DMV Fraud with Guest Expert James Scott

Identity theft is one of the fastest growing problems in America. But criminals that actually use someone else’s identity to obtain a license from a state DMV, have additional nefarious intentions beyond getting into a bar. Drug dealers, fugitives, terrorists, and others that want to “Hide in Plain Sight” are examined in this FraudKast. 

DISCLAIMER: The information provided in this podcast is for informational purposes only and is not intended to and shall not be used as legal advice. The views and opinions expressed in this episode are solely those of the speaker/s and do not necessarily reflect the views or positions of LexisNexis Risk Solutions. LexisNexis Risk Solutions does not warrant that the information provided in this podcast is accurate or error-free. 

Transcript

Narrator: Hello and welcome to the FraudKast, brought to you by LexisNexis Risk Solutions. The series that shines a light on fraud and theft across numerous government benefit programs. FraudKast is hosted by Larry Benson, Director of Strategic Alliances for LexisNexis Risk Solutions Government division, and the creator and principal author for the Fraud of the Day website. And now, here’s Larry with today’s guest.

Larry Benson: Welcome to the FraudKast. This is your host Larry Benson, and with me today is Mr. James Scott, a forty-year veteran of law enforcement, and the founder of the Identifying the Imposter program. Jim, welcome, thanks for joining us.

James Scott: All right Larry, thanks for having me.

Larry: Jim, I’d like to start off, if you could give us a little briefing on the imposter program that you’ve created. Can you tell us a little about it, and can you give us idea as to why you created it.

James: Sure. Back in 2011, as a police officer just north of Boston, I was very concerned about the heroin epidemic, regarding who was supplying the product and delivering it. I started researching that issue, and soon I became aware that identity theft and license fraud was a significant contributing factor to the heroin epidemic, not just in New England, but beyond. So I started putting this program together, ripping apart the crime scene, and what it takes for an individual to use a stolen identity, walk into a registry of motor vehicles anywhere in the country, and subsequently activate that identity in the form or a driver’s license or a state ID. And then start using that identity to essentially hide in plain sight.

Larry: So if we’re looking at identities that are being used at the DMV, are we looking at people coming in using fictitious documents or, what I believe are called “breeder documents”, and how are they doing this?

James: So, to start off with, it has to be a real identity, it has to be a real matching name, date of birth, and social security number, within the social security database. Sometimes it may be stolen documents, the real documents, or most of the time it’s a high-quality counterfeit birth certificate, social security card, and even a gas or a light bill indicating residence of where that person is claiming to live within that state’s jurisdiction. So, it’s a combination of two, but I believe most of the time it’s high-quality fake, and depending on the quality, they may, they have been very successful with defeating a number of fraud programs, fraud detection programs that the registry uses.

Larry: So if we’re looking at identities that are being used, and these identities have to have a name and a social, they’re legitimate, can it be basically any identity, can they be alive, can they be dead, could they be children? Give me a little more detail on this, what are they focused on?

James: For the most part, it has to be a real name, date of birth, and social security number that was initially reported to the social security administration, thereby activating, and that person getting issued that real and matching social security number. Once that occurs, the wannabe imposter, for lack of a better term, they need to go looking for those breeder documents it’s talking about. It may be, again, the big ones are the birth certificate or a social security card. And once they’re able to get one of those documents, a lot of times they can roll it into the other document, and once they get the matching birth certificate and social security card and an address, those are the three big documents that you need to walk into a registry of motor vehicles, and attempt to apply for a driver’s license or a state ID. 

Larry: So Jim, you’ve got a birth certificate that’s fairly easy to get anywhere in the country. All you need is the name of the individual, and what state they were born in, and maybe, Mom and Dad’s name. And now all of a sudden you’ve got their birth certificate, and you go from there.

