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Persecution of Immigrant Workers Won't Stop Identity Theft

Immigrants Are Not Slaves, Even Though We Treat Them That Way

By Martin H. Bosworth
ConsumerAffairs.com

December 22, 2006

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Federal agencies are still congratulating themselves for their raids on Swift Company's meat-packing plants, which were touted as striking blows at both illegal immigration and identity theft.

But did the raids really accomplish anything?

Federal Trade Commission chair Deborah Platt Majoras added that "identity thieves have learned that information is a powerful currency."

"But we, too, can use information to beat them at their own game," she boasted.

Lost amidst the self-congratulatory backslapping was the important point that many of the Swift plant workers who were rounded up and thrown into detention centers without due process of any kind were, in fact, legal immigrants who had as much right to be in the United States as Chertoff and Majoras.

Chertoff and Majoras both noted that those who were using fake identities had gotten them from the underground market. Arresting the purchasers of false identities is comparable to arresting the purchasers of illicit drugs. It looks good and is relatively easy, but doesn't do much to shut down the black market or punish the actual crooks.

Every Problem Is A Nail ...

The key piece of stolen information used to construct false identities is the Social Security number.

As the de facto identifier for an individual, a stolen number can be used with a phony name to create a new identity for someone, which the purchaser can then use to fill out employment forms and begin paying taxes and Social Security withholding.

These new identities are filed as a "sub-file" in the account of the legitimate holder of the original Social Security number.

The accountholder never knows about it unless the IRS pursues them for taxes owed on wages earned by the new identity, or the new identity user runs up debt.

Meanwhile, the unclaimed Social Security earnings go into the "earnings suspense file," the massive pool of benefits that are attached to unidentified or misfiled Social Security numbers. Hundreds of billions of dollars have already flowed into the Social Security system over the last 50 years or so.

The purchasers of fake identities will thus be paying into the Social Security and Medicare programs even though they have no hope of ever seeing a dime's worth of benefits. They are, in effect, donating their money to the rest of us.

The stolen numbers and identities may have been in the possession of undocumented workers, but where did they get them? How does all of this information end up on the black market, where a full "ID kit" of a green card, photo ID, and Social Security number sells for $30 on the street?

... When You're A Hammer

Much of the stolen personal information comes from physical theft -- such as muggings, burglaries, and so on. But much of it also comes from data breaches and theft of equipment like laptops, USB storage devices and mainframe break-ins.

Companies and government agencies who have carelessly lost data on individuals routinely proclaim that there is no evidence that the information is being misused.

But in fact, this is a totally unsupported claim. Does anyone believe crooks are stealing information without having a way to monetize it?

As identity thieves get smarter, they're moving on from the fairly straightforward tactic of draining victims' checking accounts and running up debt on their credit cards.

Instead, they "remix" the information into new identities, which they sell on the street just as though it were crack cocaine.

Author Jerry Eller, himself a victim of a decade-long struggle to clear his name after being hit with identity theft, describes "flea markets" where fake Social Security cards are sold with real people's numbers.

Criminal rings also take stolen card information and encode it onto blank cards, such as hotel keys, that are used to make transactions too small for most financial systems' fraud alerts to notice.

Given that the Swift raids targeted the workers in possession of fake documents, rather than the sellers, it's hard to see how the raids will have any real effect on the identity theft epidemic.

"They paid someone for a Social Security number in order to get a job. To use the drug-trade analogy, they were buyers, not dealers," Littwin said.

Identity theft is a very real crime, and using stolen personal information for employment or to make purchases is every bit as illegal as buying drugs on the street.

But just as law enforcement too often focuses too much effort on the street-corner buys and not enough on the high-level transactions, the same is true with focusing identity theft prevention on arresting undocumented workers who are using false identities.

In other words, just because every problem looks like a nail when you're a hammer doesn't mean you can solve it by bashing it repeatedly until it stops sticking out.

Skeptics suggest that Chertoff and Majoras would better spend their time going after those who supply the raw "product" that fuels the identity theft black market -- namely, the government agencies, non-profit institutions and businesses who are careless in their handling of individuals' private data -- followed by the crooks and mobsters who "distill" the street-level merchandise from the raw material left lying around by the likes of the Veterans Administration, Boeing, UCLA, Ameriprise, and Kaiser Permanente.

Federal agencies certainly do like their bands of armed agents in black riot gear and are getting awfully fond of rounding up individuals and holding them incommunicado without access to the rights guaranteed them by the Constitution, but such totalitarian tactics don't do much to address the identity theft problem and are lethal to democracy.

Detention camps and the militarization of law enforcement are an armed assault on the Constitutional right to equal treatment before the law, a guarantee that applies to every man, woman and child in America regardless of their ethnicity, country of origin or citizenship status.

Immigrant workers are not slaves, even though we have grown accustomed to treating them as such. Locking them up in pens is not much of a privacy-protection strategy.

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