Articles Posted in Identity Theft

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Appellants in the Pierre opinion appealed their federal criminal convictions and sentences for conspiracy to defraud the Internal Revenue Service, conspiracy to traffic in unauthorized access devises, aggravated identity theft and other substantive counts of identity theft following a jury trial.   The scheme in this case involved filing fraudulent income tax returns. The Defendants filed tax returns in the names of Florida prison inmates. The tax refunds were paid to the TaxProfessors’ debit cards that were used at automatic teller machines to obtain cash.

The scheme unraveled after an officer spotted a Cadillac with dark tinted windows and could not see inside the vehicle. He also noticed a temporary tag on the vehicle that was registered to the Defendant whose family owned a body shop that authorities suspected fraudulently issued temporary vehicle tags. The officer made a traffic stop because the he believed the tinting on the windows was below the standards permitted by Florida law.   After receiving consent to search the inside of the car the officer found prepaid debit cards issued by a business that was called TaxProfessor. The investigation into the debit cards led to a search warrant for the home of a defendant who was connected to TaxProfessor.   The Defendants also approached an employee of the Florida Department of Children and Family Services as a child protective investigator who had access to personal identifying information through a state database. The Defendant paid the DCF employee for a printout from the website which contained a list of inmates and SSN’s for 25 names on the list. Tax returns were filed using the inmates’ information and the tax refunds were loaded onto these debit cards for TaxProfessors accounts.

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In U.S. v. Brown the Defendant pleaded guilty in federal court for knowingly receiving 481 counterfeit United States Postal Money Orders from a foreign county with intent to pass them off as real, violation of 18 U.S.C. § 473. As part of her plea agreement she waived her right to appeal her federal conviction and sentence. At the plea colloquy she admitted that she knew the postal money orders were not true and were counterfeit.

Nevertheless, she filed her appeal and raised the issue in her appeal that her indictment was defective because it did not expressly allege the mens rea element of the section 473. She argued that the omission deprived the federal court of subject-matter jurisdiction to accept her guilty plea and therefore her conviction is null and void.
Brown’s two count indictment was based on her receipt of packages containing the counterfeit money orders. Count one did not allege knowledge, however count 2 did allege that the defendant acted knowingly. The Defendant plead guilty to count one.

Brown’s jurisdictional argument went like this. The indictment was defective on its face because count one did not include the required mens rea element, which is an essential element of section 473 that makes if a crime to receive and/or pass counterfeit money orders. Because of this omission, Brown argued the indictment does not state a federal crime and therefore the district court never had jurisdiction to sentence her.
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In U.S. v. Edmond, Defendant was indicted for conspiracy to commit access-device fraud and aggravated identity theft based upon his use of social security numbers to make fraudulent bank transfers. Pursuant to a plea agreement, he pleaded guilty to possession of fifteen or more unauthorized access devices – an unindicted offense – and one count of aggravated identity theft. On the basis of this plea, the District Court sentenced Edmond to prison for a total of 48 months.

For some time in January to the beginning of April 2013, Edmond and his co-conspirator, Sheenequa Angel Michel, allegedly engaged in a scheme fraudulently transfer money using unauthorized “replacement cards”. Michel, a Bank of America teller, would improperly access, photograph, and create lists of “the personal identification information, including Social Security numbers,” of BofA customers. Edmond would then use that information to acquire unauthorized replacement cards, and in turn, would use those cards to make fraudulent money transfers. This resulted in a total loss of $14,243.31. A BofA representative confronted her after investigation identity-theft complaints. Michel admitted her involvement. Later she agreed to cooperate. She transferred another 90 names to Edmond, this list consisted of controlled identities provided by law enforcement. Following the transfer, agents arrested Edmond.
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In U.S. v. Charles the defendant was found in possession of prepaid debit cards that were loaded with tax-refund monies sent by the I.R.S. in response to fraudulent tax returns. Charles pleaded guilty to the federal crimes of trafficking in access devices and aggravated identity theft. The identity theft count carries an additional two-year sentence that runs consecutively to another other predicate crime involving the unauthorized transfer, possession, or use of the identity of another. The applicable sentencing guidelines provision for the access device count, section 2B1(b)(11)(B), has a two-level increase for the production or trafficking of unauthorized devices The district court found that the enhancement was warranted because the Charles transferred one of the prepaid debit cards to his codefendant and thereby “trafficked” an unauthorized access device.

On appeal, Charles challenged the two point enhancement arguing the district court erred in refusing to submit the applicability of the enhancement to a jury pursuant to Alleyne v. U. S. The court rejected his Alleyne argument because the two level increase only affected Charles’ guidelines calculation and not his statutory mandatory minimum or maximum sentence. Alleyne holds that a court cannot make a judicial finding of a fact at sentencing where the fact is an element of a crime that increases the maximum sentence. Alleyne preserved a sentencing court’s fact finding authority concerning facts that impact the statutory punishment.

