IDENTITY THEFT VICTIM ASSISTANCE WORKSHOP - VOLUME 2
PANEL 4 - CLEARING CRIMINAL RECORDS
PANEL 5 - BANKRUPTCY AND IDENTITY THEFT
BREAKOUT SESSION RECAP AND WRAPUP
FEDERAL TRADE COMMISSION
IDENTITY THEFT VICTIM ASSISTANCE WORKSHOP
OCTOBER 24, 2000
FTC HEADQUARTERS BUILDING
P R O C E E D I N G S
MS. CRANE: Good morning, welcome back to the Federal Trade Commission's Workshop on Victim Assistance for Victims of Identity Theft. If we could keep our phones and other paging devices turned off today, that would be greatly appreciated. I just wanted to do a few housekeeping items before we got started today. Again today we're going to have roving mikes available for audience participation. We found that our mikes yesterday worked much, much better if you held it right up to your mouth and spoke right into it. That's also very helpful to the court reporters and to the folks who are taping the session. So, hold that mike right up and speak right into it. It will work much better. Secondly, we've had a lot of requests from participants for copies of our booklets, and of course they're available from our consumer and business education branch, but to make it easier for you, if you would leave your business card or your name and contact information with Kathleen Lund, who is standing at the back there and who will be at the back table later today, with an indication of how many copies you would like sent to you, we can just ship them out to you after the session. If you're wanting more than 150 copies, we would prefer to shift you a zip disk so you can print it on your own and that way you can put your own logo on the back or the front as well. But those are available and if you want to order copies today, see Kathleen. The first session today, we're delighted to have John Arterberry, the Deputy Chief of the Fraud Section, Criminal Division From the Department of Justice as moderator and he will introduce his panel and we're going to be talking about the very difficult issue of clearing fraudulent criminal records from the victim's name. Thank you, John.
MR. ARTERBERRY: Thanks, Joanna. We do have a panel of experts, they are experts from a number of different ways, either through profession or through experience. I think they have a lot of useful information to share with you this morning. I'm going to introduce them briefly, and then we'll begin quickly our discussion. On my right, far right, your left, Sylvia Antalis, who is an attorney in private practice in California. Next to her is Beth Givens, who is director of the Privacy Rights Clearinghouse. To my immediate right, Jack Jordan, who is a lieutenant with the Los Angeles County Sheriff's Department. To my left, Joan Logan, who is a community services officer with the Montgomery County Police Department. To her left, Shane McLaughlin, who is an attorney in private practice in New Hampshire. To his left, Robert Greer, who is a New Hampshire resident. And to my far left, Werner Raes, who is a detective with the Anaheim Police Department.
MS. CRANE: John, can I interject with one more housekeeping item? I'm sorry. You won't be getting your break today, we have to run the two panels back to back with just enough time to change the panels, the name tags, because we're going to need at least, I'm sure, an hour and 15 minutes to get through John's panel. So, we'll take a really shortened break between the two different panels this morning. Thanks.
MR. ARTERBERRY: Thanks, Joanna. The workshop has explored some of the impact of identity theft, but it has economic impact on an individual or group of individuals. There are other ways that identity theft, however, can affect individuals, and these ways are either can be subtle or they can be not so subtle, extremely disruptive. What we're talking about this morning is identity theft that either steals one's good name or in other ways interferes with one's reputation. Many books, many stories, much literature about reputation, and what it means to people, how one builds a good name, how easy it is to lose. But it's especially I think disruptive, and in many ways I think troubling to an individual to have that reputation taken completely in ways that are completely outside the control of that individual. And we have a panel, one of or panelists this morning, who speaks from experience about how that can happen, and what that means in terms of his personal life. Robert Greer, I think that in just the past few months, you've had the experience of dealing with identity theft, not in a situation in which someone was trying to take your property, but in which someone was trying to take your good name. From that, I guess you're still -- you're still working to recover.
MR. GREER: Most definitely. My case did start off in the civil credit end of things and I was able to clear that up right away. In January of this year, I got a suspension notice and my license had been suspended for a speeding ticket and a missed penalty that I had never been to. And if anybody here has tried to prove that they have never been somewhere, it can be a little challenging. And most recently, I purchased a firearm, about a month ago, and the background check came back delayed, and two days later I was notified that I was denied. So, I went up to the court house to find out exactly why I was denied, and I brought my whole thick file of identity theft with me, they said well, Mr. Greer, you have three warrants for your arrest in Massachusetts, which is 20 minutes away from me. And two weeks prior to this date, I came back in from London, and went through Customs, and it was very likely that I could have been arrested right there, and detained. Now, the arrest charges, or the warrants rather, were as a result of credit card fraud, somebody stole a credit card and used it, and it all -- all the fingers started pointing to my name and identity, through a false ID that was used at a gym. It's kind of a long story, but his face was on this ID card with my identity. They came back and said this is the guy. So, I had three bench warrants for my arrest for nonappearance. When you have a nonappearance history, when you are detained, you are not released on bail, because you didn't appear the first time, why are you going to appear the second time. So, if I was detained, I was detained until I could see a judge essentially. And thankfully at this point, up until this point, I had taken care of all of my own investigation and taken care of all the accounts on my own, because I knew how things were going, I didn't have to guess, and I was able to maintain my own pace on it, which was rather quick. As soon as I learned I had a warrant, I knew I was over my head. And that's when I turned to attorney McLaughlin here to help me out. And at this point in time, I don't think he had had any identity theft cases at all, and it was unchartered territory for Shane. And from the time Shane took the case, until the end, I was almost afraid to leave the house. If I was pulled over for anything, any traffic infraction at all, if somebody ran into me, if I ran into anybody. I ride a motorcycle, if I got pulled over. I mean, motorcycles, let's just say when you're riding on a motorcycle, you're throwing fingers at yourself saying look at me, I'm here. And I couldn't partake my typical activities, and I ended up essentially staying home most of the weekends, not being able to even go out. But Shane can handle the reaction and the interactions with law enforcement. My information is through Shane regarding the hurdles that we encountered.
MR. ARTERBERRY: Shane, I'm sure you've had clients bring you a number of different problems, but the one that Robert brings you, a person who, as Robert describes, that really feels that he's become a prisoner in his own country, probably the first time you've had to deal with something like that.
MR. McLAUGHLIN: It is, John. This is a case of first impression to me, and I suspect that due to the way that these matters tend to present themselves, often in small communities, that they will be matters of first impression for the attorney that they bring their case to. Often a person who is presented with an issue of identity theft, unfortunately for Robert, and unfortunately perhaps for others, it will be in the context of an arrest on an outstanding bench warrant. Robert was fortunate in many ways, that did not occur to him, however I'm sure that it's likely that the person is presented with that type of a dilemma will contact his closest advisor, which will most likely be his family attorney, if he does have one. If not, it's going to be a public defender, and he's going to be in a little bit -- he's going to be in a different position because he's going to have to convince that person as to the bona fides of his own identity. In Robert's case, I think he has been very fortunate in many ways. First, he wasn't arrested on any complaints. When he learned of the charges in the first instance, which was the consequence as an attempt to purchase a firearm. He had purchased firearms over the years in New Hampshire. Many of us up there do collect firearms. The firearms ATF check came back denied, he went to the local law enforcement authorities, and he was fortunate because he had the presence of mind to bring his entire file, he had done a tremendous amount of footwork, as so many of the victims who testified yesterday had, on their own. He had his file, he had his materials. He could make at least a prima facie showing, if you will, to the people at records, which is right at the state police headquarters, that I am not the person here, please don't arrest me, and they didn't. We have a very close extradition and transport agreement with the state of Massachusetts, our sister state, which is right to the south of us. Robert lives probably ten or 12 miles from Mass, so it would be an easy matter for his or the Concord State Police just a half an hour from the border to have held him, held him overnight, arranged for someone in our sheriffs office in Massachusetts, Salem, Mass, which is not far, to arrange for a pick-up and transport him down. So, that was the first instance that he was very fortunate in this matter. I received my first inclination that he had had a problem when he called me by leaving me a message that to say the least was almost frantic on the phone on a Saturday evening. I had been out of the office that Friday afternoon, he wasn't able to reach me. I had seen Rob as recently as a week ago, and we attended or our families attended together a fireworks festival, end of summer festival at a small town in New Hampshire. I have known Robert Greer for perhaps ten years. We are both pilots, we fly together, we share a lot of common interests. He's a good friend, but not somebody that I spent a lot of time with, but nevertheless, when he called and said Shane, I don't believe this, you won't, I have three outstanding bench warrants against my name, what am I going to do. Am I going to get arrested tonight? And when I received that phone message, I didn't have an answer for him either, because the likelihood did exist. I called him right back. We had a brief discussion on the phone that evening, and I learned a few of the facts, and what he had done so far. So, it became apparent that this is something that probably could wait until Monday morning, and that someone from Massachusetts was not going to seek to extradite him to Mass. But that was the first -- the first emphasis. The second was to meet with Robert, which I did, sat down, get a picture of the problem that he presented and the unique context of his case, learned a little bit about what he had discovered by nature of the complaints that were pending against him, and then to formulate a strategy and a game plan to address those pending criminal complaints. Just a couple of final points, John, if I may, on this. In Robert's case, and I think this may be true in other cases, if you're on a -- if you live in a jurisdiction town to a sister state in which a perpetrator may have obtained your identification information, Robert is part owner of a company in Massachusetts, and by nature had or by work, has to travel there regularly. He's almost prevented for practical reasons from traveling to Massachusetts, which is only a mile and a half from my home town, because of the tremendous risk that if he travels over the border. And God forbid he is involved in a minor motor vehicle accident, he may be a passenger, but once his name is taken, it's going to go into the computer, it's going to be called in to the station. He could be stopped for something as minor as a defective taillight, while in Massachusetts, for example, but that stop would be enough to trigger the inquiry to the Massachusetts State Police Warrant Information Center and to generate a response that he's under a warrant, and he would have been arrested on the spot, placed in cuffs, possibly shackles, which is what we do in New Hampshire, transferred and held. And because it's a fugitive warrant, failure to appear warrant, he would have been denied bail. And if this had happened on a Friday evening, he would have had to have waited until Monday morning to get out. And there's probably no consul that would have had the ability within the mechanism that the system has in place to do anything else. He would have probably sat in jail until Monday morning. One more point. Rob travels overseas. And this is something that impressed me when he came in the office. I don't know, and there are probably many practitioners, members of the bar who handle these matters, that don't know the extent on which data is maintained where criminal records or warrants are concerned. Now, he had no convictions, but he had outstanding warrants, fugitive warrants. He -- as I indicated to him, I said you have to be cautious about traveling out overseas until this is resolved insofar as the warrants being removed, because until I can determine whether Customs computer has the warrant information in their file, you run a substantial risk upon entering the country of arrest at your point of entry. Now, I don't -- I still don't have the answer to that, and I think that's one of the issues perhaps the panel could address this morning later in terms of what information was out there and how we can get information to the victims of wrongful criminal records about what type of information is out there in what databases that place them at risk for wrongful arrest.
MR. ARTERBERRY: Beth, I think it's safe to say that what Robert and Shane have described would for most of us be just about our worst nightmare. But I would hope that you can tell us that these are fairly rare occurrences. Can you?
MS. GIVENS: There are no hard numbers. We -- just a little background, the Privacy Rights Clearinghouse is a non-profit consumer advocacy organization in San Diego, and we take calls and emails from people who have privacy questions and privacy problems. And we've dealt with credit related or finance related identity theft since about 1993, and we get -- we've gotten thousands and thousands of calls on that. What we've been seeing in the last few years is an increasing number of individuals who are dealing with a wrongful criminal record. And I found it very interesting, yesterday the Federal Trade Commission in its slide presentation and report on the statistics said that they found that 11 percent of their callers who are dealing with finance-related credit -- identity theft, are also dealing with wrongful criminal records. Interestingly, we did a survey in March, and we found the same thing, although our sample was much smaller than what the Federal Trade Commission, we found 12 percent are dealing with criminal records. Well, if you look at perhaps between 700,000 and 800,000 victims of credit-related identity theft this year, do a little math, we're dealing with over 80,000. And that's those who are dealing with two kinds of ID theft, criminal and credit. There are individuals who don't have credit-related identity theft and they're dealing just with the criminal record. Another interesting statistic that I read in a California newspaper was that in San Jose, which is a city up by the Bay Area, they last year arrested more than 400 individuals wrongfully, primarily on citations, DMV citations, and then failure to appear. I got a call from a police department records specialist from a -- from Albuquerque, New Mexico. She said that they're putting a handful of many individuals wrongly in jail every month, and, you know, she was quite troubled about the growing problem of getting erroneous information because of identity theft. So, I think this is on the increase, and I think primarily because of the fact that there is erroneous information in databases which is obtained because of somebody using somebody else's identity. We call this the worst case scenario of identity theft, and the reason we call it the worst case scenario, actually three reasons. One is that there are no established guidelines. I think Rob and Shane are finding this out, no established guidelines for regaining your good name. At least for credit, yes, you are -- you are -- you have a terrible life for two, three, maybe four years. With criminal-related identity theft, you're potentially dealing with this for the rest of your life. Just like Rob is afraid to go out of the house. I've talked to many individuals who won't drive a car anymore, they will have someone else drive for them. With credit guidelines, we've worked out the steps, at least most of us who work in credit-related identity theft, one, two, three, four, five, this is what you have to do, and if you do all these things, in a couple of years, you should be clear. No such thing. The individual who's a victim of criminal records identity theft may not even know it for a very long time, it could go on for years and years, and then a taillight stop, and they find out that they're arrested. There was a young woman in San Diego, fresh out of law school, went to her first day on the job, was met with -- by law enforcement, was handcuffed and taken away in front of all of her soon-to-be colleagues, and this was the district attorney's office, she was going to be working in the DA's office. Wrongful arrest, marijuana possession, somebody who had stolen her wallet. Anyway, there are no guidelines to clear it up, the guidelines are different from jurisdiction to jurisdiction. So, if you're in San Diego County, you're going to clear your name differently than if you're in Santa Clara County, and then many of these cases are multijurisdictional, so like Rob is dealing with an arrest record somewhere else and he is going to have to go back and forth between more than one jurisdiction and more than one state. And also there is no way of figuring out that you've got a criminal record except by doing your own background check, and most people don't know that this is something that you can do by using some of these databases or hiring a licensed investigator to do one for you, but you're going to be spending a bit of money. It's not an $8 credit check. And you may not get all of the databases where your records might be. So, those are some of the reasons why we call it the worst case scenario and we definitely think it's on the rise.