James: Correct. I seem to remember reading that in a book that someone provided me not too long ago, that talks about how easy it is to get someone else’s birth certificate. And that’s a big breeder document, because once you get that, now you’re off trying to get, could be a quality fake or real social security number. So it’s a lot easier than people think. The other issue is, once the imposter walks into the registry of motor vehicles, the one thing we need to realize is, they’re exposing themselves, they are giving us, providing us, that stolen name, date of birth, and social security number. Wherever it came from, it could be a dead person’s identity, it could be a real living person’s identity, it could be someone that has disabilities, and when they walk into the registry, they’re giving us that stolen name, data of birth, and social security number, but they’re also giving us their driver’s license photo, in the form of a digital, I describe it as a digital thumbprint, it’s a digital third thumbprint, it’s that high in quality.

Larry: Mm-hmm. So, now you’ve got individuals that are going into the DMV, and they’re coming in with a false identity. Have you ever heard of DMV individuals that are working for the DMV, that are colluding with criminals and actually issuing out licenses to those criminals under a false identity intentionally for monetary gain?

James: Yeah, the insider threat is always a big concern for all the registries, and many registries have experienced that. And if you have an insider threat, they have the ability to go around some of the behind the scenes fraud indicating programs that the registry may be using. And, but one thing to remember, it’s not a fake identity, it’s a real matching name, date of birth, and social security number that they need to activate with someone else’s picture on that driver’s license or state ID. 

Larry: So you could actually have an internal threat that is taking legitimate identities out of a DMV, issuing out either new or replacement licenses, and giving them to fraudsters with the fraudster’s picture on it…

James: Correct.

Larry: And this could be happening in quantity.

James: Correct, and that’s a good example from a recent case that’s ongoing right now out of the Texas DMV, where about three thousand stolen identities, actually I think it’s up closer to five thousand now, but five thousand real, matching names, dates of birth, and social security numbers were obtained and through a backdoor of a third-party vendor app down in Texas, the organized crime, they were able to issue, and get issued, through the mail, thousands of duplicate licenses. And subsequently the bad guys got a hold of them, and, again, it’s a real name, date of birth, and social security number, belonged to someone else, with their picture on that license. But there’s also a real credit score behind that identity, and that enables now the imposter to walk into a bank, or a car dealership, or a retail store and make purchases using that document, that driver’s license or a state ID.

Larry: So you can end up taking advantage of businesses and destroying somebody’s credit at the same time. Can you get any kind of government benefits with it?

James: Sure, once you obtain that identity, that ID, with your picture on it, that’s essentially, for the most part, it can be U.S. citizenship. And the ability to apply for health benefits, section eight, EBT benefits, food stamps, all that sort of thing. So, and that’s been going on for decades. That’s been documented way back into the Department of Justice study from 1976. The book that someone turned me on to about twenty years ago. We’ve known this since 1976, the use of stolen identities.

Larry: Yeah, I believe that was the book that was put out by the Department of Justice.

James: I almost, I got it up in my room, I would love to just hold that up.

Larry: So, you’ve got individuals having, getting government benefits, you’ve got individuals that are using to defraud banks, insurance companies, etc. Do you have any examples of fugitives, anyone that’s hiding behind it, because they’re wanted by the law?

James: Sure. Many, many, many examples. One recent one was where the, the gentleman in Florida was wanted by the DEA for thirty, thirty-five years. He had the ability to obtain a Florida license, Florida pilot’s license, and a U.S. passport using the identity of a seven-year-old deceased person. He was able to reactivate that identity, and again, once he got one or two of those breeder documents, he walked into the registry down in Florida and essentially became that, he reactivated that dead identity. And he used that for thirty-five years.

Larry: How would you reactivate a dead identity, and where would you even get a dead identity?

James: So, I hear it could be as common as just walking through a graveyard and looking at headstones, numerous media outlets now, obituaries. If you’re able to walk into a state where it has the open document that you mentioned a few minutes ago, you know, the open document policy. If you’re able to get a copy of that birth certificate and that’s your first, potentially, breeder document, and then your second goal can be now, either get a real and legitimate social security card, or get a high-quality counterfeit made, and if it beats the registry of motor vehicles in any state, their fraud detection, you may be on your way to reactivating that identity. 

