Former law enforcement officers and company founders - on protecting your identity



Texas Ranger
Texas Ranger: Co-Founder Terry Welch



Police
Police: Co-Founder Kim Sanders

Potential for Identity Theft During Natural Disasters

In the wake of Hurricane Katrina, in Louisiana, two men posed as Salvation Army volunteers and collected personal information from more than 2,500 New Orleans police officers, Orleans Parish Sheriff’s deputies, firefighters and emergency personnel.  In the District of Colombia, a man defrauded FEMA of more than $100,000 by filing false claims using the names, birth dates and Social Security numbers of 38 individuals.  He found most of the information used in these bogus claims in the Martindale-Hubbell legal directory and various other public Internet databases.  These are just two examples of why identity theft prevention is a critical part of disaster preparedness.

Scams During Natural Disasters Have Been Around Forever:

After every major destructive event, local TV news shows inevitably report the opportunistic criminal selling a 5kw generator for $10,000 and the elderly couple who paid for a new roof but never got one.  Of course, crimes traditionally associated with natural disasters such as price gouging and home repair fraud still occur far too frequently.  Since identity theft is the fastest growing crime in the United States, it stands to reason that criminals have discovered creative ways exploit the vulnerabilities particular to these highly publicized events.  As an example, in New Jersey after Super-storm Sandy 50 cases of identity theft were reported to the National Center for Disaster Fraud (NCDF) as compared to 21 reports of contractor and 2 incidents of insurance fraud.

The nature of catastrophes and the response makes them particularly attractive to identity thieves.  Major hurricanes, earthquakes, tornados, etc., become international news piquing interest worldwide.  On scene, decisions have to be made rapidly often in confusing and disorganized conditions.  Large sums of money may be made available for distribution.  Relief agencies are charged with providing assistance quickly, often to victims without proper identification or verification.  These agencies may require additional staff or volunteers, sometimes hired in haste, often without proper vetting.  Personal papers and computers may be looted or literally blow into the wrong hands.  Outside of the affected area, caring individuals worldwide want to help by donating goods and money, sometimes to unknown charities or on-line.

The Bogus Social Security Numbers Have to Come From Somewhere:

The most common crime reported after a major natural disaster is the filing of false, exaggerated and other fraudulent claims to FEMA, the Red Cross and other relief agencies.  After Super-storm Sandy, for example, 1,746 incidents of fraud against FEMA were reported to the NCDF.  For Hurricanes Katrina, Rita, and Wilma, approximately 1.7 million people were displaced, yet FEMA received 2.5 million applications for disaster assistance.  By September 2008, according to the DOJ, 1,463 individuals were indicted in 1,370 cases in 49 districts throughout the United States.  Many of these thefts of Government funds involved the use of other people’s names, addresses and Social Security numbers without their knowledge or permission.

As examples, on January 24, 2007, an Alabama woman was sentenced to 75 months imprisonment and restitution in the amount of $267,377 for defrauding FEMA and for aggravated identity theft following Hurricane Katrina. She filed 28 fraudulent claims for assistance, falsely claiming to have lived at various addresses in Alabama, Mississippi, Louisiana and Florida.  In those applications, she admitted using Social Security numbers of other people without their permission and providing FEMA with fraudulent and fictitious documents that purported to prove her ownership of property she did not own.

As mentioned in the introduction to this article, in 2007 a District of Columbia man was convicted of defrauding FEMA of more than $100,000 by filing false claims using the names, birth dates and Social Security numbers of 38 individuals.  In explaining his scheme during sentencing the man admitted that he obtained most of this information by using an on-line directory of lawyers and law firms (Martindale-Hubbell legal directory) and various other public databases.  On the portion of the application that asked for the address of a property damaged by Hurricane Katrina or Hurricane Rita, he would fill in addresses that he found on the Internet or that he made up.  When the checks arrived he forged the signatures of the payees and deposited the checks into bank accounts that he had opened in the names of other people without their permission, but that he controlled.  In particular, he opened an account at an E*TRADE Financial Corporation Branch in Northwest Washington, D.C., into which he deposited five of the fraudulently obtained checks, intending to withdraw the money and convert it to his own use at a later date.

The DOJ’s Hurricane Katrina Task Force’s investigations revealed organized groups in Oregon, California, Florida, Louisiana, and Mississippi participated in making numerous fraudulent claims, most using inaccurate names, addresses and social security numbers.

You Don’t Even Have to Be There:

Cyber criminals also use disasters and other major media events to collect both funds and personal information from unsuspecting victims worldwide.  A common ploy is to set up a web site posing as a charity to prey upon good people wanting to help out.  The FBI shutdown one such site called “airkatrina” where a man posed as a pilot and claimed to be transporting injured victims and medical supplies to the area.  He collected $48,000 before he was caught and was able to obtain hundreds of names, addresses, and credit card numbers.  Social media is another avenue which cybercriminals use to collect information.  After the Boston Marathon bombing, for example, the FBI discovered an account on a popular social media site using the official Boston Marathon name and logo.  The post claimed $1 would be sent to the victims for every communication it received.  Although the social media service suspended the account, it was a clear attempt to collect personal information and to solicit fraudulent donations.  Since 2005 the FBI’s Internet Crime Complaint Center has issued over 16 separate warnings of these types of charity scams relating to hurricanes, earthquakes, tsunami, and other events.  Other solicitations can originate as door-to-door collections, mailings, and telephone calls.

Where Are the Vigilantes When You Need Them?

