Document Fraud in Employment Authorization

By Ronald W. Mortensen on April 19, 2012

 

A hearing before the U.S. House of Representatives Judiciary Committee

Subcommittee on Immigration Policy and Enforcement
Washington, DC


April 18, 2012

Statement of Ronald W. Mortensen
Fellow
Center for Immigration Studies



 

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Video of Ronald Mortensen's Testimony

 


Introduction

The use of fraudulent documents for employment authorization and child identity theft go hand-in-hand because adults can use children's Social Security numbers for years without being detected. Document fraud, therefore, is not a victimless crime and the children whose Social Security numbers are used for employment purposes suffer very real and serious harm.

An E-Verify requirement is actually a child protection measure because it makes it virtually impossible for adults to use the fraudulently obtained Social Security numbers of children for employment purposes.

Therefore, a mandatory, nationwide E-Verify program with extremely strong employer sanctions should be implemented immediately in order to protect the American children's futures. Employers should be required to use E-Verify to check the status of all current employees as well as new hires in order to identity individuals who are using the Social Security numbers of children.

In addition, the families of victims of employment-related identity theft should be allowed to sue employers for damages if employers fail to comply with the law.

I-9 Process Encourages Document Fraud and Identity Theft

The current I-9 employment authorization requirement has the unintended consequence of fueling a demand for fraudulent documents and encouraging employment-related identity theft since new hires are required to provide specific documents that illegal immigrants and individuals who are trying to hide their true identities cannot legally obtain.

Illegal immigrants are by far the prime drivers of employment-related document fraud and identity theft because a Social Security number is required to get a job with reputable employers. Deadbeat parents, sexual predators, criminals trying to hide their identities, and others also use fraudulent documents for employment purposes.

Shortly after arrival in the United States, most illegal immigrants purchase a set of fraudulent documents that includes a Social Security number. This results in three-quarters (75 percent) of all illegal immigrants holding and using fraudulently obtained Social Security numbers according to the Actuary of the Social Security Administration.

Thus, fraudulent documents abound and since the quality of the documents is generally quite good, employers are unable to determine if the Social Security cards, driver's licenses or "green cards" presented by job seekers are real or fake by simply looking at them.

Social Security Number Only versus Total Identity Theft

Almost all employment-related identity fraud is Social Security number-only fraud. In fact, according to a Social Security official, "98 percent of Social Security-related ID theft cases involve people who use their own names but invent or steal their numbers".

The Social Security number being used by the perpetrator of Social Security Number-only identity fraud may not belong to anyone or it can belong to a man, a woman, or to a child of any age.

According to the Social Security Administration, 453.7 million Social Security numbers have been issued; therefore, there is roughly a fifty-fifty chance that a randomly made up number has already been officially assigned to someone else. However, even if the randomly generated number has not been issued by the Social Security Administration, it is not taken out of the system when someone begins to fraudulently use it. The Social Security Administration, therefore, eventually assigns numbers that are already being used to newborn infants. When this occurs, a child may begin life with a wage history, bad credit, income tax liabilities, and an arrest record.

Total identity theft is the use of another person's full name, Social Security number, and complete date of birth. It is relatively rare because it is much harder to carry out, easier to detect, and more subject to prosecution than is Social Security number-only identity fraud.

In order to steal another person's total identity, the identity thief has to get the victim's full name (first, last, middle), his actual date of birth (month, day, year) and his actual Social Security number. In addition, the perpetrator has to be the same gender as his victim, be roughly the same age, and the name being used should more or less match the identity thief's physical appearance.

Total identities are also much more expensive to purchase than randomly made up or stolen Social Security numbers that are simply attached to another individual's name.

Children Are Victims of Employment-Related Identity Theft

According to Carnegie Mellon University's CyLab, children are 51 times more likely to be the victims of identity theft than adults. CyLab found that 10.2 percent of the 42,232 American children in its survey had their identities compromised.

Children's Social Security numbers are especially valuable for employment purposes. Children do not use their Social Security numbers for employment, credit, or other purposes so the illegal use of their Social Security numbers can go unnoticed for many years.

In Utah, a joint federal-state investigation in 2005 confirmed that the Social Security numbers of Utah children were being used for employment purposes. Based on that investigation, it was estimated that 50,000 Utah children under age 18 were the victims of employment-related identity fraud at that time. Under Utah law, identity fraud for employment purposes is a major felony.

In addition, Utah's Workforce Services identified 1,626 employers paying wages to the Social Security numbers of children under age 13.

In 2009, Utah implemented its first E-Verify legislation that required public employers and their contractors to use E-Verify. In 2010, it added a requirement for all private employers with 15 or more employees to use E-Verify. Both laws simply left it up to employers to comply and did not include any penalties for non-compliance.

The most recent figures available from Utah's Workforce Services, show that in 2010, 972 children on public assistance under age 13 had wages being reported to their Social Security numbers compared to 1,800 in 2005, a decline of 46 percent. In 2011, that number had dropped to 800, a 56 percent decrease.

In addition, in 2010, 1,367 employers reported wages on Social Security numbers that belong to children on public assistance. In 2011, that number rose to 1,449. These numbers are also down from the 2005 level.

The reasons for these decreases are difficult to determine. The nationwide economic downturn impacted Utah, although less severely than the rest of the nation. Many people lost jobs and when that occurred, wages ceased to be reported on the children's Social Security numbers that they were using.

In addition, a less friendly legislative environment for illegal immigrants coupled with Utah's weak E-Verify laws likely had some impact as more companies used E-Verify. A growing awareness of illegal immigrant-driven child identity theft may have also contributed to the decline.

