Identity Theft Is on the Rise, Tough to Solve

When the police finally tracked down Jessica Smith’s stolen car in North Hollywood, with her handbag still inside, she breathed a sigh of relief.

The thief seemed to have taken only replaceable items: cash, her driver’s license and her Social Security card.

But credit card companies mysteriously began rejecting Smith, she couldn’t get phone service or rent an apartment, and she almost got fired when an employer’s criminal background check turned up arrest warrants on prostitution charges.

Smith finally realized that the car thief had also stolen her identity, making the 22-year-old San Diego college student one of a surging number of Americans reporting the crime to police.

Identity fraud complaints and calls have grown from fewer than 40,000 in 1992 to about 750,000 in 1999, according to nationwide credit industry estimates.

“The growth in identity theft in the last five years has been exponential,” said Jodi Beebe, hotline director for the Privacy Rights Clearinghouse, a nonprofit consumer rights organization.

Federal and local agencies have been flooded with reports of such crimes, investigators say, in part because California and at least 21 other states now have laws that recognize individuals--not just financial institutions--as victims.

The Los Angeles County Sheriff’s Department reported that identity theft cases increased nearly 30% in one year, from about 650 in 1998 to 850 in 1999. Over the same period, the Los Angeles Police Department’s identity theft caseload doubled, from fewer than 1,600 to more than 3,000.

At the LAPD’s Financial Crime Division, identity thefts now comprise more than half of all cases.

“There’s only a finite amount of resources,” said Cmdr. David Kalish, spokesman for the LAPD. And these cases, he added, “are consuming resources.”

Investigators say some of the biggest victims of fraud--banks and credit agencies--are partly to blame for the surge in cases.

“A lot of it has to do with the looseness of the system we use to establish credit,” said Capt. Donald C. Floyd of LAPD’s Financial Crimes Division.

Often, all that’s required to receive “instant credit” is a driver’s license, a Social Security number, a date of birth and an address. Companies sometimes don’t thoroughly check to make sure applicants are who they say they are. And criminals are figuring that out, investigators say.

In Casey Bauer’s case, one or more impostors have had phone service installed, obtained credit cards, rented an apartment and made mail-order purchases using her identity.

Beyond ruining her credit record, someone using her identity is “really invasive,” said Bauer, 29, of Studio City, a news writer and producer at KCBS-TV. “You feel totally violated.”

Individuals can be recognized as identity theft victims under a California law passed in 1998, resulting in an increase in victims seeking police help. New laws also deemed identity theft a felony, further encouraging prosecution. Prior to that, “the victim would be, say, Wells Fargo Bank” or whatever company had lost money, said Det. Joe Dulla of the sheriff’s forgery-fraud detail.

Working with police the last few months, Bauer found that at least two people might be cashing in on her gender-neutral name. A woman was seen renting the apartment, and a suspicious man pretending to be a phone company representative called Bauer at home to find out her mother’s maiden name--a common password for accessing financial accounts.

An LAPD detective continues to investigate the case.

In addition to the sheer number of cases confronting them, police agencies say they are hobbled by the complex nature of the crime itself--one in which the criminal wears the mask of someone else’s identity, like a cat burglar leaving the fingerprints of another.

A single investigation can consume hundreds of work hours, and there is often a long gap between commission of the crime and when it is reported, making evidence gathering difficult.

Investigators often need search warrants to obtain far-flung business records to connect the impostor to the crime.

“We need the links, the paper trail from A, B, C and D. But if you don’t have C, let’s say a small bank in Tennessee that doesn’t keep good records, you can’t prosecute. So we have to go back to Square 1 to get A, B, C and D together,” said U.S. Postal Inspector Randy De Gasperin.

An investigation sometimes turns up other victims, which requires further investigation. Identity theft is often “a precursor to other financial crimes,” said Douglas Coombs, supervisor of the fraud squad of the Secret Service’s Los Angeles office.

According to a September 1999 survey, one out of five Americans or a member of their family have been victimized by identity fraud. The independent study commissioned by Image Data LLC, an identity fraud prevention service firm based in Nashua, N.H., supports what officials believe: that despite the rise in cases, identity theft is still an underreported crime.

“They’re really difficult to solve,” said Det. Steve Madden of the LAPD’s Financial Crimes Division.

All told, many cases remain “whodunits,” leaving exasperated investigators and angry victims in their wake. In 1999, the clearance rate for all cases worked on by LAPD’s Financial Crimes Division was about 50%, said Floyd of the LAPD. But fewer than 1% of the identity theft cases were solved.

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Victims can have a tough time establishing that it was someone else who committed the misdeeds.

When Bauer contacted companies to clear her record, she said they wouldn’t believe her at first. She couldn’t prove her identity after the impostor set up accounts with passwords unknown to her.

Smith can count herself lucky, investigators said. At least she had solid evidence that she was not the one who ran up credit card bills or was suspected of loitering with intent to commit prostitution.

The LAPD’s Madden searched for Smith’s name in a police database and found that it was a known alias used by a woman with a long record of arrests for prostitution and theft. Felony arrest warrants have been issued for the real criminal, he said. Smith received judicial clearances for her warrants.

Those records helped Smith to prove her identity to authorities and creditors.

Considering the enormous resources that the cases consume, the best way to fight back is through prevention, law enforcement officials and victims said.

“People should be as vigilant about protecting their identities as they are about protecting themselves from other kinds of crime,” said the LAPD’s Kalish.

In the meantime, Smith is still filling out forms, writing letters and making phone calls. More than three years after her car was stolen and two years after she learned of the identity theft, she is struggling to regain control of her life.

“I can’t get my own place. I can’t move out. I can’t get my own credit card,” Smith said. “If I get pulled over, [police] can still haul me into jail to get fingerprinted, to make sure I’m the person who’s supposed to carry these clearances.”