After major catastrophes, where the power is out and belongings are exposed, looting may occur.  Coins, jewelry and electronics, including computers containing sensitive information, are often stolen.  As examples, from October 17 through November 28, 2012 after Super-storm Sandy heavily damaged the Breezy Point area of Queens, NY, Police reported 52 home break-ins compared to only 4 during the same time frame the previous year.  Laptop computers containing personal information were stolen, among numerous other items.  The USA Today reported six men in The Philippines were arrested with laptops and computers stolen from a printing shop that was damaged in Typhoon Haiyan.  In an interesting twist, in The United Kingdom the laptop of a self-professed “hacker” was stolen from his apartment that was damaged during the August 2011 riots in London.  The computer contained security software, which allowed the hacker to remotely view the pages the thief accessed.  Shortly after shopping for a new Mercedes, the thief logged into his Facebook page and the hacker was able to identify him.

Air Mail Your Personal Information:

During a tornado or a hurricane, papers containing personal information can literally “blow away” possibly into the hands of an opportunistic criminal.  Windstorms can scatter papers for miles.  After a tornado struck DeKalb County, Alabama in 2011, for example, personal checks and pages from an address book where discovered 100 miles away in Blount County, Tennessee.  After a tornado hit Washington, Illinois in 2013, papers, photographs and checks were discovered as far as 120 miles away in Chicago, Hinsdale, and Seneca, IL.

Access Badges Given Out Like Candy:

Impersonation of emergency responders, relief volunteers and utility workers is another technique criminals use to collect personal information.  During widespread power outages, someone in a power company uniform with a marked truck can easily gain unfettered access throughout the damage area.  In the 2010 Deepwater Horizon oil spill, a woman from Belle Chase, LA, posed as an Occupational Safety and Heath Administration (OSHA) safety instructor.  She set up phony classes, supposedly to train people to work in the cleanup efforts, in order to collect personal information and money, primarily from Asian immigrants in the south Louisiana fishing community.  The woman was convicted and sentenced to 57 months in federal prison.

As mentioned in the beginning of this article, in the wake of Hurricane Katrina two men posed as Salvation Army volunteers and collected personal information from more than 2,500 law enforcement and emergency personnel.  According to published reports, the men set up a table near a hotel in New Orleans that was being used as a headquarters by first responders and enlisted the help of other unsuspecting Salvation Army volunteers.  The impersonators told the officers they were eligible for a $5,000 debit card from the international media company Viacom, Inc. and they only had to register with their names, addresses and other personal information.  The two men were arrested by the Jefferson Parish Sheriff’s office and each charged with 2,500 counts of conspiracy to commit identity theft.

Tips to Protect Your Identity During a Disaster:

  1. Have a reliable Identity Theft Protection plan, like keepmyID, in place well before the catastrophe hits.
  2. Guard your personal information in advance by securing papers in locked file cabinets and protecting computers and mobile devices with strong passwords.
  3. Bring identity documents including drivers license, passport, work ID badges, social security card, and credit cards with you when evacuating.  If possible, also evacuate your computer as well as important papers such as file copies of tax returns, bank statements and checks.
  4. Report any lost checks and credit cards to the issuing bank. Report lost drivers licenses to the issuing office and ask to have it flagged as stolen.
  5. Use caution when accessing the Internet via public Wi-Fi.
  6. Ask to see an official laminated photo ID of anyone in the disaster area.  Don’t rely on a uniform shirt or jacket from FEMA or the power company.
  7. Beware of people going door-to-door to damaged homes, especially if they solicit financial information.
  8. Be cautious of individuals representing themselves as victims or officials asking for donations via email or social networking sites.
  9. Do not open emails that claim to show pictures of the disaster area in attached files or other spam emails as they may contain viruses.
  10. Research a charity before donating.  Look for copycat names and logos, don’t open embedded links, and don’t be pressured into making a donation.
  11. Check your personal credit report approximately 60 days after the event to ensure you are not a victim.
  12. Do all the laundry you can before the storm hits.   It won’t help protect your identity, but it sure can be hard to find a washing machine when the power is out over a wide area.

Hurricanes, tornados, earthquakes, and other catastrophes are part of life. The cleanup and recovery effort can be immense and last for several weeks or even years. Don’t be victimized twice. Have an adequate identity theft protection plan in place, in advance. At keepmyID, we can help you prepare before the storm and provide restoration services should the unthinkable happen.

