Givi Palagashvili

I.

Introduction

The discovery and diffusion of technology has transformed crime and criminals, raising new challenges for the criminal justice system. However, many of these new and evolving forms of criminal activity remain, in large part, unexplored. This paper addresses the void by focusing on one type of deviance: identity theft. More specifically, the paper will: 1) provide an overview of the nature, causes and dynamics of national and international identity theft; 2) explore six case studies to highlight the diversity and complexity of this evolving form of crime; and 3) provide suggestions for combating identity theft, focusing on the dynamic tension between technology development and crime control.

II.

Identity theft: An Overview

In todays society, identity theft has greatly risen in popularity among criminals. In the United States hundreds of thousands of people have their identities stolen each year. According to the Federal Trade Commission, identity theft is one of the fastest growing crimes in the United States. Identity theft is the appropriation of an individuals personal information to impersonate that person in a legal sense.(Identity Theft and Fraud Prevention). When a criminal steals someones identity it enables them to make financial and personal transactions in someone elses name, leaving the victim responsible for the costs. Criminals may use your personal information for various reasons such as to get a loan, buy drugs, get expensive medical treatments, and even kill someone in your name. Identity theft is a relatively new name for an age-old phenomenon

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(Federal Reserve Bank of Boston). In past crime was a simple form of impersonation to act as another person with the intent to defraud others for personal gain. Imposters assumed the identities of others by imitating how their subjects dressed, behaved, and talked. This form of impersonation became ineffective as other forms of personal identifying information came into being (Hoffman 5). Also as time passed, criminals learned they could obtain enough information about a person from the trash without the need for killing the victim. One common practice was Dumpster diving this is when criminals would obtain bank statements, credit card information and other sensitive document and use it to represent someone else. As identity theft matured, criminals would steal directly from the mailbox to look for bank statement of individuals (Pragides). This method was successful and was easier then dumpster diving. Later telemarketing was used by criminals and brought a different form of crime. Telemarketers called people and told them they won a prize or were from charitable organization and asked about a donation. Once they received a donation they would convince people to give out personal information for verification purposes and use it to open credit card accounts, buy houses and other forms of illegal financial transactions (Pragides). However because of the development of technology, criminals have adopted new methods of committing crimes. Because people keep up with technology in order to conduct their daily life, people are required to adapt to information and discoveries that change the way we live. Since the early 90s, the internet has grown in the United States and over the world. People became dependent on the internet and use in their everyday lives; they rely on it for safe and accurate exchange of information (McQuade). They constantly they give out personal data such as Social Security numbers, credit card numbers, and passwords without worrying. With the security measures in place people feel it is safe to exchange personal information and believe information is

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confidential. However that is not always the case, criminals have also adapted to advancement in technology and, and today most crimes are committed over the internet. Today criminals use technology to devise new methods of theft in the form of cyber crimes (McQuade). Now criminals are using scams known as phishing to enter emails, hack in to another computer, and once their inside the computer network, they are able to view personal information and use it for personal benefits. Criminals have always taken advantage of new technologies in order to improve skills to combat security technologies.

III.

Case Studies: The Human Divisions of Identity Theft

A general overview of identity theft reveals the nature, causes and broad parameters of this relatively new form of crime. How, broad sweeps do not uncover the unique qualities of individual cases. An overview of six cases reveals the complexities and human dimension of identity theft, as well as the challenges faced by the law enforcement officials in combating this evolving form if crime.

Las Vegas Major Identity theft case:

In 1979, a 73 year old man Arthur Gerald Jones fled his home and family in highland, Illinois and bought a social security number and other information on the black market for 800 dollars. The social security was stolen from a 50-year-old veteran named Clifton Goodenough. Jones

