Expecting the Expecting the Unexpected:Unexpected:

Important Identity Theft Important Identity Theft Factors for State and Local Factors for State and Local

Law EnforcementLaw EnforcementDonald Rebovich, Ph.D.Donald Rebovich, Ph.D.

Executive DirectorExecutive DirectorCenter for Identity Management Center for Identity Management

and Information Protection,and Information Protection,Utica CollegeUtica College

2008 Economic Crime Institute 2008 Economic Crime Institute ConferenceConference

October 23, 2008October 23, 2008

Center For Identity Management Center For Identity Management And Information ProtectionAnd Information Protection

Research goals:Research goals: Trends, causes, early detection, and Trends, causes, early detection, and

prevention of identity fraud and theftprevention of identity fraud and theft Impact of policy decisions, legislation, and Impact of policy decisions, legislation, and

regulatory actionsregulatory actions Improved identity authentication systems Improved identity authentication systems

Center for Identity Management Center for Identity Management and Information Protectionand Information Protection

Recent Research Recent Research Bureau of Justice Assistance (BJA) – United Bureau of Justice Assistance (BJA) – United

States Secret Service StudyStates Secret Service StudyQuantitative and qualitative analysis of a Quantitative and qualitative analysis of a

sample of closed Secret Service criminal sample of closed Secret Service criminal cases (2000-2006) to detect and cases (2000-2006) to detect and synthesize patterns as they relate to synthesize patterns as they relate to identity fraud and theft. identity fraud and theft.

Results released in October, 2007Results released in October, 2007

““Identity” – What is Identity” – What is

it?it?

• Do you “know” who your Do you “know” who your are?are?

• Do we “know” who you Do we “know” who you are? are?

• Do we sufficiently protect Do we sufficiently protect our identities?our identities?

• Have we become Have we become complacent about identity complacent about identity protection?protection?

• Do we play an indirect role Do we play an indirect role in “enabling” identity in “enabling” identity thieves?thieves?

IIdentity Theft – Who dentity Theft – Who

Protects Protects Us?Us?

• What role does the federal What role does the federal government play?government play?

• What role does local/state What role does local/state enforcement play? enforcement play?

• Is local/state enforcement Is local/state enforcement “sensitized” to identity theft “sensitized” to identity theft enforcement?enforcement?

• How does enforcement How does enforcement respond to identity theft “red respond to identity theft “red flags”flags”

U.S. Bureau of Justice Assistance U.S. Bureau of Justice Assistance Study:Study:

Patterns and Trends of Identity Patterns and Trends of Identity TheftTheft

The following research material is derived The following research material is derived from:from:

“ “Identity Fraud Trends and Patterns: Identity Fraud Trends and Patterns: Building a Data-Based Foundation for Building a Data-Based Foundation for Proactive Enforcement” by Gordon, Proactive Enforcement” by Gordon, Rebovich, Choo and Gordon. Economic Rebovich, Choo and Gordon. Economic Crime Institute Annual Conference, Crime Institute Annual Conference, (October 22, 2007).(October 22, 2007).

Report available at Report available at www.cimip.org

U.S. Bureau of Justice Assistance U.S. Bureau of Justice Assistance Study:Study:

Patterns and Trends of Identity Patterns and Trends of Identity TheftTheft

First empirical study of identity theft cases in First empirical study of identity theft cases in U.S.U.S.

517 U.S. Secret Service cases from 2000-517 U.S. Secret Service cases from 2000-20062006

Offender, offense and case process variablesOffender, offense and case process variablesObjective: Apply results to improve control Objective: Apply results to improve control

effortsefforts

U.S. Bureau of Justice Assistance U.S. Bureau of Justice Assistance Study:Study:

Patterns and Trends of Identity Patterns and Trends of Identity TheftTheft

Released in October, 2007Released in October, 2007

Some results:Some results:Most victims did not know the offendersMost victims did not know the offenders1/3 of cases started at offender’s job1/3 of cases started at offender’s job42% involved organizational crime42% involved organizational crimeMedian loss was $31,356Median loss was $31,356

