Good morning, Mr. Chairman, members of the subcommittee. On
behalf of the United States Postal Inspection Service, thank
you for holding this hearing and giving me the opportunity
to discuss the subject of identity crimes and the significant
role Postal Inspectors play in combating it.
I'm Kevin Burke, Deputy Chief Inspector, Eastern Field Operations,
Postal Inspection Service.
The responsibility for safeguarding 200 billion pieces of
mail a year and ensuring America's trust in the postal system
falls on the shoulders of U. S.
As federal law enforcement officers, we enforce over 200 federal
statutes; primary among those are the theft or possession of
stolen mail statute and the oldest, and still the most effective
consumer protection law, the mail fraud statute. Last year,
Postal Inspectors made over 11,000 arrests. Three thousand
of those arrests were for identity theft. Identity theft arrests
each year for the past three years.
I'm sure all of you have received pre-approved credit applications
in the mail. In the past, those mailings were prime targets
for an identity thief because they simply required the thief
to sign the application and return it to the company. But times
have changed, due to our efforts in raising awareness of the
problem. For example, credit card companies have adopted recommendations
we've made and have begun automatically discarding suspicious-looking
applications for credit, especially when there are differences
between where the "customer" claims they reside and
what address their customer file indicates. In addition, credit
card companies have changed another of their practices - credit
offers sent through the mail now contain much less
Another favorite vehicle for thieves used to be the fraudulent
change-of-address scheme, directing the Post Office to forward
a victim's mail to an address the thief controlled. Not any
more. A proactive effort by the Postal Service to prevent a
false change-of-address is the Move Validation Letter. Now,
whenever a change-of-address is filed, the Postal Service sends
a letter to both the old and new addresses. The letter instructs
the recipient to
call an "800" number if they had not recently requested a change. This
simple measure has virtually eliminated the placing of a false change of address
with the Postal Service as an avenue for committing identity theft.
According to a report released by the FTC this past September,
mail theft as a source for identity theft happened in only
4% of the cases surveyed. As we have made it more difficult
for mail theft to be a component of identity theft, criminals
have turned to other means, oftentimes recruiting the assistance
of insiders, employees who have access to the personal information
of clients or
Personal information contained in corporate and government
records and computer databases is a fertile area for dishonest
employees working in
conjunction with identity thieves.
Three years ago, a Philadelphia resident reported to police
that, after her father's death, she continued receiving credit
card bills showing charges made in her father's name. The statements
even reflected a request for a new account. US Postal Inspectors
and detectives from the Philadelphia Police Department determined
that her father's identity had been stolen when his body was
processed through the Medical Examiner's Office. Sixteen suspects
were ultimately identified, ten of them employees working within
the Medical Examiner's Office. The employees used the credit
cards to make purchases for themselves or passed the credit
cards and other personal information they found to outsiders.
The scheme went on for three years before they got caught.
All sixteen defendants were caught and convicted. Postal Inspectors
were called in to participate in the investigation as bills
for illegally purchased items were sent through the mail as
was financial information for newly - and fraudulently - opened
Just last month, in a separate investigation, Postal Inspectors
in Philadelphia and other task force members arrested the ringleader
of an identity theft gang. A search of his Chester residence
found a commercial-grade credit card embossing machine that
the suspect had purchased over the Internet. The suspect used
a fictitious name and had his purchase delivered by private
carrier to an abandoned Philadelphia area address, all without
arousing suspicion. When searching his house, we also recovered
over 2,500 blank credit cards, numerous counterfeited credit
cards, valid credit cards that had been stolen from the mail,
and counterfeit PA, VA, FL and DC drivers' licenses.
Postal Inspectors together with the FBI are also investigating
the identity theft of about 30 Montgomery and Delaware County
residents who donated blood to the American Red Cross in November
or December of last year. Donors are required to supply their
names, social security numbers and other identifying information
before giving blood. As this is still an active investigation,
I am not at liberty to offer any details other than the Red
Cross has been very forthcoming in cooperating with authorities
and the case is ongoing.
In addition to modifying industry practices and making financial
mailings less attractive to a thief, our partnerships with
regulatory, financial industry and other law enforcement groups
have resulted in a number of initiatives.
In 2002, Patrick J. Meehan, U.S. Attorney for the Eastern
District of PA, formed a regional working group to facilitate
the sharing of intelligence and investigative resources in
combating identity theft in and around the Philadelphia area.
As a member of the Group, the Postal Inspection Service has
taken the lead in developing a web-based database that tracks
customer and financial industry reports of mail theft and identity
theft. The database allows all Group members to track loss
information and perform advanced searches on victims' names.
The database also performs what is known as "link
analysis," by automatically matching common addresses used by thieves.
One of the most insidious aspects of identity theft is the
length of time the scheme can be carried out before it is even
detected. It may be months before a victim realizes they've
been targeted. It's not until a consumer gets turned down for
credit, a car loan or a mortgage on a dream house because of
a bad credit rating do they realize what has taken place. Damaged
credit ratings may take years to restore. Victims run the gamut
of society - they're wealthy, they're poor; they're old, they're
young. No one is immune. Anyone is a
Aggressive law enforcement efforts are a key component of
our mission. But arrests are not the only solution. We have
found that creating awareness and prevention programs for consumers
can go a long way to lessen the impact of this crime on the
Over the past 10 years, the Postal Inspection Service has
published and distributed a series of brochures, posters and
newsletters to raise public
awareness. Our publication "Identity Theft - Safeguard Your Personal
Information," has been distributed to over two million consumers and
businesses. "Detecting and Preventing Account Takeover Fraud," another
of our publications, advises credit card companies on steps they can take to
detect and prevent takeover schemes.
Just this past September, the Postal Inspection Service, along
with our partners the FTC and the Postal Service launched a
nationwide awareness campaign on identity theft. We used a
two-pronged approach: providing prevention and awareness information
to consumers, and informing businesses on the need to safeguard
their files and databases containing customers' information.
Actor Jerry Orbach, of television's Law and Order fame, who
himself was a victim of identity theft, was the campaign's
The Mullen agency of Pittsburgh provided support for this
year's campaign on a pro bono basis. But what really makes
this campaign unique is the funding source. We've all heard
the saying, "crime doesn't pay." In the case of this
awareness campaign, it does pay. This campaign was funded through
a unique application of fines and forfeitures paid by criminals
in a past fraud case. Sometimes the most effective vehicle
for "getting out the
message" is when the message comes directly from an authoritative source,
the criminals themselves. Last year, Postal Inspectors in Pittsburgh caught a
man who stole the identities of several celebrities, including the actor Will
Smith. The thief, Carlos Lomax, was prosecuted by the U.S. Attorney's Office
in the Western District of Pennsylvania and convicted. Lomax agreed to let us
tape an interview of him describing what he did and how he did it. I would like
play a portion of that tape for you now.
Educating the public and working to reduce opportunities where
the Postal Service and the mail can be used for illegal purposes
are crucial elements in our fight against identity crimes.
As always, we will do our part to remove criminals from society.
We appreciate the subcommittee's recognition of the importance
of this issue.