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Use Of The Social Security Fraud Statute In The Battle Against Terrorism (42 U.S.C. § 408(a)(7)(A)-(C))

by John K. Webb
Special Assistant US Attorney
Central District of California and District of Arizona

I. Introduction

 

As unlikely as it might seem at first, a little-known felony fraud section of the Social Security Act (42 U.S.C. § 406, 1-189) (the "Act") has emerged as a highly effective weapon in the domestic war against terrorism. Since the terrorist events of September 11, prosecutors in some districts have used § 408(a)(7) of Title 42 to charge and detain individuals suspected of engaging in, or suborning, terrorist activities, and who have misused or misrepresented a social security account number ("SSN"). Specifically, under § 408(a)(7) of the Act, a person is subject to criminal penalties if he or she:

 

(1) willfully, knowingly, and with an intent to deceive uses a social security number on the basis of false information furnished to the SSA (408 (a)(7 )(A));

 

(2) falsely represents, with an intent to deceive, a number to be the social security number assigned to him or her or to another person (408(a)(7)(B )); or

 

(3) knowingly altered a social security card issued by the SSA, bought or sold a card that was, or was purported to be, a card so issued, counterfeited a social security card, or possessed a social security card or counterfeit social security card with an intent to sell or alter it (408( a)(7)(C )).

 

An individual who wrongfully uses or misrepresents a social security number can also face criminal penalties under 18 U.S.C. § 1001, which makes it a criminal offense to make false statements in any matter under the jurisdiction of any federal department or agency of the United States. Thus, in any instance where an individual has misused or misrepresented a social security number on a document presented to any federal department or agency, two separate felonies may be charged using 42 U.S.C. § 408(a)(7)(B) and 18 U.S.C. § 1001, respectively. Similarly, a person who uses or provides counterfeit social security number cards can be charged with violations of both 42 U.S.C. § 408(a)(7)(C) and 18 U.S.C. § 1028(a)(6) and (7), which prohibit the knowing transfer of stolen or false identification documents. The same misuse of social security numbers can be applied to other forms of fraud an d misrepresentation with respect to government documents, including false attestations and/or statements made to employers on I-9 forms for the purpose of satisfying a requirement of § 274A(b) of the Immigration and Nationality Act, 8 U.S.C. § 1324(b), and false statements made on applications for FAA security badges, passports, visas, or asylum applications. See 18 U.S.C. § 1546(b)(2) and (3).

 

A person convicted of a violation of § 408(a)(7) is guilty of a Class D felony, and will be fined or imprisoned for not more than five years, or both. Because most terrorist suspects have engaged in some form of SSN misuse, identity theft, or immigration fraud, prosecutors generally prefer charging social security number misuse under § 408(a)(7)(B). This section provides prosecutors with a reliable and convenient means of charging and detaining individuals suspected of terror-related activities.

 

II. Rampant misuse of social security numbers among individuals living or operating illegally in the United States

 

Investigations by the FBI and other law enforcement agencies since September 11 have identified a large number of aliens living within the United States who are actively utilizing false identities supported by bogus documentation. In almost every instance, this includes the use of counterfeit or fraudulently issued social security numbers, or legitimately issued numbers that have been stolen from other individuals or issued illegally by a corrupt SSA employee. Fraudulent SSN 's are used to obtain drivers' licenses, to secure employment, to apply for loans and credit cards, and to live anonymously while avoiding detection by federal and state authorities. Sometimes the SSN’s are completely fictitious, comprised of a random combination of familiar numbers. While these numbers are usually easily detected by law enforcement, they can be quickly and cheaply purchased on the black market and provide sufficient deception to secure the thief quick access to public services. Other times identity thieves adopt names and social security numbers culled from newspaper death notices, or from information lists found on the Internet. For example, some Internet hacker sites provide extensive lists of social security numbers, both legitimate and bogus, available to anyone with access to the sites. In addition, these Internet sites sometimes include corresponding names, addresses, dates of birth, telephone numbers, and credit card numbers of individuals. In one instance in 2001, the Office of the Inspector General/Social Security Administration (“OIG/SSA”) investigated and prosecuted an individual who advertised several thousand valid social security numbers (with names) for purchase on eBay , with bids for each number starting at one dollar.

 

In some instances, a legitimate number (one actually issued by SSA) can be purchased from a black-market vendor who has stolen the number from an unsuspecting individual. When a legitimate social security number holder has his number stolen, she is usually unaware of the theft until her credit is destroyed or her identity is used criminally by the thief. A legitimate SSN, unless reported stolen, will allow the thief almost unlimited access to employment, credit cards, replacement social security cards, driver’s license, and any other sensitive identity document available to a legitimate social security number holder.

 

It is not unusual for an alien to deceive SSA into issuing a valid social security number by filing applications containing false information supported by bogus identity documents. In order to secure a new or replacement social security number, SSA requires that an individual show proof of identity, including at least two identification documents such as a driver's license, U.S. passport, birth certificate, U.S. government or state employee ID card, school ID card, record, or report card, marriage or divorce record, military records, clinic, doctor, or hospital records, adoption records, or alien registration number. See SSA Programs and Operations Manual ("POMS ", §§ RM 00 203.100-400 (20 01). Library cards, vehicle registration, rental or lease agreements, credit cards, check cashing cards, bank deposit slips, telephone or utility bills, or any identification documents issued by a commercial firm are not considered identity documents and cannot be used to secure a social security number. See POMS § RM 00203.770.