  •  Numerous news articles in various publications including a report in the Times-Picayune on September 22, 2005.
  •  FBI: Press Release. February 8, 2007
  •  National Center for Disaster Fraud: An Overview. June 21, 2013.
  •  United States Sentencing Commission: Report to Congress: Amendments to the Federal Sentencing Guidelines in Response to the Emergency Disaster Assistance Fraud Penalty Enhancement Act of 2007.  September 2008.
  •  Footnote:  In 2005, following Hurricanes Katrina, Rita and Wilma there were so many fraudulent claims filed in federal disaster relief programs that the U.S. Department of Justice established the National Center for Disaster Fraud (NCDF).  Its mission has since been expanded to include all types of fraud, including identity theft, in natural and man-made disasters.  The NCDF is a partnership of over 20 federal agencies, as well as state and local emergency management and law enforcement officials.  In examining information from the NCDF, and its member agencies including the FBI, certain criminal patterns emerge.  More information about the NCDF may be found at their website.  http://www.justice.gov/criminal/oilspill/about/ncdf.html
  •  United States Sentencing Commission: Report to Congress: Amendments to the Federal Sentencing Guidelines in Response to the Emergency Disaster Assistance Fraud Penalty Enhancement Act of 2007.  September 2008.
  •  United States Attorney’s Office, Middle District of Alabama: Press Release March 30, 2007
  •  FBI:  Press Release February 5, 2007.
  •  United States Sentencing Commission: Report to Congress: Amendments to the Federal Sentencing Guidelines in Response to the Emergency Disaster Assistance Fraud Penalty Enhancement Act of 2007.  September 2008.
  •  United States Sentencing Commission: Report to Congress: Amendments to the Federal Sentencing Guidelines in Response to the Emergency Disaster Assistance Fraud Penalty Enhancement Act of 2007.  September 2008.
  •  Internet Crime Complaint Center: Public Service Announcement, Beware of Possible Fraud Associated wit the Boston Marathon Explosions.  April 25, 2013.
  •  New York Post. November 24, 2012.
  •  USA Today. November 13, 2013.
  •  Numerous news articles in various publications including a report in C/NET on August 16, 2011.
  •  The Daily Times, April 30, 2011.
  •  ABC 7 Eyewitness News, November 18, 2013.
  •  Department of Justice: Press Release May 17, 2013.
  •  Numerous news articles in various publications including a report in the Times-Picayune on September 22, 2005.

An Identity Theft Prevention Program At The Next Level

Most services offer credit “monitoring.”  Any Identity Theft Expert will tell you that monitoring is practically useless.  Why?  All monitoring does is inform you, that you are now a victim.  That is far too late.  You want someone to prevent you from becoming a victim in the first place – more specifically an ID theft prevention program that blocks ID theft.  That is what www.keepmyID.org does best (for only $19.95-25.95/month).  If you see the words “monitoring” save your money.  Don’t sign up.

In addition, almost all the companies out there only protect you from financial ID theft.  That sector represents 51% of ID theft.  There is also:

  • Medical ID Theft
  • Child and Elderly ID Theft (up 35x since last year)
  • Tax Fraud (filing fake tax returns, etc.)
  • Benefits Fraud
  • Criminal ID Theft (getting arrested in your name)
  • Employment Fraud (a felon or an illegal getting a job in your name)
  • Social Security Fraud (yes, they will start to collect your benefits)
  • Family Fraud

What is your monitoring service going to do about those?  I can tell you — nothing.  Monitoring services do not block anything; an identity theft prevention service will.  So how does a person know the difference.  Make sure you get a service that (1) prevents (not monitors) identity theft and (2) covers ALL ID theft events; not just half of them and (3) does all the work for you if you are ever victimized.  Maybe you are not sure what they provide (understandably, as many companies blur the lines).  Watch out.  Many provide little to no protection.  Put them to the test:  Ask them these four questions:

(1)  Do you hire an attorney for me from Day One?  In order to ensure preventative services are provided (fraud alerts, credit freezes, extended fraud alerts, credit reports, etc.) they must hire an attorney for you, to act as your personal representative.  That is the law.  Don’t settle for “we’ll show you how to do it.”  No, that is their job.   If they say NO, move on.  They are really just a monitoring service pretending to be a prevention service.  Again, be wary of any company touting monitoring as their primary service.

(2)  Do you ensure that fraud alerts are put on my accounts every 90 days?  This is ID Theft 101.  Alerts are your main tool for blocking financial ID theft.  If they say NO, move on quickly.

(3)  Do you protect me from ALL ID theft events (Medical, Tax, [see above])?  Now, you may want to pay less and roll the dice on just covering yourself for financial ID theft.  That is certainly fine and the most common ID theft worry.  But know you are taking the risk.  It is a cost/benefit analysis.  Total protection costs more (ours is $19.95/mo. and $25.95/mo. for the whole family).  But the company should, at least, offer the protection if you want it.  If they do not, red flag, move on.  For example, we don’t make any profit on the additional $6 service (family coverage).  Really.  But we felt it was important enough to add anyway.  Sometimes doing the right thing is not profitable, but it’s the right thing to do.  Make sure your company has it as an option.

(4)  Do you offer unlimited recovery services and assign a case worker to do ALL the work for me, if I ever get my identity stolen?  The FBI reports that you will spend 331 hours trying to clean up the mess that ID theft leaves behind.  You do not have time for that.  That is their job.  If they do not assign a case worker who does ALL (not part) of the work for you, move on.

At the end of the day, we want to protect you and your families from ID theft.  That is our sole mission.  Whether you use us or a competitor is of lesser importance. We just want you to get protection.  You have a 1 in 3 chance each year of becoming a victim.  It will happen to you eventually.  You must have something to protect you this day and age.  Make sure that something is ID theft prevention, not monitoring, and that you will be covered in the event your ID is stolen.  There is no 100%.  So get full protection.  That is our advice. 

Note: Your credit card company and bank do not protect you from ID theft (just bank fraud).  They just protect that particular account from monetary loss; not your identity.  That idea is a very common misconception.  Also, stealing an existing, legitimate,  account (like your credit card number) is not really “identity” theft; that is credit card fraud.  And your credit card company will bear 100% of the loss.  Identity theft occurs when they take your information and open a new account in your name and you are responsible.

MORE ABOUT KEEPMYID

Founded by former law enforcement.  keepmyID has over 200 years of combined law enforcement experience.  We have investigated, tracked, prosecuted, and stopped identity theft rings.  Our founders devoted their life to law enforcement and now bring that experience to you.  They understand what the victims experience and how damaging the effects of this crime can be.  They know how to best prevent it from happening; and fix it if it happens to you.