Larry: So one of the things I understand is, in some states, is that they actually issue the death certificate, so if we’re talking about a deceased individual, they actually print the social security number on the death certificate, which if anyone can get a birth certificate, they can get a death certificate that gives them the number that they could use then, I assume, to go create a fraudulent social security card with a legit number on it that matches the name.

James: Correct, and the important here is if that identity is recorded and reported in the social security death file, that should prevent someone from getting a driver’s license or a state ID, because it will hopefully be flagged by the social security administration during the application process. Hopefully.

Larry: Right.

James: We could probably get a little bit better at that, but that’s one fraud prevention measure that probably we should get a second look at.

Larry: Well, I would assume that if we’ve got an insider threat, they’re going to bypass any checks, and just issue the license under the deceased’s social.

James: Correct, that, again, your insider threat is never going to go away, and is always going to be an issue. One thing the Imposter Program does, among a bunch of things that we do, it really becomes a vetting process of how well your registry or DMV is doing in issuing your driver’s licenses because, you know, I teach guys the practical application of ripping open that name, date of birth, and social security number behind that driver’s license. And if there are no imposters, then there’d be no need for the training. Well, unfortunately there’s no lack of imposters and we can identify what registries, what states are doing better jobs than others. For example, four or five years ago, Massachusetts had a huge problem with imposters and beating them. That has completely flipped the other way. We’re still catching in Massachusetts, but it’s a rarity now that we find a newly created imposter who just got his driver’s license within the past two, three, four years. So Massachusetts has taken, has utilized the program to their advantage {Larry: Mm-hmm]. So, it’s really, again I can stress it’s a vetting process. If there’s imposters out there, this program will detect them and identify them for you in a number of ways, and allow you to detect, especially if you’re tracking your employees, we’ve got, every time they issue a driver’s license, individually, then all of a sudden we’re identifying two, three, four imposters in a month, what if it’s the same employee ID that goes back to that initial license issue. So we see that. 

Larry: Do you often run into people that are undocumented that are trying to get a license from a DMV, or is it mainly fugitives, is it mainly drug dealers, what are the combinations that you see?

James: It’s a combination of all of them, we’ve identified. The vast majority of our imposters are from non-U.S. citizens, but we’ve got a few U.S. citizens using another stolen U.S. citizen’s identity. There was a big stolen car case, maybe a year ago out of Brockton, MA that went all the way to Ohio. There was about seven or eight individuals that were using primarily Puerto Rican driver’s licenses, counterfeit, but with a good credit score behind them, and they were walking into car dealerships up and down the east coast purchasing cars. It’s definitely organized crime, a lot of our imposters have been significantly contributing to the heroin epidemic as drug traffickers. Some of those same people have even gone after having numerous licenses in numerous states. We also have a big issue with imposters altering their fingerprints. That initial identity that they stole in the form of a driver’s license or a state ID, which got tattooed to their fingertips during the arrest procedure. At one point that identity becomes no good. They have a lot of warrants, maybe they’ve been previously deported under that identity. So now they need to go and get another identity, their third or fourth identity, and attempt to activate that in the form of a state ID or a driver’s license. So that’s a big issue nationwide that we’re really not looking at due to the altered fingerprint aspect of all of this.

Larry: You had mentioned drug dealers, explain to me why, or explain to the listeners why a drug dealer would go off and spend the time to get a license in the system. And it sounds like this is a big problem.

James: It is. So the need for the imposter to hide in plain sight, when you break that down, it’s the ability to become a U.S. citizen immediately, obtain a driver’s license, and then start driving and delivering the product for the drug cartel. So that’s been happening for decades, all over the United States. 

Larry: Well if it’s just to drive, couldn’t they just use a Puerto Rican driver’s license, what does the U.S. license get them, that if they’re just driving?