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moved to Florida first however because of personal reasons he fled to Las Vegas in 1988, and found a job as a bookie at a casino. While back in Highland reports showed Jones was missing and was officially declared dead in 1986. Jones main tactic was using Goodenoughs Social Security number to pay taxes on his Las Vegas winning income. A first the IRS did not notice Jones was doing business with two Goodenoughs with the same ID number. While this was occurring Goodenough was living in Illinois. Goodenoughs did not think IRS took notice because he and Jones were filing their separate returns to different IRS regional offices. All of this changed when Goodenough moved to Arizona in the mid-1990s (Famham). The IRS noticed something suspicious because the real Goodenough and fake on were filing tax returns to the same office. Goodenough said he began hearing from the IRS asking why he was paying taxes on the extra income he was earning in Las Vegas. Goodenough responded and told the IRS and said he hasnt earned any money in Las Vegas and has not been in Las Vegas. (Famham). It appeared that Jones wasnt paying taxes on his earnings. This became frustrating for Goodenough because he found himself having to spend weeks worth of time writing to the IRS, Talking in the phone. In 1998 Goodenough went to get 20 dollars form an ATM machine and was told he lacked sufficient funds. He was unsure what has happened and immediately called his bank. The bank responded by say The IRS took your money. ( Farnham). Further he called the IRS and said I dont know what youre doing, I wasnt in Las Vegas, and I can prove it. (Farnham). He got his employer to write a letter testifying to his whereabouts on the dates in question. Eventually, the IRS relented, and put the money back in his account. In addition to the 75 dollars they charged him for the wire transfer. Goodenough personal life was seriously affected decided to take steps further. He and his wife got the phone number of the fake Goodenough in Las Vegas. When they called the fake Goodenough they found an easy-

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going guy who insisted there must be some honest mistake. Goodenough was asking fake Goodenough personal question like what hospital he was born and where he grow up. It appeared they both had exactly the same stories. The police investigated more on the case and eventually ended a 15 years of Identity theft crime. Arthur Gerald Jones has been order to pay restitution to both the Social Security Administration and to the man whose identity he stole. Jones pleaded guilty to one count of felony identity fraud. He will be sentenced on January 31, 2012 (Farnham).

Massive NYC theft ring

Accrording to Msnbc News since 2010 a criminal enterprise crime operating took place with the involvement of one bank and restaurant in Queens. The operation consisted of three bank workers, retail employees and restaurant workers would steal credit card numbers in a process known as skimming, this is when workers take information form a credit card and swipe it for payments and illegally sell the credit card numbers (Msnbc.com). Further different member of the criminal enterprise would steal personal information online. Later the information was given to the team responsible for manufacturers; they would forge Visas, MasterCards, Discover and Amercian Express cards. Further realistic identification was made with the stolen data. Credit cards were given to the teams criminal shoppers for spending sprees at higher-end stores including Apple, Bloomingdaless and Macys. Most of these products were resold in China, Europe and the Middle East. In result more than 13 million dollars was spend on IPads, IPhones, computers, watches and fancy handbags from Gucci and Lousi Vuitton. In addition suspects used the money to pay for hotel rooms and pricy cars. During the investigation

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detectives found it hard to translate Russian, Farsi, and Arabic. Deputy Inspector Gregory Antonsen of the NYPDs organized theft and identity theft task force stated. Part of the problem, especially for foreign tourists in the U.S., is the, unlike overseas, credit card companies in the U.S. do not install special microchips that make skimming more difficult.( Msnbc.com). In addition Antonsen states "Thieves have an amazing knowledge of how to use technology.(Msnbc.com). He said. "The schemes and the imagination that is developing these days are really mind-boggling." Police searched several homes and seized computers, packaged electronics, and 650,000 dollars in cash, along with several weapons. The charges for this case included enterprise corruption, theft and grand larceny. In this operation about 111 people were charged and 86 are in custody; the other are still being questioned. Criminal were hit with over 100 charges, and is going on record for the largest identity theft takedown in U.S. History.(Msnbc.com).

Largest credit card theft in U.S. history

Eleven people including U.S. Secret Service informant have been charged with hacking nine major retailers and the theft and sale of more than 41 million credit card numbers (Huff Post). Reports states breach is believed to be the largest hacking and identity theft case ever prosecuted by the Department of Justice, which said the suspects were charged with conspiracy, computer intrusion, fraud and identity theft.( Huff Post). Three people were U.S. citizens and other s from Eastern Europe and China. The suspects hacked into wireless computer networks of retailers such as TJX Cos., BJs Wholesale Club, OfficeMax, Boston Marke, Barnes & Noble, Sports Authority, Fovever 21 and DSW and set up programs that

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captured card numbers, passwords and account information. (Huff Post). The thieves that where responsible for this activity where just regular people that used a technique called , wardriving, which involved cruising through different areas with a laptop and looking for accessible wireless internet signals. Once they located a vulnerable network, they installed specific programs that captured credit card numbers. Further the information was kept internationally on computer servers in countries like Ukraine and Latvia. The ring operated mostly in Eastern Europr, the Phillipines, China and Thailand (Huff Post). Albert Gonzalez of Miami was responsible for this crime, and is charged with computer fraud, wire fraud, access device fraud, aggravated identity theft and conspiracy. Further Gonzalez was feeding criminals with information about ongoing investigations and warning the criminals about possible dangers. Gonzalez faces maximum sentence of life in prison. Gonzalez was a member of U.S. Secret Service working on websites used to transfer stolen goods (Hoff Post).