However, the court of appeals did find that the two level increase for trafficking was error. U.S.C. § 1028A(a)(1). The guidelines applicable to U.S.C. § 1028A is USSG 2B1.6 which specifically provides that the sentencing guideline for the identity theft offense is the two year consecutive sentence mandated by statute. The Application Notes of the guidelines explain that if a sentence under section 2B1.6 is imposed in conjunction with a sentence for an underlying offense, the court should not apply any specific offense characteristic for the “transfer, possession, or use of a means of identification when determining the sentence for the underlying offense.” Because Charles already received the mandated two-year consecutive for aggravated identity theft, the Application Note to section 2B1.6 precluded the two level increase for transferring the debit card to the codefendant.

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In U.S. v. Philador the two defendants pled guilty to conspiracy to steal government funds in violation of 18 U.S.C. §371 and to the charge of theft of government funds in violation of 18 U.S.C. §641. Their offenses involved a scheme to submit fraudulent tax returns to the Internal Revenue Service using stolen social security numbers. They then received refund checks from the government and deposited the funds into various corporate accounts of companies they controlled. The presentence investigation report recommended a six-level enhancement to their offense level pursuant to guidelines section §2B1.1(b)(2)(c) because it claimed the offense involved 250 or more victims. Only twenty-six of the taxpayer victims had been positively identified by the government. The defendants objected to the enhancement, and while they conceded there were more than 250 social security numbers used to file over 250 fraudulent tax returns, the defendants argued that the government failed to meet its burden because the government failed to show by a preponderance of the evidence that 250 of the social security numbers were authentic and belonged to living people.

In rejecting the defendant’s argument, the 11th Circuit found the district court did not err in finding there 250 victims. There was no dispute that over 250 social security numbers were used to cause the Internal Revenue Service to issue fraudulently submitted returns. Because the Internal Revenue Service issued refunds for tax returns associated with those numbers, the district court made the “legitimate” inference that social security numbers corresponded to actual persons. The 11th Circuit has stated in prior cases that it is not necessary for the government to show that in the context of a government issued identification the government verifies an individual’s identity before it issues a driver’s license or a passport. It is reasonable to conclude that the government routinely obtains an applicant’s identity to verify the authenticity of that identity. Here the district court could infer, based on common sense and ordinary human experience that the Internal Revenue Service verifies identifying information, like social security number, before issuing a tax refund. The fact that the Internal Revenue Service paid the refund to the defendants indicates that the social security number used to procure the refunds are associated with real people and the district court’s conclusion was not erroneous.

Additionally, the district court did not err in applying the six-level enhancement without first finding the victims were living. A victim in this context under the sentencing guidelines a victim is a person whose means of identification was used unlawfully. A means of identification is limited to an actual, and not fictitious, individual. The 11th Circuit found the plain meaning of the phrase “actual” does not distinguish between living and deceased persons. Therefore it was not necessary for the district court to make this finding.

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In U.S. v Washington the defendant pleaded guilty to conspiracy to traffic in unauthorized credit cards and using and trafficking in unauthorized credit card numbers in violation of 18 U.S.C. § 1029. The presentence investigation report recommended an enhancement under sentencing guidelines § 2B1.1(b)(2)(C) because the number of victims exceeded 250, the threshold number for a 6-level enhancement. Washington disputed the number of victims and requested that the government identify the victims by name. The defendant noted the government only identified 70 banks and financial institutions and requested hard evidence of the 250 or more victims. He also disputed the length of time he was involved in the conspiracy.

At the sentencing hearing, the government did not present any evidence identifying 250 or more victim and only argued that there were thousands of individuals who had their credit cards stolen. The district court ruled for the enhancement noting that it previously applied the enhanced the codefendants’ sentences.

The 11th Circuit held that the government has the burden of introducing sufficient and reliable evidence to prove the necessary facts by a preponderance of the evidence. The government did not meet its burden because it did not introduce any evidence to support the enhancement. While the government told the sentencing court there were over 250 individuals who have been victims of stolen credit card information and other related account information during the time the defendant was involved in the scheme, the representation was insufficient. Absent a stipulation by the parties, an attorney’s factual assertions at a sentencing hearing do not constitute evidence that the district court can rely upon in the face of challenged conclusions of the presentence investigation report. Even though the district court had applied the enhancement to the coconspirators, those findings could not serve as a basis for applying the enhancement to the defendant because the defendant objected. The defendant should have been given an opportunity to rebut the evidence or to generally cast doubt on its reliability. Furthermore, the defendant was not a participant of the conspiracy during the entire duration and without the information about the identities of the victims and the dates of the theft of their credit card information, the government failed to meet its burden of showing that the fraud scheme involved more than 250 victims during the time of the defendant’s involvement.