 

Unfortunately, very well-crafted, false identification documents are available on the Internet and/or can be easily purchased on the black market. SSA frequently discovers and rejects applications for social security numbers that are supported by a combination of bogus identity documents, including a fake driver's license, counterfeit birth certificate, fake baptism certificate, or false INS alien registration number. However, some bogus documents are almost impossible to detect, and SSA sometimes issues social security numbers that are based on fraudulent representations. Once a new SSN has issued, SSA has little ability to prevent fraud or misuse associated with the number, and the recipient is free to live, work, and travel freely within the United States until his illegal activities are discovered. In recent testimony be fore Congress , SSA Commissioner James B. Lockhart, III reported that an audit of social security numbers issued during 2001 revealed that 999 of 3,557 original SSN applications reviewed by the SSA/OIG were approved based on improper evidentiary documentation. (See Testimony of James B. Lockhart, III, U.S. Senate Committee On Finance, confirmation hearing for Deputy Commissioner of SSA, 11/1 5/01).

 

Legitimate social security numbers issued by corrupt SSA employees are the identity documents most prized by identity thieves and bring the most value on the black market. Newly issued social security numbers are almost impossible to detect and provide a legitimate cover for illegal activities and for aliens seeking to blend into American society. In the past five years, the SSA Inspector General has investigated fifty-five cases involving sixty-one SSA employees who have disclosed, sold, or released SSN in formation. (See Testimony of James B. Lockhart, III, U.S. Senate Committee On Finance, confirmation hearing for Deputy Commissioner of SSA, 11/15/01). Criminal allegations involving SSA employees include the processing of false social security number card applications, the selling of legitimate social security numbers, and the printing of counterfeit social security number cards. Forty-five cases have resulted in criminal convictions, approximately half of which resulted in incarceration of the corrupt employees. Until 9-11, a long-standing SSA policy allowed individuals to obtain up to fifty-two “replacement” social security cards during any one-year period. Prior to the events of September 11, audits by the SSA Inspector General had identified this policy of almost unlimited access to “replacement” social security cards as ripe for abuse, noting that during year 2000, 192 individuals obtained six or more replacement SSN cards. (See Testimony of James B. Lockhart, III, U.S. Senate Committee On Finance, confirmation hearing for Deputy Commissioner of SSA, 11/15/01).

 

III. The statutory framework of 42 U.S.C. § 408(a)(7)(A)-(C)

 

In 1981, Congress amended the misdemeanor provisions of the Act, making Social Security fraud (including SSN misuse) a felony, punishable by five years in prison and a fine up to $5,000. (See 1981 Amendments. Pub. L. 97-123). The SSA felony fraud statute, cited as 42 U.S.C. § 408(a)(1)-(8), contains the Social Security Act's primary criminal provisions. The statute, set forth below in pertinent part, comprehensively spells out restraints on fraud by specifying requirements for disclosure of specific events, and by identifying facts that affect the right to payment of SSA benefits.

 

In general

 

Whoever -

 

(7) for the purpose of causing an increase in any payment authorized under this subchapter (or any other program financed in whole or in part from federal funds), or for the purpose of causing a payment under this subchapter (or any such other program) to be made when no payment is authorized thereunder, or for the purpose of obtaining (for himself or any other person) any payment or any other benefit to which he (or such other person) is not entitled, or for the purpose of obtaining anything of value from any person , or for any other purpose (emphasis added)

 

(A) willfully, knowingly, and with intent to deceive, uses a social security account number, assigned by the Commissioner of Social Security (in the exercise of the Commissioner's authority under § 405(c)(2)(A) of this title to establish and maintain records) on the basis of false information furnished to the Commissioner of Social Security by him or by any other person;

 

(B) with intent to deceive, falsely represents a number to be the social security account number assigned by the Commissioner of Social Security to him or to another person, when in fact such number is not the social security account number assigned by the Commissioner of Social Security to him or to such other person;

 

(C) knowingly alters a social security card issued by the Commissioner of Social Security, buys or sells a card that is, or purports to be, a card so issued, counterfeits a social security card, or possesses a social security card or counterfeit social security card with intent to sell or alter it.

 

IV. Legislative history of the fraud provisions of 42 U.S.C. § 408(a)

 

A. The 1972 amendment

 

In 1972, misdemeanor fraud provisions were first added to the Act, designed by Congress for the sole purpose of preventing any person from obtaining federal benefits by using a fraudulent social security number. Specifically, the Act’s 1972 fraud subsection forbade anyone from using a social security number to increase any payment or to obtain any improper payment or benefit under any federal program. (See Social Security Amendments of 1972, Pub.L. No. 92-603, sec. 130(a), 1972 U.S.C.C.A.N. 1548, 1586; See also H.R.CONF.REP. NO. 92-1605(1972) reprinted in 1972 U.S.C.C.A.N. 4989, 5370, 5373 (citing prevention of improper benefit payments as the sole purpose behind the new provisions)).