MR. ARTERBERRY: Jack, you're from a jurisdiction that has been very aggressive in pursuing identity theft. Beth describes for us, I think, some numbers that suggest that we can't take much comfort in the fact that most of these ID theft cases involve some credit-related problems. Are you seeing a mix that is the criminal record versus credit ID theft targeted case for your jurisdiction?
MR. JORDAN: Yes, I do, John. However, it is very small. Very small. Unfortunately, for people like Robert Greer, that is not any consolation at all. In Los Angeles County Sheriffs Department, we make approximately five million traffic stops a year, as our patrol division, we have about 2,000 people every night out there looking for people to stop. The thing that I think happens with criminal identity theft is like Beth said, you don't find out about it until the worst case scenario, and that is Saturday night you're out with your family and you get stopped for a traffic ticket, somebody runs your name and you come out with a warrant out for you. The solutions, like we said yesterday, what we're trying to find is number one, when you take an oath as a law enforcement officer to support the constitution of the United States, we have tremendous power to take someone's freedom away. But if you look at the Iwo Jima Memorial, the Viet Nam Memorial, a lot of people died for this country to give us those rights. I take it very personally and the people we work with do, also. We do not want to put the wrong person in jail. Number one, because we would not want to be in that position ourselves. Number two, because it's a waste of our time, we want to get the guilty people out there. Having said that, one of the things, if I were stopped, and somebody accused me of having a warrant that was -- I knew was not mine, the first thing I would ask the officers, and hopefully you're dealing with somebody with some compassion and some sense of reason, compare the description on the warrant to me. A lot of times the people that steal the identity don't go out solely looking for somebody that looks like John Arterberry, they happen to do it by happenstance and take that identity. Unless like we heard from Beth yesterday, a lot of times it's family members. If they're your family, then they know what you look like and there's a chance that they might have a similar resemblance.
MR. ARTERBERRY: Sylvia, from the private law side, like Shane, I think you've had experience in seeing what can happen to people when either because these steps that Jack has just described weren't taken, that the victim of the criminal identity theft either didn't have the presence of mind or just didn't have the opportunity to say what can I do? What's been your experience in how victims have reacted in that first instance, this is when they're first confronted with it?
MS. ANTALIS: My experience tends to be a little bit different than Shane's and Rob's. I think that often times theft of identity in the criminal arena can take two forms. You can have a situation where you actually have a criminal who targets a particular person and says I'm going to pretend that I'm Robert Greer when I get arrested, and assume his identity. I think the other situation is perhaps what I would call an inadvertent theft when the personal identifying information is entered incorrectly. I have a client named Scott Lewis who that's exactly what happened. Somebody else was arrested, did not pretend to be Scott Lewis, didn't have a name anything similar to Scott Lewis, but when the arresting officer went to put in the identifying information, he looked over to type in the wrong-doer's social security number and actually typed in the last four digits of his telephone number. And the resulting social security number was actually my client's social security number. That's a very different situation. Typically, you know, Scott doesn't have any outstanding warrants or anything like that, but the damage can come in two forms as well. Besides outstanding warrants, Beth suggested background checks, and that's a situation where now all of the sudden, Scott Lewis goes to get a job, and the potential employer runs a background check and finds the arrest record and in fact several felony convictions and things like that from the wrong-doer's background. So, that's a completely different situation. The solution, which I don't know that we're going to get into solutions just yet, is a very different situation. At that point, Scott is in a position where all he can do is clean up more in the sense of a credit reporting clean-up, as opposed to hoping that he doesn't end up in jail.
MR. ARTERBERRY: Werner, Sylvia describes, I think, one, just the threshold problem that police officers have, and that is at that moment, when they're confronted with a possible arrest situation, or at least they have a traffic stop, some incident that requires that they identify an individual. Today, and we're not going to ask you to take us five years from now, but today, what does the -- what does the officer have that he or she can use to try to ensure that we have good identification of the individual who is the subject of that stop or arrest?
MR. RAES: Well, first of all, I can say that I can greatly identify with victims, especially this gentlemen. And I, Jack, at LA, we at law enforcement like to put a high integrity on our jobs and on our oaths, and even one arrest of false circumstances is inappropriate, but I do want to say that in -- with Beth Givens and her surveys and some of the other organizations, you know, I've done some informal surveys, I don't have any, you know, statistics like a lot of them, but through the International Association of Financial Crimes Investigators, which is a world-wide organization, I've done sort of an informal survey as I'm on their executive board and kind of asked how great is the scope of this problem. And what I've learned, again, very informally, is that this is a very minimal, now again, that's not to discredit or to minimize the fact that it happened to one individual, that one is too many. I will agree with Beth that the problem is slightly on the increase. I think getting more directly to answer your question, one of the things that the investigator -- I'm sorry, the officer at the time of the stop or the contact has is what we perceived to be identification in this country, which is the element driver's license. And unfortunately, the driver's license has nothing to do with identification in the United States of America. That's a very bold statement, but in all 50 states, that driver's license that we just automatically reach for when people ask for identification, is a certificate that guarantees that you're certified, capable of operating a motor vehicle. And that's the only thing that that document, in all 50 states and Puerto Rico, signifies. The driver's license has very little, if any, validity as a form of identification, due to the fact that when you apply for that document in all states, that driver's license is never -- I'm sorry, the human being is never linked to anything prior to it being issued. So, what happens is, your driver's license is issued based on primarily a birth certificate, which I could sit here and give you a seminar of 200 ways to get a birth certificate with signed seals, et cetera, they're embossed. So, there's a complete breakdown at the state level with what the officer is being presented, and this goes directly to answering your question. He's presented with this document, the element driver's license. We've all been imprinted like ducks since birth that this is valid ID. Well, the police officer is just like a human being, he's like your eye, and he's been given this document and he's been trained since the academy to rely on this thing. So, he's looked at it, hopefully he's conscientious and does a descriptor comparison. Hopefully if there's a warrant, he is going to check routine numbers, perhaps a social, perhaps a driver's license number, it could be a criminal history rap sheet number. There's a lot of things that law enforcement officers can check, but the heart and soul of this whole discussion and to answer your question very directly, back at the initial point of transaction, what has to happen is a person has to be identified properly. And what we have to get to and aspire to is some form of biometric identifier. At that car stop for its citation, or in this case where the gentleman had to try to go to the court house and explain himself. You know what, if someone had taken a fingerprint as a form of biometrics or, you know, there are some futuristic things like retinal scans, I mean we can get way out there for the future, but right now the fingerprint is the best form of identity. I mean, if they had checked our fingerprints when we walked in this building, we could have easily been identified. At the traffic stop, to answer your question directly, take a fingerprint, we can compare that. That's the best form of human identifiers that are possible, and it makes this workshop go away, and it makes a lot of other problems in identity theft go away, if we properly identify people at the initial point of transaction.
MR. ARTERBERRY: Well, Joan, we have one suggested remedy here, but before we get into the remedies, let me ask you, you are in a department that is responsible for jurisdiction that is probably one of the more complicated ones, complicated multijurisdictions, because you have Virginia, Maryland and the District of Columbia, all in one relatively small area, which means that -- and you have a lot of international traffic in and out of the Washington, D.C. area. So, I would imagine that your officers are confronted with perhaps some special problems in trying to make positive identifications.
MS. LOGAN: It is complicated because we have multijurisdictions. The plus is, we also have good communication between jurisdictions, because we are relatively close. We're not a rural department. So, that is actually to our advantage, because we send information, teletypes to each other, daily, which is read on roll call. What would be of assistance is if we shared the information through roll call education, through interdepartmental notifications if we identify that someone has been a victim, and we can share that. We share information literally on just about any subject you can imagine, criminal subject, and traffic. So, we do have a good communication flow and that does help us. The problem you have, this is not a new thing. People have used other people's names and dates of birth when they have been stopped for many years, it just wasn't called identity theft, it was your brother, it was your sister, it was your cousin that knew your address. This is not an unusual thing. This is unfortunately now a growing problem, but there are many things we need to do. MVA, motor vehicles, sells your information. We need to -- we need to do biometrical would be great, but we also need to limit the information flow down to those individuals who are trying to obtain your identity. There are easy steps, if we go in that direction, that would assist us, and I agree, as far as the warrant goes, we have an obligation, and we have the ability to contact D.C., Virginia. If we stop someone, and we have a warrant, it comes out that there's a warrant, we go many steps deeper. If things aren't matching where they were allegedly committed the offense, the physical descriptors, things like that. So, we have to dig deeper. And we have to educate ourselves and the citizens, the victims, to force that officer to dig a little deeper, to ask those questions, especially when they make a traffic stop and the person doesn't have ID, because that's a big red flag. That means they're already either they just left a home, which does happen, or they're already planning to give you false information. You've got to dig deeper before you start writing that citation, then you become a failure to appear, and an innocent person is victimized. So, there is many steps to this, but not very difficult, some of them.
MR. ARTERBERRY: We've heard from our panel, I think some of the dimensions of what happens when we get this misidentification, and it's intentional, and when it begins to interfere with someone's life and reputation. The main thrust of this panel, however, is not just focusing on the problem, but how do we clear that record, what steps could be taken by the individual or by people, by governments, by other -- by officials who can help that individual restore his or her good name, and eliminate what can be, I think, we would all agree, a huge -- not just an impediment, but a huge handicap in trying to pursue careers, if we know that there's always the possibility that one of these arrests or some report of an arrest or conviction can pop up in a background investigation. Let's look at that now. What can we do, we understand that there is this problem, what can we do to begin to take steps to clear it. I'm going to return to Robert. He's the person who certainly has the first-hand experience. Robert, what's your view on, as you began this process, you've done a good job of, I think, as best you can, of trying to find out what the dimensions of your problem are, and you may not ever be able to get the full feel of that, because some surprise may be lurking out there, but what did -- what do you think is the most important thing you can do, at least initially, to begin to contain that problem and get your good name back?
MR. GREER: Initially, I know the law enforcement is too strung out, they've got limited resources, and growing crime. So, law of averages says that they're going to be spending less time on some cases and more time on the more important cases to correct those. And my case has been seen as a very low priority case. The dollar volume is very minimal. The speeding ticket, oh, well, we'll just drop that and make that go away. The warrants we're still working through, but two points -- one point definitely that I need to make, is this person, this perpetrator was arrested the day before I learned my identity had been stolen. He was arrested for opening an account with my name, my social, my date of birth, at a furniture store. They arrested him on charges that I still don't know what they are. If that officer, that detective, who arrested this gentleman, using the term very lightly, he knew my identity, but he didn't chase me down. He didn't ask the question where is he, does he exist. He just made a very brash assumption that I was a total fake identity. And that one act alone could have changed the whole story. If that officer had chased me down, and given me documentation as such, I would have been more than willing to help prosecute him. And I'm still trying to find a way to prosecute him again on this other stuff.
MR. ARTERBERRY: Well, I think you've given the -- particularly the law enforcement members of this panel something to think about. Let me invite any of them, do you see something that either is built into the process, the arrest and reporting of an arrest, and in a records check that should you face, and should, I think, trigger on the part of the booking officials, some other step, some other action to take to ensure that they have the right person, or that some misidentification may have brought another person into it indirectly.
MS. LOGAN: If I could just make a comment. Defendants have given aliases, false dates of birth, false social security numbers for years, and unfortunately we've gotten so used to that, I think we don't take that extra step and see if there's a real victim. When it all matches, a name, a date of birth, a social security number, the officer should dig a little deeper and contact that victim. It's something that we can educate the officers so they understand that aliases, yes, we have to record those, but there's more to it. There's a person that's attached to that alias, it's another person who has been victimized. Luckily now with identity theft laws, that is going to help us tremendously. We have a tool now. In Maryland, we do have that tool, but we've got to educate our officers to make that extra step, because there is a person attached to that information that that person has given us that's false information.
MR. RAES: If I could. In Anaheim, and most of California, what we're ascribing to do is to run everything everybody that is booked through what we call the Cal ID system, it's a fingerprint system. So, we're not quite there yet, but everybody that would be picked up from shoplifting to homicide would have their fingerprints input and it would match in most cases, because we have not only criminals in our databases, we also have taxicab drivers, attorneys, et cetera, et cetera. There's a large segment of the population that have their fingerprints on file. A lot of good citizens for legitimate purposes have to be fingerprinted in professional capacities. So, we would search the files forensically and try to make matches in most cases. And that's what we're ascribing to. We're not there 100 percent yet, but that is the goal, so that everybody booked would at least be checked that way.
MR. GREER: What would happen if the person being booked was using an identity fraudulently, would that identity be checked out?
MR. RAES: Well, for instance, let's just take an example, let's just say you're an attorney, so you're a good citizen and your fingerprint is on our files as an attorney. So the person who is now impersonating you is picked up for something minor and he tries to use your name. He goes through the system with your name, et cetera, et cetera, when he's fingerprinted, it is going to red flag and say wait a minute, it's not matching up biometrically.
MR. GREER: When my person was arrested, they knew he was using a fraudulent identity and he was booked under his own name.
MR. RAES: Under his own name?
MR. GREER: Under his own name.
MR. RAES: Well, it seems evident that they should have done a little follow-up investigation. It seems evident that they should do that. That's all I can say.
MR. GREER: I was just curious.
MR. ARTERBERRY: I think we need to understand why you have instances where you have an individual that is arrested, that individual may use a false or try to use a false identification, and then be caught in a lie, and yet not have follow-up on the person's name who has been -- who was the subject of the attempt. Until recently, and I say the past two to three years, most states did not have an identity theft statute. There were various laws that dealt with false identification in some ways, but what we can call the modern ID theft statute, really is something that has occurred over the past two to three years in most states. The federal law is not yet two years old. So, I think several members of this panel have talked about education. There certainly is need for education on the part of the public, for the public to be aware that these things can happen, and perhaps to take steps just as we do credit checks, maybe we should do background checks from time to time. But I think there also has to be awareness for those of us in the law enforcement community, that because we do live in society that is more complex, where identification, our face-to-face dealings are becoming less and less frequent and we're becoming much more comfortable with casual identification. We are not really careful on that. And I think when that enters the law enforcement realm, we see that the possibilities multiply for misidentification, especially where someone is doing it intentionally. But, Jack, I think let's take it back to the Los Angeles area, because you have, I think, perhaps in terms of just raw numbers of cases, you probably have the largest inventory of identity theft cases in the country, of any one jurisdiction.
