficiently protect our identities?Do we sufficiently protect our identities? Have we become complacent about identity protection?Have we become complacent about identity protection? Do we play an indirect role in “enabling” identity thieves?Do we play an indirect role in “enabling” identity thieves?

I dentity Theft – Who Protects Us? I dentity Theft – Who Protects Us? What role does the federal government play?What role does the federal government play? What role does local/state enforcement play?What role does local/state enforcement play? Is local/state enforcement “sensitized” to identity theft enforcement?Is local/state enforcement “sensitized” to identity theft enforcement? How does enforcement respond to identity theft “red flags”How does enforcement respond to identity theft “red flags”

U.S. Bureau of Justice Assistance Study: Patterns and Trends of Identity Theft The following research material is derived from: “Identity Fraud Trends and Patterns: Building a Data-Based Foundation for Proactive Enforcement” by Gordon, Rebovich, Choo and Gordon. Economic Crime Institute Annual Conference, (October 22, 2007). “Identity Fraud Trends and Patterns: Building a Data-Based Foundation for Proactive Enforcement” by Gordon, Rebovich, Choo and Gordon. Economic Crime Institute Annual Conference, (October 22, 2007). Report available at

U.S. Bureau of Justice Assistance Study: Patterns and Trends of Identity Theft First empirical study of identity theft cases in U.S. 517 U.S. Secret Service cases from Offender, offense and case process variables Objective: Apply results to improve control efforts

U.S. Bureau of Justice Assistance Study: Patterns and Trends of Identity Theft Released in October, 2007 Some results: Most victims did not know the offenders 1/3 of cases started at offender’s job 42% involved organizational crime Median loss was $31,356

Local/State Police Referral Cases Close to half of the cases were referred from local and state law enforcement (246) Some results: Similar to “Non-local” cases in most areas More outside of Northeast Greater percentage of two-person offender “teams” Comparatively narrow range of losses

Local/State Police Referral Cases Some results: Greater overlap with forgery and drug crime Greater percentage of cases that originated with the investigation of cases outside of the economic crime arena

Average Loss Per Case The median dollar loss among the local/state cases was $30,726. Dollar loss varied with the number of defendants in the case Offenders Median Loss 1$22,344 2$34,474 3$18,000 4$50,000 5$77, $76,000

Who Are The Offenders?? They are “criminal opportunists” They search for the easiest route to profits They specialize their criminal services They “adapt” well to control efforts They have all the time in the world

The Offenders: Arrest History 30.7% -- no arrest history 30.7% -- no arrest history Of the arrests: Of the arrests: 26.6%: larceny or theft. 26.6%: larceny or theft. 36.7%: fraud, forgery, or ID theft 36.7%: fraud, forgery, or ID theft

Situational Patterns Of Identity Theft Routine Professional

Situational Crimes of Opportunity Patterns Of Identity Theft Routine Professional

The Role of “Insiders” Of the total 246 local/state cases, 65 involved offenders who accessed personal identifying information at their place of employment. Of the total 246 local/state cases, 65 involved offenders who accessed personal identifying information at their place of employment. The employees victimized: Retail – 27 Retail – 27 Private Company – 17 Private Company – 17 Bank/Credit Union – 7 Bank/Credit Union – 7 Government Agency - 3 Government Agency - 3 Education – 3 Education – 3 Insurance – 3 Insurance – 3 Unavailable – 5 Unavailable – 5

IDENTITY THEFT RING DEVELOPMENT

Information “Insider”

IDENTITY THEFT RING DEVELOPMENT Information “Insider” RECRUITMENTRECRUITMENT RECRUITMENTRECRUITMENT

IDENTITY THEFT RING DEVELOPMENT Information “Insider” RECRUITMENTRECRUITMENT RECRUITMENTRECRUITMENT

IDENTITY THEFT RING DEVELOPMENT Information “Insider” RECRUITMENTRECRUITMENT RECRUITMENTRECRUITMENT

IDENTITY THEFT RING DEVELOPMENT Information “Insider” Theft Ring Director RECRUTIMENTRECRUTIMENT RECRUTIMENTRECRUTIMENT Demonstration of Ease (“Teasers”) Criminal Mentoring

IDENTITY THEFT RING DEVELOPMENT Information “Insider” Theft Ring Director Testing the “System” RECRUITMENTRECRUITMENT RECRUITMENTRECRUITMENT Demonstration of Ease (“Teasers”) Criminal Mentoring

