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April 07, 2003 21:17

Illicit Use of Social Security Information Rises
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By Michael Riley, The Denver Post

Apr. 6--The IRS letters started arriving in Nancy Law's Colorado Springs mailbox five years ago.

Polite but firm, the letters urged the fifth-grade teacher to pay the extra taxes she owed on those little jobs she did on the side -- working at the textile plant in Missouri and the tortilla factory in Denver.

After some nervous nights and a little bit of checking, Law discovered that her Social Security number had been stolen by an undocumented immigrant using the name Nancy Morales.

"We're just teachers, so when we get a note from the IRS that says we owe more money, I panic," said Law, whose husband, Rich, teaches junior high school.

The letters proved more than just an early warning. Along with her own credit reports, the letters became unwitting entries into the life of the immigrant worker who used Law's number to get jobs.

Besides the textile plant and tortilla factory, Morales also worked for a McDonald's in Boulder. She had good years and bad. In 1998, she did well enough to get a $7,000 loan from a California bank and pay it all back. By 2001, she wasn't earning enough to pay a $189 medical bill.

The two women stand on opposite ends of an underground economy built on a single fact: Of the 5 million or so illegal immigrant workers in America, most need fake Social Security numbers to get work.

They buy the cards on street corners or from storefront labs. Immigration agents say in some cases, a forged card is part of a starter kit given to immigrants by smugglers, included in the price of passage.

But since many of those numbers belong to somebody else, that black market can have profound implications, affecting individuals, credit-rating companies, even the massive Social Security system.

One indication of how large the problem is, experts say, is the ballooning size of the Social Security Administration's suspense fund, money collected from payroll taxes tied either to fake numbers or numbers not matching government records.

In 1990, the fund totaled $1.2 billion. By the end of a decade during which America's undocumented immigrant population doubled and the circulation of fake identity documents surged, that fund topped $6 billion. Since illegal immigrants have no right to SSA benefits, the government will pocket most of the money, experts say.

"It's very possible that there are something like 4 million illegal aliens in the United States working with some form or another of false documents," said Steven Camarota of the Center for Immigration Studies, a Washington think tank advocating big reductions in immigration levels.

Camarota said that 1986 immigration-reform legislation requires all firms to verify their employees' eligibility to work in the U.S. -- usually by asking to see a Social Security card and driver's license. Rather than slow the hiring of illegal immigrants, the law fostered a massive black market in the fake documents, many of which use numbers found in trash cans, banks, even on grade reports posted outside university classrooms.

Although using a false Social Security number is a felony that carries a five- year prison term, many immigrants consider it a harmless necessity -- the path to a good job and a new life. Working Social Security numbers are shared with friends and relatives, and many workers become used to living under the multiple identities that come with the fake documents they buy for $100 to $150.

"I've seen some illegals go through 15 or 20 years of their lives, and their whole identity is based on a bogus Social Security card," said Scott Weber, head of the Bureau of Immigration and Customs Enforcement in Denver.

In the comfortable dining room of his Aurora home, a young immigrant, Alejo, shows off credit card applications, cable bills, even mortgage stubs -- all fruits of another's Social Security number.

When he first arrived from a small village in the Mexican state of Zacatecas 10 years ago, Alejo got work using a number that belonged to his grandfather, a legal U.S. resident. He later switched to a second number after the SSA informed a prior employer that his name didn't match the first.

His revolving identities have let him reach the American dream, but they come with a price, especially as his family grows and he puts down roots in metro Denver.

"How would you like to be Brad Pitt today, Tom Cruise tomorrow and then someone who is homeless the day after? You wouldn't like to do that, because you have children, and they want to know who they are," said Alejo, who spoke on condition his last name not be used.

A construction worker who makes $15 an hour, Alejo said he pays all his bills on time. But he also knows not every undocumented immigrant is so careful.

"People I know come here, they get super credit, they get a big old truck, and they enjoy life," Alejo said. "Some are good, they keep on doing their payments on time. But some aren't."

That has led to a burgeoning law-enforcement problem, helping make identity theft one of the fastest-growing crimes in the U.S.

"From that one piece of identification (a Social Security number) you can devastate a person's life," said Special Agent Lon Garner, head of the Denver office of the U.S. Secret Service, the primary federal agency dealing with counterfeit documents. "They open up bank accounts. We've seen them purchase homes."

Along with the INS, the Secret Service has launched operations against counterfeit document rings in Denver and elsewhere in Colorado. But the manufacture and distribution of the IDs is organized much the way drug trafficking is, with small-time street vendors buying documents from labs that come and go quickly.

Most recently, a federal sweep netted hundreds of undocumented immigrants using fake Social Security numbers at airports across the country. More than 100 immigrants working at Denver International Airport were indicted last year for misuse of a Social Security number, a felony, although the majority of those in custody later pleaded guilty to misdemeanor charges and were handed over to immigration authorities.

Enforcement agencies say the most effective way to control the problem would be to issue a counterfeit-proof Social Security card to every U.S. worker. But a 1997 government study found the move would cost $10 billion, and lawmakers have so far balked at the price.

So the SSA has created a patchwork of measures. Last year, the agency sent 800,000 letters to employers whose workers submitted Social Security numbers that might be fake or don't match records. Immigrants say that has made keeping jobs harder, but not impossible. Many simply buy a new number and take another job.

Beyond that, there is little the agency can do, SSA spokeswoman Carolyn Cheezum said.

"As far as someone misusing a Social Security number, it is not a jurisdiction that Social Security has," Cheezum said. "We give them guidance for getting an alert placed on their credit record. We give the contact information for the three major credit bureaus."

When she first found out her Social Security number had been stolen, Law said she couldn't believe the agency could be so lax. "They said, 'Why don't you write your congressman?"' Law said in disbelief.

Instead, she devoted days every year to cleaning up her credit and tax records. The first Internal Revenue Service letter about unpaid taxes arrived in 1998. As Morales changed cities and jobs, Law got similar letters each year.

Law said her problem didn't seem to be a priority for local law enforcement. Although she filed a police report in November 2001, it was never assigned to a detective because there was no loss of property involved, said Lt. Skip Arms of the Colorado Springs police.

Credit-reporting agencies such as Equifax and Experian have identified the fraud as a serious problem, affecting the reliability of credit reports that use Social Security numbers as a key identifier. But because officially the number is issued by the government only to pay into the Social Security fund, agencies that rate credit can't check to see if a number is genuine or who the real owner is, said Rod Griffin of Experian.

Law eventually called Morales' employers that showed up in the IRS letters. "The funniest was McDonald's. They said they didn't hire illegal immigrants," Law said.

Eventually, she called up Morales' home using a phone number listed on Law's own credit report, leaving a message asking her to stop using her Social Security number. Soon after that, the annual IRS letters stopped coming.

"These are probably very hard- working people that are trying to get by. They've found gaps and loops in the system and are trying to get through those gaps and loops," Law's husband, Rich, said of Morales and other immigrants.

"But where is the accountability from the INS? Where is the Social Security (Administration)? This is theft. I think the Social Security number should be seen as property," he said.


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(c) 2003, The Denver Post. Distributed by Knight Ridder/Tribune Business News.

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