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In U.S. v. Cruz, the defendant and her brother obtained credit cards numbers which they purchased from a waiter working at a Flanigan’s restaurant in Hialeah, Florida. Using a credit card skimming device, the waiter sold the skimmed numbers to a codefendant who was married to Cruz. Cruz’s sister also a codefendant worked at a Target. At one point after a complaint by a customer about an authorized purchase of $200 on the credit card, Target security began to focus on the sister. While working the register they observed her and became suspicious because she was continuously selling to the same man buying stacks of gift cards and other merchandise. She sold 65 gift cards and 50 “other” other transactions involving the same two customers. After she was interview by Metro-Dade Police, she admitted selling to her brother who came into the store to use credit cards she knew to be fraudulent and did not belong to him.

They were convicted of aggravated identity theft. The identity statute, 18 U.S.C. §1028(a)(1) mandates a 2 year additional consecutive sentence for a defendant convicted of a predicate crime if during (or in relation to) the commission of the predicate crimes, “the offender knowingly transfers, possess, or uses, without legal authority, a means of identification of another person.” The 11th Circuit found that the defendant’s underlying offense of using an unauthorized access devise (section 1029) was a predicate offense for purposes of §1028A and were subject to the 2 year consecutive sentence in addition to the guidelines sentence. In calculating the guidelines sentence, the district court gave them a two- point increase for the use of a device-making equipment under U.S.S.G. §2B1.1(b)(10)(A)(i).

The defendants argued this was double counting and found support in the commentary of U.S.S.G. §2B1.6 which limits the application of §2B1.1(b)(10) to avoid double counting. That section states that the guidelines sentence for an aggravated identity theft conviction under §1028 is the statutory term of imprisonment. The commentary prohibited applying any specific offense characteristics for “the transfer, possession, or use of a means of identification when determining the sentence for the underlying offense” because the sentence under 2B1.6 accounts for this relevant conduct. The defendant interpreted this commentary to prohibit a guidelines enhancement for relevant conduct that includes the use of a device-making equipment. The 11th Circuit did not agree and found that §2B1.6 allows for an enhancement for the use of device-making equipment. The court interpreted the commentary of §2B1.6 to prohibit the enhancement where the relevant conduct pertains to the transfer, possession or use of a means of identification. Here, the defendants’ enhancements were premised on relevant conduct related to the device-making equipment. The court found the commentary did not prohibit this relevant conduct from serving as the basis for the increase. The evidence supported the enhancement given the sister’s knowledge her codefendant brother bought merchandise using credit cards that did not belong to him. There was also circumstantial evidence that the sister knew about the skimmer because she lived at the same address where it was found.

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The issue here is whether the unauthorized transfer of an individual’s identifying information to another party involves the actual use of that information for a fraudulent purpose such that the individual whose identifying information was transferred is as victim under U.S.S.G 2B1.1(b)(2)(B). This sentencing guideline provides for a 4 level enhancement if the offense involved at least 50 but less than 250 victims. The defendant in U.S. v. Hall pleaded guilty to bank fraud conspiracy, identity theft and access device fraud and wrongfully obtaining and transferring individually identifiable health information for personal gain. The district court applied a four level enhancement because the offense involved more than 50 but less than 250 victims. Hall challenged the enhancement arguing that the unlawful transfer or sale of identifying information does not equate to the actual use of identifying information for a fraudulent purpose. The conspirators actually used 12 of the 141 individuals to obtain fraudulent credit cards the so Hall claimed there were less than 50 victims and the 11th Circuit agreed.

Hall worked as an office assistant in a Coral Springs doctor’s office where she had access to patients’ dates of birth, social security numbers and other protected information. She received $200 for each individual’s information she provided to the coconspirators. She received only $200 though sent the codefendants 65 to 141. Her conspirators used 12 of the patients’ personal information to obtain fraudulent credit cards. The government’s position was that all 141 patients whose information was transferred were victims.

The 11th Circuit found that while the 12 individuals were victims, the remaining individuals whose information was merely transferred were not victims under the Application notes which define victims as “any person who sustained any part of an actual loss…who sustained bodily injury as a result of the offense.” Under this enhancement, whether an individual was a victim depends on whether their identification was used. The conspiracy’s purpose was to obtain cash advances and purchase using fraudulent credit cards. Hall’s mere transfer of the personal identifying information, without more action, did not involve using the information to procure fraudulent credit cards and cash and the personal information was not used until the coconspirators secured the credit cards.