MR. JORDAN: Yes.
MR. ARTERBERRY: Do you think it would hamstring the efforts of your investigators if in each instance when you find that someone is using false identification, you try to track down that individual whose name was used wrongly, and tell them, by the way, someone tried to use your identification in a recent arrest? Is that practical?
MR. JORDAN: Well, you've hit on a number of things, and so has Joan, and so has Werner. I think my personal thing is you're dealing with two things. One is dedication to duty on the officer that makes the initial contact. Also, self-generated activity. You want to have someone with initiative that's going to take that one step further and absolutely ensure that they have the right person in custody. I've been doing my job for 29 years, and in California, we have a law that's called false impersonation, and it's 529.3 of our penal code, and it deals directly with the criminal aspect of identity theft, and it's been on the books for a long time. The nightmare is the person that gets arrested innocently, that's one instance, and we have a law that's in the 850s of our penal code that deals directly with what's called factual innocence, and that is where you apply to the court of jurisdiction where the original crime occurred, and you present evidence in front of the district attorney and the judge. The judge deems that that individual is factually innocent, and then it directs the state to eliminate every piece of paper that deals with that crime from the records system. To answer your question again, though, would it hamstring the officers that make the initial contacts, no. Most of the deputies that I have dealt with in my career as a sergeant since 1981 and a lieutenant since 1986, there's a check and balance, like I said yesterday. Every person has to do his or her job, and when that officer comes in and gets that arrest approved, if it's a misdemeanor, it's presented in front of a sergeant. If it's a felony, it's presented to the watch sergeant, and then the watch commander, who is usually a lieutenant. We have to ask the hard questions. We have to ask what follow-up steps did you take to ensure. Generally speaking, if you have a person like Robert in the booking cage at a sheriffs station in South Central Los Angeles, they're kicking and screaming to say this is not me, get me out of here, I want to get out of here. Fortunately, in California, they do have bond systems, even if you do have a warrant out for your arrest where you have failed to appear, you can get bonded out. So, unfortunately, a lot of us don't have $600 sitting in our pocket to go down on Saturday night and fork it over to the cops to get you out of there. So, self-initiated activity and dedication of the person to get the right person. And going back to the golden rule. I testified August 30th, Sheriff Lee Baca our sheriff of Los Angeles County and Senator Diane Feinstein, held a Senate fiduciary -- judiciary hearing, we're stuck on money, and anyway, we dealt with just exactly that, where the federal government can go, where the State of California and the individual states can go and where the individuals have to go. And hopefully we can do what we said yesterday and let the state carry the victims and minimize the problem.
MS. ANTALIS: John, if I can ask a question.
MR. ARTERBERRY: Surely.
MS. ANTALIS: Is there a way to separate the victim from the imposter, because at that point doesn't the police need to know that there's a man out there using Robert Greer's identity and using that as an alias? So where that is warehoused and later used for background checks and things like that, how do we make sure that we keep the criminal's information out of Robert Greer's information, but keep Robert Greer attached to the criminal? Do you see what my question is?
MR. McLAUGHLIN: John, I would like to add a comment to that if I could, amplify Sylvia's remarks and perhaps hear from law enforcement in response. I would like to add a couple of points to some of the remarks I made earlier concerning Rob Greer and I think they go right to the points that you're raising and the points that Werner mentioned earlier in terms of education, as well as Joan and Jack in terms of law enforcement doing their job. In Robert's case, and he's mentioned two cases. He's mentioned a case that arose out of a place called Avon, Mass, where the perpetrator was actually arrested for trying to open an account. That's a little bit separate from what we're talking about today in his cases because his case that brought him the most grief, the most trouble and the outstanding warrants arose out of the use of a fraudulent Massachusetts driver's license, and it was so fraudulent, and I have a copy of it here today, with his photograph on it, the perpetrator's picture. The signature was a typed face from a computer, it's fairly clear that it's not a signature at all, it's just a font from the word processor they used to create the fake ID. But when he perpetrated his crime, he used the fake ID to enter a gymnasium establishment, a health club, and when he entered the health club for a day pass, they took a photocopy of the driver's license as his -- as has been well noted this morning, routine identification, and valid ID. Now, they took that, he went into the health club. While he was there, for not health purposes, he entered the locker room, he went into someone's locker which was unlocked, took a credit card out of the wallet, substituted another credit card in the place where the other was, put the wallet back, although not as -- in the same condition it was when it went back in. And then exited the establishment with the new credit card and right away, within minutes, went to proceed and make a purchase. We know this. What happens, and this gets back to the point that you were making. What happened was this, is that he went to another establishment, made some purchases with the card. The individual who was working out at the health club went to his locker, said geez, I didn't hang my clothes up in the same place, this doesn't look right, and he looked in his wallet, found the missing credit card. Immediately went to the front desk and said I'm missing a credit card, called his credit card company right away, and they said you're too late, someone has just made a purchase ten minutes ago. So, he had the presence of mind and the health club did as well, they said it must have been stolen here, who has been here today. They went and they called the establishment, they were able to locate it and the police were helpful in this respect, and in short order, find out where the perpetrator had made the purchase on the recently just stolen credit card. In any event, the perpetrator left, he was gone and he had left with the merchandise, it was $250 in this case, and all they had was a photo of a driver's license. Now, the point here, and this gets back to the comments that were made earlier. On the driver's license, the only information they had was a name, they had a false address, however, they had a correct date of birth for Robert Greer. And most importantly, for this discussion as well as for the Social Security Administration discussion tomorrow on the social security numbers, they had his social security number. And that's the tracking ID that will follow, and if Rob is haunted by this for the rest of his life, it will be because of that social security number that to some extent may be inextricably linked to those complaints. Now, the arresting officer, and this moves on to your point, the arresting officer took a copy, I say the arresting officer, the processing officer, or detective, took a copy of the license and used that license alone, which had no other information than a photo, name, date of birth, and social security number, and prepared the criminal complaints against the perpetrator. Now, the perpetrator was of a different race, and that helps us in this case, because it makes a little bit more clear that geez, it couldn't be, it couldn't be Mr. Greer, they just don't look alike at all. However, in the complaints that were prepared by the police department, there are three identifying pieces of information, there's a name, there's an address, which turns out to be incorrect, however, the same address that is on the whole line of fraudulent credit cards that were obtained in the year preceding, and the other two identifying pieces of information are what, date of birth, and social security number. Nothing else. That's enough, however, to trigger a notice to the New Hampshire DMV that's sufficient to suspend Robert's driver's license, as well as to get him into the federal warrant computer to deny him the ability to obtain a firearm on the warrant -- when the firearm check is completed. So, responding back and following up, Sylvia, on your point, we've got a database here at issue in terms of tracking numbers through the system, we've got merger issues, and we've got police -- we've got some police departments, no doubt due to resource-specific problems, and a lack of perhaps education about the seriousness of this, who aren't following through. The system is breaking down.
MS. ANTALIS: Well, I think it's a catch-22, though, because we want law enforcement to be able to put in the wrong-doer's alleged social security number, and while it says Robert Greer, to ultimately lead back to the wrong-doer. I mean, we want to add that information in as an alias so that we know ultimately who committed the crime. However, that doesn't get Robert away from the criminal. And when background checks are compiled and things like that, Robert will always be strapped with the wrong-doer's wrongdoing, in addition to the criminal himself. And I just don't know if law enforcement has a suggestion to keep it in for the good purposes and keep it out for the bad purposes.
MR. RAES: Sure, I think if I could comment, I think you've clearly just in great detail illustrated what the problem is. And the problem is, and it's not just through law enforcement, it's throughout our society. And the problem is we are incorrectly relying on account numbers, social security numbers, and all of these numbers, which is step two. Step one is, affix a human being to a number. The number is second, and what we are doing as a society, whether it be in these arrest situations, applying for a credit card, applying for a loan, we're skipping over step one. And we're doing it as a society. What we need to do is, and your example, if this crook had stolen the credit card out of the gym locker and gone out and used it, if he had been mandated by federal legislation, local legislation, whatever, to provide a biometric identifier, so that he would have had to be properly identified, it would not have been this gentleman here, okay? It would have red flagged it. The transaction wouldn't have gone through. Possibly, ideally, an arrest would be made at that point. It would have stopped the whole thing. We're relying on too many numbers in this society in our systems, okay? Systems are great, high tech is great, but we have to get back to basics. We have to get to step one, identify human beings at each point of transaction, at the booking point, at the point of application for the credit card, when you go apply for your gym membership, when you use that credit card. We have to somehow identify human beings.
MS. GIVENS: The thing is, in some respects the cure is worse than the disease. I think what you're talking about is a society in which we base every day transactions proving who we are by giving a fingerprint or an iris scan and I think that brings up some pretty serious civil liberties implications if you look at what could happen when you've got, you know, a fingerprint shopping for grocery, a fingerprint at the ATM, or an iris or whatever. But I wanted to go into just a little bit different direction for a couple of moments, if I could, it's related to background checks, but since this is a Federal Trade Commission hearing, I wanted to bring up some of the problems with information brokers, and the fact that this information is getting out from criminal records and from law enforcement into many, many different databases that are on the commercial marketplace. What we're seeing a lot of, and it's not a -- we're not seeing it through the law enforcement, which is where we've been focusing our attention this morning, but we get called from individuals who say I'm perfectly qualified, I can't find a job. I go to interview, interview, interview. I can't find a job. Do you suppose there might be some information out there about me. And what we got started on this path in California was when we got a call from a man who had told us that he had become homeless for about a year because he went from interview to interview to interview, wasn't getting jobs, and what he had later found out is that the person who had stolen his wallet had used all of his IDs and been arrested for shoplifting and larceny and had always been released, but what bothered us most is that none of the employers, none of the employers told him that the reason we're not hiring you is because we see that you have some criminal activity here. And there is the Fair Credit Reporting Act, which thankfully now says that the reporters have to report the employers. The reporters have to report the employers to the applicant for turning them down for a negative reason, but I think there are some loopholes here. One is that I think that the employers should give the report, the background check to the applicant every time, whether or not it's adverse, because many of the employers will say well, we decided not to hire you because there are many people more qualified and they'll try to shuttle that criminal record aside, but that's probably what was in their mind in not hiring that person.
MS. ANTALIS: Actually that's exactly what happened with my client, Scott Lewis, is that he went from interview to interview to interview and simply could not get a job. And upon hiring people who know what's going on and eventually hiring a private investigator, he found the arrest record, several felony convictions, actually the most recent being a murder arrest, and no one was telling him why he wasn't being hired. And I think that touches on what Beth was going to say about information brokers. Not only did it cause Scott a problem in getting a job, we have no idea where the information is right now. I mean, there's no way to tell who has tapped into the database originally and who is reselling it. There's no mechanism to track that information to put a stop to it. So, you know, we can talk about prevention, you know, how do we get criminals to stop stealing people's information. I think the real question is, how do we stop letting them use the information, and how do we reign that information in so that it's not causing any damage to the individual. And until we get to a point that we track every single step of that information, and who is getting that information, and what are they doing with it, we're not going to be able to help people like Scott. I mean, Scott's information is out there with a lot of negative stuff, and we don't even know who to contact to say that information is false, and dispute that information with. And that's a very big problem.
MR. RAES: You know, Sylvia, I would like to comment, I think we're at an age in high tech, and I think we ought to try to be prudent and safeguard our information, I really after 28 years, 15 of them in this ID theft area, I really am coming to the conclusion that I don't think we're able to build a picket fence around our information anymore.
MS. GIVENS: But you can do disclosure and notice. And see the thing is we can have a lot of early detection of these things if the employer is required to say I use X, Y, Z database and this is what I found out about you. We have a problem of there just isn't adequate -- there is a lot of noncompliance I think with the Fair Credit Reporting Act in this whole area that I think needs to be looked at very seriously. If these individuals, and by the way, more and more background checks are being done on applicants. It's very, very common. They're cheap. You can go on the Internet and do a background check for $40, and that's another loophole in the Fair Credit Reporting Act.
MS. ANTALIS: And perhaps they should be. I mean I'm not advocating that employers don't do background checks, because then I'm going to be the attorney who sues them for negligent hiring, so I'm not suggesting that we should build a picket fence around our information, but I think since our information is out there, we should know who has it and what they're doing with it, so that when there's a problem, I know who to dispute it with.
MR. RAES: Agreed.
MS. ANTALIS: And under the Fair Credit Reporting Act, we require for credit information, and I'm going to argue that we require that for criminal information, but that's completely different.
MS. GIVENS: Adverse or averse, everyone should get their background check, unless there is some sort of exception, like we are investigating you, you're on the job for possible wrongful conduct on the job. But it shouldn't be just if they make a negative decision, it should be all of them.
MR. RAES: But that information I think needs to be tied again to the human being. There are so many different ways and so many different systems out there, and yes, there needs to be disclosure, there needs to be accountability, but there also needs to be assurances that this is tied to the human being that you're looking at.
MS. ANTALIS: I think it's going to depend on whether you're talking about the actual criminal act of stealing someone's identity versus the inadvertent identity, and I would agree with you that when you have a wrong-doer who steals someone's every bit of information that yeah, there's going to be -- we're going to need some other pieces of information to tie it to the individual, but in my experience, the inadvertent theft of someone's identity is far more rampant than anybody realizes. By allowing partial information to be put out there, just a name and a social security number, or just a last name and a social security number, you could have merges of information which appear to be theft of identity, when really it's just been the miskey of information.
MR. RAES: But Sylvia, that's again what I'm saying, the mismerges can't occur if you have proof positive tying information, numbers and things to a human being. The mismerges cannot occur.
MS. ANTALIS: Well, I would agree with you, I don't think that we necessarily need to get to thumbprinting every single person in every single transaction. I think if we required, you know, first, middle, last name, date of birth, social security number, on every single transaction, or transactions that would be reported on, that's going to prevent the mismerges. So, I think the only thing we're disagreeing on is I don't think the biometric step is necessary to curb inadvertent theft identity.
