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Identity thieves likely to be first-timers, strangers
Robert Lemos, SecurityFocus 2007-10-22

An analysis of identity-theft cases closed by the U.S. Secret Service in the past six years has found that identity thieves typically do not have a criminal record and are generally not known by their victims.

The study, published on Monday, reviewed data from 517 cases resolved by the U.S. Secret Service between 2001 and 2006. The analysis found that nearly 60 percent of the 933 offenders implicated in the cases did not know their victims and more than 70 percent of the thieves had no prior criminal record. While most reports of identity theft focus on individuals, the analysis found that financial institutions are slightly more likely to be a victim.

The review is the first time that the federal agency has allowed the public analysis of its cases, said Gary R. Gordon, a professor of economic crime at Utica College and an author of the study.

"It challenges some of the conventional wisdom about how we have thought of identity theft," said Gordon, who is also the executive director of the school's Center for Identify Management and Information Protection (CIMIP). "This is the first time we have been able to view identity theft from the detection phase all the way to the arrest and conviction phase -- who the offenders are, what they did, how they did it and who they victimized."

Identity theft has become the financial crime of the 21st century. The crime has made up approximately a third of all complaints -- the largest proportion -- to the U.S. Federal Trade Commission and other government agencies since 2004. The U.S. Secret Service has cracked down on a number of identity-fraud rings this year, including the arrest of former security consult Max Ray "Max Vision" Butler in September.

Gordon and his colleagues used a strict definition of identity theft, requiring that the criminal assume a person's identity to classify the crime as identity theft. The hack of retail giant TJX Companies' transaction processing servers, which led to the leak of 46.5 million credit- and debit-card accounts and massive fraud, did not necessarily lead to identity theft, for example.

The review of U.S. Secret Service cases found that, while slightly more identity theft cases were generated in the Northeastern United States, the offenses were fairly evenly spread throughout the country. The average loss claimed by the victims totaled $31,356, with the largest loss totally $13 million. Women made up a significant percentage of offenders -- a third -- compared to other types of crimes, and 71 percent of offenders had not previously been charged with a crime.

Despite anecdotal reports that have linked drug habits with identity theft, the study only found that 2.2 percent of offenders cited procuring drugs as the reason for their crimes. Arguments that terrorists use identity theft to fund their violent activities also failed to make the grade. Not a single case mentioned the issue, Gordon said.

"We had that as a possible reason (for perpetrating the crime), and didn't find any cases," he said.

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