 

B. The 1976 amendment

 

In 1976, the reach of the penalty was expanded substantially when the Act was amended to include not only those who sought unauthorized or excessive federal benefits, but also those who misuse d social security numbers "for any other purpose."(emphasis added). (See Tax Reform Act of 1976, Pub.L. No. 94-455, sec. 1211, 90 Stat. 1520, 1711 (1976); codified at 42 U.S.C. § 405(c)(2)(C)(i)) (the "1976 Act"). The House Conference Report to the 1976 Act spoke directly to the broadened statutory language, stating:

 

[The Senate amendment] makes a misdemeanor the willful, knowing, and deceitful use of a social security number for any purpose. In addition, the Senate amendment changes the Privacy Act so that a State or political subdivision may use social security numbers for the purpose of establishing the identification of individuals affected by any tax, general public assistance, driver's license, and motor vehicle registration laws.

 

See H.R.CONF.REP. NO. 94-1515 (1976), reprinted in 1976 U.S.C.C.A.N. 2897, 4030, 4118, 4 194-9 5.

 

In a particularly revealing and crucial portion of the legislative history, the 1976 report of the Senate Finance Committee also sought to explain the addition of the words "for any other purpose" to the Act:

 

While the Social Security Act currently provides criminal penalties for the wrongful use of a social security number for the purpose of obtaining or increasing certain benefit payments, including social security benefits, there is no provision in the Code or in the Social Security Act relating to the use of a social security number for purposes unrelated to benefit payments. The committee believes that social security numbers should not be wrongfully used for any purpose. (Emphasis added).

 

See S.Rep. No. 94-93 8(I) (1976), reprinted in 1976 U.S.C.C.A.N. 3438, 3819.

 

This insightful look into legislative history demonstrates that Congress has unequivocally explained that the words "for any other purpose" mean precisely what they say. Courts have reached similar conclusions regarding the legislative intent behind the words "for any other purpose." See United States v. Silva-Chavez, 888 F.2d 14 81 (5th Cir. 1989).

 

C. The 1981 amendment

 

In 1981, Congress again amended 42 U.S.C. § 408, changing the offense from a misdemeanor to a felony and adding the language "or for the purpose of obtaining anything of value from any person" before "or for any other purpose." (emphasis added). (See Omnibus Reconciliation Act, Pub.L. No. 97-123, sec. 4, 95 Stat. 1659, 1663-64 (1981)). While the House Conference Report accompanying the amendment offers no explanation of the reasons for the change (see H.R.CONF.REP. NO. 97- 409 (1981)) reprinted in 1981 U.S.C.C.A.N. 2681, 2687-88), the text of the amendment makes clear Congress' intent both to punish a broader range of acts and to impose a stiffer penalty. In summing up the prior law the House Conference Report stated:

 

Criminal penalties are provided for: (1) knowingly and willfully using a social security number that was obtained with false information, (2) using someone else's social security number, or (3) unlawfully disclosing or compelling the disclosure of someone else's social security number.

 

See H.R.CONF.REP. NO.97-409(1981), reprinted in 1981 U.S.C.C.A.N. 2681, 2687.

 

V. Charging decisions and elements of the crime: 42 U.S.C . § 408(a)(7)(A)-(C)

 

The felony provisions of 42 U.S.C. § 408(a)(7)(A)-(C) are particularly effective in charging cases where an individual has entered the country illegally, or has tried to manipulate the identification systems currently in place. The elements of proof for each subsection of § 408(a)(7) are more flexible than those required by 18 U.S.C. § 102 8, a better known identity theft statute, that also contains subsections dealing with the misuse of a social security number. What follows is a description of each of the three subsections of § 408(a)(7), including a breakdown of the elements necessary to prove a charge under each, and a brief suggestion of when and how each subsection should be charged.

 

In an effort to make the discussion of the charging elements more meaningful, a fact-driven case study has been provided at the end of this article. The case study is not necessary to an understanding of the subsections and elements of § 408(a)(7), but the factual description can provide helpful insight into applying the elements for the subsections set forth below. The case study involves an individual indicted, because of venue issues, in both the Central District of California and the District of Arizona.

 

A. 42 U.S.C . § 408 (a)(7 )(A) provides, in pertinent part:

 

In general

 

Whoever -  

 

(7) . . . . . for the purpose of obtaining anything of value from any person, or for any other purpose (emphasis added)

 

(A) willfully, knowingly, and with intent to deceive, uses a social security account number, assigned by the Commissioner of Social Security (in the exercise of the Commissioner's authority under § 405(c)(2) of this title to establish and maintain records) on the basis of false

 

information furnished to the Commissioner of Social Security by him or by any other person;

 

Elements of the crime

 

The elements required to prove a violation of § 408(a)(7)(A) are:

 

(1) willful and knowing use of a Social Security account number;

 

(2) with intent to deceive;

 

(3) based on false information furnished to the Commissioner of Social Security.

 

See 42 U.S.C. § 408(a)(7 )(A).

 

When to charge?