H & R Block Identity theft

According to Chicago Breaking News in Highland Indianan, A police officer pulled over a car

that he suspected driving under the influence. Once the police officer approached the vehicle he noticed a female passenger nervously fidgeting in the back seat. The officer asks her what the issue was, and she responded she was looking for a bottle for her small child also in the car; however the officer noticed a gold Visa card at her feet (Chicago Breaking News). The name on the card did not match the woman. Officers arrested her and discovered she was a former H&R Block employee who has stolen the identities of dozens of clients and then collected hundreds of thousands of dollars in refunds after fraudulently filing customers names without their

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knowledge. Once the car was searched officers have uncovered a large amount of evidence. They found a box full of H&R Block client information, numerous blank W-2 forms, about 100 debit cards and yellow legal pads with columns of Social Security numbers, Pin numbers, dates of tax filing and whether the returns had been accepted or rejected authorities said. Coming at the height of tax season, the arrests of Francesca Foster, who worked at an H&R Block office in East Chicago and a second woman, illustrate the dangers citizens face when filing tax returns full of sensitive information and the ease in which scammers can use electronic filing to steal identities. H&R officials said the company follows several measures to protect customers' information, including data encryption and shredding of confidential data. (Chicago Breaking
News). The business also said it provides victims with a year's subscription of identity-theft

protection and helps them file the necessary forms with the IRS. (Chicago Breaking News).
Internal Revenue Service officials said citizens need to have the same level of trust with their

tax preparer as they do with their own doctor before giving out personal information. (Chicago Breaking News).

Largest Medicare fraud in United States

A highly organized group referred to as Armenian Power have encountered in many organized crime throughout United States and other countries around the world. The Medicare fraud occurred in the United States was considered largest in U.S. history (Rothfeld). Identities of doctors and patients were stolen and used for different clinics in 25 states to bill Medicare for more than 100 million for treatments no doctor ever performed and no patient ever received. This occurred over a four year period. There were over 118 clinics and over 100 million

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dollars in bogus billing. 41 of the people accused had been arrested, 21 of them came from New York City, and many others in Los Angeles (Rothfeld). The leader of the organization was Armen Kazarian who is indentified as Vor which mean thief in-law which comes from a term used in the former Soviet Union. A person with that nickname is highly respected criminal boss. Law enforcement officials described Armenian Power as having an "extensive portfolio" that combined ruthlessness with opportunism, focusing on white-collar crime that included identity theft crimes such as credit-card skimming (Rothfeld). Total money stolen was around 163 million dollars in fraud. In addition the groups members and associates are charged with numerous crimes, including racketeering, health care fraud, identity theft, money laundering and bank fraud (Rothfeld).

Celebrity Identity Theft

According to New York Times identity theft is a common concern for celebrates because of their perceived wealth and status. Mayor Michael Bloomberg was a victim of Identity theft four years ago when two men have hacked into his personal financial account and were trying to steal 420,000 dollars from his account. According to prosecutors, Mr..Bostic created the Laderman Development Company in Elizabeth, N.J., and set up accounts in the companys name at two banks, PNC and Sovereign Bank. The problem occurred in early June when Mr. Bostic deposited 190,000 dollars into the Sovereign account and 230,000 dollars deposited into PNC bank account (chan). Both the checks were on Mr. Bloombergs personal account. However because of the size of the two checks, the bank decided to put it on hold for forgery. In August Mr. Bostic got arrested in New Jersey and was charged for grand larceny in the

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second degree, and faces up to seven years in prison (Chan). In addition while investigation took place into forged checks another fraud was discovered. The second man was, Charles Nelson hacked into the Mr. Bloomberg account and stole 10,000 dollars from the bank account. He transferred the money to his E Trade account and used a debt card for purchases. Mr. Nelson got arrested in Newark, where a computer, documents and two guns were discovered. Mr. Nelson was convicted and sentenced up to seven years in prison. According to New York Times this was not the first time criminals have gone after the mayor. Before his election officials have investigated a case against a person from Kazakhstan who tried to extort money from Mr. Bloombergs account. In addition a man named Oleg Zezev in March 2000 has sent threatening emails saying he had infiltrated the companys computer system and wanted 200,000 dollars. Mr.Bloomberg immediately contacted the F.B.I. about the threats. Months later the F.B.I tracked Mr. Zezev arrested him for extortion and was sentenced to 51 months in prison (chan).