MR. RAES: If you hear from the victims here, ask the victims who have been through it whether that will work. After they went through it, no. Beforehand, everybody wants to say, you know, we want our liberty, we want our freedom, we don't want our privacy invaded. And I could sit here and make the case for an hour about it versus whether it's education or an invasion of privacy, I won't go there. But I think we need to generally philosophically achieve a balance. We want to achieve a balance of privacy versus proper identification, and right now we are so far to one end of the pendulum, that's why we're having this workshop. And all I'm trying to do is propose one solution to bring it back towards middle ground.
MS. ANTALIS: And I understand that, and I understand what Robert is saying, too. And I prefaced what I said by, you know, if you actually have a wrong-doer who is stealing someone's, you know, targeting Rob Greer and taking his information, it's not going to help. But I think that if we completely underestimate how much the inadvertent theft of identity that's going on, that's sort of what my comments are talking about, if we have an exact match of personal identifying information, mismerges won't occur, and the actual damage to the average consumer would be less.
MR. GREER: Right, the mismerges would not occur, but the information that is keyed that got me into trouble and the whole reason I'm here becomes more widely available.
MS. ANTALIS: Sure.
MR. GREER: To everybody.
MR. ARTERBERRY: And, Robert, I think one of the things that ultimately you want is that you would like to see that there are steps taken that preclude this from happening to others, and happening to you again.
MR. GREER: Um-hmm.
MR. ARTERBERRY: How do you get your good name back, and ultimately it comes to that, and Beth, there is recent legislation, Jack just alluded to it somewhat out in California, that aims to try to take those steps. How can you help?
MS. GIVENS: Well, I mentioned the case of the homeless man who came to the Privacy Rights Clearinghouse, and that really opened up our eyes to the -- the real problem that one person had and the potential problem that a lot of people had. He suggested that there are -- he tried to do an awful lot of his investigation, and he ended up talking to so many different law enforcement entities and different kinds of governmental agencies, he said I think we need to get everyone together around the table and talk about this issue from everyone's perspective, all of the stakeholders. So, we formed a task force in California to an informal kind of self-called task force. We've got the District Attorneys Association, DMV, LAPD, Los Angeles Police Department, Los Angeles Sheriffs Department, including Jack here, the Attorney General's Office, of course they have the criminal records database, the Judicial Council of California, which is the administrative environment, the courts, two victims, including Bronte [phonetic], the individual I've been telling you about, and then two consumer privacy advocates. And we've worked towards first we studied the issue, what needs to be done, and then we came up with some legislative ideas, which we did introduce in the legislative session this year, and the bills did pass. One of the bills expands upon the existing statute and sets up an expedited court process for individuals to clear their names where they can start at their own jurisdiction. I have a feeling that most of these criminal identity thefts are multijurisdiction, and people don't know where to go first. So, this at least says the police department is the first stop. They don't have to do the investigation, but they can take the police report, and then send that person along to whatever step they need to take next. And of course that will require a lot of education, and training at that point. And the other -- and then they can go through the court process. The Judicial Council is coming up with a form that people can then use, and once they are determined that they're factually innocent, they get a certificate of some sort, and also the record is expunged. The second bill is kind of interesting, because it gets to that background check problem that I've been talking about. The -- and this is a bill that was backed by the Attorney General's Office, and they're going to establish a database that's kind of a companion to their criminal records database, and this is a database that people who have proved that they have a wrongful criminal record. And so let's just say they are stopped for that broken taillight, they can say check this database, here's the 800 number that you can call, it's in the Attorney General's Office, here is my PIN number, I give you permission to get into my record. They can also do this if they're applying for work, and they're going to say look, I know you're going to do a criminal background check, you're going to find that I am associated with this crime, either as a key name or as an alias, and here's my PIN number, I want you to know that the state of California has a database and you can check that out and you can get the true record that I am the one associated with that record, but it's not me. And I think that those will help a lot. We still have a lot of work to do in our task force, because those just attack a couple of the issues. We do think the information broker is one that deserves a lot more look and the background check process.
MR. ARTERBERRY: Unfortunately for Robert, though, he doesn't live in California.
MR. GREER: Absolutely.
MR. ARTERBERRY: Shane, what have you told Robert that he needs to do to try to protect himself in the event he is somehow associated with this information, this misinformation about his criminal record?
MR. McLAUGHLIN: Well, I -- that's the most important question we've got, the most significant one that Robert's facing, excuse me, right now. We've just recently cleared his criminal records, and we were able to do this inside of about two weeks. Most of it was by telephone, and also one personal appearance by me at the originating police department that originated the complaints, the bench warrants against him. But it wasn't easy, because of all of the probably 40 or 50 or 60 calls that I had made to authorities, three were returned. Yeah. The next step for us are to determine what databases still have information about his record -- about the complaints that were against his record, and I say against his record, I'm returning again to that social security number issue. In his case, I see that as the core or the crux of the problem, because the only other identification number was a name and a date of birth, but it was a name with a middle initial, the perpetrator didn't have the correct middle name, and so names and date of births may be coincidental, but the social security number was our central problem. So, we'll need to track down, and I don't know the full answer to that question, John, in terms of where we go now, and that gets back to the comments made by Beth Givens and the good work that her organization has done in California, we need in our state, and I would suggest on a national level, a protocol that's in place for both federal law enforcement as well as local state law enforcement. It could be a protocol, a guidance issued perhaps by the FTC in conjunction with its own program here, reporting program for credit card theft, for consumer fraud, but a protocol that's disseminated to the different law enforcement agencies all the way down to the local police department. So that when someone presents himself, like Rob, or like myself as counsel for Rob, or when the case comes in the office in the first instance, you know where to turn, you know what the steps are that you're going to need to follow, and you also know that there are 12 different state, federal and local criminal databases in which the information is likely to be stored, including possibly INS computers. And that you need to then obtain, as was suggested by one of the victims yesterday, it might have been Eric Graves or Joe Genera, that we need to have some sort of, if you will, a safe harbor letter or document issued from a court that ought to be perhaps from one jurisdiction or one court, or perhaps from one entity like the FTC. And I just suggest that as one possibility. That the individual who has been the victim of these offenses, these crimes, can place in his wallet, in which there's a database, like as the database in California is maintained, which access can be gained with a PIN number, and that letter can be given to someone arresting him on a warrant from we'll say Alaska, when we're here in New Hampshire or Massachusetts, or D.C. And then that the arresting officer can say all right, he can call, the case will be flagged, and right away he will know that this is a probable victim of ID theft, and that that other warrant is probably or may not be him, but at least he's then been given reason to believe that there's an issue and doubt exists.
MR. RAES: Shane? One of the things I want to point out from law enforcement perspective is that there's an organization that's an International Association of Financial Crimes Investigators, and we network with the federal law enforcement, local law enforcement and private industry and credit card companies, financial institutions, throughout the world. And it's a very strong partnership, and we've had a lot of success, and lately we're focusing a lot on identity theft prevention and how to assist victims. And we have annual training conferences and such, and I know the Postal Inspection Service has taken the lead federally in identity theft and been very instrumental, they have put an 11-minute video out that's available in trying to train law enforcement folks. Another thing that we do to help victims, is we partner with like the credit unions -- credit reporting bureaus, in particular Trans Union has a victim fraud -- fraud victim assistance center, and what we do is we refer people like Robert to them, and what they have been doing and very, very successfully is helping to run that credit report, not only put flags, but to help clean up with situations of criminal identity theft. And when I teach other detectives throughout the country, I actually will point victims in that direction to try to get that done on what I call the civilian end of things. Back to the criminal end of things, I think what we do need to do, and I think I probably concur that we need some sort of a protocol, some sort of a clearinghouse, because unfortunately in our country, what we have is so many small jurisdictions, we have so many county sheriffs, we have so many law enforcement agencies, that it is hard to integrate all the systems. And I couldn't sit here, quite honestly, after 28 years and tell you, Robert, here's a list of 20 places to call to get your name and number off of there, you know. I'm kind of ashamed to say that, but that's the truth. I'm really, after 28 years, I'm not sure that I would have every database that he would need to go to.
MR. ARTERBERRY: We had a question out here. Yes, sir?
MR. MEISSNER: Yes, sir, Gary Meissner with the Office of Consumer Credit Commissioner in Texas. I'm Gary Meissner with the Office of the Consumer Credit Commissioner in Texas. I'm about to raise a human cry here for half a second. I read a document recently and have studied it over the years that says the right to life, liberty and the pursuit of happiness. Mr. Greer's life has been put in the tank. His liberty is pretty well stopped. And his happiness is pretty well down the tubes, also. Back to what the law enforcement officers are saying, what ties my identification, if it's fingerprint, what is -- what makes me unique to the rest of the world? And I'll go with what the officer says, I'm sorry about civil liberties and everything else, but the same way is, what is going to identify me to the world? Mr. Greer's print would identify him to the world. What can we do to augment that and go with it?
MS. LOGAN: I have one comment, just we need to make people less vulnerable. There are some states who use your social security number as your driver's license number, your soundex. This isn't good practice. You have health care providers who use your social security number as your number. And you provide that readily to many places, and that can get out of control if we don't get a hand on it. So, until we can get to something with technology and fingerprints, at least let's make people less vulnerable by changing those type of practices, because they are not -- right now, it is just not good for anyone. It is not practical.
MS. ANTALIS: I agree completely. The over reliance on the social security number is what allows the dissemination of the information. In many instances, that's the tie-breaker. If that matches, people just assume that well, gosh, everybody only has one social security number, just because the first names are a little different or the last names, there must be some logical reason for that, and that's what allows the information to be merged together and disseminated throughout the system. And then once it's out there, you have no control over it.
MS. GIVENS: Werner mentioned that you can't put picket fences around information. I'm suggesting that if we were to have a nation-wide, all-encompassing biometric system, it would need to be done within some kind of regulated system where there are picket fences put around the uses made. Because there's a classical principle in privacy, information that has been gathered for one purpose shall not be used for another purpose without the consent of the individual. One of the problems with a mass biometric system, we will see that information used for other purposes. If we can put picket fences around it, I would be more inclined to be forward with that.
MR. ARTERBERRY: I see three other questions, but we are exceeding our time. Do we have time for those questions? We'll try to squeeze those in. MS. FRANK: This is just a brief one. I sat on that task force with both Jack and Beth, and one of the things that we did was we were able to last year amend one of our penal code sections, 530.5 to include since many -- I was a victim of identity theft and I am an alias for Tracey Loyd, who is my imposter. So, what we did was we got the penal code changed so that when you arrest someone, if someone is arrested as an imposter, the record must reflect that the person is not an alias, but a victim, and that's put into the field, and so that is one thing that has helped. My suggestion is that that should happen not only when it's civil, you know, identity theft, but also when someone assumes your identity and they are arrested for criminal identity theft, that the field should also reflect that the alias was really a victim, a real live victim. That would help a little bit to start, and we've done that in California already. So, I also agree, I mean I know Scott Lewis because I referred him over to them, and I lived it with him for ten months, just trying to clear up his record, and he was just devastated, could not get a job. And I think the real issue is who is selling these databases to the information brokers who are then selling it. We could -- I mean I talked to the CEO of Open, who said I can't tell you who we sell this data to, so all of the employers that found out that Scott Lewis was arrested for murder never got that corrected, and we don't know who it is, and thank God for Sylvia, who is now taking it to Court. But I must tell you that's a huge issue.
MR. JORDAN: Mari, and I agree with you and I have talked at length with you. I spoke with you, Shane, yesterday, about Robert's case?
MR. McLAUGHLIN: Yes.
MR. JORDAN: Years and years ago, and I'm not that computer literate, there was a statement that said garbage in, garbage out. My first thing to anybody out there that deals with this is to go back to the origin. You told us that the driver's license had a typed signature on it, the picture is of another nationality. My thing would be if anybody came to me and said what do I do, Jack? Street cops have common sense, and we learn very early in our careers, there's two sides to every story. I would be at the desk, and I know it's inconvenient for people to travel across town or whatever. I would go to the desk and say I would like to speak with the watch sergeant. How in the name of God did you do this? You took somebody who is one ethnicity and you gave this record to my client, and look at this. I don't want to sue you, I want to know why, just explain this to me, how did you do this and take this license and put this record on somebody.
MR. McLAUGHLIN: And Jack, that's what I had to do.
MR. JORDAN: Eventually, yeah, and it took a long time.
MR. ARTERBERRY: I have another question back here. One more after this and I think we're going to have to finish.
MR. McGEE: John McGee with Computer Sciences Corporation and I have heard a lot of discussion about the validity of social security numbers. I just want to make a small comment, hopefully it will come out tomorrow. Unlike you credit cards, a social security number is not a check digited number, and any nine digits could potentially make a valid social security number. So, I think that as it's been pointed out here, that we rely an awful lot on the social security number as being an accurate number, as I said, any nine digits could make up one, it could be yours or mine or anybody else's in the country and I think you need to keep that in mind.
MS. ANTALIS: That's actually my experience, and I think we will talk about this more tomorrow, is the fact that a lot of people in this age of information overload, being afraid, give fake social security numbers, just make them up. I mean people do that all the time. You know, they know that any nine digits will do, and with the over-reliance on social security numbers, once that's merged together, it's out there, and there's no way to track where it went or how to reign it in.
MR. GREER: And once that information is combined with a valid birthday and name, the name of that victim is --
MS. ANTALIS: Once it's merged, there's absolutely no record. If you start with two files, once they're merged, you don't know what the two files used to be. I mean you go from that point, and future mergers will be based on the inaccurately merged information.
MR. ARTERBERRY: One final question.
MR. THOMPSON: Joe Thompson, the President's Information Technology Advisory Committee. I wanted to pick up on the comment from the gentleman from Texas over here. Roosevelt identified four freedoms, and one of those freedoms was freedom from fear. We have fear back big time today, the victims have certainly exemplified that. It's a growing problem that has the potential to touch any one of us, any day. The President's Information Technology Advisory Committee, PITAC, is implementing a study in this regard that will be taking place from now through the next year. And we're calling it individual security. We're also doing a parallel study on national security, national security is very much in the public's eye. Individual security has not yet become such an issue with the public, but it's potentially even a bigger issue. I couldn't agree more with Werner about the biometric. Regardless of all of our other concerns, it's certainly the biometric that's put in jail. There's no way to get around that. The cyber identity is not the one that's put in jail. We have a spectrum that extends from privacy to security, and it all has to be balanced. Technology has to provide some answers. I'm afraid we're in the situation that we were with nuclear energy in the late forties when we didn't really understand the effects of radiation on human beings. We don't right now, the public does not appreciate the effects of the individual security that has been exacerbated by the information age on the individual. This is a serious problem.
