Identity Theft Penalty Enhancement Act

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1731) to amend title 18, United States Code, to establish penalties for aggravated identity theft, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 1731, currently under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic or other gain including immigration benefits.

The Federal Trade Commission received 161,819 complaints of someone using another's information in 2002. In 2003 the FTC performed a random sampling of households. The results from the survey suggest that almost 10 million Americans were the victim of some form of ID theft within the last year, which means that despite all of the attention to this type of crime since September 11, 2001, the incidence of this crime is increasing.

As border security and international cooperation increases to combat terrorism, al Qaeda and other terrorist organizations increasingly turn to stolen identities to hide themselves from law enforcement. For example, according to testimony from the Inspector General of the Social Security Administration, five Social Security numbers associated with some of the September 11 terrorists appeared to be counterfeit. One was assigned to a child and four of the terrorists were associated with multiple Social Security numbers.

Since September 11, 2001, Federal and State officials have taken notice of this crime because of the potential threat to security. But the cost to the consumer and corporations is equally alarming. The FTC estimates that loss to business and financial institutions from identity theft to be $47.6 billion per year. The costs to individual consumers is estimated to be approximately $5 billion a year.

As this crime increases, we must find new ways to combat it. Web sites developed by the FTC and consumer groups encourage consumers to protect themselves by shredding mail and keeping a close watch over their credit report. Yet the FTC statistics suggest that identity thieves are obtaining an individual's personal information for misuse not only through ``dumpster diving'' but also through accessing information that was originally collected for an authorized purpose, a so-called ``insider threat.''

In one such case, U.S. attorneys charged a 33-year-old customer service representative from Long Island, New York with identity theft and fraud. This individual was using his position at a company that provided computer services to banks and lending companies to access personal consumer credit information from three credit reporting agencies. The scheme allowed him to access personal information of over 30,000 victims.

The insider threat from identity theft and identity fraud is a threat to personal security as well as national security. The U.S. Attorney in Atlanta charged 28 people as a part of a fraud ring to supply over 1,900 individuals with fraudulent Social Security cards. The cards were supplied by a Social Security Administration clerk in exchange for $70,000 in payoffs.

Under current law, many identity thieves are receiving short terms of imprisonment or probation; however, many of these thieves will use false identities to commit much more serious crimes. Thus H.R. 1731 provides enhanced penalties for persons who steal identities to commit terrorist acts, immigration violations, firearms offenses, and other serious crimes. The bill would amend current law to impose a higher maximum penalty for identity theft used to facilitate acts of terrorism.

This legislation will allow prosecutors to identify identity thieves who steal an identity, sometimes hundreds or even thousands of identities, for purposes of committing one or more crimes. Importantly, it will facilitate the prosecution of terrorists who steal identities with the intent of subsequently committing terrorists acts. It also directs the Sentencing Commission to apply the guidelines for abuse of trust to an insider who uses his position to steal identities.

I support this common sense legislation and urge my colleagues to join me in its passage.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 5 minutes to the gentleman from Texas (Mr. Carter).

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, the only opposition to this bill appears to come from those who are opposed in principle to mandatory minimum sentences. I think that opponents of mandatory minimums would have a much more compelling case if they could assure Congress that the judges are faithfully following the sentencing guidelines that were passed 20 years ago at the time when Congress abolished parole and passed the law establishing determinant sentencing. Sadly, I am afraid the evidence does not support that.

The most disturbing recent example of judges deciding to ignore the sentencing guideline's recommendations comes from Supreme Court justice Anthony Kennedy's testimony before a House appropriations subcommittee in which he stated that judges who depart downward are courageous, and the judges should not have to blindly follow unjust guidelines.

Now, Congress creates crimes, Congress prescribes the penalties for crimes, and the reason that there were sentencing guidelines passed to begin with was to prevent both prosecutors and defense counsel from shopping around for judges to try cases that met with their own particular views on what the sentence should be, should the defendant be convicted.