 

Any fraudulent use o f a social security card obtained on the basis of false information supplied to SSA, and used deceitfully, is actionable and constitutes a felony for purposes of § 408(a)(7)(A). For example: a subject in the U.S. on a tourist visa secures a non-work SSN using his French passport. The subject then uses an alias to file a bogus application for asylum, resulting in INS approval and issuance of a green card and alien registration number. The subject then uses his new name and illegally procured INS documents to apply for a second social security number, thus completing the creation of a new identity. The subject then uses the second social security number to secure credit cards, open bank accounts, attend flight training, and make applications for employment as a pilot. The subject’s use of the social security number is actionable because he used false and fraudulent documents (deceptively procured from the INS) to deceive SSA into issuing him a new social security number, and he may be charged with a felony under § 4 08(a)(7 )(A). See United States v. Pryor, 32 F .3d 11 92 (7 th Cir. 1994) (Defendant acted "willfully, knowingly, and with intent to deceive," in illegally using social security number obtained on basis of false information).

 

B. 42 U.S.C . § 408 (a)(7 )(B) provides, in pertinent part:

 

In general Whoever -

 

(7) . . . . . for the purpose of obtaining anything of value from any person, or for any other purpose (emphasis added)

 

(B) with intent to deceive, falsely represents a number to be the social security account number assigned by the Commissioner of Social Security to him or to another person, when in fact such number is not the social security account number assigned by the Commissioner of Social Security to him or to such other person;

 

42 U.S.C. § 408(a)(7 )(B).

 

Elements of the crime

 

The elements required to prove a violation of 42 U.S.C. § 408(a)(7)(B) are:

 

(1) false representation of a Social Security account number;

 

(2) with intent to deceive;

 

(3) for any purpose.

 

See United States v. Means, 133 F.3d 444, 447 (6th Cir. 1998) (setting forth the elements for prosecution of a case under 42 U.S.C. § 408(a)(7)(B)). See also United States v. McCormick, 72 F.3d 1404, 1406 (9th Cir. 1995).

 

Alternative elements

 

The majority of jurisdictions apply the Means standard as set forth above. However, a few jurisdictions break down the language of § 408 (a)(7 )(B) to include a fourth element:

 

(1) for any purpose;

 

(2) with intent to deceive;

 

(3) represented a particular Social Security account number to be his;

 

(4) which representation is false.

 

See United States v. O'Brien, et. al., 878 F.2d 1546 (1st Cir. 1989).

 

When to charge?

 

Subsection (B) is the most commonly charged subsection of § 408(a)(7) because of its broad application and straightforward elements of proof. It is typically charged whenever a subject has misrepresented a social security number to open a bank account; apply for a credit card; secure credit for a cell phone; rent or lease an apartment or car; apply for employment; or enroll in flight training. The charging standard, “for any purpose,” is broad and self-explanatory, and any false representation of a social security number, with an intent to deceive, is actionable conduct that may be charged as a felony under §408(a)(7)(B). See United States v. Silva-Chavez, 888 F.2d 1481 (5th Cir. 1989).

 

Intent to deceive and the “use” vs. “possession” distinction

 

Direct evidence is not always necessary in order to prove that a defendant intended to use a social security card or number for deceptive purposes. Mere possession of a social security card or number that does not belong to a defendant is sometimes sufficient to support a finding that the defendant intended to deceive. United States v. Charles, 949 F.Supp. 365 (D. VI 1996). In Charles, the government was unable to produce direct evidence that the defendant had actually applied for a driver's license using a false social security number, but conclude d that the jury could infer that the defendant received the social security card through false representations when the government’s evidence showed that:

 

(1) the Police Department Licensing Section had printed defendant's license; and

 

(2) generally, in order to obtain such a license, an applicant must give a social security number to the licensing agent.

 

However, mere possession of false identity documents, including a false social security number, might not always be enough to convict. Some courts have held that the term “represent” connotes a positive action, not merely passive possession, and have thus reasoned that Congress, by using the term “represent,” meant to proscribe the “use,” not merely the “possession,” of a false social security number. United States v. McKnight, 17 F.3d 1139, 1144 -45(8th Cir. 1994). However, the concurring opinions of two McKnight panel members under score that this is not a hard and fast rule: “We write separately to make explicit that possession of an identification card bearing a false social security number can, in some instances, provide a sufficient predicate for a jury to properly infer that a defendant falsely represented a social security number in violation of 42 U .S.C. § 408(a )(7)(B )."Id. at 114 6; see also Unite d State s v. Teitloff, 55 F.3d 391, 394 (8th Cir. 1995) (court rejected defendant’s contention that he did not technically "use" the social security number because the DMV computer system automatically provided that information when he supplied the other person's identification documents).

 

When a defendant acts willfully and knowingly

 

A defendant may be found to have acted willfully, knowingly, and with intent to deceive, even if the defendant did not intend to deceive federal officials when he presented them with documents containing a false social security number. U.S. v. Pryor, 32 F.3d 1192 (7th Cir. 1994) (defendant's driver's license had been suspended and he was found to be carrying false documents which he acknowledged that he planned to present if pulled over for a traffic violation).