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The issue in U.S. v. Zuniga-Arteaga is whether the defendant can be convicted of aggravated identity theft under 18 U.S.C. §1028A(a)(1) where the person whose identity was stolen is no longer living. The 11th Circuit Court of Appeals held in this decision that the person whose identity was stolen does not have to be a living person. Using a fictitious name, the defendant first attempted to enter to the U.S in 1995, she had claimed to be born in Texas but she was returned to Mexico when immigration officers discovered she was not the person she claimed. Subsequently she returned to the U.S. and arrested for drug offense. She gave the name M.S.G. (the opinion only gives the initials) and provided false identification. At her initial appearance in the drug case, she admitted she was Zuniga-Arteaga, the person named in the indictment. Eventually she was convicted in federal court of drug conspiracy and sentenced. Some eight years later I.C.E. agents encountered her at the federal prison while serving her sentence where she claimed to be MSG born in Mercedes Texas. She gave ICE agents a date of birth belonging to MSG who lived and died prior to the defendant’s use of the name. On two subsequent occasions she told ICE agents that she was MSG and presented ICE agents with a valid birth certificate for MSG. Meanwhile law enforcement officials found the defendant was not MSG and eventually located MSG’s brother who told them MSG died as a child in 1960.

The defendant was indicted for falsely representing herself as a U.S. and with using the means of identification of another person in relation to the 18 U.S.C. §911 offense, making this aggravated identity theft, in violation §1028A(a)(1). This section makes it a crime for anyone to knowingly transfer, possess, or use, without lawful authority, a means of identification of another person, in relation to the any of the felony violations listed in the statute.

The defendant argued she could not be convicted of the aggravated felony because the term person in the statute refers to the living and does not cover theft of the identity of a person who has died and her use of M.S.G. identity falls outside the scope of the statute. In attempting to determine whether Congress meant the word “person” to include living as well as dead person, the 11th Circuit considered the context the word was used. The Court found that the term “means of identification” was not meant to be limited to living persons. A further analysis of other provision in the statute convinced the court that Congress intended the term “person” in section1028 to include living and dead individuals. Furthermore, the 11th Circuit concluded that the purpose of the statute is supported by this interpretation because the theft of deceased person’s identities is not a victimless crime and has a real consequence for the living such as the beneficiaries of the decedents and businesses who are misled into relying on the stolen identity information. The Court also concluded that Congress likely recognized this form of identity theft needed deterrence because stolen identities of real people have a broad range of uses, for example, using a real persons birth certificate to obtain and authentic passport and freely enter and depart the U.S. A dead person is not going to create conflicting paper trail or notice strange activity on their credit reports.

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In U.S. v. Doe, the defendant John Doe went to the Miami passport agency office to apply for a passport presenting drivers license, birth certificate and other identifying documents in the name of Laurn Daniel Lettsome. Doe was not Lettsome. When the passport agency official became suspicious, Doe was asked to return with more identification document. He then returned and suspecting fraud, the passport officials located the real Lettsome and discovered he was not the person who had applied for a passport. The defendant was called “John Doe” in this case because the government claimed it did not know his true identity.

Doe was charged with making a false statement in a passport application and two counts of aggravate identity theft. Doe pled guilty to making a false statement in a passport application but went to trial on the aggravated identity theft, claiming that the government failed to prove beyond a reasonable doubt that Doe knew the false identification he was using belonged to a real person. The aggravated identity theft conviction provides for a mandatory two year sentence for possessing an identification of another person.

In the benchmark decision of Flores-Figueroa, the U.S. Supreme Court required the government to show the defendant knew the identification used belonged to another person. The Supreme Court acknowledged there were many ways the government could show this through circumstantial evidence. Following this decision, the 11th Circuit Court of Appeals affirmed an aggravated identity theft conviction where it was shown the defendant had been successful in obtaining a drivers license or passport using the victim’s personal information. There was no need to show the defendant had knowledge of the rigorous verification process.

Here, the appellate court found circumstantial evidence that Doe knew the identification belonged to a real person by Doe’s repeated and successful testing of the authenticity of the victim’s identifying information prior to the crime, and by his using the birth certificate and social security card to obtain drivers license in two jurisdictions – the Virgin Islands and from the state of Florida. Doe also opened a bank account and obtained a credit card in the false name.

Even though the government did not present direct evidence that Doe knew of the verification process to which he subjected Lettsomes’ identifying documentation, the Eleventh Circuit precedent makes clear that it was not required to do so. A rational jury could have inferred based on ordinary human experience that federal and state governments routinely verify the authenticity of the identifying documentation. Also, the passport application say that documents and statements presented are all subjected to verification. Doe’s conduct could be understood to mean that he had unfaltering confidence in his ability to obtain a U.S. passport using Lettsome’s identification.

Evidenced showed Doe showed no trepidation about the possibility that Lettsome’s identifying information (his Virgin Islands D.L. and Florida D.L.) were not genuine. A rational jury could conclude beyond a reasonable doubt that Doe never doubted for a moment that Lettsome identifying information belonged to a real person. Otherwise, the increased scrutiny from an official, on Doe’s first visit to the passport agency would have given Doe great pause about continuing the effort to obtain a passport.
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