Identity Theft & Bankruptcy Fraud

Footnotes

1. See e.g., Jonathan Kim, “Customer Data Lost, Citigroup Unit Says; 3.9 Million Affected as Firms’ Security Lapses Add Up,” the Washington Post, June 7, 2005, at A1 (“A unit of financial services giant Citigroup Inc. said yesterday that a box of computer tapes with account information for 3.9 million customers had been lost in shipment, exposing a vast new swath of Americans to the increased possibility of identity theft.”); Tom Zeller Jr., “Students Surfing Public Records Learn It’s Easy to Find Out a Lot,” New York Times, May 18, 2005, at C1 (noting “all it takes to obtain reams of personal data is Internet access, a few dollars and some spare time,” and indicating that a single Internet query revealed a person’s precise address, phone number, occupation, his spouse’s name, their birth dates, and other personal information); David Abel, “ATM Cards Pirated for Plenty, Police Say,” Boston Globe, May 10, 2005, at A1 (“Using small cameras and secretly installed ATM card readers, a thief stole private bank card information from more than 400 ATM users in Greater Boston and withdrew at least $400,000 from their accounts over the past two years….”); Press Release, United States Attorney for the Southern District of Florida (May 4, 2005) available at www.usdoj.gov/usao/fls/050504-01.html (indicating that two defendants pleaded guilty to access device fraud involving at least 112,000 unauthorized access card numbers and a loss of more than $56,000,000); Tom Zeller Jr., “Time Warner Says Data on Employees Is Lost,” New York Times, May 3, 2005, at C4 (“Time Warner yesterday reported the loss of computer backup tapes containing sensitive data, including the names and Social Security numbers of about 600,000 people.”); David Pringle and Rachel Zimmerman, “LexisNexis Reveals Further Breaches of Database,” Wall Street Journal, Apr. 13, 2005, at B3 (“LexisNexis said 310,000 Americans, nearly 10 times its original estimate, have had their personal data accessed by unauthorized individuals via its computer systems….”); Robert A. Guth, “Microsoft Sues Over ID Theft,” Wall Street Journal, Apr. 1, 2005, at A12 (noting Microsoft Corp. filed 117 lawsuits against certain “web sites it alleges are using a technique called ‘phishing’ to steal people’s identities online”); Evan Hendricks, “When Your Identity is Their Commodity,” Washington Post, Mar. 6, 2005, at B1 (noting the first “privacy debacle[]… involved a company called ChoicePoint Inc., which admitted it had been tricked into providing information on 145,000 people to a group of bogus companies and the second stemmed from Bank of America’s loss of credit data on 1.2 million federal employees”). Return to article.
2. Holly K. Towle, “Identity Theft: Myths, Methods, and New Law,” 30 Rutgers Computer & Technology Law Journal 237, 238 (2004) (noting “[i]dentity theft has been described as one of the ‘fastest growing crimes in the nation,’ and ‘the crime of the new millennium’”); Chad C. Coombs and Keenen Milner, “New California Identity Theft Legislation,” 27-AUG L.A. Law. 21, 21 (2004) (“identity theft is the fastest growing crime in America”). Return to article.
3. See Securing Electronic Personal Data: Striking a Balance Between Privacy and Commercial and Governmental Use, Before the U.S. Senate Committee on the Judiciary 1 (2005) (Prepared Statement of the Federal Trade Commission) available at www.usdoj.gov/usao/fls/050504-01.html (revealing that a 2003 Federal Trade Commission “survey showed that over a one-year period nearly 10 million people… had discovered they were victims of some form of identity theft”). Return to article.
4. “The terms ‘identity theft’ and ‘identity fraud’ refer to all types of crimes in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic or other gain….” Identity Theft Penalty Enhancement Act, H.R. Rep. No. 108-528, 2004 WL 1260964, at *4 (2004), reprinted in 2004 U.S.C.C.A.N. 779, 779. See also Towle, supra note 3, at 242 (“The term ‘identity theft’… is used to refer to several different types of crimes in which personal or financial data is compromised.”). Return to article.
5. The Identity Theft and Assumption Deterrence Act, S. Rep. No. 105-274, 105th Cong. (1998) (Statement of Senator Patrick Leahy). Return to article.
6. Hendricks, supra note 2. Return to article.
7. Id. Return to article.
8. Id. Return to article.
9. Id. Return to article.
10. See e.g., United States v. Gregory Lynn Sampson, United States District Court for the Central District of California, CR 02-0184-ER (Sampson filed a bankruptcy case using the name and Social Security number of his thirteen-year-old son); United States v. Banyard, United States District Court for the Eastern District of Wisconsin, 03-CR-49-R.R. (Janice Banyard fraudulently obtained a Social Security number for her deceased daughter, Janice Precious Banyard, who had died shortly after birth. Banyard then used that Social Security number to obtain three mortgages and to file for bankruptcy protection.). Return to article.