James: Well, it’s so, we’re seeing it all now. Here in Massachusetts, again applauding the Mass registry of motor vehicles, what they’ve done, yeah, we’re seeing less Mass licenses, but we’re seeing a lot of out-of-state licenses, we’re seeing alleged Puerto Rico licenses, alleged Dominican driver’s licenses, which is outside of the U.S. jurisdiction. There is a program I applaud, it’s called the State-To-State program, it’s an AAMVA program, A-A-M-V-A, American Association of Motor Vehicle Administrators. And their goal, and about twelve or thirteen states are left, but their goal is one identity, one name, date of birth, and social, one driver’s license. So they are getting better at this. So, the ability to obtain a stolen identity, name, date of birth, and social, and sell that, if you’re the [Unclear: hack/breach?] broker, you’re the identity broker selling these stolen identities …

Larry: Mm-hmm.

James: … back in the day you could sell it four, five, six times, and those four, five, six people would go to different states and get four, five, six driver’s licenses, different people, but with the same identity. That’s starting to shrink with about thirteen states left to get into this State-to-State program, and that’s a big game changer. It’s not going to eliminate the fraud problem by any means, it’s really going to come down to the quality of the stolen identity, what we call the complete package, and how good that identity that you just stole is. Because don’t forget there’s a victim, there’s a real person behind that name, date of birth, and social. So, it’s going to be a quality issue where one stolen identity, one license. So that’s going to require the organized crime to go looking for other locations of stolen identities. And I think we just saw that in New York with the organized Chinese gang, where they were able to get about five thousand stolen, real identities and utilize that to access a backdoor at a, at the Texas registry.

Larry: Do you think there’s going to be an identity shift, a theft identity shift, more away from the existing license holders, more towards maybe the deceased and children …

James: Great question. 

Larry: … that aren’t in those DMV databases today? 

James: That is my concern, and I’ve already reached out to some of my best imposter students to start thinking around the corner. I refer to those as cookie jars, cookie jars full of quality names, dates of birth, and social security numbers, and I’m very concerned that some of those may have already been compromised. I don’t want to name any, but yes, if I was the bad guy looking for stolen identities and my ability to use one stolen identity five, six, seven, eight times is being shrunk, I can still steal one identity and maybe one license, but I’m going to start accessing private databases, and you see these breaches all the time. I just got one in the mail from one of my health companies where [Unclear: fields?] was breached. My military, I’ve been breached, I’ve actually been compromised through the military. So that is going to be even more of a threat, looking for cookie jars full of quality names, dates of birth, and social security numbers, especially someone that’s not actively using their identity. It’s a real identity, but that person doesn’t have a driver’s license for whatever reason. That is a pretty good identity. So, we haven’t talked about these third-party data search programs that we use in our program. One thing I teach the officers is, I teach them how to see double. Two or more people using the same name, date of birth, and social security number, whether they’ve been arrested using the same name, date of birth, or social security number, or they may have a P.O. box, or an address, or a gas or light bill, but in two different locations. Someone has an electric bill in Massachusetts, and someone has an electric bill in Texas, same name, same date of birth, and if you can dig out social security number out from behind the scenes, same social. Well why? Does the person have a summer place, or is it a compromised identity? That’s why we really like, there’s a number of those third-party data programs out there. Our program, we use one that the FBI owns, but it’s a nationwide arrest database. All of our arrests go into this one database. And that’s what we use. We have the ability to see, no two people should have ever been arrested, booked, and fingerprinted using the same name, same date of birth, and the all-important, same social security number. One person, one social security number. So we use that arrest database nationwide to see multiple people, at one point or another, have been arrested, booked, and fingerprinted using the same name, date of birth, and social security number. We’ll have two different FBI numbers because the FBI number is based on their own specific fingerprint pattern. It’s like, one vehicle, one VIN, Vehicle Identification Number. It’s the same way in the arrest database, one FBI number, one person. 