 

The "moral turpitude" exception

 

The Ninth Circuit has held that an alien’s use of a false social security number to further otherwise legal conduct is not a crime of “moral turpitude.” Beltran-Tirado v. Immigration and Naturalization Service, 213 F.3d 1179, 1184 (9th Cir. 20 00). The significance of this decision lies in the impact such a conviction would have on the illegal alien’s eligibility for inclusion on the Immigration and Nationality Act registry. See 8 U.S.C . 1259 . The registry statute was originally enacted by Congress in 1929 as a means to regularize the status of long-time illegal aliens residing in the United States, and has been updated periodically since. Under current registry provisions, conviction for a crime of moral turpitude would preclude an alien from eligibility because he would not be considered “of good moral character.”

 

"Otherwise legal behavior"

 

In Beltran-Tirado, defendant lived under an assumed identity, using the name and social security number of the victim to obtain employment, marry twice, obtain a driver's license, credit cards, and a HUD loan. Beltran's earnings attracted the interest of the IRS, resulting in her arrest and conviction under 42 U.S.C. § 408(a)(7)(B) and 18 U.S.C. § 1546(b)(3). The INS moved to deport her , but the Ninth Circuit intervened to interpret the legislative history of 42 U.S.C. § 408 and carve out an exception to a conviction for a crime of moral turpitude by allowing the use of a false social security number to further "otherwise legal behavior." The Beltran-Tirado case appears consistent with an earlier decision by the Ninth Circuit in which the court concluded that “the crime of knowingly and willfully making any false, fictitious or fraudulent statements or representations to an agency of the United States is not a crime of moral turpitude because a jury could convict if it found that the defendant had knowingly, but without evil intent, made a false but not fraudulent statement.” Hirsch v. INS, 308 F.2d 562, 567 (9th Cir. 1962).

 

Sale of false or counterfeit Social Security cards is a crime of moral turpitude

 

Another California federal court, citing Beltran-Tirado (n.8), held that the sale of false or counterfeit social security numbers is a crime that involves moral turpitude. Souza v. Ashcroft, 2001 WL 823816 (N.D. Cal.). The court distinguished between those who sell rather than use false or counterfeit social security cards (“persons convicted of the crime of selling false or counterfeit social security cards have, like persons convicted of the analogous crime of selling counterfeit green cards, committed a crime of moral turpitude”) Id. at *3, and stated that Congress, in amending 42 U.S.C. § 408, specifically excluded from the exemption those who sell, rather than use, false or counterfeit social security cards. The reason for this distinction is apparent. Sale of false alien registry documents (green cards), as well as the crime of selling false or counterfeit social security cards, inherently involves a deliberate deception of the government and an impairment of its lawful functions.

 

Multiple false representations and the rule against multiplicity

 

When an individual makes multiple false representations by misrepresenting a social security number on multiple credit card applications, bank accounts, or federal documents relating to employment (I-9, W-4), each use or representation constitutes a separate offense. Each of the separate offenses is supportable by a different set of predicate facts, and is actionable under § 408(a)(7)(B). In addition, each use or representation on a federal form is actionable as a false statement under 18 U.S.C. § 1001, and can be charged as a separate offense also supportable by a different set of predicate facts. While charging multiple counts might not be desirable, doing so when separate predicate facts exist would not run afoul of the rule against multiplicity that prohibits the charging of a single offense in several counts. United States v. Castaneda, 9 F.3d 761, 765 (9th Cir. 1993) (holding that a defendant may properly be charged with committing the same offense more than once as long as each count depends on a different set of predicate facts); see also United States v. Hurt, 795 F.2 d 765, 7 74-75 (9th Cir. 1 986).

 

Use of false Social Security on non-federal documents

 

It is not necessary that the false use or representation of a social security number have a detrimental effect in some way on the government to be actionable. See United States v. Holland, 880 F.2d 1091 (9th Cir. 1989). Any use of a false social security number on non-federal documents is still actionable under § 408(a)(7)(B). For example, the subject in the case study used his falsely obtained SSN when completing multiple applications seeking employment as a pilot, and in applying for taxi permits with airport cab companies. Even though the airline and cab company employment applications are not federal documents, the subject can still be charged under 408(a)(7)(B). Further, it is not necessary to prove that the defendant used a false social security number for payment, gain, or pecuniary value. United States v. Silva-Chavez, 888 F.2d 1481 (5th Cir. 198 9).

 

C. 42 U.S.C . § 408 (a)(7 )(C) provides, in pertinent part:

 

In general Whoever -

 

(7) . . . . . for the purpose of obtaining anything of value from any person, or for any other purpose (emphasis added)

 

(C) knowingly alters a social security card issued by the Commissioner of Social Security, buys or sells a card that is, or purports to be, a card so issued, counterfeits a social security card, or possesses a social security card or counterfeit social security card with intent to sell or alter it.

 

Elements of the crime

 

The elements required to prove a violation of § 408 (a)(7 )(C) a re:

 

(1) knowingly alters a social security card; or

 

(2) counterfeits or possesses a social security card with intent to sell or alter it; or

 

(3) buys, or sells a social security card.

 

42 U.S.C. § 408(a)(7 )(C).

 

When to charge?

