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Is Identity Theft a Federal Crime?

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If you have questions about whether identity theft is a federal crime, the short answer is—yes, identity theft may be a federal crime.

In this post, we discuss the differences between state and federal identity theft charges and the punishments for these crimes.

Identity theft or identity fraud are legal terms used to refer to several crime types in which someone improperly obtains and then uses another individual’s private data in some way that involves deception or fraud. In many instances, the identity thief’s motives include economic gain.

Do you know someone who is facing a federal crime?
Schedule a consultation with criminal defense attorney Brett Podolsky >>

Identity Theft Laws

In Texas, identity theft is a crime. It’s illegal to obtain and/or misuse someone else’s identifying data, either financial or personal. This data, such as another person’s Social Security number, PIN number(s), or credit history may be acquired when:

  • The offender uses lost, stolen, or improperly delivered mail, credit or debit cards, wallet or purse, or other personal identification materials, or
  • The offender accesses another person’s name, Social Security number, date of birth, Medicare or Medicaid number, address, birth certificate, death certificate, passport number, bank or credit card account numbers, bank routing information, password or “challenge” information, e.g. mother’s maiden name, or even biometric information, e.g. iris scans or fingerprints, or
  • The offender makes an unlawful access to another person’s data from a financial or government entity

Identity theft is increasing throughout the country. Identity theft often occurs on the Internet. In recent well-publicized personal financial data breaches, identity thieves may purchase users’ identities on the “dark web.” However, identity thieves also use low-tech methods, such as retrieving another person’s data from the trash or from another unsecured location.

Federal Identity Theft and Assumption Deterrence Act

In 1998, Congress passed the Identity Theft and Assumption Deterrence Act. The law says that it’s a federal crime when an individual knowingly transfers…uses, without lawful authority, a means of identification of another person—with the intent to commit, or to aid or abet, …unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable state or local laws.( 18 U.S.C. § 1028(a)(7)

In 2004, Congress passed the Theft Penalty Enhancement Act. This law increased punishments for aggravated identity theft. This law requires courts to impose added sentences of two years for a general offense and up to five years for terrorism-related crimes.

Federal prosecutors work in tandem with the U.S. Postal Inspection Service, Federal Bureau of Investigation (FBI), and the U.S. Secret Service in prosecuting identity fraud and identity theft cases.

However, the Federal Trade Commission (FTC) coordinates between federal agencies and offers resources to consumers, businesses, and law enforcement agencies.

Identity Theft Usually Occurs without the Victim’s Awareness

Unlike a burglary or a robbery, the identity thief usually performs the crime without the victim’s realization. In most cases, the victim finds out about the identity fraud after he or she notices unusual changes on credit or debit card statements or when they apply for new credit.

Prevention against identity theft is always the best way to avoid it.

Unfortunately, security breaches at a company, credit reporting agency (CRA, e.g. Equifax’s breach), or banks can open individuals to the specter of identity theft. For that reason, it’s possible even when the consumer is vigilant.

Here is one example and reason the federal government addressed identity theft.

A convicted felon used other stolen identities to rack up at least $100,000 in credit card loans. He applied for a federal home loan and got approved. He then bought handguns and motorcycles in other peoples’ names. He later served a short sentence for making false statements to purchase a firearm, but he didn’t make restitution to the victims for the harm he caused.

Federal law provides severe punishments for identity thieves. If convicted, the offender faces up to 15 years in prison, fines, and criminal forfeiture of personal property used/intended to have been used in the commission of the offense.

Any scheme used to commit identity fraud or identity theft might also include violations of other federal statutes, e.g. 1) identification fraud (18 U.S.C. § 1028), 2) computer fraud (18 U.S.C. § 1030), 3) credit card fraud (18 U.S.C. § 1029), wire or mail fraud (18 U.S.C. § 1341, 18 U.S.C. § 1343), or financial institution fraud (18 U.S.C. § 1344). Any of these federal offenses carry significant penalties. In some instances, the offender faces up to 30 years in prison, severe fines, and forfeiture of property (criminal forfeiture).

