Is Identity Theft a Felony?

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Identity theft happens when someone wrongfully acquires another person’s identifying information and uses it for fraud. 

People who commit identity theft are often regarded as cyber criminals. These people use the internet to steal other people’s personal information. 

Although the internet is one of the most common places where identity theft occurs, there are other ways to steal personal data. 

Many people wonder whether identity theft is a felony. This article will explore the legal definition of identity theft and whether it is classified as a felony offense. 

Federal Identity Theft

As mentioned above, identity theft refers to the criminal act of taking someone’s personal identifying information and using it to commit other crimes. 

Federal identity theft is covered under 18 U.S.C. § 1028. According to this law, a person commits an identity theft felony if they use the stolen identity to commit felony crimes such as: 

  • Stealing social security benefits
  • Committing domestic terrorism
  • Committing immigration violation

The US Congress enacted the Identity Theft and Assumption Deterrence Act in 1998. 18 U.S.C. § 1028 was modified to include the intentional commission, attempted commission, or assistance in committing identity theft as a federal offense.

The Act stipulates that knowingly transferring or utilizing someone else’s means of identification with the intent to engage in unlawful activity that violates federal law or constitutes a felony under state or local laws is considered a federal crime.

Identity theft typically does not fall under the jurisdiction of federal law enforcement agencies and prosecutors unless the crime involves interstate activity, significant financial losses, or a coordinated effort to carry out a fraudulent scheme.

What is Aggravated Identity Theft?

Aggravated identity theft is when someone uses, possesses, or transfers another person’s identity without permission. 

The Identity Theft Penalty Enhancement Act was made in 2004 to give stricter punishments for aggravated identity theft. Under 18 U.S.C § 1028A, aggravated identity theft is defined as:

Whoever transfers, possesses, or uses, without authority, a means of identification of someone shall, in addition to the penalties for such a general felony, be sentenced to two years imprisonment. If terrorism is involved, the sentence could be up to five years.

This statute means that if someone is convicted of aggravated identity theft, they will be given a 2-year prison sentence for a general offense or a 5-year sentence for a terrorism-related offense, on top of any other penalties they get for their other crimes. 

For example, someone charged with wire fraud and aggravated identity theft will get a sentence for wire fraud first, then an additional two years for the identity theft conviction. 

Consequences of an Identity Theft Conviction

The consequences of a federal identity theft conviction vary depending on the case’s specifics. These can include:

  • Up to 15 years in prison if the conviction involves creating or transferring identification, producing counterfeit documents, or possessing equipment to do so.
  • Up to 20 years in prison if the conviction involves identity theft in conjunction with drug trafficking or violent crimes or if the defendant has a prior identity theft conviction.
  • Up to 30 years in prison if the conviction involves identity theft in the context of aiding someone or committing a terrorist act.

When allegations of drug trafficking, violent crime, or other federal offenses are involved, the prosecutor may file separate charges with increased penalties.

Identity Theft Investigation Process

Anyone who suspects their identity is stolen should report it to their law enforcement agency. 

The law enforcement agency is legally obligated to accept the complaint, document it in a police report, furnish a copy of the information to the complainant, and investigate the alleged violation. 

The law enforcement agency may also collaborate with other agencies to conduct a comprehensive investigation if necessary. 

Another law enforcement agency may become involved, such as when the crime transpires across multiple jurisdictions or upon receipt of a request for assistance. 

The protocol for conducting the investigation may vary, contingent upon the particular details and circumstances of the case.

Biggest Identity Theft Cases of the Modern Times

David Matthew Read Case

Case summary: In 2018, David Matthew Read and Marc Higley posed as Demi Moore’s assistants to request a new no-limit American Express card.  Read then used the new card to spend over $169,000 in New York and Los Angeles luxury shops.

The downfall: Read was caught when he used the stolen card and his own to pay off a balance on some transactions. Both were caught on surveillance cameras in a Nordstrom store. 

The sentence: Higley was sentenced to 14 months in a halfway house and ordered to pay restitution of $52,670. On the other hand, Read was sentenced to six years in federal prison after being charged with purchasing a Mercedes using another person’s information.

Kenneth Gibson Case

Case summary: A former IT professional, Kenneth Gibson, designed a computer program to steal data from the company’s database and automatically create fake accounts. 

Gibson then used the stolen identities to apply for credit accounts linked to these fake PayPal accounts. Over time, he opened over 8,000 accounts and stole over $3.5 million.

The downfall: He was caught when he made a mistake when he asked PayPal to send him a check, and the name on one of the checks matched that of one of his victims. 

The sentence: Gibson was sentenced to four years in prison, with three more years of supervised leave. He was also ordered to pay $1 million in compensation and sell his assets to repay the stolen money. 

Luis Flores Case

Case summary: Luis Flores Jr. and his mother committed identity theft by pretending to be celebrities, FBI directors, and US Marshals service directors. 

He and his mother changed the victims’ addresses and phone numbers on their accounts, ordered replacement cards, and made wireless transfers from targeted accounts to their own. 

The downfall: Flores Jr. called American Express, claiming to be Kim Kardashian, and changed her personal information to his own, but American Express got suspicious and reported them to the Secret Service. 

The sentence: Flores Jr. was sentenced to three and a half years in federal prison, while his mother was sentenced to three years of probation for covering up her son’s fraudulent activity.

Turhan Armstrong Case

Case Summary: Turhan Armstrong was found guilty in 2017 of managing a $3.3 million scam by using stolen identities. Armstrong used the Social Security numbers of children and people who had left the US, allowing the scheme to continue for almost a decade. 

The downfall: The police discovered something wrong when Armstrong failed to declare any income to the IRS between 2009 and 2017 while maintaining multiple residences in different states.

The sentence: Armstrong was convicted of all 51 offenses in a grand jury indictment in 2020. He was sentenced to 21 years and ordered to pay $3.3 million in restitution. 

Wrapping Up

Identity theft is a severe crime in the United States. The consequences of an identity theft conviction can include hefty fines and imprisonment, and the severity of the sentence depends on the nature of the crime committed.

Aggravated identity theft carries even harsher penalties, including mandatory minimum sentences. It is essential to be vigilant and take steps to prevent identity theft, including financial, medical, and tax theft. 

Individuals can take appropriate steps to protect themselves and their personal information by understanding identity theft’s legal and practical implications.

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