 

This subsection is typically charged when a subject has knowingly altered a social security card (usually to remove work restrictions from the face of the card), or has manufactured or counterfeited a card or cards for sale on the black market. This section can also be charged when an individual is discovered to have purchased a social security card for his own use or for resale. Note : Nothing in the case study supports a charge under 42 U.S .C. § 408 (a)(7)(C ).

 

Altered or counterfeited cards

 

In order to qualify as counterfeit, a social security card must include the name of the number holder and the social security number. United States v. Gomes, 969 F.2d 1290 (1st Cir. 1992) (“A bogus document is counterfeit if it is calculated to deceive an honest, sensible, and unsuspecting person of ordinary observation and care dealing with a person supposed to be upright and ho nest”). Id. at 1293. Conduct charged under §408 (a)(7 )(C) most commonly a rises from:

 

1) the printing or manufacture of counterfeit social security cards for resale on the black market; or

 

2) the altering of social security cards to remove work restrictions from the face of the card.

 

The altered and/or counterfeited cards are then used to secure false identification documents, open bank accounts, apply for credit cards, and to work, including employment in sensitive positions at airports, government facilities, and other locations requiring security clearances. To qualify as counterfeit, a bogus copy of a social security card does not have to be such a good imitation that it baffles an expert. Gomes, at 1294 (“ . . the law does not criminalize only masterpieces”).

 

D. Sentencing Guidelines for 42 U.S.C. § 408(a)(7)

 

Prosecutions under 42 U.S.C. § 408(a)(7) are governed under the U.S.SENTENCING GUIDELINES MANUAL, § 2B1.1 (2001), which covers basic economic offenses involving fraud or deceit (including false identity, theft, embezzlement, receipt of stolen property, and property destruction). The basic offense level is six, with offense levels increasing as the loss amount rises. For a first-time offender with no prior convictions, the minimum guideline range would be 0-6 months. This range is, however, subject to possible enhancements.

 

Identity theft enhancement

 

If the social security number misuse includes possession of any device-making equipment or counterfeit access device, or the unauthorized transfer or use of any unlawful means of identification, or possession of five or more means of identification unlawfully produced or obtained by some other means of identification, the offense level is enhanced by two levels. However, if the resulting level is lower than twelve, the guidelines require that the offense level be increased automatically to level twelve. See U.S. SENTENCING GUIDELINES MANUAL § 2B1.1(b)(9).

 

Cross references with other guidelines

 

If other offenses are charged in an indictment along with § 408(a)(7), their guidelines can be cross-referenced and applied (e.g., 18 U.S.C. § 1001, 18 U.S.C. § 1341, 18 U.S.C. § 1342, or 18 U.S.C. § 1343). These include crimes involving the theft of a firearm, destructive device, explosive material, or controlled substance (USSG §2D1.1); a crime involving unlawful possession, attempt or conspiracy (USSG §2D2.1); unlawful receipt, possession, or transportation of firearms or ammunition (U SSG § 2K1.3 ).

 

Intended loss

 

The offense level in cases involving social security number misuse and identity theft fraud is calculated by applying the guidelines and, if appropriate, by determining the amount of loss. U.S. SENTENCING GUIDELINES MANUAL § 2B1.1. In cases involving terrorism suspects, fraud losses can be generated in a number of ways, including credit card losses, bank loan fraud, or money laundering used to fund terrorist activities. Sometimes fraud losses are interrupted before the entire crime is completed, resulting in a real money loss of less than was otherwise intended. In such cases, if the loss the defendant was attempting to inflict can be determined, that figure should be used if it is greater than the actual loss. The fact that the fraudulent scheme was interrupted before its full loss was realized is of no importance. United States v. Lorenzo, 995 F.2d 1448, 1460 (9th Cir. 1993) (defendants held to higher intended loss for sentencing purposes, although they actually received a considerably smaller sum); see also United States v. Robinson, 94 F.3d 1325, 1328 (9th Cir. 1996) (holding intended loss appropriate measure in scheme interrupted by a government sting operation).

 

Seriousness of offense and course of conduct

 

Intentional use of a false social security number is not a trivial offense. United States v. Sullivan, 895 F.2d 1030 (5th Cir. 1990). For sentencing purposes, a court is not limited to the conduct comprising the offense of conviction. The court can also consider the entire course of conduct involving the defendant. Id. at 103 2; see also United States v. Fulbright, 804 F .2d 84 7 (5th Cir.1986). Where the conduct involving SSN misuse is particularly egregious, a court can impose an upward departure beyond the guideline range. United States v. Scott, 915 F.2d 774, 777 (1st Cir. 1990) (Where defendant fled prosecution and stole the identity of another person and obtained, through fraud, a dead man's SSN, driver's license, and birth certificate). Upward departure is also warranted when the defendant's prior conduct and criminal history suggests a similar propensity towards identity theft and social security frau d. United States v. Myers, 41 F.3d 53 1, 533 (9 th Cir. 199 4).

 

In considering the facts set out in the case study, a departure for egregious conduct is entirely warranted. A strong case can be made for similar departures in most cases involving subjects indicted for activities related to the terrorist events of September 11, and a request for upward departure should be strongly considered.