Why We Are Different.  www.keepmyID.org ensures the legal protections are put in place beforehand.  Our goal is that you never become an ID theft victim in the first place.  We don’t wait until you are victimized to take the steps.  We ensure they are taken from the get go. This is very different from the “monitoring” services.  They simply alert you by phone AFTER you have been victimized.  That is far too late.  In the end we provide a better service, from more experienced people, for less cost.

100% Recovery Services.  And keep in mind – there is no such thing as 100% protection. That is why we also offer 100% recovery services.  While we dramatically reduce your chances of ever becoming a victim, there is still a chance you can become a victim.  If anyone tells you otherwise, they are not telling you the truth.

We provide 100% recovery services.  If you are ever a victim while with us, we will cover your losses up to $1 million dollars.  You will also get a case agent assigned to you.  They will make the calls, challenge the inaccuracies, and do whatever it takes to return you to pre-fraud status.  In short, they do ALL the work.

What else do we do?  We hire an attorney to represent you.  Every customer is represented by a lawyer the entire time they are with us.  According to your profile, our team (comprised of former law enforcement from: FBI, U.S. Marshals, Police, Army Intelligence, Texas Rangers, Secret Service, and state prosecutors), will recommend to your attorney what steps and actions need to be taken to protect your identity.  Those steps will be taken.  You also get put into the junk mail and telemarketing reduction programs.  Your junk mail will be reduced dramatically.  Telemarketers will not call you as often (some still violate the rules).  You will also receive 3 credit reports per year.  You will also be notified about the most popular scams and strategies.  We do this to keep you up-to-date and educated about common scams and ID theft in the public sector.  You will be protected and you will be taken care of.  That much we can promise you.

North Carolina Hit by ID Theft

ID theft is everywhere.  Financial ID theft, Tax Fraud, Criminal Liability, Child ID Theft, Elderly ID Theft, Family Fraud, Employment Fraud, Benefits Fraud, and Social Security Fraud are growing every year.  There were over 13 million reported victims last year alone.

North Carolina Woman Sentenced for Preparing False Tax Returns and Identity Fraud.  In Greensboro, N.C., Leslie Louise Brewster, of Durham, N.C., was sentenced to 70 months in prison and ordered to pay $92,910 in restitution to the IRS. On February 20, 2013, Brewster pleaded guilty to preparation of false tax returns, aiding and assisting the preparation of a false tax return, wire fraud, and aggravated identity theft. According to court documents, Brewster was the manager of a tax return preparation franchise. Brewster falsified federal income tax returns for hundreds of clients in order to obtain larger tax refunds for the clients than they were actually entitled to receive. The returns Brewster prepared for clients reported, among other items, false dependents, fictitious businesses and bogus education credits. Brewster also purchased personal identifying information, including names and Social Security numbers, from members of the community. Brewster used this personal identifying information to claim false dependents on tax returns she prepared for clients, and provided some of the identities she purchased to other return preparers for their use in a similar fashion. Two defendants in related cases were also sentenced to prison for tax crimes arising out of this scheme. Saichelle McNeill was sentenced to 27 months in prison on August 20, 2013. Tiffany Rogers was sentenced to 48 months in prison on August 14, 2013.

Provided by the IRS and keepmyID.org.

Ohio Hit by ID Theft – Dione Howard of Cincinnati

ID theft is everywhere.  Financial ID theft, Tax Fraud, Criminal Liability, Child ID Theft, Elderly ID Theft, Family Fraud, Employment Fraud, Benefits Fraud, and Social Security Fraud are growing every year.  There were over 13 million reported victims last year alone.

Ohio Man Sentenced in Identity Theft and Tax Refund Scam. In Cincinnati, Ohio, Dione Howard was sentenced to 12 months and a day in prison, three years of supervised release and ordered to pay $30,129 in restitution to the IRS. On March 13, 2013, Howard pleaded guilty to conspiring to file false claims for federal income tax refunds with the IRS and unlawfully using a means of identification. According to court documents, between January 2012 and April 2012, Howard purchased 18 names, social security numbers and dates of birth from a co-conspirator for $3,500. Howard used this information to prepare and electronically file at least nine false claims with the IRS for income tax refunds. Howard attempted to have the income tax refunds deposited on prepaid debit cards, but instead received the income tax refunds in the form of United States Treasury checks. Howard then provided the income tax refund checks to a co-conspirator to be cashed. Once cashed, Howard received a portion of each check, ranging anywhere from $600 to $1,600.

Provided by the IRS and keepmyID.org

The Top 5 ID Theft Prosections (2011 – 2014)

When ID theft strikes, you call the Police, right?  Unfortunately the vast majority of ID thieves are never caught.  But once in a while they are apprehended and go to prison. Over 938,000 false tax returns (tax fraud) were filed last year.  Over one million are expected this year.  TIP: File a paper return and do it as soon as possible.  If you are ever compromised request a PIN number from the IRS for all future returns.

#5 Two Sentenced for Participating in Identity Theft Scam
.  In Los Angeles, California, Michael Williams, of Palmdale, was sentenced to 33 months in prison and ordered to pay $787,086 in restitution. Mike Niko, of Los Angeles, was sentenced to 15 months in prison and ordered to pay $104,662 in restitution. According to court documents, from May 2008 through July 2010, Williams and Niko conspired with others to defraud the United States by using the personal identifying information of various individuals to file false tax returns claiming fraudulent tax refunds.  A co-conspirator stole names and social security numbers from the California Department of Public Social Services (DPSS) computer system. The fraudulent returns claimed the First Time Home Buyer Credit and/or Earned Income Credit. Purporting to be tax preparers, Williams and Niko established bank accounts for the purpose of receiving the refunds claimed on the false tax returns.