Local/State Police Referral CasesLocal/State Police Referral CasesClose to half of the cases were referred from Close to half of the cases were referred from

local and state law enforcement (246)local and state law enforcement (246)Some results:Some results:

Similar to “Non-local” cases in most areasSimilar to “Non-local” cases in most areasMore outside of NortheastMore outside of NortheastGreater percentage of two-person offender Greater percentage of two-person offender “teams”“teams”Comparatively narrow range of lossesComparatively narrow range of losses

Local/State Police Referral CasesLocal/State Police Referral CasesSome results:Some results:

Greater overlap with forgery and drug crimeGreater overlap with forgery and drug crime

Greater percentage of cases that originated Greater percentage of cases that originated with the investigation of cases outside of the with the investigation of cases outside of the economic crime arena economic crime arena

Average Loss Per CaseAverage Loss Per CaseThe median dollar loss among the local/state cases was $30,726. Dollar loss varied with the number of defendants in the case

Offenders Offenders Median LossMedian Loss 11 $22,344$22,344 22 $34,474$34,474 33 $18,000$18,000 44 $50,000$50,000 55 $77,503$77,503 6+6+ $76,000$76,000

Who Are The Offenders??Who Are The Offenders??

They are “criminal opportunists”They are “criminal opportunists”They search for the They search for the easiesteasiest route to route to profitsprofitsThey specialize their criminal They specialize their criminal servicesservicesThey “adapt” well to control effortsThey “adapt” well to control effortsThey have They have all the time in the worldall the time in the world

The Offenders: Arrest The Offenders: Arrest HistoryHistory

30.7% -- no arrest history30.7% -- no arrest history Of the arrests:Of the arrests:

26.6%: larceny or theft.26.6%: larceny or theft. 36.7%: fraud, forgery, or ID 36.7%: fraud, forgery, or ID

thefttheft

Situational

Patterns Of Identity Theft

Routine

Professional

Situational

Crimes of Opportunity

Patterns Of Identity Theft

Routine

Professional

The Role of “Insiders”The Role of “Insiders” Of the total 246 local/state cases, 65 Of the total 246 local/state cases, 65

involved offenders who accessed involved offenders who accessed personal identifying information at personal identifying information at their place of employment.their place of employment.

The employees victimized:The employees victimized: Retail – 27Retail – 27 Private Company – 17Private Company – 17 Bank/Credit Union – 7Bank/Credit Union – 7 Government Agency - 3Government Agency - 3 Education – 3Education – 3 Insurance – 3Insurance – 3 Unavailable – 5Unavailable – 5

IDENTITY THEFT RING DEVELOPMENT

IDENTITY THEFT RING DEVELOPMENT

Information “Insider”

IDENTITY THEFT RING DEVELOPMENT

Information “Insider”RECRUITMENT

IDENTITY THEFT RING DEVELOPMENT

Information “Insider”RECRUITMENT

IDENTITY THEFT RING DEVELOPMENT

Information “Insider”RECRUITMENT

IDENTITY THEFT RING DEVELOPMENT

Information “Insider”

Theft Ring DirectorRECRUTIMENT

Demonstrationof Ease

(“Teasers”)

CriminalMentoring

IDENTITY THEFT RING DEVELOPMENT

Information “Insider”

Theft Ring Director

Testing the “System”

RECRUITMENT

Demonstration of Ease

(“Teasers”)

CriminalMentoring

IDENTITY THEFT RING DEVELOPMENT

Information “Insider”

Theft Ring Director

Testing the “System”

“Reaping the Rewards”

RECRUITMENT

Demonstration of Ease

(“Teasers”)

CriminalMentoring

Insider FakeDL

IDFraud

Fake Driver’s License as “Catalyst”

Insider FakeDL

IDFraud

Info. Broker

DLTech.

DLTech.