MR. McLAUGHLIN: You know, as a personal comment to Mr. Thompson's remarks, and I heard his remarks yesterday in the form of a question. I would have to say that I'm being brought to the conclusion as well that although I've been a staunch privacy advocate all my life, I come from a conservative state and a conservative family, that I think that Werner's remarks need to be taken seriously in terms of the biometrics, and I think that we need to be exploring new options, because the current system of identification simply isn't working.
MS. CRANE: Thank you very much, to John.
MS. GIVENS: Actually, I'm sorry, I forgot to mention this earlier. We're putting together, one of the things we do is put together tip sheets or fax sheets for victims, where we've got a draft up here for a guide for victims who are victims of criminal records identity theft, and we are asking people's help, also if you're just curious and you want to read it, they are right up here in front of me and we will put them out back. If you want to help us, great, we would like to -- we would like to clear this up in the next couple of weeks, two or three weeks.
MS. CRANE: Thank you so much to John and the entire panel. Of course tomorrow social security is having a workshop on prevention and I think a lot of the issues raised today touch upon the prevention issue as well, so hopefully we will continue our robust discussion at social security tomorrow. Let's take a quick, really quick break, five, ten minutes, and we'll need to get started with panel 5. (A brief recess was taken.)
MS. CRANE: We have another great panel here today of experts. Jeannie Crouse, the bankruptcy counsel for the Federal Trade Commission is going to moderate this panel today, which will focus on another issue that we're hearing about on our identity theft hotline, and that is fraudulent recording of a bankruptcy filing in a victim's name. Thank you very much. We're going to run from 11:30 to 12:30 --
MS. CROUSE: 10:30 to 11:30.
MS. CRANE: Oh, really, it's that early? I'm sorry. 10:30 to 11:30, and then we will push everything back by 15 minutes after that.
MS. CROUSE: Good morning. As Joanna introduced me, my name is Jeannie Crouse, I'm the Commission's counsel for bankruptcy and redress, and I would like to take a moment to briefly introduce the other members of our panel here today. On my far right, is Mr. Tom McQuillan, an Assistant United States Attorney from the Eastern District of Virginia, which is located in Alexandria . To Tom's immediate left is Mr. Eric Graves, a resident of California who appeared on several panels yesterday. To my immediate right is bank -- I'm sorry, nonbankruptcy -- admittedly nonbankruptcy attorney, privacy expert, consumer rights advocate, Mari Frank. To my immediate left is Mr. Lee Barnhill, a senior attorney for FOIA and privacy issues with the executive office for U.S. Trustees. And finally, to Lee's immediate left, Mr. Cliff White, Assistant United States Trustee for the U.S. Trustee Programs Office in Greenbelt, Maryland. Before I begin, there are a few administrative, one administrative issue. There are various hand-outs in the back as you leave, you will not need them today for this -- for our very -- for our panel, but there are -- I just wanted to alert you to the fact that there are several hand-outs in the back on that table as you leave the room. Now, our panel has let's say the dubious honor of being asked to discuss bankruptcy and identity theft. Many people mistakenly believe that because individuals file for bankruptcy relief and therefore their perspective is that their credit is already, quote unquote, "ruined," there is no intersection between these two issues. But regrettably, that is not the case. To demystify what can be a very complicated and confusing world of bankruptcy, we have here today attorneys who practice in the civil and criminal context, identity theft victims and consumer rights advocates, and we will also be discussing the manner in which private information is collected in the bankruptcy system, and a current study that's being conducted by the Clinton-Gore Administration on that issue. Because this process can be very complicated and confusing, we're going to take a slightly different approach than that of the other panels. Our first two panelists are going to make a little bit more of a formal presentation with respect to the civil context of the bankruptcy system and with respect to the criminal context. And with that, I would like to ask Cliff White, who represents the civil side of the bankruptcy world, as Assistant United States Trustee, to talk a little bit about the way -- the bankruptcy system itself, the ways in which the United States Trustee Program has seen identity theft impact on the system, and approaches that the program is adopting to combat the problems. Cliff? MR. WHITE: Thank you, Jeannie. Let me start, then, with just a very brief and very general description of the bankruptcy system. The bankruptcy system is first and foremost a judicial process, and that means it's serious business. And that is a theme I think we'll see throughout our discussion of implications of identity theft in bankruptcy. Essentially the bankruptcy laws of the United States are designed to permit a person or a business that is overburdened with debt to be able to discharge or be forgiven most kinds of debts, or to change the repayment terms. And the first step in that process, the first and a key step for our discussion today is the filing of a petition, the filing of a bankruptcy petition. Because when that's done at the court house, instantly, and I mean instantly, there is an automatic stay, a court order, if you will, imposed that stops most kinds of actions by creditors to collect on debts. And most particularly, that includes actions to foreclose on a home mortgage. Now, in some cases, a debtor may have to give up most of their personal property to a private trustee who will liquidate or sell that property and distribute the proceeds to creditors. So, in a nutshell, that's sort of the bankruptcy system with about a 1,001 steps left out. But what's the purpose of the system? I describe it essentially as having a twofold purpose, it's both fairness and it's efficiency. Because to the consumer the bankruptcy system is designed to provide a fresh start, so that someone who is overburdened with debt can get on with the rest of their lives without being burdened by that past debt forever more. And for creditors it serves certain fairness and efficiency purposes as well, because it is designed to provide the most effective means for locating assets, liquidating assets, and then distributing those proceeds according to a scheme set out in the statute. So, more efficient for creditors than the so-called race to the court house to see who can get the first judgment against the debtor. Let me move on, then, very briefly to what is the U.S. Trustee Program? We are a part of the United States Department of Justice, and essentially we have the responsibility for the appointment of private trustees and for the oversight of bankruptcy trustees in bankruptcy cases. We have more than 90 offices in almost all of the judicial districts in the country, but we are not the Court, and we are not the private trustees who administer most of the consumer cases. We are, however, regulators of those trustees and debtors, and we're litigants who go into court to see that the bankruptcy law is enforced. In the legislative history that created us more than two decades ago, we were called the watchdogs of the bankruptcy system. Now, an important part of our responsibility is consumer protection, but by statute, we're a neutral party in a case. We cannot represent an individual. We promote the integrity of the bankruptcy system, and in doing that, we may directly benefit individual parties, but we're not a substitute for a victim's own lawyer, who can look out for the specific interests and problems of her client. Now, in addition to our civil enforcement responsibilities, we also make criminal referrals to the U.S. Attorney, and we'll hear more about that later. And we try to assist law enforcement in prosecuting cases, such as by advising them on bankruptcy law, or testifying in court as fact or expert witnesses. Now, as Jeannie said, in the bankruptcy system, in fact we do see many kinds of cases of identity fraud, and there are a number of different scenarios, and believe me, we don't possibly have time to go into as many as we could, but let me just identify three broad kinds of scenarios with an example maybe for each. First is the credit doctor scenario. Someone with a credit problem will go to a so-called credit repair service, and I know this has been an area of interest to the FTC as well in its enforcement responsibilities. But someone with a credit problem will go to a credit repair service, and a disreputable service among other things provide a false social security number or false identity to the client who then would apply for new credit under that false social security number. And then when that debtor, that client, falls behind on payments, she might file for bankruptcy under the false number. Now, why file for bankruptcy? Because in many cases, although a false social security number is being used, the address and phone number on the credit applications is that of the person using the credit card, and that person therefore has just as much an interest in trying to stop creditors from collecting and making phone calls as a legitimate user, as a legitimate credit user would have. And the victim, the real holder of the social security number may not become aware of the theft for years. We had a recent case in Greenbelt where the debtor, come to find out, had filed seven bankruptcy cases over nine years, using four different social security numbers. There are a couple of variations in the name, but the key to the fraud was the use of the social security number. And by using phony social security numbers, that was a way to evade detection for years by the Court, the U.S. Trustee, creditors, and others. The next example I'll give is the mortgage scam. Now, usually this will involve a con artist who promises to help a debtor stop foreclosure on a family home. And for a large fee, usually something like hey, what would be your mortgage payment to the mortgage broker or service, for that large fee, the scam artist will, among other things, file a bare bones bankruptcy petition for the client, a petition that doesn't have all the required information that Lee may talk about later, and that will cause the case to get dismissed. But again, because it is filed, the foreclosure will stop on the home, for example. And then the case is dismissed, and then perhaps with a new social security number, the case can be filed again, and again, and again. If you get the idea. The different use of social security number, evade detection, the automatic stay goes into effect, foreclosure is delayed, and there's a scam and there is a victim, two victims, the victim being perhaps the mortgage company, as well as the real holder of the social security number. We had a case within the last year in Greenbelt where the debtor was a real estate investor, and he and his wife filed six cases over six years using false social security numbers, and when we put him on the witness stand, he said that well, he really needed the -- what the bankruptcy court relief afforded him, because he was under capitalized, and filing bankruptcy was just as much a part of his business plan as getting the mortgage in the first place. The third and final scenario I'll describe is one you've heard something about already, I think, during the conference, the family member or the friend who purloins the social security number. And this might be done by a family member, an adult child, for example, who lives with the victim, in the victim's home, and maybe is responsible for making the monthly mortgage payments for the victim, and that adult child or friend maybe starts not to make those mortgage payments, and maybe runs up some other debts in the victim's name and social security number. So, again, with that key objective being for stalling foreclosure, bankruptcy will be filed. We had a case in Greenbelt I'll use as a final example where a man cosigned what he thought he was cosigning a mortgage loan for his girlfriend who had bad credit. Well, that's what he thought. In fact, he had gone to a settlement on a house, he became the owner of the house and the sole obligor on the note. And he didn't realize that until his girlfriend fell behind on her mortgage payments, filed for bankruptcy, in his name, of course, and in the bankruptcy papers, she also revealed she had also taken out some credit cards in his name and she wanted those debts discharged, too. And the boyfriend found out about it after he was turned down for credit when he decided he needed another credit card for himself. And in that case, incidentally, he also through the testimony of his girlfriend in that case found out that she thought that she was his fiance and he protested that was a lie, too. We didn't ask the judge to resolve that one way or the other. Now, what can the U.S. Trustee try to do to -- when it uncovers identity theft, and we certainly welcome your thoughts on this during the panel session and afterwards, but let me tell you a bit about the kinds of things we presently do. And importantly, again, we're a civil enforcement agency. We don't prosecute crimes, only the U.S. Attorney can do that, but we uncover such a situation, if the mistake is innocent, such as the transposition of a social security number, we will ask the debtor or debtor's counsel themselves to correct the court record, but in a more serious case, it's more likely that what we will do is file a motion asking the bankruptcy court to dismiss the case, but with special relief, designed to do two things. One, to impose a civil sanction on the identity thief, and two, to try to help the victim as well. And with regard to the sanction, we will try to have the case, a denial of discharge order entered, so that the person who ran up the debts will still be responsible for those debts, and a bar against that person refiling with any social security number, and if they violate that, then they've got a contempt of court problem as well. As remediation for the victim, we might more typically seek a court order declaring that the debtor is not the person whose name or social security number is on the petition. Now, in some cases, we just don't know who the real victim is, we at least can get a court order and where we do know who the victim is, that is a document that they can use from the court to go to the credit reporting agencies and so forth. There are numerous other approaches we might take in a case, and we can discuss some of those later on, if there is time. Just some parting advice, if you think that you're a victim of an identity theft involving bankruptcy fraud, I suggest you first gather up all the information you have, the notice from the credit card company denying your credit and so forth, but remember there's really no substitute for self help, and I know that isn't, perhaps, the most pleasing statement to hear, but bankruptcy is a judicial process. Sometimes it might be necessary to obtain a lawyer to address the specific problems that the theft may cause an individual victim. Among other things, you will have to show that you're not the person who filed the petition, and you'll have to show that to the court. I would also ask you, please, contact your local U.S. Trustee office where there is fraud. There is no simple way to solve your problem, and under different fact scenarios, different things we may or may not be able to do, but we would want to be aware, and we might be able to be of some help. And by coming forward, you're, of course, helping yourself, you're promoting the integrity of the system, and perhaps retarding the chances of this happening in the future. So, with that brief overview, which I hope wasn't -- was sufficiently brief, but maybe not given our time constraints, I do thank you for your attention.
MS. CROUSE: And, Cliff, before we turn to our next panelist, you have mentioned that you would encourage victims to contact the appropriate U.S. Trustee offices. Do you have any suggestions as to how members of the public can identify those offices? Because I know you have 90 offices throughout the country.
MR. WHITE: Well, I think that if you were, for example, obtaining the -- if you knew a bankruptcy has been filed, you're going to be trying to obtain the bankruptcy petition filed in your name, the clerk's office will have the phone number for the U.S. Trustees office serving that district.
MS. CROUSE: And there's also information on the website as well?
MR. WHITE: There is, which you can go to the main DOJ website and work to. Um-hmm.
MS. CROUSE: Thank you. As Cliff has described, the U.S. Trustees program has a civil authority within the bankruptcy system to supervise and appoint trustees, and to also supervise bankruptcy cases. The other end of the spectrum is the criminal side, and our representative here is Tom McQuillan, AUSA, from Alexandria. Tom, could you briefly address criminal issues that your office has seen within this context?
MR. McQUILLAN: I would be pleased to do that, Jeanne, thank you very much. Thank you, Cliff, too. Thank you ladies and gentlemen, I have for the first time in my professional career prepared a power point presentation.
MS. CROUSE: And we're all going to be subjected to it.