IV.

Preventing Identity Theft: Direction for the Future

Although it is very easy for someone to steal your identity, there are many ways to prevent identity theft. First, destroy all credit cards, and all financial statements; always use secure websites when making purchases over the Internet; dont talk about financial issues using wireless communications; call up your local DMV and request that your private information get protected from disclosure. Dont use your mothers maiden name on your passwords for credit cards. Be cautious of anyone calling to confirm personal information. Thoroughly review all of your bank, credit card, and phone statements for unusual activity. Dont carry around your

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social security number. And most-importantly, secure your mail and monitor your credit by asking for credit report once a year and to watch for any unknown purchases.

If you suspect that you are a victim of identity theft, there are different things that you could do. The first thing to do is be aware. Watch out for any unusual purchases; being denied a loan you have qualified for; watch when your personal records dont agree with personal records; look out for any unexplained changes in your bank access codes; and look out for any unusual calls regarding your personal or financial information. If you suspect foul play with your credit or feel that something may be wrong, contact your local law enforcement officials to look into it. Dont hesitate to follow up. If you are a victim of identity theft there are many different steps you can take to make sure that the crime is going to be solved or to make sure that this does not happen again. As with all crimes, report the crime to your local police departments immediately. Call the fraud unit at each of the big three credit bureaus to notify them of what has happened. Do not pay any bills or charges that result from identity theft. Write a victim statement of 100 words or less. Get copies of your credit reports. Call your credit card issuers to close accounts. Create new secret passwords and PIN numbers. Contact the Social Security Administration and advise them of what has happened. Contact an attorney to make sure you are not victimized again. Be persistent and follow up.

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I.

Conclusion

Today, identity theft continues to remain a primary focus of law enforcement. As the crime rate for this offense continues to rapidly grow, law Enforcement officials as well as government representatives continue to target the crime and find ways to stop it. There are many things that officials must consider doing that would help prevent identity theft. For instance, provide a law enforcement response to high tech crime complaints 24 hours a day seven days a week. Knowledge, resources, and training should be shared among local law enforcement investigate agencies to prosecute Internet crime more effectively. Funding for a computer forensics lab, which will be essential for investigating and prosecuting Internet crimes, should be made available to legislation and should be enacted to help prosecute on-line crime. Finally, sentencing of this crime must also be put into perspective. One third of all identity theft offenders dont even get sent to prison, and those who do, dont even get lengthy terms. Representatives need to come up with legislation that would prosecute and fairly sentence criminals charged with identity theft because this crime surely is a victims crime. And remember, identity theft could happen to anyone, even to you.

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Bibliography

Chan, Sewell. Metro - City Room Blog - NYTimes.com. Web. 07 Dec. 2011. <http://cityroom.blogs.nytimes.com/2007/10/02/the-latest-victim-of-identity-fraud-mayorbloomberg/>.

Farnham, Alan. "Las Vegas Identity Theft Case Ends After 15 Years." ABCNews.com: Daily News, Breaking News and Video Broadcasts - ABC News. Web. 5 Dec. 2011. <http://abcnews.go.com/Business/las-vegas-identity-theft-case-ends-15years/story?id=14625723>.

Federal Reserve Bank of Boston. "Idenitity Theft Protect Yourselt." Web. 4 Dec. 2011http://www.bos.frb.org/consumer/identity/idtheft.pdf

Hoffman, Sandra K. Identity Theft. Greenwood, 2010. Print.

Huff Post. "Biggest Identity Theft In History." Breaking News and Opinion on The Huffington Post. Web. 5 Dec. 2011. <http://www.huffingtonpost.com/2008/08/05/biggest-identity-theftca_n_117094.html>.

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Identity Theft and Fraud Prevention. "FTC: Identity Theft Is the Fastest Growing Crime." Identity Theft | Leader in Identity Protection and Credit Reports. Web. 07 Dec. 2011. <http://www.identitytheft.com/article/fastest_growing_crime_in_the_country#sf>.

McQuade, Sam. "Technology-enabled Crime, Policing and Security." The Journal of Technology Studies (2003). Print.