Well, because of statements like Justice Kennedy's, we now have to have mandatory minimums when we feel the crime is important enough that somebody should at least spend a day in jail or more. That is why there are mandatory minimums in the bill that is before us that deals with identity theft and identity fraud.

I would urge the House to reject the argument that mandatory minimums are bad per se. We need a mandatory minimum in this burgeoning crime. I urge support of this bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in opposition to H.R. 1731. Although I agree with the purpose of the bill, my position is based on the reliance in the bill of mandatory minimum sentencing. By adding mandatory minimum sentencing and denying probation and concurrent sentences, the bill imposes unnecessary and unproductive restrictions on the ability of the Sentencing Commission and judges, in individual cases, to assure a rational and just system of sentencing as a whole and for individuals.

The notion that Congress is in a better position to determine at the front end what the sentence has to be for an individual case than the judge who has heard the case and applies guidelines established by the sentencing professionals not only defeats the rational

sentencing system that Congress adopted but also makes no sense in our separation of powers scheme of governance. Moreover, the notion of mandating a 2-year or 5-year sentence to someone who is already willing to risk a 15-year sentence is not likely to add any deterrence.

Mandatory sentences do not work. They have been studied extensively and have been shown to be ineffective in preventing crime. They distort the sentencing process. They discriminate against minorities in their application, and they waste money. In a study report entitled ``Mandatory Drug Sentences: Throwing Away the Key or the Taxpayers Money?'' The Rand Corporation concluded that mandatory minimum sentences were less effective than either discretionary sentencing or drug treatment in reducing drug-related crime and far more costly than either. The Judicial Conference of the United States has reiterated its opposition to mandatory minimum sentencing over a dozen times to Congress, noting that though sentences ``severely distort and damage the Federal sentencing system . . . undermine the Sentencing Guideline regimen'' established by Congress to promote fairness and proportionality,'' and ``destroy honesty in sentencing by encouraging charge and fact plea bargains.'' The U.S. Sentencing Commission indicated its opposition to the Senate bill, which is virtually identical to this bill, for similar reasons.

Both the Judicial Center in its study report entitled ``The General Effects of Mandatory Minimum Prison Terms: a Longitudinal Study of Federal Sentences Imposed'' and the United States Sentencing Commission in its study entitled ``Mandatory Minimum Penalties in the Federal Criminal Justice System'' found that minorities were substantially more likely than whites under comparable circumstances to receive mandatory minimum sentences. The Sentencing Commission also reflected that mandatory minimum sentences increased the disparity in sentencing of like offenders with no evidence that mandatory minimum sentencing had any more crime-reduction impact than discretionary sentences.

Chief Justice Rehnquist has spoken often and loudly about these wasteful cost increases. One quote attributed to him says: ``Mandatory minimums are perhaps a good example of the law of unintended consequences.''

Mr. Speaker, there is one good part of the bill, and that is an authorization for funding to investigate consumer credit card fraud cases. I introduced in the committee a newspaper report of an identity theft case in which a Senator from New Mexico, Senator Domenici, was the victim. It involved about $800 worth of fraudulent credit card purchases. We checked with the FBI. No action is being taken on this case because of limitations on resources. That is not surprising because these cases often involve stolen credit cards with the card stolen in one jurisdiction, purchases made in another jurisdiction, a suspect living entirely somewhere else, and so the local place cannot effectively investigate these cases. They can be solved because there is usually a paper trail leading right back to the suspect, but it takes resources. Mandatory minimum sentences will do nothing in cases that are not investigated and not prosecuted, and this bill does provide funds to investigate and prosecute cases such as Senator Domenici's.