Larry: Interesting. 

James: So again, that’s all part of the data search programs that we use.

Larry: Sure. You know, you had mentioned licenses from Puerto Rico, we talked a little bit about undocumented, you said there’s a lot of people that are coming in undocumented. You had mentioned Puerto Rico a couple of times, give me a little more background. What’s going on there?

James: So Puerto Rico, going back to that study by the Department of Justice, way back in 1976, that study, and others, have identified Puerto Rico as being significantly compromised, their government databases. It even goes back to about seven or eight years ago, Puerto Rico went to a new format for their birth certificates. They required all their residents, from Puerto Rico, to obtain a new passport format, and they invalidated, I think it was 2011 I think they did that, and they invalidated all the birth certificates prior to that because of the rampant fraud and identity theft that’s been coming out of Puerto Rico since the 70s.

Larry: That’s several million birth certificates.

James: I think you’re low on that number.

Larry: Ok, so they’re replacing the birth certificates, you had mentioned that there’s a problem with it, so are people coming here using those birth certificates? Because, let’s face it, Puerto Rico is a territory of the United States, just like Guam, etc. 

James: Yup. 

Larry: So they are legitimate U.S. citizens. 

James: Correct. 

Larry: And have a social security number.

James: Yup, and know you’ve got to throw the Virgin Islands in there too, because we’ve had issues with the Virgin Islands. Identities compromised out of the Virgin Islands. Another cookie jar.

Larry: So are these other Puerto Ricans coming here, using Puerto Rican birth certificates of somebody else, are these different groups coming into Puerto Rico, getting a birth certificate, and then coming to the mainland? What’s the process?

James: So most of our imposters will be a non-U.S. citizen who has obtained a stolen identity from a U.S. citizen in Puerto Rico.

Larry: Ok.

James: Whether they’re, we see them being stolen from either the criminal records of U.S. citizens in Puerto Rico, or right out of the Puerto Rico DMV, right out of their registry of motor vehicles. It’s again, the analogy of the cookie jar. Both of those, criminal histories and the Puerto Rico DMV, are full of thousands and thousands and thousands of real names, dates of birth, and social security numbers.

Larry: So does the U.S. not have a connection, or that program that you mentioned, State-to-State does not have a connection to Puerto Rico?

James: So I think there’s about eleven to thirteen states left to get in that program, not including Puerto Rico, Virgin Islands, Guam, and I think there’s one other territory. I’m not aware of a date, however, the day that Puerto Rico joins the program, or, I’ve been asking for years that a federal agency obtain, or another registry, obtains a copy of Puerto Rico DMV’s database and compare it with their own, you know, you put the two databases side by side, you’re going to start seeing doubles and triples. You’re going to a person in, in other words, if you took the Mass registry database and you put it up against the Puerto Rico registry database, you’re going to see a lot of doubles. Two people, same name, date of birth, and social security number, with two different driver’s licenses.

Larry: Mm-hmm.

James: One in Mass, one in Puerto Rico.

Larry: If you had to make a guess based on your experience, what percentage of a DMV, and we’ll just say in general, what percentage of a DMV would you say have bad licenses? Is it five percent, is it half a percent, a quarter percent, would you even have a guess?

James: So, because I talk to a lot of people, I started this training in 2104, 2015, and I’ve been traveling outside the state quite a bit lately. I network and talk to people all the time. I won’t name any particular states, but I know that one smaller state, when they started applying what I teach they were surprised at how many imposter cases they had. And they literally went from zero to a hundred. They came to the class, they heard about it, they, preparing for the Real ID Act implementation, and it didn’t take long, once myself and the facility, one of the facilities I teach a lot at is NESPIN, New England State Police Information Network, part of the RISS, R-I-S-S, organization nationwide. When they came to the class and they listened to what we were talking about, they were shocked at what they didn’t know. They’ve gotten pretty good at it very quickly. 