MR. McQUILLAN: Bear with me, please. First of all, I would tell you that I am an Assistant U.S. Attorney. I work in the U.S. Attorney's Office in the Eastern District of Virginia, right across the river. I'm an AUSA in the Eastern District of Virginia in Alexandria, and I work in a particular unit within the criminal division of that office, known as the fraud unit. We are responsible for investigating and prosecuting all sorts of economic crime, and one particular type of crime that I have recently become involved in for the first time is bankruptcy fraud. And Jeanne asked me to be on the panel today because of a case that I handled over the summer, which thankfully resulted in a guilty plea. It was a scheme, a bankruptcy fraud scheme, a criminal scheme, remarkably similar to one of the schemes that Cliff just pointed out. It was a real eye opener for me. I had not been involved in this area before. And for that reason, Jeanne asked me to speak to you a little bit today. Before we talk about that case, though, I want to talk a little bit about how we function, how the United States Government functions as a team when it investigates economic crime. We have the concept, we use the concept of the prosecution team. The FBI, I should point out, does not report to us, they would be very upset if they thought for a moment that they worked for me, although in reality they do. But in any event, when a case comes in to be investigated, the bankruptcy fraud case, it is generally assigned to the FBI. The FBI, of course, is the chief investigating agency, criminal investigating agency of the federal government. They cover the whole gamut of crimes and they have a very ambitious economic crime program. And so the -- a case agent is assigned that will investigate the case. Also, on the other side of the organizational chart, the United States Trustee, which, of course, does not work for the U.S. Attorney, but which provides invaluable assistance to the government, or to the AUSA, in investigating bankruptcy fraud. Now, in my office, we have a general crimes unit that handles reactive type crimes, bank robberies, kidnappings, that sort of thing. We have a drug unit, narcotics unit that handles sophisticated drug cases. And we have the fraud unit where I work. Our cases are traditionally paper cases, the fraud unit's cases. How do we investigate a case? Sometimes I wish I could tell you that we investigate a bankruptcy fraud case like this. I really wish I could tell you that because it's just so exciting to be able to say, we have a rapid response unit and we go out to the bankruptcy court and pick up those petitions. We don't do that. Economic crime cases, bankruptcy fraud cases, are paper intensive and require a lot of time to investigate. Agents gather facts, agents work with assistant U.S. Trustees to try and understand the system a little better, and ultimately agents seek my advice and counsel, and describe to me what they found. And what I do is reading, after having read their reports, is I look at this. This is Title 18, United States Code, Section 157. This is, for me, at least, an extraordinarily interesting statute. This is the bankruptcy fraud statute. And if you look at the criminal code, Title 18, you will see that there are various other statutes that concern lying on bankruptcy forms, concealing assets, that sort of bankruptcy fraud. More traditional bankruptcy fraud. People who want to hide assets. This statute is, I would say, maybe three years old. And it addresses a whole different problem. And the problem that it addresses is -- one of the problems that it's aimed at addressing is massive bankruptcy fraud schemes, schemes that are aimed at the public. Think about it for a minute. You have received in the mail a foreclosure notice. They say they're going to take your house away. You're not a sophisticated person. You're scared. And you get a call or a letter from somebody who says they're a work-out specialist, they can help you. They're hiding your mortgage payments, your rent, they're going to kick you out of your house. I can stop it, right now. All you need to do is pay me. All you need to do is give me a month's rent or a month's mortgage payment, money that you really don't have. I can stop it. How do I do it? Well, first of all, as a work-out specialist, I've got to find business. Who am I looking for? I'm looking for the people who are kind of marginalized, unsophisticated. Where do I find these people? I have employees who troll the foreclosure notices for new business. That's how I find my victims. Kind of makes you think the of the term bottom dwelling, doesn't it? What am I going to do? How do I accomplish this service that I'm going to provide? Well, essentially what I'm doing is making or abusing one particular facet of the bankruptcy code for my benefit, and that's called the automatic stay, and that's something that Cliff just talked about a moment ago. Because the moment a bankruptcy petition is filed, the stay takes effect. You can't be kicked out of your house. They can't evict you. They can't foreclose. But am I for real about this? Am I really -- do I really want these people to follow through with bankruptcy? No. For that payment of money, what I ask the victims in this scheme to do as the work-out specialist, is sign bankruptcy petitions in blank, and sign voluntary dismissal motions in blank. Do I as the work-out specialist tell these people exactly what I'm doing? No. Because if I did, they might turn around and say you're going to do what? You're going to file bankruptcy? They might say will it have an effect on me? Is this a good thing in my life, or a bad thing? After I get those clients to sign those blank petitions, what do I do as the work-out specialist? Well, I fill in portions of the petition that need to be filled in, listing addresses, things of that nature, the address of the property, the mailing address, the social security number. And I have one of my employees file it in court. Of course, it triggers the automatic stay action. At the same time, I serve the mortgage holder with a copy of the petition, putting the mortgage holder on notice that hey, stop, bankruptcy, you can't do anything more. So, where are we in the process now? Well, where we are is a bankruptcy has been filed in somebody's name, and they really -- the person in whose name it's filed, they're really not that sure they understand all this. What's the practical effect? Well, you know, I asked Cliff this morning what the practical effect terms of a credit reporting agency is when a -- or what the practical effect on that agency is when a bankruptcy petition is filed, and he told me that two or three times a week representatives of credit reporting agencies are in the bankruptcy court, monitoring the docket, looking at who's filing what. So, you know that when a bankruptcy petition is filed in somebody's name, within a matter of two or three days, that is picked up and reported to a credit reporting agency. That's not a judicial function. These people from these credit reporting agencies, they serve a legitimate purpose, they are sitting in court, going to the clerk's office, looking through the documents. Now, there's another part to this process, right? I mean, nobody in this process is thinking -- the work-out specialists are not thinking we're going to follow through on this, so how do you stop a bankruptcy case once you file a petition? Well, remember that voluntary dismissal notice that you asked the client to sign? That's what you file. You wait a couple of weeks and you file that. But who don't you serve? You don't serve the mortgage company, right? Because you don't want the mortgage company to know that the case was dismissed. Why? Because you want the mortgage company to think that there's still a bankruptcy, and that they shouldn't be messing around trying to foreclose on somebody's property. But nothing lasts forever, and the mortgage company is ultimately going to say hey, what's going on with this bankruptcy that we heard about six months ago, I mean, where are we in the process, and they will eventually find out that the case was dismissed. So, what do you do as the work-out specialist then? After the mortgage company starts the process all over again. Well, you respond in kind. You start the process all over again. And you run to bankruptcy court and file another case. Because you've gotten the person, your client, to sign multiple bankruptcy petitions. But are you going to file in Greenbelt, Maryland if you've already filed there? Probably not. You'll probably go down to the Alexandria bankruptcy court and file there where they don't know you. You use a false address. You use a vacant lot or a mail drop to put on as the mailing address. And that's how the system works. That's the work-out scheme. Who are the victims? Well, certainly victim number one is the mortgage company who has a legitimate claim on the property or the property owner in the case of somebody who is renting. On the people who are the clients of work-out specialists victims? By and large, yes, they are, because by and large, work-out specialists don't tell victims the whole story. They take their money and they tell them that they can make their problem go away. It only goes away temporarily, but that's what they tell them. They take their money and they don't produce. And the third victim, of course, in a sense probably the most important victim, in a larger sense, is the court system. Because in order for this crime to take place, the court system, the judges, the U.S. Trustees, everybody involved in the court system has to be lied to. They have to be made to think that the bankruptcy petitions are part of a legitimate case, when, in fact, they're not. So, it's a scheme. It's a scheme that only recently we're really, you know, fully understanding. I had occasion this summer to prosecute a case involving this scheme, and I was amazed at how little law there was on the subject. As an aside, when somebody is sentenced for a bankruptcy fraud scheme, one of the most important sentencing factors is the amount of loss in the case. That's what drives the sentence. That's what determines how many months somebody is going to spend in jail. And in my particular case, because this is such a new area, there was no law on how to determine loss. It was what we call a case of first impression, which is rather rare in trial courts, especially when you're talking about criminal law. So, we have a problem, and we have emerging a federal response from the criminal loss side. And the twin goals are, of course, as the twin goals are in any sort of crime, to punish the bad guy and to help the victim. But Cliff touched on something, or maybe it might have been Jeanne, just a little while ago, and that is self help. If the federal response is to work, then people who have been victimized have to help us. They are witnesses. A long time ago, a boss of mine when I was a new prosecutor starting out said to me, he gave me sage advice, he said to me lawyers are fungible, witnesses are not. Witnesses are very, very important. These are the people who tell the story of the crime, to us and to the judge and to the jury. So, witnesses may need to testify. If the bad guy is convicted, hopefully he gets a stiff sentence. He goes to jail, and other work-out specialists, because they track the prosecution, because they read about it in the papers, because we issue press releases, understand that they might be next. Restitution in a criminal case is available. And particularly in a case like this, where you're prosecuting a man who is operating a business, sometimes you find that there is actual money out there that can be used to pay restitution. But the focus here today is really on victims, and what we do as the Department of Justice, as U.S. Attorneys, to help victims. In the interest of time, I'll be brief, one area that would be of interest, I think, to you all, is a website. I have the site up here. It is a website for the office of victims of crime. And it explains or contains -- it's a comprehensive website, and it contains a lot of information on services that victims of crime, particularly bankruptcy fraud, people who have had their credit rating negatively affected because somebody's filed bankruptcy on their behalf. It contains information on what can be done. There is a new and emerging emphasis on the victims of financial crime. Victims' rights have always been of a concern to the Department of Justice, but only recently have victims of financial crimes, the rights of those people, only recently has that subject area really moved to the fore. And perhaps at a local level, that is to say at a local U.S. Attorney's Office level, one of the most important things to know is that we all had a person known as a Victim Witness Coordinator, we have one in my staff, and these are the front-line people who help victims of crime, including people who have had their identities stolen from them, people who have experienced bankruptcy fraud problems. What can the Victim Witness Coordinator do? In short, they can do -- they can help you through the process. They can write letters on your behalf, they can contact lawyers, employers rather, to inform your employers and your creditors as to what has happened to you as a victim. They can deal with creditors, landlords, mortgage companies, who may not fully realize that people have been the victim of crime. They maintain contact with credit reporting bureaus, and can be of help in working things out. Lastly, they can obtain court-ordered certified copies of court orders involved. My final thoughts are essentially the same as Cliff's final thoughts. These crimes are insidious because it takes a long time for people to realize that they've been victimized. So, if you ever meet somebody who is going to -- thinking about using the services of a work-out specialist, tell them to ask a lot of questions, and understand what it is they're getting into, and of course never sign documents in blank, maintain good records, and contact the U.S. Attorney, the FBI or the U.S. Trustee if you think there's been a problem.
MS. CROUSE: Thank you, Tom, for those resources. I would also note that out in the front is a fax sheet prepared by the office of Department of Justice Programs that also lists other references that victims may want to consult. Now, as Tom has pointed out, the witnesses are very important in the process, and with that, I would like to ask Eric Graves, who we have heard from before, but not necessarily within the context of bankruptcy fraud, to share a little bit about his experiences as a layperson who got inveigled into the bankruptcy process. Eric's son's identity and social security number was used improperly to file for Chapter 13 relief in the Central District of California. Now, there will be a quiz later, so for those of you who don't know, Chapter 13 relief is available in bankruptcy for individuals who have limited debts, and regular income. And with that, Eric, could you share a little bit about your prospectus as a layperson who was brought into the bankruptcy process?
MR. GRAVES: Sure. Thank you very much. Let me say that it's been very educational, these panels and everything, to myself, because even though we have gone through a lot of this, there's more to learn. My son was 19 in September of '98 when we first found out through a declined auto loan that he couldn't get an auto loan, and the credit union told us, you know, which report they used and why it was declined. So, we started pursuing it. We contacted the OIG Hotline through an email. We got a response within four days of basically talking, it was in '98. I get the impression that this crime was fairly new, and a lot of agencies hadn't really addressed it directly. And so the word -- the verbiage in the social security reply was more around workplace and employer benefits and what was on your account, although it did specify the three credit agencies to pursue, which we had already done. But in trying to -- once we found that there was this bankruptcy on his report, you know, you wonder, 19 years old, address that was not his. They did have his name, obviously the social security number, and we started pursuing that, and my son got down to the Woodland Hills branch of the bankruptcy court, got the documents, I really, as I said before, I don't know how he did that, but I guess it's information that's available, and I credit him for doing that. And we got the names, there was the attorney's name, the plaintiff, the defendant, and apparently the defendant was late in paying a rent, and so the landlord was pursuing this, and the guy claimed bankruptcy, somehow he got my son's name and social security number. I called the bankruptcy court, they said that we needed to contact the U.S. Trustees Office. I contacted the trustees office, they said we needed to contact the court. I contacted the court, they said I needed to contact somebody else at the trustees office. I spent a dozen calls contacting ten different people, being pointed back and forth between downtown LA Trustee and Woodland Hills branch of bankruptcy court, getting really nowhere. I sent three letters to the trustees office, which I did get response from, but they suggested -- the first suggestion was to contact a bankruptcy attorney. Let me just say that, you know, that hasn't been cleared out of the court yet. It has been taken off of all the credit reporting agency reports. Trans Union was the last, and I think the only reason it's off of that is because I pressured them because Experian and Equifax had already taken it off. And not until I presented those facts did they finally say they would investigate it. I had conflicting correspondence between Trans Union because of different timings of letters that were sent, but excuse me for any bad English I am going to say, but I am getting real emotional about this, I have had too much caffeine this morning, and, you know, this panel that was up here earlier, just, you just get really galled as a victim, and I'm not the victim, it's my son. And he's 21 years old, and he has not established credit, I wanted him to establish credit by this point, and he has not done that, because he is only a secondary signer on the loan. And then all this criminal activity that went with Robert and could potentially go with any of us as victims, or any of you. And I know all of you are victims of some sort of this crime, and what else can they do, if they haven't racked up your credit cards, they are going to possibly go for a crime. I don't understand, and excuse me, but screw the ACLU. You know, as a victim, you want to be able to have your rights, and I don't understand why a fingerprint can't be utilized. I know that it has to have safeguards, there obviously is all this warehousing of data that gets sold, but it's a direct ID of all of us. I don't see --
MS. CROUSE: I think what Eric is pointing out here is the question of whether identification needs to be provided with respect to bankruptcy filings.
MR. GRAVES: Yeah, I know I'm getting off track, but I think that's the issue is why didn't the bankruptcy court ask for ID.
MS. CROUSE: That's one of many.