Unfortunately, Mr. Speaker, because this bill primarily focuses on the narrow piece of the identity theft problem, much of which has nothing to do with consumer identity theft, through the discredited and ineffective and costly mechanism of mandatory minimum sentencing, I cannot support the bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 5 minutes to the gentleman from California (Mr. Schiff), a distinguished member of the Committee on the Judiciary and a former assistant U.S. Attorney.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I thank the gentleman from California for his remarks and also for his hard work on this legislation. As I have indicated, I agree with the purpose of the legislation. However, I disagree with the use of the mandatory minimums.

With mandatory minimums, low level offenders frequently get too much time. The more serious violators often get too little time. That is why we have the Sentencing Commission, that is why we have judges who will hear the evidence and impose the appropriate punishment in the individual case.

Mr. Speaker, I would hope that we would reject the legislation so that we could eliminate the mandatory minimums.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I thank the gentleman for yielding me this time.

I also want to thank the gentleman from Wisconsin (Mr. Sensenbrenner), our distinguished chairman; and the gentleman from North Carolina (Mr. Coble), subcommittee Chair, for moving this legislation through the Committee on the Judiciary and onto the House floor.

I joined the gentleman from Texas (Mr. Carter) in introducing this legislation in response to the plague of

identity theft that has beset the country. Identity theft has now topped the list of consumer complaints filed with the FTC for the last 4 years in a row, impacting millions of Americans and costing consumers and businesses billions of dollars.

My home State of California ranks number three in the number of victims of identity theft per capita with over 37,000 complaints reported by consumers, costing over $40 million just last year alone. Nationally, California cities crowd the top ten list of metropolitan areas with the highest per capita rates of identity theft reported. The Los Angeles-Long Beach metropolitan area, which includes my district, is particularly prone to such crimes and ranks number two nationally with over 13,000 victims.

A victim of identity theft usually spends a year and a half working to restore his or her identity and good name. Many of my constituents have contacted me. Many of my colleagues have heard similar urging that Congress act quickly and effectively to crack down on this growing epidemic. For this reason, I joined the gentleman from Texas (Mr. Carter) in introducing the Identity Theft Penalty Enhancement Act, legislation that will make it easier for prosecutors to target those identity thieves who steal an identity for the purpose of committing other serious crimes. The bill will stiffen penalties to deter such offenses and strengthen the ability of law enforcement to go after identity thieves and prove their case.

Our legislation also makes changes to close a number of gaps identified in current Federal law. Identical legislation was introduced by Senators Feinstein and Kyl, passing by unanimous consent in the Senate in January of last year. H.R. 1731 has also been endorsed by the Justice Department and the Federal Trade Commission.

I am very mindful of the reservations that my colleague, the gentleman from Virginia (Mr. Scott) has expressed about mandatory minimums in general, and I share those concerns about the practice of mandatory minimums. I think my difference with the gentleman from Virginia (Mr. Scott) comes in where there are appropriate exceptions. In this case, I believe there is an appropriate exception, and I believe the gentleman from Virginia (Mr. Scott) believes this is not an appropriate case for an exception. But let me outline why I believe that this is an appropriate exceptional case.

First, we have the epidemic nature of the crime, which rather than abate has merely grown and proliferated over the last several years.

Second, because the enhanced penalties are reserved for aggravated identity theft, they must be committed in connection with other serious felony offenses. But since the underlying offense and the identity theft are generally merged for sentencing purposes, prosecutors have little incentive to charge identity theft. This current sentencing structure and practice is flawed because it does not reflect the impact on the victim, in addition to the impact and loss to the financial institution.

I was pleased to work with the gentleman from Texas (Mr. Carter) as well as sponsors from the other body in order to make some additional improvements to the bill in committee. These improvements respond to specific concerns that were raised by the Social Security Administration. In addition, we respond to the ever-growing problem of insider theft. A peer review study will be coming out later this year that will show perhaps as much as 70 percent of identity theft cases are facilitated through the workplace.

Homeland security concerns have certainly highlighted the need to protect against identity theft, given the potential ease with which a terrorist can assimilate to or move about in our society with stolen identity documents.