#4 Alabama State Employee Sentenced for Providing Names in Identity Theft Scheme.  In Montgomery Ala., Lea’Tice Phillips was sentenced to 94 months in prison and ordered to pay $567,631 in restitution. Phillips pleaded guilty on May 30, 2013 to wire fraud and aggravated identity theft. According to the court documents, Phillips worked for an Alabama state agency and had access to state databases that contained forms of identification of individuals. Between October 2009 and April 2012, Phillips conspired with Antoinette Djonret and others to file false tax returns using stolen identities. On multiple occasions, Phillips accessed a state database to obtain identification which she then sent to Djonret.  Djonret and others used the stolen identification to file false tax returns, mostly from Djonret’s residence in Montgomery. Djonret and her co-conspirators used an elaborate network of individuals to launder the tax refunds. They recruited individuals to purchase prepaid debit cards on their behalf. Fraudulently obtained tax refunds were directed to the prepaid debit cards that Djonret and her co-conspirators used to obtain the proceeds. Some of the prepaid debit cards were in the name of Phillips. In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds. Antoinette Djonret was sentenced to serve 144 months in prison for her role in the conspiracy.

#3 Florida Resident Sentenced for Aggravated Identity Theft
.  In Orlando, Fla., Abdul Cunningham, of Rockledge, Fla., was sentenced to 144 months in prison, ordered to pay $560,731 in restitution and a money judgment of $560,731. Cunningham pleaded guilty on June 13, 2013 to wire fraud and aggravated identity theft. A co-defendant, Jana Harris-Cunningham, pleaded guilty on June 24, 2013 and is awaiting sentencing. According to court documents, the defendants engaged in a scheme to defraud the United States Treasury by filing fraudulent income tax returns and negotiating fraudulent tax refunds using stolen identities. Cunningham and Harris-Cunningham filed 145 false claims with the IRS for tax years 2010 and 2011. As part of their scheme, both used the stolen identities along with false and fraudulent wage and tax withholding information to prepare fraudulent federal income tax returns. After filing the false returns, Cunningham and Harris-Cunningham accepted and  negotiated re-loadable debit cards that they knew contained fraudulently obtained income tax refunds.

#2 Ohio Woman Sentenced in Identity Theft and Tax Refund Scam
.  In Cincinnati, Ohio, Bridgette Jones (no diary found) was sentenced to 61 months in prison, three years of supervised release and ordered to pay $477,490 in restitution to the IRS. In April 2013, Jones pleaded guilty to one count of conspiracy to submit false claims for federal income tax refunds with the IRS and to one count of aggravated identity theft. According to court documents, between January 2011 and September 2012, Jones conspired with others to obtain false claims for income tax refunds from the IRS by electronically filing false 2010 and 2011 federal income tax returns claiming at least $654,550 in refunds that they knew they were not entitled. Jones’ primary role in the scheme was to prepare and submit false returns to the IRS using stolen identities. Co-conspirator Ellis Maurice Scott unlawfully obtained the individual names, dates of birth, and social security numbers used to prepare and file the false income tax returns. Jones and Scott kept lists of these individual’s identities to be used in filing false income tax returns for multiple income tax years. In April 2013, Ellis Scott pleaded guilty and currently awaits sentencing.

#1 (tie) Californian Sentenced for Role in Fraudulent Refund Scheme
.  In Los Angeles, California, Kashawn Monique Savery was sentenced to 18 months in prison, three years of supervised release and ordered to pay $1,608,021 in restitution to the IRS. Savery pleaded guilty to ten counts of filing false claims against the United States. According to court documents, Savery conspired with others to file with the IRS false claims for refunds based upon fraudulent Earned Income Tax Credits and First Time Homebuyers Tax Credits. A co-conspirator provided personal identifying information of individuals, including names and Social Security numbers, from the computer system of the California Department of Public Services where the co-conspirator was employed.  Savery would use the stolen personal identifying information to file false returns. The fraudulently obtained refunds would be deposited into bank accounts controlled by others in the scheme.

#1 (tie) Florida Man Sentenced for Tax Fraud.  
In Tampa, Fla., Maurice J. Larry was sentenced to 174 months in prison and ordered to forfeit $2,240,096. He pleaded guilty on April 11, 2013 to wire fraud and identity theft charges. Larry will serve this sentence concurrently with his sentence from another unrelated tax fraud case in which he received 101 months in prison for conspiracy to defraud the United States Treasury through tax fraud and aggravated identity theft.  According to court documents, Larry and his co-conspirator, Rashia Wilson, engaged in a scheme to defraud the IRS by negotiating fraudulently obtained tax refunds. They did so by receiving U.S. Treasury checks and pre-paid debit cards that were loaded with proceeds derived from filing false and fraudulent federal income tax returns in other persons’ names, without those persons’ permission or knowledge. Larry and Wilson filed these false and fraudulent federal income tax returns from multiple locations, including Wilson’s residence and hotels in the Tampa area. Wilson, Larry, and others then used these fraudulently obtained tax refunds to make hundreds of thousands of dollars’ worth of retail purchases, to purchase money orders, and to withdraw cash. During the course of the investigation, agents searched Wilson’s residence and Larry’s storage unit. They recovered thousands of names and social security numbers found in ledgers and various other records. Additional reloadable debit cards loaded with fraudulent tax refunds were also found in both locations. Rashia Wilson was sentenced on July 16, 2013, to 234 months in prison.

