Phantoms of deceit

Tim Willert

Armenuhi Kartalyan-Oganesian never knew what hit her, but it might

as well have been a punch to the stomach.

Last month, the 37-year-old Glendale resident tried to make a bank

deposit but discovered her ATM card had been canceled over the phone

and a duplicate card issued and mailed to an address in Los Angeles.

“Whoever did this gave the bank my Social Security number, my

mother’s maiden name and her date of birth,” Kartalyan-Oganesian

said. “I have very good credit, which worries me, because they can

request high lines of credit.”

Another woman, Cathy (not her real name) was betrayed in August by

her nanny, who after stealing her employer’s personal information and

obtaining a bogus driver’s license, brazenly ran up $10,000 in

credit-card debt at several department stores -- including two in

Burbank.

“She quit on a Sunday and started shopping on a Tuesday,” Cathy

said. “It was just so frustrating to think she came into my house and

set me up.”

Similar horror stories are played out at an alarming rate in

Burbank, Glendale and the foothills, where identity thieves have

replaced the everyday burglar in the eyes of law enforcement.

The often nameless and faceless culprits steal personal

information and use it to open bank and cellular-phone accounts,

obtain driver’s licenses, manufacture new checks, and even buy or

furnish homes.

They rarely pay for their crimes. Their victims, though, are left

to clean up the wreckage, often spending months and years trying to

repair damaged credit.

“At the rate we’re going right now, it’s probably not going to be

too long before everybody who lives in the state of California is

going to know a victim of identity theft,” Glendale Police Det. Bob

Zahreddine said. “It’s that bad.”

Identity theft -- the unauthorized use of personal information to

obtain credit, goods, services or medical information -- has

increased by 130% in Glendale since last year, from 177 cases in 2001

to 381 through Dec. 17.

“It’s surpassed anything else that we handle,” said Zahreddine,

one of four detectives who investigate financial crimes. “The chances

of getting caught are pretty slim, and even if you get caught, the

penalties are pretty lax.”

In Burbank, violent crime is down, but identity theft is up by

more than 60%. Through November, 261 cases of identity theft had been

reported, compared to 160 last year.

“We are absolutely overwhelmed,” said Burbank Police Det. Matthew

Ferguson, who estimates the average identity crook gets more than

$10,000 before getting caught. “There are cases we could solve that

we just can’t get to.”

Last month, Glendale Police arrested 11 people who allegedly used

identification stolen from actors, musicians and studio executives to

make off with more than $500,000 in recording equipment. It marked

the largest case of identity theft ever worked by the department.

The ring used high-tech gadgets, wireless networks and

graphic-design skills to forge everything from checks and credit

cards to fax numbers.

A “high percentage” of identity theft cases, however, go unsolved

because it’s virtually impossible to identify those responsible,

Ferguson said.

“Since it’s not the real person doing it, the suspect is a

phantom,” he said. “Most of the time, we don’t know who we’re dealing

with.”

‘EASIER THAN ROBBING A BANK’

Identity theft is the fastest-growing white-collar crime in

America, expanding at a rate of more than 50% per year, according to

Privacy Rights Clearinghouse, a nonprofit consumer information and

advocacy program based in San Diego.

Identity theft has become the biggest source of consumer fraud

complaints logged by the Federal Trade Commission, which recorded

86,000 in 2001. Nationwide, identity theft accounts for annual losses

estimated at more than $2 billion.

“It’s much easier than robbing a bank, and you don’t have to use a

gun,” said Rep. Adam Schiff (D-Burbank), a former federal prosecutor

who tried identity theft cases. “But you leave quite a path of

destruction in your wake.”

Thieves typically sift through trash cans or mailboxes to find a

person’s address, date of birth and Social Security number. But

investigators are working on even more sophisticated identity theft

rings, including one that paid off a bank insider to provide data on

hundreds of customers, then used the information to set up online

accounts to conduct fraudulent wire transfers of funds.

“This is a crime that operates within our normal daily life,” said

Jonathan Fairtlough, a high-tech and identity-theft prosecutor with

the Los Angeles district attorney’s office. “It’s a crime that you

can commit while appearing to seem normal.”

PENALTIES LACK TEETH

In 1998, federal and state lawmakers enacted laws to curb identity

theft. Violations of the federal law carry a maximum penalty of 15

years in prison, whereas California’s law is punishable by up to

three years in prison.

But investigators say identity thieves are rarely apprehended and

sentenced. If they are, penalties are minimal and rarely include jail

time. Community service and probation are common.

“Crooks know that if they get caught, the punishment is greatly

inferior to, say, robbing a bank,” Ferguson said. “We could end this

very quickly by making the penalties much more severe.”

Investigators say some of the biggest victims of fraud -- banks

and credit agencies -- are partly to blame for the surge in cases,

because they extend credit so rapidly and don’t always check as

thoroughly as they could to make sure applicants are who they say

they are.

“I’ve seen companies issue credit too leniently, but I’ve also

seen companies that do an outstanding job of verifying credit get

fooled,” Fairtlough said.

State and federal legislators, including Schiff and Assemblyman

Dario Frommer (D-Burbank), are pushing for stiffer penalties and

other reforms to slow identity fraud.

“We have to give law enforcement the tools they need to

investigate and prosecute, and help innocent victims clear their

names and reputations,” Frommer said.

Schiff, meanwhile, is co-sponsor of a bill that would prevent the

sale of Social Security numbers and keep businesses from demanding

Social Security numbers from customers.

“It’s simply too easy for people to get a hold of identifying

information,” he said. “I think we have to protect some of those

numbers.”

PICKING UP THE PIECES

Fortunately, victims of identity theft are not liable for bills

accumulated by impostors, thanks to federal law. But in many cases,

it can take months, even years, for them to regain their financial

health and restore their good credit history.

“That’s probably the most difficult part, reestablishing credit

once it’s been damaged,” Zahreddine said.

Ferguson agreed.

“In reality, most victims don’t lose a penny in dollars,” he said.

“But the amount of money they lose in time, trying to prove their

innocence, is in the thousands.”

After filing a police report, Kartalyan-Oganesian had to alert all

three of the major credit bureaus. She lives in fear of her credit

being ruined by the person or persons who have access to her vital

information.

“I never thought this would happen to me,” she said. “I don’t feel

secure anymore.”

Cathy’s former nanny was arrested by Burbank Police and sentenced

to three months in county jail and probation.

It’s small consolation for Cathy, who said she will have to

contact creditors every three months for the rest of her life to

request fraud alerts be placed on her accounts to guard against

future theft.

“The whole thing makes me so angry,” Cathy said. “She had the

nerve to say I was mean to her.”