In order total protect the good credit of hard-working Americans and their reputations and to protect the homeland, the time to strengthen the law is now. I also support the effort of the gentleman from Virginia (Mr. Scott) to increase the resources for the enforcement of these laws. Merely increasing the deterrent value is not enough if the resources lag behind.

I want to thank my colleague for all his efforts along those lines, and again want to thank my colleagues, Mr. Speaker, for acting on this piece of legislation, and urge their support.

Mr. Speaker, I am pleased to be the author and sponsor of H.R. 1731, the Identity Theft Penalty Enhancement Act, and appreciate the support of the gentleman from Wisconsin (Chairman Sensenbrenner) and the fact that he advanced this important legislation. I would also like to thank the gentleman from California (Mr. Schiff) for his support as the lead co-sponsor on this bill.

This legislation addresses the growing occurrences of identity theft. It will facilitate the prosecution of criminals who steal identities in order to commit felonies.

Felonies arising from identity theft are a very serious problem. Four years in a row, the Federal Trade Commission has reported identity theft as the number one consumer-reported complaint filed with the Commission. More than 200,000 identity theft complaints were reported in 2003.

Mr. Speaker, unfortunately, the mentions of ID theft are becoming all too commonplace. Just recently, last month, I believe, two brothers were convicted in Dallas of running an ID theft ring to buy luxury cars and obtain bank loans worth over $1 million, sometimes using the names of dead people. In Collin County, Texas, a former Texas driver's license bureau clerk pleaded guilty to selling ID cards to illegal immigrants using stolen information from immigration papers.

Just as concerning, the trafficking of identities aids terrorist crimes. Terrorists can move more freely in the United States with illicit IDs, credit cards, and other documentation. Insufficient legislation and prosecution has allowed a situation to arise where identities are easy to steal without fear of reprisal. Last year, the U.S. Department of Homeland Security warned that would-be terrorists may try to use stolen IDs, uniforms, and vehicles to enter sensitive facilities in order to carry out an attack.

The Identity Theft Penalty Enhancement Act gives prosecutors greater power in convicting and sentencing identity theft. First, it creates a new separate crime of aggravated identity theft for any person who uses the identity of another person to commit certain felonies. It provides a separate sentence of 2 years for most felonies and 5 years for terror-related felonies is mandatory. It would run consecutively to any other sentences.

Second, the bill lessens the burden prosecutors face when seeking convictions of aggravated identity theft. Under this bill, if a thief uses the stolen identity in connection with another Federal crime and the intent of the underlying Federal crime is proven, the prosecutor may not need to prove the intent to use the false identity in a crime.

H.R. 1731 addresses the improper receipt that Social Security, Medicare, disability, veterans and other benefits by misuse of illegally obtained Social Security numbers. We have a responsibility to protect the benefit programs of the Social Security Administration from these identity thieves.

This legislation also addresses a prevalent mode of identity theft which is committed by insiders of organizations who illegally use or transfer individuals' identifying information which has been entrusted to them. This is an increasing problem which we must protect all our consumers from. Last year Texas witnessed an example of this when a University of Texas student who was trusted with access to the University's database stole 55,000 Social Security numbers, including one of my staffers.

A recent report by researchers at Michigan State University estimates about half of all identity crimes were the result of personal information being stolen from corporate databases. This legislation directs the U.S. Sentencing Commission to amend its guidelines to appropriately punish ID theft offenses involving the abuse of a position.

I urge my fellow colleagues to favorably support H.R. 1731. And, again, I thank the chairman for his support and the hard work of his staff on behalf of this legislation.

I ask unanimous consent that the Senate proceed to the immediate consideration of H.R. 1731, which is at the desk.

Madam President, I ask unanimous consent that the bill be read a third time and passed, the motion to reconsider be laid upon the table, and that any statements relating to the bill be printed in the Record.