• U.S.

Crime: Psst, Secrets For Sale

3 minute read
Richard Behar

Most Americans assume that their Social Security records, along with other personal information filed with the Federal Government, are secure from prying eyes. Alas, such information is illicitly traded and available to almost anyone — for a price. The extent of the black market in government data became apparent last month, when 18 individuals in 10 states were arraigned in federal courts — participants in what may be the largest government-data theft ever uncovered. So far, the network includes Social Security employees, police officers, private eyes and so-called information brokers, and stretches from New York City and Tampa to Chicago and Seattle. “The problem is widespread, and there’s simply no control over who’s buying the information,” concedes James Cottos, a regional inspector general for the U.S. Department of Health and Human Services.

All sorts of information is available. Suppose that an insurance company wants to know if a claimant has a criminal past, or an employer wants to see the earnings history of a job applicant. Or maybe a lawyer wants to learn anything he can about an opposing party. A popular solution these days is to hire a private eye, who in turn uses self-styled information brokers — usually other private eyes — who often pay government employees for confidential data that can be gleaned in a matter of seconds. “If you’re in a fight with your neighbor, these brokers can get you all the information you , want — criminal records, earnings records, credit reports,” says inspector Cottos. A California sleuth sums up the situation this way: “Look, we can get most of the information that we need in legitimate ways, but that’s more expensive and time consuming.”

Several members of the recently busted ring have agreed to plead guilty, and are expected to testify against yet more participants. In many instances, the Social Security employees sold earnings histories for $25 apiece, and these were then marked up by brokers and resold for as much as $175. Local law- enforcement employees punched into the FBI’s national database for criminal-history reports, which subsequently retailed for $100. In telephone conversations taped by federal agents, information brokers bragged about pocketing hundreds of thousands of dollars each year. One Tampa-based outfit, Nationwide Electronic Tracking, even advertised its illegal services in brochures to private eyes, promising to process requests for “confidential data . . . 24 hours a day, 7 days a week.”

To crack down on the growing racket, Social Security officials are beginning to keep closer tabs on employees whose personal computer codes enable them to access information. “This is something that was basically unchecked,” explains an agency official in Atlanta. “If a clerk’s job requires her to access one or two names a month and she’s doing 100, someone ought to go down there and find out why.”

Of course, sometimes even high-level government employees could use some monitoring. Last month former IRS official Robert Roche was indicted for selling nonpublic marital records to Saranow, Wells & Emirhanian, a California-based investigation outfit run by ex-IRS officials. If convicted of the offense, Roche, who was the highest-ranking IRS criminal investigator in New Jersey until he retired in 1988, faces up to 12 years in prison. “I’m afraid these kinds of business crimes will become more and more prominent in the future,” says U.S. Attorney Michael Chertoff, whose Newark office is involved in both the IRS and Social Security cases. “Information has become so valuable, and the government is really its largest consumer.” Without tougher monitoring from within, the government may also unwittingly become its largest vendor.

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