Be aware.  Be Safe.  Provided by the IRS and keepmyID.org

Illinois Hit By ID Theft

ILLINOIS Hit by ID Theft

ID theft is everywhere.  Financial ID theft, Tax Fraud, Criminal Liability, Child ID Theft, Elderly ID Theft, Family Fraud, Employment Fraud, Benefits Fraud, and Social Security Fraud are growing every year.  There were over 13 million reported victims last year alone.

Illinois Woman Sentenced for Tax-Related Frauds
.  In Springfield, Illinois, Monica D. Nicholson, of Cairo, Ill., was sentenced to 105 months in prison, three years of supervised release and ordered to pay $283,688 in restitution. According to court documents, Nicholson was part of a scheme to help others get false refunds from the IRS by filing false tax returns for 2007 through 2011. Nicholson gathered others’ identifying information, claimed fraudulent dependents, and transmitted this information over the telephone to a tax return preparer located in Memphis, Tennessee.  As part of this conspiracy, the participants or those whose names appear as taxpayers on the fraudulent income tax returns were required to pay Nicholson between approximately $200 and $300 per tax return from the tax refund received. During the 2011 and 2012 tax filing seasons, approximately 50 federal income tax returns were filed claiming $406,228 in false refunds. Nicholson purchased dependents’ Social Security numbers from the guardians and/or parents of the dependents for filers who did not have legitimate dependents. The typical fee was $1,000 per Social Security number and this fee was paid from the fraudulent income tax refund received from the IRS.

Provided by the IRS and keepmyID.org

 

Arizona Hit by ID Theft

ARIZONA Hit by ID Theft

ID theft is everywhere.  Financial ID theft, Tax Fraud, Criminal Liability, Child ID Theft, Elderly ID Theft, Family Fraud, Employment Fraud, Benefits Fraud, and Social Security Fraud are growing every year.  There were over 13 million reported victims last year alone.

Arizona Woman Sentenced for Role in Tax Refund Fraud Scheme
.  In Tucson, Arizona, Roshelle Davis was sentenced to 18 months in prison, three years of supervised release and ordered to pay $421,665 in restitution. Davis pleaded guilty on February 19, 2013, to conspiracy to defraud the government through false claims. According to court documents, beginning on August 27, 2010 and continuing until February 2, 2012, Davis and others prepared and filed at least 150 false income tax returns claiming at least $675,000 in false refund payments. For tax year 2009, Davis prepared and filed false income tax returns which contains names, social security numbers and dates of birth provided to her by another defendant. For the tax years 2010 and 2011, the income tax returns filed contained false wages and withholding amounts. Some of the individuals whose identifying information was used on the false claims for refund were inmates in state and local detention facilities. A total of 30 false claims amounting to $111,504 were deposited into a bank account controlled by Davis.

Provided by the IRS and keepmyID.org

Companies Are Required To Let Customers Know About Breaches

Have you ever had your credit card number stolen and wonder how?  Well, many times it comes after a company had a breach.  Companies retain your information for a variety of reasons.  Unfortunately, when thieves get into their systems, the treasure trove of information about you is there for the taking.  Companies should tell you if this happened.  But that is not always the case. For example, three U.S. public companies identified as Chinese hacking victims didn’t report the theft of trade secrets and other data to investors, despite rules designed to disclose significant events.

Two of the companies — aluminum maker Alcoa Inc. and metals supplier Allegheny Technologies Inc. — said the thefts weren’t “material” to their businesses and therefore don’t have to be disclosed under Securities and Exchange Commission rules designed to give investors information that may affect share prices. The Justice Department, in an indictment unsealed on May 19, alleged that five Chinese military officials conspired to steal information from the U.S. nuclear power, metals and solar industries that would be useful to competitors in China. Attorney General Eric Holder called the data loss significant. “The question is would an investor have cared if Chinese hackers broke into a company and were messing around the place?” Jacob Olcott, a principal focusing on cyber security at Good Harbor Security Risk Management LLC in Washington, said in a phone interview. “As an investor, show me the evidence that you reviewed this thoroughly.” Federal and state regulators and lawmakers have been grappling with how to sharpen disclosure rules as banks and retailers have been slow to inform the public about cyber-attacks and the loss of customer data. Companies including Target Corp. have disclosed cyber-attacks in which customer data was stolen, affecting the company’s share price and leading to the ouster of the chief executive officer and other officials. Scott Kimpel, a lawyer who previously worked on disclosure rules as a member of the SEC’s executive staff, said there is “a gray area where a lot of the companies are not perfectly clear on what they should be disclosing.”

Prominent Target

“What it would take is an enforcement action against someone prominent,” Kimpel, who is now a partner at Hunton & Williams LLP in Washington, said in an interview. “Until then you are going to continue to see the same approach taken by companies and the commission.”

There is no explicit requirement under the federal securities laws that require companies to disclose when they have been hacked, said Bradley J. Bondi, a partner at Cadwalader, Wickersham & Taft who leads its securities enforcement group and previously worked at the SEC. While the SEC’s staff advised companies how to disclose cyber-attacks and risks in 2011, companies still have to exercise their judgment about whether that information is material for an investment decision. “Modern issues such as cyber-attacks are assessed to a large degree under the lens of laws and rules that have predated computers,” Bondi said in an interview.

