Latest Twist in Identity Fraud: Preying Upon Groups of People

When Lorraine Machado thought she was the only one, she was frightened. When she realized she was just one victim in a cluster of schoolteachers whose identities had been stolen, she became mad.

Now the soft-spoken teacher at Webster Middle School in West Los Angeles has mobilized the dozen colleagues who also have been victimized. They are pushing law enforcement to consolidate its cases and pursue the perpetrators. Machado also is urging credit grantors to investigate--not just to clear her name, but to find the crooks who stole it.

Fraud “clusters” such as the one that has hooked Machado and her friends, once considered rare, are cropping up with increasing frequency, experts say.

“We have found that there are many instances where whole groups of people will be victimized,” said Betsy Broder, assistant director for planning and information at the Federal Trade Commission’s Bureau of Consumer Protection in Washington. “That’s usually because it’s an inside job.”

Though the FTC started an ID-theft consumer hotline and research Web site late last year, it’s still too early to get solid statistics on how many people are hit by identity fraud each year and how many of those victims are part of fraud clusters. But anecdotal evidence of these fraud clusters abounds.

For instance, 80 to 100 California scientists were victimized after a pharmaceutical firm acquired their company and they were laid off. Several executives at General Motors got hit when a temporary employee sold their personnel records. Clerks at a national department store recently complained that they were all getting harassing phone calls from collection agents, one of the first indications of an identity fraud cluster, according to Mari J. Frank, an attorney and author of “The Identity Theft Survival Kit” (Porpoise Press, 1998).

It happened much the same way at Webster Middle School, said Cliff Burems, a physical education teacher. When bill collectors started calling him at school, he complained to a colleague. Machado overheard him, and things began to click. She had already compared notes with another teacher, Mary Barton, who was trying to clear fraudulent items from her credit report. They began to ask around and encourage other teachers to check their credit records.

One by one, they came forward. There was Susie Besone, another P.E. teacher; Lynda Davidson in the library; the bilingual coordinator, Victoria Sussman; and Bud Gold, who teaches English and social studies.

“It’s outrageous,” said Carol Petronis, a sixth-grade math and science teacher who also is among the Webster victims. “You know that somebody within L.A. Unified [School District] must have compiled a list of our names and Social Security numbers and sold it.”

It’s also possible that someone simply got the information from the school’s computer system, Sussman said. She worked in the office last year and realized she had access to computerized personnel records. She believes security has been tightened since, but for a while, there was easy access to even the most sensitive information.

“The workplace is where people are at the greatest risk,” said Frank, who is helping the Northern California scientists sue their former employer for negligence. “We are finding more and more of this because there is a tremendous amount of information in the workplace that is not secured.”

The bright side, as it were, of being part of a fraud cluster is that the chance of determining the identity of the criminal is generally much greater. Three arrests were made in the scientists’ case, for instance.

With clusters, the larger number of victims means there are far more clues. Four of the teachers at Webster, for instance, have the same fraudulent addresses, down to the apartment number, on their credit reports. The criminals also have applied for the same cards on nearly every teacher’s record.

And yet, a key frustration for these teachers and many other victims of identity fraud is that it’s hard to convince law enforcement to care. The fraud at Webster started roughly a year ago. But the teachers, who dutifully filed police reports, were dismissed when trying to urge the detectives to investigate the cases in concert. Instead, they were sent to different districts--field offices near their homes, rather than near the school where the crimes seemed to originate--and their cases languished.

“Nothing has been done at this time,” Det. Mary Allen said recently. Allen, who is assigned to the West Los Angeles division where Machado’s case is filed, declined to comment further.

A spokeswoman for the Los Angeles Police Department said it actively investigates identity fraud, but acknowledged that less than 1% of the cases are solved. The police say that’s because there is often little information with which to start an investigation. Identity fraud cases also are a lower priority than violent crimes, a department spokeswoman said.

“The LAPD is notorious for not doing anything about identity fraud,” said Beth Givens, executive director of the Privacy Rights Clearing House in San Diego. “But that’s no different than many police departments across the country. They don’t give identity theft a high priority because it’s a nonviolent crime, and many of them still see it as a victimless crime.”

Don’t tell that to the teachers at Webster Middle School. They feel like victims when they’re forced to sign one affidavit after another swearing to the fact that they aren’t the perpetrators. They feel like victims when creditors call to badger them to pay off thousands of dollars in debts that were run up by impostors. They feel like victims when they’re turned down for loans and mortgages that they should be able to get. But they’re not willing to stay victims forever.

“I want these criminals caught,” Machado said. “I do not want to live with a shadow my whole life.”

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Where to Find Help

Need information about identity fraud or help determining what to do about it? Here are a few resources:

* The Federal Trade Commission’s identity fraud hotline: (877) 438-4338 or on the Web at https://www.consumer.gov/idtheft.

* Privacy Rights Clearinghouse: (619) 298-3396 or https://privacyrights.org.

* Mari J. Frank, attorney and author of “The Identity Theft Survival Kit”: (800) 725-0807 or https://www.identitytheft.org.

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Times staff writer Kathy M. Kristof welcomes your comments and suggestions for columns but regrets that she cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof@latimes.com.