11. See e.g., United States v. Arla Waxman, United States District Court for the Central District of California, CR 02-1264-NM (Waxman filed fraudulent bankruptcy cases in the names of her mother and ex-husband using variations of their Social Security numbers); United States v. Williams and Sanders, United States District Court for the Northern District of Illinois, 94-CR-00737 (Verna Williams—who was separated from her husband, Rudolph—filed a chapter 13 bankruptcy case in the names of Rudolph and Verna Williams. She fraudulently represented Rudolph’s income, making it appear as if they had sufficient income to fund a chapter 13 plan. When Verna went to her attorney’s office to sign the bankruptcy documents, she was accompanied by Thomas Sanders, who fraudulently represented that he was Rudolph Williams and who forged Williams’ signature on the bankruptcy documents). Return to article.
12. Jane E. Limprecht, “Fresh Start or False Start? Dealing with Identity Theft in Bankruptcy Cases,” 19 ABI Journal 12, 40 (Jan. 2001). See e.g., United States v. John Doe, United States District Court, District of Nevada, CR-N-04-0031-HDM-VPC (After the victim lost his wallet, the defendant fraudulently obtained a driver’s license and credit in the victim’s name and then filed a fraudulent bankruptcy case using the victim’s name and Social Security number. The defendant also presented a fraudulent Social Security card, driver’s license, and immigration document to a representative of the United States Trustee Program). Return to article.
13. Maureen A. Tighe and Emily Rosenblum, “‘What Do You Mean, I Filed Bankruptcy?’—Or How the Law Allows a Perfect Stranger to Purchase an Automatic Stay in Your Name,” 32 Loyola of Los Angeles Law Review 1009, 1013 (1999). Return to article.
14. Id. Return to article.
15. Id. Return to article.
16. Id. at 1010. Return to article.
17. Id. Return to article.
18. Id. Return to article.
19. United States v. Glen Alan Ward, United States District Court for the Central District of California, CR 00-338 (Ward fraudulently represented that he could stop foreclosure of the victims’ homes. As part of Ward’s scheme, he convinced the victims to transfer their residential properties to non-existent individuals, collected “rent” from his victims, and then filed fraudulent bankruptcy cases in the names of the non-existent individuals.). Return to article.
20. United States v. Randle, 324 F.3d 550, 553 (7th Cir. 2003) (indicating that Randle was convicted of bankruptcy fraud for fraudulently representing he would halt foreclosure of the victims’ homes by using his “special knowledge and expertise,” which consisted of preparing and filing fraudulent chapter 13 bankruptcy cases in the names of the victim homeowners); United States v. Travers, 223 F.3d 1327, 1328-29 (11th Cir. 2000) (providing that Travers obtained title to approximately 100 properties using a variety of false names and aliases, collected rent on the properties, and filed successive bankruptcy petitions to forestall foreclosure). Return to article.
21. United States Trustee Program, 2003 Annual Report of Significant Accomplishments 17 (2003) available at www.usdoj.gov/ust/press/annualreport/ar2003.pdf; Press Release, United States Trustee Program, Personal Bankruptcy Filers Will be Required to Show Proof of I.D., Based on Results of Pilot Study 2-3 (Jan. 3, 2002) available at www.usdoj.gov/ust/press/pr20020103.htm (indicating that “[i]ndividuals filing for personal bankruptcy under [c]hapter 7 or [c]hapter 13 will be required to provide proof of identity and SSN when they appear at the statutorily mandated Section 341 meeting of creditors to discuss their financial obligations”). Return to article.
22. Limprecht, supra note 13, at *40. Return to article.
23. Id. Return to article.
24. Identity Theft Penalty Enhancement Act, Pub. L. No. 108-275, 118 Stat 831 (2004) (the “Act”). Return to article.
25. Id. at §2. Section 1028A applies to certain fraud, theft and immigration offenses. Id. The Act also created a five-year mandatory term of imprisonment for persons who engage in identity theft while committing certain terrorism crimes. Id. Return to article.
26. Id. at §3. Return to article.
27. 18 U.S.C. §§1028A(c)(4), (c)(5), (c)(11) (2004). Return to article.
28. The Act at §2. Because of the judicial function exception set forth in 18 U.S.C. §1001(b) (2000), false statements in bankruptcy documents and false statements made during bankruptcy hearings cannot be prosecuted under §1001. Cf., United States v. McNeil, 362 F.3d 570, 574 (9th Cir. 2004) (holding that McNeil could not be prosecuted under 18 U.S.C. §1001 for making false statements in a financial affidavit submitted to the district court for appointment of counsel because “[s]tatements made in judicial proceedings are excluded from liability under [§1001] by subsection (b)”). Return to article.

About the Author

Ms. Klein is a Bankruptcy Fraud Criminal Coordinator for the United States Trustee Program and an Adjunct Professor of Law at Loyola Law School in Los Angeles. The views expressed herein are solely those of the author and are not necessarily those of the Department of Justice or any other institution.