 

E. Recent indictments using § 408(a)(7)(B)

 

AUSAs in Arizona and Los Angeles have used § 408(a)(7)(B) as the principal charge in several indictments involving individuals on terror watch-lists, or who are individually suspected of 9/11 related activities . It is notable that all nineteen of the hijackers in the September 11 attacks had social security numbers, and thirteen hijackers had obtained them legally (See Testimony of Hon. James G. Huse, Jr., Inspector General, Office of the Inspector General, Social Security Administration, before the Subcommittee on Social Security of the House Committee on Ways and Means; hearing on Social Security Administration's response to September 11, 2001 terrorist attacks; dated November 1, 2001). Law enforcement agencies are still learning about the extent of their activities, but it should not surprise anyone that the hijackers, and their suspected accomplices, committed identity theft and used false SSN's to blend into American society while planning the September 11 attacks. In fact, subsequent investigation has shown that securing and using social security numbers was a critical element of the plans of the terrorists and their support cells. In Arizona, five individuals have already been indicted as a result of investigations related to the events of 9/11, and two have recently been convicted after jury trials. Prosecutors have charged these individuals with a variety of counts, including 42 U.S.C. §§ 408(a)(7)(A) and (B) (SSN misuse); 18 U.S.C. § 1001 (false statements on documents presented to SSA, INS, FAA); 18 U.S.C. § 1014 (false statement to federal banking institution); 18 U.S.C. § 1029 (access device fraud); 18 U.S.C. § 1546 (passport fraud and false attestation); 18 U.S.C. § 1621 (perjury); and 18 U.S.C. § 371 (conspiracy). In each instance, the individual was found to have attempted to use a false identity or SSN to secure some strategic benefit such as: a driver's license, FAA certificate, credit card, bank account, grant of asylum, or employment as a pilot. Similar charges have been used success fully by prosecutors in the Central District of California, Los Angeles, to secure indictments against individuals identified as having ties to the events of 9/11. Jurors in both jurisdictions have shown little tolerance for identity thieves.

 

F. Securing search warrants using § 408(a)(7)(B)

 

Special Agents from OIG/SSA and the FBI have successfully asserted § 408(a)(7)(B) as statutory authority to secure a search warrant. In support of the search warrant, prosecutors attached an affidavit describing social security number misuse and setting out specific reasons for viewing SSN misuse as evidence of identity theft. By showing that the subject of the investigation used false information to create a second identity, prosecutors were able to establish probable cause that a "pilot's case" belonging to the subject contained more evidence of concealed identity and/or fraudulent activities. Based on a properly drawn affidavit describing violations of 42 U.S.C. § 408(a)(7)(B) and 18 U.S.C. § 1001, a federal magistrate signed a warrant allowing the agents to conduct a search of the subject's pilot's case. (a copy of the affidavit is available to AUSA's for review upon request). Information found in the pilot's case allowed prosecutors to secure initial indictment and superseding indictments. Neither the magistrate who issued the search warrant nor the judge who denied the subject's request for suppression and release at a subsequent detention hearing, found any problem with the probable cause or evidentiary support establishing a felony charge under § 408(a)(7)(B).

 

VI. “Operation Safe Travel" and "Operation Tarmac"

 

In the weeks following September 11, a task force consisting of several federal agencies, including OIG/SSA, FBI, FAA, INS, DOT, U.S. Customs, and Homeland Security, initiated investigations designed to conduct audits of the social security numbers of security-badge holders at airports throughout the United States.  This investigation, referred to as either “Operation Safe Travel” or “Operation Tarmac,” (the names are interchangeable), was first initiated by SSA/OIG and INS at the Salt Lake City airport prior to the Winter Olympics. An audit of social security numbers at the airport revealed significant irregularities among holders of security badges with access to the tarmac and other sensitive areas of the airport. The investigation, labeled “Operation Tarmac,” resulted in the indictment and arrest of sixty-nine individuals employed by private companies operating at the airport and providing services such as security screening, food services, aircraft fueling, cargo handling, cleaning/housekeeping services (inside the airport, the on-ramps leading to planes, and on the airplanes), airplane service and maintenance, and maintenance and construction in secure areas of the airport. Of the sixty-nine individuals indicted in the Operation Tarmac sweep, sixty-one individuals had Security Identification Display Area (“SIDA”) badges that allowed them access to highly secure areas of the airport, including access to planes, runways, ramps leading to planes, and cargo areas. Three of those indicted were airport security screeners. The indictments charged violations of 42 U.S.C. §§ 408(a)(7)(B) and (C) (SSN misuse and using counterfeit or altered Social Security cards), 18 U.S.C. § 1001(a)(3) (false statements on government forms), and 18 U.S.C. § 1546(a)(3) (false statements on applications to INS). Other violations uncovered by the investigation included the use of false and counterfeit alien registration cards and numbers, making false representations about citizenship status to obtain employment and security badges, and making false statements to authorities about criminal history. All of those indicted were in the country illegally.