MR. GRAVES: Why didn't this get fingerprinted, if it was instituted, all of us, we think you're trying to be responsible, you think you're doing the right thing through life.
MS. CROUSE: Just so I'm clear, one of the problems that Eric encountered, that Eric's son encountered, was the fact that the person who filed bankruptcy using his son's social security number did not provide identification when the bankruptcy was filed. And that is, in fact, the case in many jurisdictions. I understand that the U.S. Trustee program is currently reviewing this issue. Cliff, would you like to speak to that?
MR. WHITE: Well, with respect to one of the steps of the process, all of the filings are asked to come to a meeting of creditors and testify under oath before the a private trustee or the U.S. Trustee and creditors can ask questions. So, we are looking at possibilities at that step in the process. But the first step is the filing of the petition and I am not aware of any clerk's office that requires any method of identification.
MR. GRAVES: Well, this is the point and we've been saying this time and time again here, and it is getting to the point where Werner said, you know, a camel is nothing but a horse made through committee. But, you know, you have got to be able to cut through all this paper chase, the bureaucracy. A fingerprint would do that, especially when you are going to ID a guy in a car or whatever, you've got the technology, why start new technology for things?
MS. CROUSE: Eric. There are two other points that we need to make here, and first of all, this is very unchartered territory. The fact that there is -- that the Internet exists, that there are now potential collectors of this private data, have increased expedentially the availability -- the possibilities for identity theft. So, these are -- and the other problem that has been tangentially touched upon is the fact that you have various agencies. You have the U.S. Administrative Office of U.S. Courts which deals with the court system which deals with the actual filings of documents and you have the U.S. Trustees office which deals with the civil side, they are more of the administrators, but they're not the courts, and they have no jurisdiction over the courts. And then finally you have the U.S. Attorney's Office. So, these are very important issues that Eric raises, and sadly they are not issues that have been resolved yet, but hopefully they are rising higher on the radar screen.
MR. GRAVES: I guess all I'm suggesting, I hate to interrupt, but just a federally funded program to implement and deploy fingerprint technology.
MS. CROUSE: Now, Mari as a consumer rights and privacy advocate, but a non-bankruptcy attorney, has had to deal with the bankruptcy system with respect to various individuals she has tried to assist, and Mari, if you could share briefly your perspective based on those experiences.
MS. FRANK: I didn't know very much about bankruptcy, I never filed bankruptcy, I always referred it out, thank goodness, and now you know why. I have gotten calls from several victims of identity theft, one was a gentleman from Nebraska who called me who went out to dinner with business clients and he went to pay the bill with a credit card and it didn't work. And he thought well, there's something wrong here, he tried a second card and he tried a third card, and it didn't work. He was humiliated, he didn't have money to pay the bill. He goes back home, he calls his credit cards, the 24-hour number, and they said well, I'm sorry, Mr. Jones, you filed bankruptcy, so we cancelled your credit cards. And he said what do you mean I filed bankruptcy? Well, you filed bankruptcy in Los Angeles. He said I don't live in Los Angeles, I live in Omaha, Nebraska, and I have never been to Los Angeles, what are you talking about? And this started this horrible thing that he went through. And he also found out, when I was trying to help him through the process, we found out there was no attorney, because in California, unlike other states, there a lot of preparers who file, or you file with a paralegal. So, we had no attorney to call to scream and yell at, we had to try and get the records. And it was, for me, as an attorney trying to help him, it took us months and months. And I still don't know if those records that the original filing that was picked up by the credit -- we did get it off the credit reports, but I don't know if the original filing was then sold, like with Sylvia's case, resold by other data brokers that are on other databases that will again show up later, which might happen to your son as well, because we don't know who is reselling this information. And I know Lee is going to talk about the privacy issue. I also got a call from a woman who was from Virginia who found out that she wanted to buy a home with her husband and found out that she already owned a home and this home was starting foreclosure and then, of course, the person filed bankruptcy to, you know, forestall the foreclosure with the automatic stay. So, the two main reasons that someone will file bankruptcy in your name is to avoid getting kicked out of your apartment, and avoid getting kicked out of your house, all right? And being -- and so you buy a house in somebody's name and then of course, you avoid losing that house by filing bankruptcy. And then the person who is the innocent victim, doesn't find out until they go out to dinner or they're denied credit when they want to buy a car. So, it's a horrifying experience. Now, if you live in the same jurisdiction, which luckily Eric lives in the same state, but we're talking about what do you do if you're in Nebraska and, you know, you're not even in that state, let alone you can't just drive to the court house. So, it's a real hassle to even get the court records, no one believes you, they don't want to have any time with you. So, here are some of the suggestions, in our limited time, I wrote something and there's something out on the back shelf, but I just wanted to go over some of the suggestions that I have for victims dealing with the kind of problem that Eric has. First of all, I think, and this is kind of a prevention measure, is requiring some kind of authentication of identity, which you're talking about. Someone can go into the bankruptcy court and show no identification whatsoever. Not only that, now we're going into bankruptcy electronic filing. So, again, are we going to authenticate with some kind of digital signature? What I think we should have is if you're going to have an attorney file for you, the attorney should -- the attorney should file a declaration that they have verified your identity, or if a paralegal is going to file for you, that they should verify your identity, or somehow the initial court should take verification of identity. Secondly, that's first, and second, I think when the bankruptcy court does become aware that a debtor has used the identity or the social security number of another person, what they should do is they should contact the Social Security Administration. I know that you've told me and I've heard from other people in the Los Angeles area, but sometimes a debtor will just use a series of social security numbers, like Cliff was saying, they don't even know who it is. They are not like deliberately taking the identity, the whole takeover, but what happens is they use the social security number, and then we find out somehow that it is not the correct social security number. When the bankruptcy court finds out about this, they should somehow notify that victim, just like we have the criminal victims that don't know until much later. If a bankruptcy court finds out that a social security number is used, I know they can't get that social security number, however they can report it to the Inspector General of the Social Security Administration who can investigate and that department can notify the victim. We have a tremendous problem with victims not knowing, and if they know early on, they can do that self-help that you were talking about, Tom, and perhaps get the bankruptcy dismissed before it's discharged.
MS. CROUSE: But the cross border issue with jurisdiction is a very difficult one, and in Mari's hand-out, which I commend to all of you are some wonderful suggestions for approaches, but Mari, other than what --
MS. FRANK: Let me just finish up.
MS. CROUSE: If you could, fine.
MS. FRANK: Okay, basically you can look at the hand-out, but one of the main issues is, Cliff was talking about hiring an attorney. When a victim has gone through what they have gone through, they don't feel like they can hire an attorney. Often they don't have the funds. So, I think what they should do is luckily what Los Angeles County is starting to do, which is putting together forms and declarations that you just fill in the blank, I think they should be available, so that you can go in and have the bankruptcy either dismissed, if it's prior to discharge, or the case opened, and then have it expunged. And I have talked with a judge in Orange County, California, who is very open to making up these forms. So, again, it's kind of like what we're asking the criminal aspect to do, which is we need to have -- this is U.S. Department of Trustees, we need to have a formal protocol that are a list of steps for victims to do, even though you have victim assistance programs, I can tell you that they did nothing for the clients that I have talked to, okay? Nothing. And we hear now that even if you call the Office of Trustees, everybody does this, here, go to them, go to them. No one gives you the right answer. So, we need a one-step protocol that everybody can tap into.
MS. CROUSE: I also have to point out, though, that this issue is just coming up on the radar screens, and unfortunately three years ago, four years ago, whatever, it did not have the publicity that it is incurring now. So, again, this is unchartered territory, it's difficult. As you can hear, what Mari has suggested is an excellent approach within a particular jurisdiction, but you may even find within one district court that one of your judges likes this approach, whereas the other one doesn't and the chief judge will not mandate a specific approach. So, unfortunately there may not be one cookie cutter approach.
MS. FRANK: Jeanne, let me just say one thing to that, and this is why I got our judge involved. When I was doing my research, I talked to Judge Riddle and I said you need to have all the stakeholders involved, you need to have the judges represented by several judges and you need to have the victim advocates there and you need to have the prosecutors there and the civil U.S. Trustees to be part of the process.
MS. CROUSE: And that district may be an unusual district, but I unfortunately know from past experience that there are other districts where they're not so collegial and one judge may impose in fact a certain local rule with respect to a fee application in bankruptcy that is completely different than what the other judges do.
MS. FRANK: Then maybe we need legislation to mandate them, if they're not willing to be cooperative.
MS. CROUSE: Now, there are other privacy issues that the bankruptcy system impacts, and that is the fact that debtors, in order to avail themselves of the fresh start in bankruptcy must necessarily provide certain sensitive data, and that data includes name, social security number and birth dates. With that in mind, the Clinton-Gore Administration is conducting a study on financial issues and financial issues within the realm of bankruptcy, and Lee Barnhill is here as the contact person for the administration study. Lee, if you could tell us a little bit about the study, the procedures, and where we are going from here.
MR. BARNHILL: Well, as you can see, the financial privacy is really on the radar screen now. I mean, it wasn't a couple of years ago, but it definitely is now, and it has the attention of the administration. In April, the President came forward with a plan to enhance the privacy. And part of that plan was in August to go ahead and direct three agencies, Department of Justice, the Treasury and OMB to go out and accept comments from the public. So, now we have 300 or so pages of comments, recommendations, policy recommendations, statutory recommendations as to how we might address some of these issues. We have a very ambitious schedule, and as a matter of fact we meet tomorrow for a couple of hours, and we have to have this thing done by December, for a lot of reasons. So, keep us in your prayers, but I tell you, the privacy issue is so important, because there is so much that is in a bankruptcy petition. When an individual files -- and so many things happen. We talked about the identity situation, but also, there's so many chances for somebody to go out in a bankruptcy file and pull data out, because it's public record data. There's also non-public record data that's filed, and these are some of the things we're looking at as to what should be public record, and maybe what should not be public record data. Or maybe some of the things that are there now should be changed. But this is all now required by the Bankruptcy Code for things like bank account numbers, identifying numbers, social security numbers, are all in there, credit card numbers, home address. So, we're looking at those issues as to how to -- how we might change that. But in the banking and credit reporting context, we notice that these types of -- this type of information is confidential, but it's not in the bankruptcy context. In the past, access to public record data basically for all practical matters, it was very limited. You would have to go down to the court house and you would have to talk to a clerk for a couple of minutes, get them off the phone or whatever, and maybe get a file. And then you would have to go to a copy machine, or maybe they wouldn't allow you to copy it. That clerk would copy pages that you said you would like. But now, with electronic databases, and the Internet access to bankruptcy records, you can sit in the comfort of your home and perhaps get information on bankruptcy files, on debtors all over the country. So, now this might improve bankruptcy administration, it might help us find people who are using wrong social security numbers, but also it might allow one to easily steal the identity of a debtor. So, we are looking into those matters. And to be brief, because we are almost out of time, I'll just say that the privacy study that's been commissioned by the President is -- we're looking at the types of information that are being presently filed, the current and future practices, the needs for the information that's in the bankruptcy cases, of course the privacy issues, and the effect of technology on all of this is a big issue. We're looking at business and governmental models, and also, we're trying to come up with principles, fair information practices, notice, choice, access, security, enforcement, those are the things we're looking at. And as I say, we have a -- 41 comments so far, 300 or so pages. We also have a website, if you go into the main Department of Justice website, usdoj.gov, and go to United States Trustees, you can see our financial privacy study. The comment period has closed, but I tell you, if you come up with a good idea, we would listen, definitely, but the comment period closed in September.
MS. CROUSE: And not surprisingly, one of those comments was provided by the Bureau of Consumer Protection here at the Commission, that formal comment is in the back, if you care, if you're interested, you may pick one up as you leave. Not surprisingly, the bureau is concerned about the publication of such private data on the Internet as courts move to accessibility or making such data more accessible, and given what we heard this morning in John Arterberry's panel, with respect to the potential for identity theft, and to me that answers the question that I always get, which is why should we care about this private information being provided within bankruptcy, because these people have no credit to speak of, and the answer is, that not everybody is trying to take identities and use them for credit purposes, they have maybe more nefarious purposes. Let's take a few questions, there's one back there, if you can grab the mike.
MS. NEWHOUSE: My name is Joan Newhouse, I'm a private investigator, I identified myself earlier. I would counsel that you not take too much of that information out of the bankruptcy filing, and not make it unavailable to the public. I was party to a particular investigation where someone had been convicted in the civil court system of a significant insurance fraud. When his seven-figure judgment was rendered against him, he then filed bankruptcy. He used, I found that he was using multiple social security numbers. He was using an address in one state, but primarily resided in the other state. If I had not had that detailed information in his bankruptcy filing to go by, in which he said this totals all of my assets, and had not been able to find out his other address in a different state, I would not have determined that he had, say, just in rough figures, he had said that he had $150,000 in assets, when he clearly had over $4 million in assets. And we were able to break the bankruptcy. Now, we had to do that through civil litigation and through private investigations. The bankruptcy court had not picked it up. Yet had we not had an initial sworn document filed in a court stating that this was true, we would not have been able to then break his bankruptcy by providing certified documents in the bankruptcy court showing that he was perpetrating a fraud, not only on my client, but all of the other people that had extended credit to him.
MS. CROUSE: May I jump in? She's exactly right that there is attention here and there is a fine balance that needs to be struck, and what the bureau did not counsel in our formal comments is completely restricted access but limited access and protections of certain information within certain parameters and models and such. I saw a question here.
MS. FRANK: Can I just say one thing? In California what we did is we limited certain things like in a divorce proceeding, you can't have the social security number on there. There are certain things that are filed with the court that are public record, and then there are certain things that are kept confidential. So, it could be -- you could do it that way.
MS. CROUSE: I see a gentleman here who had a question.
MR. MEISSNER: Just a quick one. I've got to leave, and unfortunately I love what you're doing. I wanted to defer to the technology part, where someone has got to be accountable. And then I want to defer back to the underlying issues, and God bless all of you, but it's back to Mr. Graves' underlying issue, and that is what ties me to the information. We can sit here and create this camel all day long, but the horse is what ties the information together. We're in the information age, we need information to progress. Joan has made the point, everybody has made the point. What ties Mr. Graves' son to that information?