Fake Driver’s License as “Catalyst”

Insider FakeDL

ID Fraud

Tech.Skills

Runners

IDFraud

Fake Driver’s License as “Catalyst”

CRIMINAL DEVELOPMENT STAGES

Citizen Fraud Report

OFFICER RESPONSE STAGES

Citizen Fraud Report

Victim Theft/Victim

Manipulation

OFFICER RESPONSE STAGES

Citizen Fraud Report

Victim Theft/Victim

Manipulation

IdentityConversion

OFFICER RESPONSE STAGES

Citizen Fraud Report

Victim Theft/Victim

Manipulation

IdentityConversion

Identity TheftRecognition

OFFICER RESPONSE STAGES

Citizen Fraud Report

Non-FraudReport

Encounter

Victim Theft/Victim

Manipulation

IdentityConversion

Identity TheftRecognition

OFFICER RESPONSE STAGES

Citizen Fraud Report

Non-FraudReport

Encounter

Victim Theft/Victim

Manipulation

IdentityConversion

Identity TheftRecognition

Response to OriginalOffense

OFFICER RESPONSE STAGES

Citizen Fraud Report

Non-FraudReport

Encounter

Victim Theft/Victim

Manipulation

IdentityConversion

Identity TheftRecognition

Response to OriginalOffense

Exposure to Identity Theft“Red Flags”

OFFICER RESPONSE STAGES

Citizen Fraud Report

Non-FraudReport

Encounter

Victim Theft/Victim

Manipulation

IdentityConversion

Identity TheftRecognition

Response to OriginalOffense

Exposure to Identity Theft“Red Flags”

Officer Reaction to

Case Factors

OFFICER RESPONSE STAGES

Citizen Fraud Report

Non-FraudReport

Encounter

Victim Theft/Victim

Manipulation

IdentityConversion

Identity TheftRecognition

Response to OriginalOffense

Exposure to Identity Theft“Red Flags”

Officer Reaction to

Case Factors

Inductive Assessment by Officer

OFFICER RESPONSE STAGES

Citizen Fraud Report

Non-FraudReport

Encounter

Victim Theft/Victim

Manipulation

IdentityConversion

Identity TheftRecognition

Response to OriginalOffense

Exposure to Identity Theft“Red Flags”

Officer Reaction to

Case Factors

Inductive Assessment by Officer ID Theft Recognition

OFFICER RESPONSE STAGES

Laminating machines

Bar Code Scanners

Bar Code Rewriters

Credit Card Embossing/Encoding Equipment

Multiple Drivers Licenses

Multiple Social Security Cards

TOOLS OF THE TRADE

Multiple Vehicle Titles

Blank Check Stock

Drivers License Templates

Check Producing Software

Treasury Check Template Disks

TOOLS OF THE TRADE

RECOGNIZING “RED FLAGS”

Connecting the Dots

Unusual behavior, circumstances,

evidence

Reports (Average Citizen, Service)

RECOGNIZING “RED FLAGS”

Connecting the Dots

Motor Vehicle Stops

Narcotics Cases (e.g., trafficking,

possession)

RECOGNIZING “RED FLAGS”

Connecting the Dots

Role of “chance” in routine calls/original offenses (e.g.,

disturbances, domestic violence, assault, burglary,

loitering)

QuestionsQuestionsIn the present environment:

How do we protect “Who We Are?”

How do we prevent others from “Becoming Us?”

How do we thwart the criminal relations and transactions leading to identity theft and identity fraud?

Identity Theft& FraudControl

Prevention

Punishment/Deterrence

Identity Theft& FraudControl

Prevention

Punishment/Deterrence

Point of Theft

AwarenessScreening

Monitoring

Identity Theft& FraudControl

Prevention

Punishment/Deterrence

Point ofConversion

Document “Target

Hardening”

Point of Theft

AwarenessScreening

Monitoring

Identity Theft& FraudControl

Prevention

Punishment/Deterrence

Point ofConversion

Document “Target

Hardening”

Point of Theft

AwarenessScreening

Monitoring

Point of Fraud

AwarenessVerification

Identity Theft& FraudControl

Prevention

Punishment/Deterrence

Point ofConversion

Document “Target

Hardening”

Point of Enforcement

CoordinationAwareness

Point of Theft

AwarenessScreening

Monitoring

Point of Fraud

AwarenessVerification

DiscussionDiscussion