 

Since the initial sweep at the Salt Lake City airport, similar operations have been successfully undertaken at more than twenty airports in the United States, including Phoenix, Los Angeles, Miami, Boston, San Diego, Charlotte, Las Vegas, and San Francisco. These investigations have resulted in a significant number of indictments and arrests of individuals illegally living and operating under false identities in the United States, some of whom were fugitives from felony convictions. Each person indicted and arrested by agents involved in Operation Tarmac/Operation Safe Harbor possessed security badges with clearance to enter restricted and sensitive areas of each airport. Each person indicted was found to be using false identification documents, including false social security numbers. Particularly disturbing is the fact that, in Miami and Los Angeles, agents arrested individuals working as pilots and possessing false identification documents and bogus social security numbers. Further, agents arrested individuals during some sweeps who were employed as security screeners. In one particularly disturbing incident, an illegal used false identity documents to secure employment with an airline and to obtain a security badge allowing complete access to airport facilities. The subject failed to show up for work after obtaining the security badge, but the airline failed to cancel the badge. However, airport records show that the badge continued to be used to access the airport regularly. In each operation, the principal charge used to indict those using false identification documents was § 408(a)(7)(B).

 

The arrest of individuals utilizing false identities by Operation Tarmac/Operation Safe Harbor investigators has underscored the seriousness of the false identity problem faced by law enforcement and Homeland Security officials since the terrorist events of 9/11. In every airport security badge holder arrest, use of a false social security number proved to be the foundation block that supported the identity theft and enhanced the ease with which the individual was able to secure obscurity from law enforcement. It also helps explain why securing and using social security numbers was a critical element of the plans of the terrorists and their support cells in their preparation for the September 11 attacks. The indictments resulting from investigations implemented under Operation Safe Travel and Operation Tarmac also indicate the value and importance of using § 408(a)(7) as a tool for prosecuting such violations.

 

VII. Case study

 

Subject entered the United States legally in 1992, holding a French passport and using a visa waiver based on his French citizenship. Subject had been a pilot for a small middle-eastern airline for several years before coming to the United States. Subject applied for and legally secured a non-work SSN from SSA by presenting his French passport and a student ID card from a flight training school as identification. Subject used the SSN to lease an apartment, open bank accounts, attend flight training schools, secure an FAA certificate, obtain a cellular phone account, apply for credit cards, and apply for federal and state program funds to pay for his flight training (he was not successful!). Subject demonstrated no known source of income, but traveled frequently abroad using his French passport and visa waiver  to enter and leave the United States virtually unchallenged. In 1998 , using a variation of his  true name, subject submitted an asylum  application to the INS that contained material false statements and misrepresentations as to his  identity, nationality, family, work history, and  persecution at the hands of others. Subject also lied about his date of entry into the United States, representing that he had arrived by boat only four days before filing his asylum application. Based  on his false statements and representations, INS  granted subject's asylum application and issued  him a green card an d alien registration number.  Subject presented the green card and INS alien  number to SSA and applied for a new SSN using  the false name from his asylum papers . On his application for a new SSN, subject represented  that he had never before applied for or received an  SSN. Based on subject's false representations and  presentation of legitimate documents from the  INS, SSA issued a new SSN in the name shown in  subject's asylum papers. Subject used the new  SSN to establish a new identity and to apply for  employment with numerous domestic airlines and  air-freight carriers. During this time, subject  continued to travel extensively abroad using his  French passport and true identity. At times,  subject carried a pilot’s case and represented himself as a pilot, thereby gaining admittance into  the cockpit jump-seat of passenger aircraft. He  also opened bank accounts and applied for credit  cards using his new SSN, and worked periodically as an airport cab driver using his new identity and SSN to secure airport access. Within thirty weeks of receiving his new SSN, subject applied for, and secured a replacement social security card and continued his flight training using a "simulator club" at a local aviation school. Subject is known to have trained on the flight simulator at the same time as two of the 9/11 hijackers and other individuals associated with the events of 9/11.

 

VIII. Conclusion

 

The use of 42 U.S .C. § 4 08(a )(7)(A )-(C) to charge and detain suspects has already proven to be a particularly effective weapon in the domestic war against terrorism. Since September 11, prosecutors in several districts have used 42 U.S.C. § 408(a)(7) to indict individuals suspected of engaging in, or suborning, terrorist activities, and who have misused or misrepresented social security account numbers to secure positions at airports and other sensitive facilities. The elements of proof for each subsection of 42 U.S.C. § 408(a)(7) are more flexible than those required by other felony statutes such as 18 U.S.C. § 1028 (identity theft). The ease of charging § 408(a)(7)(B) makes it an increasingly popular tool for prosecutors.

[Editor's Note: This article was obtained from the United States Attorneys' Bulletin]

 

ABOUT THE AUTHOR

 


John K. Webb is a Special Assistant United States Attorney, and is responsible for prosecuting federal crimes involving identity theft and Social Security number misuse. He is the Identity Theft Coordinator for the United States Attorney’s Office (USAO) in Los Angeles, and divides his time between the USAOs for the District of Arizona and the Central District of California. Since September 11, 2001, he has served as a member of the Joint Terrorism Task Forces for the District of Arizona and the Central District of California, where he has participated in the indictment and prosecution of individuals related to events of 9/11 as well as the planning and implementation of Operation Tarmac/Operation Safe Harbor in Phoenix and Los Angeles. Questions pertaining to in this article can be directed to SAUSA John K. Webb, 602-514-7544 (Phoenix) or 213-8 94-3518 (Los Angeles).


The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.


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