IDENTITY THEFT RING DEVELOPMENT Information “Insider” Theft Ring Director Testing the “System” “Reaping the Rewards” RECRUITMENTRECRUITMENT RECRUITMENTRECRUITMENT Demonstration of Ease (“Teasers”) Criminal Mentoring

Insider Fake DL ID Fraud Fake Driver’s License as “Catalyst”

Insider Fake DL ID Fraud Info. Broker DL Tech. DL Tech. Fake Driver’s License as “Catalyst”

Insider Fake DL ID Fraud Tech. Skills Runners ID Fraud Fake Driver’s License as “Catalyst”

CRIMINAL DEVELOPMENT STAGES

Citizen Fraud Report OFFICER RESPONSE STAGES

Citizen Fraud Report Victim Theft/ Victim Manipulation OFFICER RESPONSE STAGES

Citizen Fraud Report Victim Theft/ Victim Manipulation Identity Conversion OFFICER RESPONSE STAGES

Citizen Fraud Report Victim Theft/ Victim Manipulation Identity Conversion Identity Theft Recognition OFFICER RESPONSE STAGES

Citizen Fraud Report Non-Fraud Report Encounter Victim Theft/ Victim Manipulation Identity Conversion Identity Theft Recognition OFFICER RESPONSE STAGES

Citizen Fraud Report Non-Fraud Report Encounter Victim Theft/ Victim Manipulation Identity Conversion Identity Theft Recognition Response to Original Offense OFFICER RESPONSE STAGES

Citizen Fraud Report Non-Fraud Report Encounter Victim Theft/ Victim Manipulation Identity Conversion Identity Theft Recognition Response to Original Offense Exposure to Identity Theft “Red Flags” OFFICER RESPONSE STAGES

Citizen Fraud Report Non-Fraud Report Encounter Victim Theft/ Victim Manipulation Identity Conversion Identity Theft Recognition Response to Original Offense Exposure to Identity Theft “Red Flags” Officer Reaction to Case Factors OFFICER RESPONSE STAGES

Citizen Fraud Report Non-Fraud Report Encounter Victim Theft/ Victim Manipulation Identity Conversion Identity Theft Recognition Response to Original Offense Exposure to Identity Theft “Red Flags” Officer Reaction to Case Factors Inductive Assessment by Officer OFFICER RESPONSE STAGES

Citizen Fraud Report Non-Fraud Report Encounter Victim Theft/ Victim Manipulation Identity Conversion Identity Theft Recognition Response to Original Offense Exposure to Identity Theft “Red Flags” Officer Reaction to Case Factors Inductive Assessment by Officer ID Theft Recognition OFFICER RESPONSE STAGES

Laminating machines Bar Code Scanners Bar Code Rewriters Credit Card Embossing/Encoding Equipment Multiple Drivers Licenses Multiple Social Security Cards TOOLS OF THE TRADE

Multiple Vehicle Titles Blank Check Stock Drivers License Templates Check Producing Software Treasury Check Template Disks TOOLS OF THE TRADE

RECOGNIZING “RED FLAGS” Connecting the Dots Unusual behavior, circumstances, evidence Reports (Average Citizen, Service)

RECOGNIZING “RED FLAGS” Connecting the Dots Motor Vehicle Stops Narcotics Cases (e.g., trafficking, possession)

RECOGNIZING “RED FLAGS” Connecting the Dots Role of “chance” in routine calls/original offenses (e.g., disturbances, domestic violence, assault, burglary, loitering)

Questions In the present environment: How do we protect “Who We Are?” How do we prevent others from “Becoming Us?” How do we thwart the criminal relations and transactions leading to identity theft and identity fraud?

Identity Theft & Fraud Control Prevention Punishment/Deterrence

Identity Theft & Fraud Control Prevention Punishment/Deterrence Point of Theft Awareness Screening Monitoring

Identity Theft & Fraud Control Prevention Punishment/Deterrence Point of Conversion Document “Target Hardening” Point of Theft Awareness Screening Monitoring

Identity Theft & Fraud Control Prevention Punishment/Deterrence Point of Conversion Document “Target Hardening” Point of Theft Awareness Screening Monitoring Point of Fraud Awareness Verification

Identity Theft & Fraud Control Prevention Punishment/Deterrence Point of Conversion Document “Target Hardening” Point of Enforcement Coordination Awareness Point of Theft Awareness Screening Monitoring Point of Fraud Awareness Verification

Discussion