The U.S. Congress in 1998 enacted the Identity Theft and Assumption Deterrence Act. The Act makes it a federal crime if someone “knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable State or local law.”
It is estimated that some 15 million people in this country experience at least one identity theft incident each year with financial losses totaling up to $50 billion. The average loss per victim is approximately $1500.
The most common type of identity theft is the use of someone else’s credit card. There are 15 times more reports of credit card fraud than there are of other personal information fraud.
Identity theft is the fastest growing white collar crime in America today. The Federal Trade Commission reports that an individual’s stolen ID is used some 30 times before the victim become aware of it. The five most common identity thefts are:
- Driver’s license ID theft
- Social security ID theft
- Medical ID theft
- Character/criminal ID theft
- Financial ID theft
Section 1028 of Title 18, United States Code, governs identity theft. Under this statute, the penalty for identity theft starts with a mandatory minimum term of two years or a 5-year mandatory minimum if the theft is connected to terrorism. As a general rule, these terms of imprisonment cannot be served concurrently with sentences for other offenses.
Guideline 2B1.1 of the U.S. Sentencing Guidelines places the base offense level for identity theft at 7. If the economic loss is more than $5,000, the offense level increases by 2. The offense level can be increased up to 30 under this Guideline, depending upon the economic loss involved. And additional levels can be added to the offense level depending upon the number of victims involved and the nature of the offense(s).
The number of identity theft cases brought by the U.S. Justice Department reached its peak in 2007 and 2008, and have remained steady at between 800 to a 1000 cases between 2010 thru 2013. Most of these cases were resolved through plea bargains. An astounding 97% of all federal criminal cases are resolved through such negotiated plea agreements.
Federal prosecutors often use the threat of aggravated identity theft (Section 1028A), which enhances the identity theft mandatory minimum sentence by two years (five years if the predicate crime is terrorism), to pressure defendants into pleading guilty. This enhanced provision, known as the Identity Theft Penalty Enhancement Act, was signed into law by President George W. Bush in 2004. The purpose of the Act is essentially to punish individuals for the non-monetary harm they cause victims of identity theft.
After the enactment of the aggravated identity theft statute, the federal courts of appeal disagreed over whether the government had to prove that a defendant knew that the means of identification actually belonged to someone else in order to convict the defendant.
In 2009, the Supreme Court settled the disagreement in a case in which the defendant, a citizen of Mexico, gave his employer counterfeit social security and alien registration cards in his real name but whose numbers belonged to other people. The government argued that it did not have to prove the defendant knew the numbers belonged to someone else. The Court rejected this argument, saying the government must indeed prove that a defendant knows “the means of identification” actually belongs to another person before it can secure an aggravated identity theft conviction.