Alcoa Filing

Chinese military officials illegally breached computers at Alcoa, Allegheny Technologies and U.S. Steel Corp. between 2006 and 2014, the Justice Department said in its indictment. Safeguarding data is a top priority for Alcoa, Monica Orbe, a spokeswoman for the New York-based company, said in e-mail. “To our knowledge, no material information was compromised during this incident which occurred several years ago,” Orbe said. The company’s annual SEC filing for 2013 acknowledged security breaches. The filing said the company “has experienced cyber security attacks in the past, including breaches of our information technology systems in which information was taken, and may experience them in the future, potentially with more frequency or sophistication.” The filing didn’t mention Chinese hackers and said, “past attacks have not had a material impact on Alcoa’s financial condition or results of operations.”

Damage Assessment

Dan Greenfield, a spokesman for Allegheny Technologies based in Pittsburgh, said the company didn’t publicly disclose the incident because it determined “there was no material incident.” He declined further comment on the Justice Department investigation, citing company policy to not discuss active litigation. Courtney Boone, a spokeswoman for Pittsburgh-based U.S. Steel declined to comment, referring questions to the Justice Department. John Nester, an SEC spokesman, declined to comment.

Investors should be asking if the companies conducted an extensive and documented damage assessment into the attacks to determine there was no material impact, said Olcott, who led a congressional review as counsel to Senator Jay Rockefeller, a West Virginia Democrat, that resulted in the SEC guidance being issued in 2011.

Corporate Value

“Corporate value is closely tied to intellectual property and trade secrets,” Olcott said. “If companies aren’t protecting it, shareholders should know.” In announcing the indictment, Attorney General Holder said, “the range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response. This administration will not tolerate actions by any nation that seeks to illegally sabotage American companies and undermine the integrity of fair competition in the operation of the free market,” Holder said at a press conference in Washington.

provided by Bloomberg and keepmyID.org

2013 Recap on Cyberattacks on US Companies

 According to Ellen Nakashiuma at the Washington Post, federal agents notified more than 3,000 U.S. companies last year that their computer systems had been hacked, White House officials have told industry executives, marking the first time the government has revealed how often it tipped off the private sector to cyber intrusions. The alerts went to firms large and small, from local banks to major defense contractors to national retailers such as Target, which suffered a breach last fall that led to the theft of tens of millions of Americans’ credit card and personal data, according to government and industry officials. Three thousand companies is astounding,” said James A. Lewis, a senior fellow and cyberpolicy expert at the Center for Strategic and International Studies. “The problem is as big or bigger than we thought.” The number reflects only a fraction of the true scale of cyber intrusions into the private sector by criminal groups and foreign governments and their proxies, particularly in China and Eastern Europe. The estimated cost to U.S. companies and consumers is up to $100 billion annually, analysts say.

 The scale of notifications is an effort to ramp up the sharing of threat information by the FBI, the Department of Homeland Security and other agencies with U.S. companies, officials say. The alerts follow a February 2013 executive order by President Obama to “increase in volume, timeliness, and quality” the cyber-threat information shared with the private sector so people can better defend themselves. The disclosure comes as the federal government has struggled to pass legislation to set security standards that companies in critical sectors must follow and to increase information-sharing between the public and private sectors. It also comes amid reports that the National Security Agency has breached the servers of a Chinese telecommunications firm to learn whether the company has been spying on behalf of Beijing, although agency officials say the United States does not steal corporate data to benefit U.S. companies’ competitiveness.

 In the absence of cyber-security legislation, the government last month unveiled a voluntary framework of best practices that companies can follow to secure their computer networks. Lisa Monaco, deputy national security adviser for homeland security and counterterrorism, told industry leaders at a White House event that the government had alerted more than 3,000 companies, officials said. “When companies are notified that they have been victimized by malicious cyber actors, it should be a wake-up call,” White House cyber-security coordinator Michael Daniel said in a statement to The Washington Post. “U.S. businesses must improve their cyber-security.” Daniel said that companies need to make “smart investments” in personnel and technology, and that staying on top of threats through information-sharing with government agencies is crucial. “These notifications are helping to build and exercise public-private teamwork on a daily basis,” he said.

 About 2,000 of the notifications were made in person or by phone by the FBI, which has 1,000 people dedicated to cyber-security investigations among 56 field offices and its headquarters. Some of the notifications were made to the same company for separate intrusions, officials said. Although in-person visits are preferred, resource constraints limit the bureau’s ability to do them all that way, former officials said. Nonetheless, agents are trying to provide companies with useful information that can help them identify the problem and stop the bleeding of data, said special agent Tim Marsh of the FBI’s cyber division. “One of the frustrating parts for our industry was agents going out and saying, ‘You’re a victim, you’re being targeted, and I can’t tell you anything else.’ So we spend a lot of time making sure that before we send an agent or an investigator out that they have quality information to provide to the company,” he said. That could include Internet protocol addresses, malware samples and specific attack signatures, industry officials said.