Fraudulent Intent

An individual may be charged with identity fraud even if he or she didn’t benefit from theft of another person’s private information.

The crime of identity theft happens when the offender obtains, possesses, or uses another person’s data with the intention of fraudulently using that information at a later date.

For instance, if the offender is a waiter and a diner provides a credit card to settle the bill, the waiter commits identity theft if he or she writes down the credit card number with the intention to use the information later to buy something online. In that case, he or she committed identity theft without taking the next step to use the information to purchase something.

Identity Theft and Identity Fraud Penalties

When an offender is convicted of an identity theft or identity fraud crime, he or she faces:

  • Prison time. The offender may face a significant prison sentence. Generally speaking, a misdemeanor conviction may entail up to 12 months in jail. A felony sentence may result in at least several years or more in a prison.
  • Fines. The offender may be required to pay significant fines if convicted of identity theft or identity fraud.
  • Restitution. The court may also order the offender to pay restitution to victim(s) who lost money or suffered financial harm as a result of identity theft. The restitution is intended to repay the victim for these losses. In contrast, fines are intended to penalize the offender.
  • Probation. A first-time offender of identity theft, when it doesn’t result in victims’ “significant harm” may receive probation in addition to (or separate from) other court-imposed penalties. Probation typically lasts about 12 months, but a probation sentence may extend several years. A person on probation must comply with court-mandated restrictions, including regularly reporting to his or her probation officer, payment of imposed fines and restitution, and obeying all federal, state, and local laws.

Identity Theft in Texas

Identity theft is also a crime under Texas law. In Texas, two primary laws deal with identity theft crimes.

The definition of identity theft in Texas is similar to the federal definition. Identity theft may occur when an individual fraudulently possesses or uses another person’s identifying details.

When a person in Texas uses, obtains, transfers, or possesses another individual’s identifying data without the individual’s consent, and with the intention to defraud or harm another person, he or she commits identity theft or identify fraud.

Depending on the specific circumstances of the identity theft, fraudulently possessing or using another party’s identifying information is 1) a state jail felony, 2) third-degree felony, 3) second-degree felony, or 4) a first-degree felony. (Texas Penal Code Annotated Section 32.51)

As above, identifying information includes any type of data that, by itself or when offered with other data, identifies a person.

Unauthorized Transfer or Acquisition of Some Types of Financial Information

An individual in Texas may be charged with the crime of unauthorized acquisition or transfer of certain financial information if he or she, without prior authorization from the owner of this information, obtains payment card or financial data to use with any recording, electronic or photographic device, or when he or she transfers these details to others.

Financial sight order information is data derived from a magnetic strip or a card, check, credit card, or debit card (i.e., account, routing, date of issue, etc.).

In Texas, obtaining this data is considered a Class B misdemeanor. Transferring this data to a third party is considered a Class A misdemeanor. (Texas Penal Code Annotated Section 31.17)

Identity Theft Penalties in Texas

Depending on the specifics of the crime, an individual facing identity theft charges in Texas is facing significant prison time and fines, such as:

Prison time. If convicted of unauthorized acquisition/transfer of financial information in the state of Texas, the offender faces up to one year in state jail. If convicted of the fraudulent access or possession of identifying data, he or she faces up to 99 years or life in prison.
Fines. If convicted of a felony for fraudulent use/possession of identifying data, the offender faces up to $10,000 in fines. A misdemeanor conviction for unauthorized acquisition/transfer of financial data may result in a $4,000 fine.
Probation. Texas courts may sentence an offender to probation in some circumstances. Typically, probation lasts about a year and entails some loss of freedom. The probationer must adhere to certain terms and conditions of probation.
Restitution. The offender may be required to pay restitution to identity theft victim(s) when the court issues a restitution order. The amount of restitution required depends on the court award.

Contact an Experienced Identity Theft Lawyer

If you’re facing federal or state identity theft charges, you need an experienced criminal defense attorney who will fight for you.

Call the Law Office of Brett A. Podolsky in Houston at 713-227-0087 now to request an initial case evaluation.

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