Msnbc.com. "11 Charged in Connection with Credit Card Fraud." Msnbc.com - Breaking News, Science and Tech News, World News, US News, Local News- Msnbc.com. Web. 5 Dec. 2011. <http://www.msnbc.msn.com/id/26041151/ns/technology_and_science-security/t/chargedconnection-credit-card-fraud/>.

Pragides, Bernard. "History Of Identity Theft and Technology Advancements | Bernard Pragides." Bernard's Latest Writings. Web. 4 Dec. 2011. <http://bpragides.wrytestuff.com/swa257682.htm>.

Rothfeld, Michael. "Medicare Scheme Netted $35 Million, Officials Say." The Wall Street Journal. Web. 5 Dec. 2011.

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" Woman Charged in H&R Block Identity Theft Case." Chicago Breaking News. Web. 07 Dec. 2011. <http://archive.chicagobreakingnews.com/2010/03/2-women-accused-of-using-tax-data-to-filefalse-returns.html>.

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Identity Theft: The Dialectics of Technological Developments and Crime Control

Givi Palagashvili

Professor Pisciotta CRJ 380 Senoir Seminar December 7, 2011

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Givi Palagashvili

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This article highlights a growing, almost unstoppable, problem with the advancement of technology today. It describes how the increase in technological advantages makes it more difficult to prevent the misuse of information on the internet. Identity theft was a highlighted crime in this situation as it has become easier to exploit this type of crime. Identities are sold around the world quickly after they are stolen through online auction sites operated by organized crime or hackers, and they are used for a number of purposes -- most of which do not need a personal presence where a retina scan might be used. This clip from the article highlights two critical problems with the current technological situation as well as revealing a potential problem with the proposed solution, which is physical identification. The first problem is the availability of internet sources that make a profit selling and buying personal information. These sites are capable of quickly and discretely selling information such as credit card numbers, phone numbers, social security numbers and complete names to buyers across the world for a simple transfer of funds and an email. Considering the nature of this crime and its potential for easy money, it is no surprise that identity theft has become such a growing crime. Once the information has been stolen or purchased, it can be used to create

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false duplicate identities of a person on the internet. This can result in several false purchases of various products in another persons name. However, it should be noted that these purchases are rarely sent to, or identified with, the person who had stole the information. It makes sense as a criminal would not want to identify themselves with the crime that they had just committed. An analogy was used that described a theft using a stolen credit card at an ATM. They would eventually be caught as many ATMs have cameras that watch and monitor the transactions. However, the internet does not have such a monitoring device which leads to the second problem. The second problem is the lack of identity on the internet. Because a computer only recognizes a person as a series of inputs it is possible to become anyone on a computer as long as you possess the necessary inputs. If a person has the inputs necessary than they can essentially become anyone that they wish to and the computer will not have the ability to distinguish the difference. This allows hackers and identity thieves to pass as anyone they want to as long as they have the necessary information to do so. This includes bank accounts, paypals, credit companies and online businesses. And because of the lack of identity given by the internet, it becomes increasingly more difficult to trace someone back to the crime. This has led many to suggest physical identification in the form of retina scanners and even fingerprint scanners. While this is just the tip of the suggestions offered, they seem to be the ones that are gaining ground in protection of information. However, the solution has some potential problems. By giving users a physical presence on the internet it infringes on the freedom offered by internet autonomy. This freedom will be lessened if everyone is given a traceable presence on the internet. This is one of the reasons that the article at hand suggests that a physical solution would be made impossible by the people who would reject it. Another problem is the implausibility of physical identification. While it is possible in the office places as well as in a few other places where information is publically accessible, it is not plausible on something as vast and flowing as the internet. I am at a loss as to how a system like this could be applied to any of the online business. Would they need direct access to a users personal computer to be able to gain access to the information needed? How much permission must outside sources be given in order for a system like this to function? Is it possible for hackers to scam a user into giving out their fingerprints and sensitive information?

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While I see potential application to closed systems which are designed to function in a manner that allows physical identification, the internet has grown too far in complexity. So much so that it is often impossible to propose a single encompassing solution to fix an overall problem which leaves independent organizations to come up with their own solution. However, because these solutions often lack a physical way of identifying one person from another, they are often exposed to potential unauthorized access and possible identity theft. The article itself delves into the topic but its difficult to imagine that anyone is capable of understanding the problem to the depth that is needed in order to fix it.