MS. CROUSE: And that's a question that was more thoroughly addressed and discussed this morning, but it's a very good one and one that we will have to wrestle with going forward in this arena, most definitely. One more question, then we'll have to finish.
UNIDENTIFIED AUDIENCE MEMBER: Can I ask a quick just a very -- can I ask a quick variation on that, and perhaps this question is for Cliff White. If I understand what happened, Robert Graves, a phony petition was filed for Robert Graves with his name and social security number, and somehow that affected an automatic stay on Jane Smith's eviction. How does that happen?
MR. WHITE: Well, because that's the -- it's in the bankruptcy code. A major purpose of the bankruptcy filing is to stop creditors from collecting. In 99.9 percent of the cases, this is a good thing. Somebody here in the instances of the victims we're talking about, it is a problem. It is being misused. Let me also say, too, and Jeanne referred to this a little bit before with regard to places along the process where identification of the perpetrator could be uncovered, that the people who are perpetrating the frauds, the kind that Tom described, the scenarios I described, what the victims during this conference have described. People are not trying to complete the bankruptcy case, they're filing, getting the automatic stay. They're not going forward later on in most cases where the investigation will be done by the private trustee, et cetera. Now, when you -- when it is uncovered that there is this serial filing and the automatic stay keeps being imposed defeating the creditor. When that's uncovered, there are remedies, civil and criminal. And someone referred a minute ago, I think it was Mari, with regard to something was done in a civil violation, most of these things we're talking about, these scenarios, they're not just civil violations where we can try to bring about civil remedies, they're almost always also crimes. They're crimes under 18 USC 152 and 157 that Tom described, and it's serious business, and it is in more recent years that we are becoming more aware of this and I think we have actually made a lot of process in being sensitive to the fact patterns to pursue, John Arterberry ought to get some credit for the working group he has which brings federal agencies together, what the Federal Trade Commission has done with its database and so forth. So, we don't have all the answers up here, but I think we can take some solace in the fact that there is a lot going on and a lot of progress. And the problem is not going to be solved before I get back to my office in Greenbelt.
UNIDENTIFIED AUDIENCE MEMBER: I'm sorry, maybe I could request a clarification. Maybe my question wasn't clear, I'm sorry.
MS. CROUSE: We have run way over.
UNIDENTIFIED AUDIENCE MEMBER: What I was asking was how does a bankruptcy petition fraudulently filed in the name and number of Robert Graves stop an eviction of Susan Smith, who is the one who is filing? MR. WHITE: Because what you have, is you would have the property address listed.
MR. GRAVES: Can I interject something? Just for the facts, it was -- he used my son's name. He had the same person's name, my son's name, and the social security number.
MS. CROUSE: He had the same name but he used your son's social security number to file the petition?
MR. WHITE: But the property listed on the petition will be the property they're trying to stop the foreclosure on, and I apologize if I didn't understand the question the first time around.
MR. GRAVES: But it also goes to the address that the person was getting this applied to was not our address, it never had been.
MS. CROUSE: That's right, because that's the address that was listed on the petition.
MR. GRAVES: Can I just emphasize the fact of ID?
MS. CROUSE: Right. I know that all of my panelists are thrilled that you all are so interested in the topic and we're here, so, please, we have run over. I thank you so much for your attendance and for your interest, and these are very difficult issues as we move forward. Thank you.
MR. STEVENSON: Well, that was the last word on that panel, but not the last word in general. We now have the break-out groups to go to to follow up on some of the issues that we have raised here. There are four break-out groups, four rooms. In this room the discussion of technological solutions. In room 332, directly below this room, an open mike for workshop participants. In room 532, directly above this room, more discussion on the standard fraud declaration that we talked about yesterday. And in room 481, which is basically at the other end of this floor, discussion of the one-stop shop concept. This will be an opportunity for people to further make comments. This will all be transcribed in all of those sessions, so if you have further comments, we would encourage you to participate there. We would ask you to come back here at 12:45. We will summarize the break-out sessions and we promise to close up very promptly after that. Thank you. (A brief recess was taken.)
MR. STEVENSON: We'll try to take a back end approach to this and give you a brief summary of the various breakout groups, at least as we experienced them, and we will start with the discussion of the standard fraud declaration, and Helen will fill us in on that.
MS. FOSTER: Joanna.
MR. STEVENSON: I'm sorry, I'm sorry, Joanna.
MS. CRANE: We had representatives of the consumer advocates, the National Retail Federation and a bank and the New Jersey DA's office at our breakout session, and even with that few number of people, we still only got through question 21, so we still have work to do. I did get a lot of valuable feedback and insights on how the form can be more clear to consumers as to its purpose and its potential uses. We tried to discuss in more detail how we could apply additional confidentiality to it. We didn't resolve that issue. We are going to streamline the document so that only the information needed by a particular creditor would go to that creditor to resolve the dispute with that creditor. What I plan to do at this point is to work with the identity theft team and post it back on the web site within let's say two weeks. Then we would look to participants who would like to give us feedback on our revised version to do so moving toward a document that we could put out there for throughout the trade associations or independent entities, banks, major banks or whatever, to adopt on a trial basis and see how it goes. But again our goal is to provide victims with a more easier way to report and to clear their names with particular institutions, and we still have that goal. We still believe it's reachable. We're just going to have to spend quite a bit more time doing it.
MR. STEVENSON: Okay. Now, let's talk about one stop shop, and this time I got it right, Helen.
MS. FOSTER: Our session was well attended. We had representatives from the consumer reporting agencies. We had least one creditor represented, and many other interested parties as well as a victim. We expanded on the themes started yesterday, identifying some hurdles to this process, both technical hurdles and procedural hurdles or whether or not the idea will actually work in practice. I have six listed on my pad, so we are going to roll up our sleeves here at the identity theft program and get back to the drawing board. The most important thing that we did get was a reaffirmation of the commitment that Stuart Pratt made yesterday that this is an idea we should still be working on, so we are going to try to keep talking about it and moving forward, so it was a very positive meeting.
MR. STEVENSON: All right. And, Don, tell us about the technological solutions?
MR. BLUMENTHAL: The technical solutions breakout was primarily for people in the private sector to present some of their thought, some of their solution, and we had a good cross-section, a representative of the International Biometric Industry Association, someone from the National Fraud Center, someone from a company called Pragmista which is introducing a product called ID Guard and someone from Image Data. It's a photo ID based system. And it was a good cross-section. We heard issues about self help. We heard the issues about self-help merchant based systems, databases, pretty much all the possible tools that are out there for victims to take advantage of, both helping themselves in protecting themselves in advance but also helping them afterwards. There were a lot of questions. I think there could have been a lot more. If nothing else with all technology solutions, it was obvious from the discussion that this is an evolving area, and particularly as ECommerce picks up, there's going to be a whole lot more issues to address and a lot more technologies to consider.
MR. STEVENSON: Betsy, what news from the open mike?
MS. BRODER: I was tremendously gratified that only three people showed up for the open mike indicating to me that everyone felt that their voice was heard over these past day and a half and that they had an opportunity to share their thoughts with us, so I was very pleased.
MR. STEVENSON: Good. Thank you. And thank you all for coming on behalf of the entire identity theft team. We really appreciate the feedback that we've gotten and the very thoughtful comments, the participation from all the different groups involved in this process, and I specially would like to thank the victims who attended, and I think people would agree that that was a very helpful perceptive to have spelled out here. We would also appreciate the feedback we have gotten from people in finding this a useful dialogue from whatever their perspective has happened to be. What we try to do here in the victim assistance workshop, this obviously follows the treasury summit that occurred earlier which sounded some of the great themes, and here we are trying to work more at the goal focusing on the practical and what we could get done in the near term and what the challenges were that we all needed to rise to. Someone yesterday who I think said, Well, no one person causes the identity theft problem, and there's no one person who is going to solve it, and I think what we've heard are challenges that we all in our perspective roles have to rise to, and I would like to just touch on some of those challenges as we heard them. The challenge to the credit bureaus involved figuring out ways to be more responsive to the consumers when they were experiencing this being an identity theft victim and making the process for them, to improve that process as much as possible. We talked quite a bit about the idea of the one stop shop for fraud alert notification. We originally raised this issue shortly after the legislation establishing the FTC's role in this area in 1998. We appreciate that, as Joanna said, what we heard yesterday and today, the commitment of the credit bureaus to work with us on the issue of identifying the potential obstacles, the one stop shop fraud alert, and to seeing what we can do to overcome those and to that end, we will be inviting the credit bureaus in to meet and follow up with the nuts and bolts and logistics and the various other issues. And we're going to invite them in for a meeting to happen within the next 20 days. We would really like to move on this, figure out what needs to happen and try to take the next steps, and there are obviously a number of steps to take there. The challenge for creditors, the challenges for creditors that we have identified here is working on streamlining the process to the extent possible of reporting this problem, and we talked quite a bit about the standard fraud declaration and whether there's a way to do that in a way that makes it easier for victims to deal with this crime. I sat on part of that breakout session. I think it's fair to say that there was no criticism whatsoever of our form for being too short, so we heard you on that one, and we are going to take that on and rework it, but I think what we also heard was that it was an undertaking that is worth pursuing, and we will take the next step. We will put out another draft for comments as Joanna is suggesting. Another challenge here I think to banks and creditors and those people involved in this process is to recognize the need that victims have for information, and one practical instance of that, I think we heard an example at the leadership of some entities in really making it a very clear incentive practice to send information of fraudulent applications and fraud statements to identity theft victims and law enforcement, and we think it's a challenge there that creditors can help meet by making that a more standard prevailing practice and not making it like pulling teeth to get that information. The victims we heard from, and I think also really sounded a strong note on the theme of responsive consumer assistance, the need to be able to speak to a live person, a well trained person, someone who can help them through the problems that they have. At the breakout session on the one stop shop, they put it well I thought when they said, "When your identity is compromised you want to talk to someone, you want it now and it's a real problem." They find it difficult to make that connection and that is something that we pose as a challenge. Then there's law enforcement and the challenge for law enforcement, including local law enforcement, the challenge of taking the reports from identity theft victims, and one of the things we saw from the statistics are there a lot of people who are victims who have a problem here and who are counseled by various people that you need a police report and then they encounter great difficulty in getting one. And a real challenge for the police agencies generally is to make this the norm rather than the exception that people can get through that step and get through it without a lot of aggravation and extra work. What are some ways that that process may be further smoothed out? Well, there are, and I think one person made a point yesterday that the challenge of passing the difficulties or dealing with the difficulties of dealing with regional and state law differences or dealing with law enforcers who are located in different places and dealing with a crime that in a sense occurs in several different places, you can have the victim in one place and one instance of identity theft that is located in one part of the country and perhaps a second one that's located somewhere else hither and yonder, and indeed perhaps even outside the borders of the United States. One of the challenges and inside -- someone said people don't know where to go first. It would be helpful for people to know where they can go and to have procedures to ease the process so people can find the right place to report the problems that they have. We also have a challenge to law enforcement to make sure they're using the tools available to them including the tools that we have been developing. The identity theft clearinghouse has collected a large number of complaints since we started in November of last year. We've made this available through an encrypted password protected site to law enforcers, and this is a part of a larger project called Consumer Sentinel which deals with consumer fraud generally, and one of the things that we've done there is we signed up over 250 agencies and offices to use that system, to use the data that's there as a tool to really get, as Jim said yesterday, that sort of first 80 percent of the legwork done so that people can focus on what they have -- to focus on the strength of the value that they add to the process as law enforcers. And we have -- we would make it a challenge generally to law enforcers to sign up and use the system, and for all of you to help to make people aware of this because I think Mari raised yesterday, that part of this is making people aware of what's out there to help them work on this. On the subject of awareness, there's also a challenge for all of us to raise awareness, and to that end one thing I would like to mention is the No Fraud Project. Some of you may be familiar with the No Fraud Campaign from last year which focused on telemarketing, and the project this year hopes to focus on raising public awareness of identity theft. There's a flyer out in front. We have worked with the Postal Inspection Service and a number of other government agencies on this project, and this is an opportunity for various people in the private sector and creditors and banks and everyone to become involved in raising awareness and helping people become aware of the information that's out there and help them to become aware of the toll-free number that we have that we've got discretely right up here, and we see that as an important way. There's also a web site, CONSUMER.GOV/NOFRAUD where we posted the information discretely out there on the Internet as well, and we invite you to take a look at and consider the challenge to participate in that project as a program. The FTC and the identity theft clearinghouse project, we have challenges that we have to meet as well, and we are -- I would like to go over those where we are committed to assisting and working with the consumer reporting agencies in further pursuing this idea of the one stop fraud alert and seeing what can we do there, what can be done to smooth that process so that people can get those alerts put on quickly. We are also committed to continuing to facilitate the process of the standard fraud application. We've gotten feedback there. We've gone back to the drawing board. We will issue another version, and we invite you to comment on that, and it's been -- while it maybe doesn't feel maybe great at the moment you get that feedback, it actually is very useful, and I think that we end up with a document that serves everybody's purposes better when we get that kind of very direct and constructive feedback. We also are committed to further developing the data sharing capabilities of the identity theft clearinghouse and working with people who may have information that they would like to share through that system. Bear in mind that it can be a vehicle, a cyber tool for sharing information that you may have in whatever capacity you operate that may be useful to the people on the ground who are doing this law enforcement work, and we urge you to think about that, whether you have some kinds of consumer complaint information of this sort, whether you have other information that you would like to see posted there, whether you have best practices you would like to make available to local law enforcers, national law enforcers. We invite you to share that with so that we can share that with that group. We also would like to take up a challenge that was mentioned by Shane on one of the panels earlier of the notion of what kinds of protocols there may be for coordinating law enforcement on the subject of helping victims, and we would like to continue the dialogue that we've already had with a number of government agencies on this subject, and we found it very helpful when we were setting up a database to convene a group of law enforcers to get their feedback on what could be done there, at the very nuts and bolts level, and we are committed to continuing that process. That's the end of our challenges, but we also have a challenge for our friends and colleagues at the Social Security Administration, and that is simply to continue the dialogue and the workshop tomorrow so to sort of remind you of that project which we think is also helpful in focusing on prevention. As I said, I think it captures the point to say that there's no one entity here that causes the problem, no one entity or person that's going to solve it, so we all, in whatever role we're playing, have our work cut out for us. Thank you very much for coming. (Time noted: 1:10.)