 Officials with the Secret Service, an agency of the Department of Homeland Security that investigates financially motivated cyber-crimes, said that they notified companies in 590 criminal cases opened last year, officials said. Some cases involved more than one company. The list included Target, which the agency said it alerted in December. Others notified by the Secret Service last year included a major U.S. media organization, a large U.S. bank, a major software provider, and numerous small and medium-size retailers, restaurants and hotels, officials said. “Within hours of us coming up with information that we can provide, we would go to a victim,’’ said Edward Lowery, Secret Service special agent in charge of the criminal investigative division. “The reaction would be just like when you’re told you’re the victim of any crime. There’s disbelief, there’s anger, all those stages, because there’s a lot at stake here.” To better coordinate the alert process, the FBI is expanding a computer system used to track counterterrorism tips and information, called Guardian, to include cyber-security cases across the government. The idea is to avoid duplication of efforts between agencies and make sure, for instance, that the FBI knows when the Secret Service is notifying a company. In most cases, the company had no idea it had been breached, officials say. According to Verizon, which compiles an annual data-breach survey, in seven out of 10 cases, companies learn from an external party — usually a government agency — that they’ve been victimized.

 That’s an ironic role reversal, said Steven Chabinsky, former deputy assistant director of the FBI cyber division. “It’s usually the victim calling 911, not 911 calling the victim,” he said. A company in the Midwest that was notified Wednesday by the FBI welcomed the tip-off, according to an industry official familiar with the case. Company officials were given a spot clearance for a few hours so the agent could brief them on classified threat information, the official said. In some cases that involve companies with sophisticated capabilities, the government is not telling them what they don’t already know, industry officials said. “What they find is that they’re giving up more information to the government than the government’s giving them that’s of value,” said a cybersecurity consultant who spoke on the condition of anonymity to be candid.

 Many of the companies the FBI has notified in past years were defense contractors, said Chabinsky, who stepped down in September 2012. And often it is China that is behind such intrusions, experts say. More than two dozen major weapons systems have been breached by Chinese hackers, who experts say focus on advanced technologies in bio-technology, space and alternative energy. The FBI often discovers that companies have been hacked by surveilling a virtual stash-house or “hop point” server used by hackers to store data that has been siphoned off from a firm. The hackers use that server to store stolen material from numerous victims, officials said. One hop point could have more than 100 victims. Often, the FBI makes repeat notifications. “We used to have one agent who, when approaching a company, would say, ‘Unfortunately, this is going to be the beginning of a long-term relationship,’ ” said Chabinsky, who was the FBI’s top cyber lawyer and is now general counsel and chief risk officer for CrowdStrike, a cybersecurity firm. The reason, he said, is that the victim is usually being targeted by an unrelenting foreign power such as China or Russia. Lewis said that when it comes to theft of intellectual property, those two countries account for the bulk of all cases. “Far and away the largest is China,” he said. “The second-largest is Russia. Between those two, you’re probably looking at more than two-thirds of cases in the United States.”

Target’s (plus other large retailers’) Breach – Over 40 Million Credit and Debit Cards Compromised

As you have heard by now, this holiday season, hackers stole over 40 million credit and debit card numbers from Target’s retail system. This makes all of us extra cautious about protecting our own computer systems. Here’s how to hold off those hackers:

1. “ABC” online. ”Always Be Careful” when checking emails and surfing the Web. Hackers use these online connections to get malware onto your system that gives them access to personal information and passwords.
  • Watch for bad links: Check a link by resting your cursor on it, without clicking, to see the web address. If you want “Sports.com” but you see “x83pzt.net,” don’t click on it.
  • Avoid questionable websites: Places that push the norms of taste and morality are notorious sources of malware.
  • Don’t fall for phishing scams: Wiring money to someone you don’t know is never a good idea. But also watch for scams that pose as your bank, email provider, social media, or even the IRS. Banks don’t ask to reset your password by email and the IRS never emails taxpayers.
  • Don’t download from an unknown source: Only get files or apps from websites you trust.
2. Use different passwords for different sites and accounts. That way, if one account is hacked, only one is compromised. Write passwords down and keep in a secure place, or use a secure online password manager.
3. Make passwords hard to hack and change them often. ”Password” and “123456″ are easy to hack. So is your birthdate and your child’s name, which can be found online. Experts suggest using a long sentence with numbers and symbols, such as “PumpkinsClimbIntoHurricanes%82&.” Or make up an even longer sentence, such as “I came to Dallas in 2011 after living in Atlanta for 4 years”, but just use the first letter of each word: “IctDi2011aliAf4y.” And change passwords every six months.
4. Watch what gets stored. Never email or text your Social Security Number (pictures of your SS Card are much safer). Delete old messages with bank account info or credit card numbers. Never put your master list of passwords on your computer.
5. Use protection tools: 
  • Antivirus software: Scans for known computer viruses and some can detect phishing scams and other schemes.
  • Secure connections: If a website uses your personal info, make sure you’re on a secure, encrypted connection. Instead of “http,” the web page URL should start with “https”–the “s” stands for “secure.”
  • Two-factor authentication: This makes sure no one can pose as you. Once you set it up, every login needs two steps. First, enter user name and password. Then you’ll get a third, one-time password sent to your phone or other device. This option is offered by Amazon, Facebook, Google, Twitter, and others.
What to do if you’ve been hacked. Take these steps immediately:
  • 1) Destroy the computer virus: Run antivirus software to find and remove the virus.
  • 2) Update all software: Download the latest versions of all programs, including operating system, Internet browsers (Chrome, Firefox, Internet Explorer, Safari, etc.), Office, and Adobe programs.
  • 3) Change all passwords: Make sure to do this on a different computer from the one that got infected. If the virus had keylogging software, hackers might find the new passwords.
Provided by First Choice Bank and keepmyID.org

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