Larry: So this sounds like the assumption is there’s no problem until they really start to look for it, and then they realize how bad it could be. 

James: Correct, and then especially when they apply the program along with facial recognition and they identify, for example, the one state, again I’m not going to mention the name, they identified an eighty-year-old man using his identity for one driver’s license and his dead brother’s identity for another driver’s license, and he was collecting social security benefits under his dead brother’s identity. 

Larry: Wow. 

James: But he had two driver’s licenses within that particular state.

Larry: Sure, yeah, same picture, different names.

James: Correct.

Larry: So are there any tools that DMVs or RMVs could be using to audit the licenses that could be plugged in, turned on, and give them an idea as to what problems exist?

James: Sure, there’s a current program, the unofficial name is called Match/No Match, and I believe all registries are doing that, and during the application phase the social security number that’s being presented is vetted against the social security number in the social security administration database to see if it matches that name and date of birth. If it’s a match, then go ahead and give the license. No match, then they, there’s a question about is it a real social security number. Oh yeah, there’s a number of programs that are occurring, again that State-To-State program is going to be a game changer. The other issue that’s happening is July 1, of this year, 2023, both Massachusetts and Rhode Island will be allowing non-U.S. citizens to come in and apply for driver’s licenses. The documents that are going to be presented during the application phase, they’re going to be alleged out of country birth certificate, and alleged out of country driver’s license, and then, you know, you’ll see a gas or light bill or whatever. The registry of motor vehicles will have no way of vetting the alleged documents being presented. So if someone comes in and says, they’re, I have a driver’s license from Spain, here it is, and here’s my original birth certificate from Spain, and here’s my light bill and gas bill showing where I live now currently in Massachusetts or Rhode Island. Other than those two documents, the original birth certificate and driver’s license, those registries will have no ability to vet those documents.

Larry: So Jim, doesn’t this present a problem? My understanding is TSA right now honors any license issues by a DMV as identity to get a plane. Real ID has not gone into effect and won’t go into effect until 2025. So doesn’t this leave the door wide open for the same problem that we had from 9/11?

James: I’m afraid it does. This is a significant step backwards. A lot of people didn’t realize that the, what was it, seventeen of the nineteen hijackers were able to obtain some form of driver’s license or a state ID.

Larry: Correct. Yes.

James: And shortly after 9/11, the 9/11 commission was formed, and they said ok, what happened, and the issue was social security number, there were no, the driver’s licenses that they were able to obtain, based on not a social security number. And a social security number, for the most part, not always, but for the most part, is an indicator of a U.S. citizen.

Larry: Right.

James: And that’s one of the things that the 9/11 commission pushed and went through, now we’re going, it’s, it’s a step in the wrong direction. Some of the states, when they issue this driver’s license, it is going to look no different than a previously issued format of a driver’s license of a U.S. citizen from two, three, four, five years ago.

Larry: Probably the only thing it won’t have is the Real ID star in the upper right-hand corner. But it’s still a government-issued, or state-issued, driver’s license which they’ll let that person get on a plane. So here we are twenty years later after they formed Real ID. They’ve delayed it now eight times. So my guess is we’re going to get to 2025 and they’ll come up with another reason why they have to delay it yet again. 

James: I just don’t know what to say. It’s, it’s, yeah, no comment.

[Slight laughter]

Larry: Anything you’d like to add Jim? We’re running out of time, we certainly appreciate your participation on the FraudKast, and your insight is exceedingly eye-opening. So thank you for your time. Anything you’d like to add?

James: No, I think that’s about it Larry.

Larry: We’re good.

James: All right.

Larry: Jimmy, thank you for your time.

Narrator: Thank you for listening to this episode of the FraudKast. If you’re interested in learning more, head over to our website at FraudKast.com for more episodes, transcripts, and social media links. And remember, that’s FraudKast with a K, not a C. And to stay current on what’s occurring in the world of fraud, be sure to check out FraudoftheDay.com.