In spite of these favorable trends, child identity theft in Utah continues to be a serious problem as noted by a headline in the April 7, 2012 edition of the Salt Lake Tribune which read: "Identity theft involving children is a growing crime". According to the Tribune:

In the past five years, the Utah Attorney General's online Identity Theft Reporting Information System has received more than 3,000 reports of ID theft — about 67 percent of which involved Social Security numbers belonging to children. Nationally, more than 19,000 reports of child identity theft were made to the Federal Trade Commission, up from about 6,000 reports in 2003.

These reported cases of identity theft are, however, just the tip of the iceberg because most parents are unaware that their children's identities are being used and the crime is only discovered when children grow up and eventually apply for credit or when the family applies for public benefits. Therefore, many of the reported adult cases of Social Security number-only identity theft may have occurred during childhood, but were only discovered later on.

Document Fraud Is Not a Victimless Crime

The children and other victims of employment-related document fraud and identity theft suffer real harm. They have their good names destroyed and can have their credit ruined and medical records compromised with life-threatening consequences.

They can have income tax liabilities attached to their names for unpaid taxes on revenue earned on their Social Security numbers and they can be denied public benefits such as critically needed Medicaid coverage because wages are being reported on their Social Security numbers.

And once children enter the workforce or go to college, they may not be able to qualify for internships, student loans, jobs, unemployment benefits, and mortgages because of the records of other people that are attached to their Social Security numbers.

Multiple Felonies to Get a Job

People from diverse backgrounds use fraudulent documents and the identifying information of American children to get jobs. Deadbeat parents use their children's Social Security numbers to avoid having their wages garnished for child support.

In a well-publicized case in Utah, a child pornographer used a fraudulently obtained Social Security number to obtain employment as a truck driver, and still other individuals who are trying to hide criminal records from employers may use the identifying information of children.

Perhaps most seriously of all, millions of illegal immigrants use fraudulent documents and the fraudulently obtained Social Security numbers of an untold number of American children to get jobs. In fact, Illegal immigration, document fraud, and identity theft go hand-in-hand because millions of individuals illegally in the United States must have Social Security numbers to get jobs with employers who require the completion of an I-9 form.

Since individuals illegally in the United States cannot legally obtain a Social Security number and cannot legally work using an Individual Taxpayer Identification Number (ITIN), they rely on fraudulently obtained Social Security numbers. They also purchase and use other fraudulent documents such as driver's licenses and "green cards". When they do this, they commit multiple felonies including document fraud, Social Security fraud, forgery, perjury on an I-9 form, and, under state laws, identity fraud.

States with the highest percentage of illegal aliens in their population also tend to be among the states with the highest levels of both overall and employment-related identity theft. Border states including California, New Mexico, Arizona, and Texas are among the most impacted not only because they have large populations of illegal immigrants, but also because many newly arrived illegal immigrants obtain their false documents in those states before moving inland.

E-Verify Prevents Document Fraud and Employment-Related Identity Theft

Given the high quality of fraudulent documents being used by illegal immigrants, deadbeat parents, pedophiles, and others, employers have no grounds to challenge them. That is why it is so important to have a mandatory employment verification system in use that protects children from becoming victims.

E-Verify can help dramatically reduce job-related child identity theft because an employer using the system in good faith cannot legally enter a child's date of birth when the employee is obviously an adult.

E-Verify also stops 100 percent of all Social Security number-only, job related identity theft, which accounts for as much as 98 percent of all employment-related identity theft. And with the addition of photos and other features, E-Verify makes it very difficult for individuals to use total stolen identities for employment purposes.

Arizona's experience seems to indicate that the use of E-Verify plays at least some role in preventing employment-related identity theft. Prior to the enactment of its E-Verify legislation, employment-related identity theft made up an exceptionally large percentage of total identity theft in Arizona and it had been rapidly increasing year after year.

Following enactment of Arizona's strong E-Verify requirement in 2007, employment-related identity theft declined from over 39 percent of total identity theft in 2006 to 25 percent in 2011. This is a 36 percent decline and it is likely that many of the cases of employment-related identity theft now being reported occurred before the implementation of mandatory E-Verify. In addition, new cases continue to occur because not all Arizona employers are complying with the law and because other states where people use the Social Security numbers of Arizona children do not mandate E-Verify.

It is important to note that the decline came during a time of economic retrenchment and that factors in addition to E-Verify likely played a role in the decrease of employment-related identity theft. However, given the heavy reliance on Social Security number-only identity theft for employment purposes, E-Verify almost certainly contributed significantly to the decrease.

Arizona – Employment-Related Identity Fraud Trends

Year Employment-Related Identity Fraud as a Percentage of Total Identity Fraud Percentage Increase/Decrease from One Year to the Next
2002 20 % -
2003 25 % +25 %
2004 31 % +24 %
2005 34 % +10 %
2006 39 % +15 %
2007 (E-Verify with sanctions) 36 % (-9 %)
2008 33 % (-8 %)
2009 30 % (-9 %)
2010 29 % (-3 %)
2011 (E-Verify law upheld — May) 25 % (-14 %)
Source: Federal Trade Commission

As noted previously, the number of Utah children on public assistance who have their Social Security numbers used for employment purposes appears to be down as is the number of Utah employers paying wages to the Social Security numbers of children. This consistent with FTC reports that show an initial leveling off of employment-related identity theft and then a sharp drop since Utah's E-Verify requirements took effect.

This initial trend suggests that even a weak employment verification requirement with no enforcement mechanism may help reduce the incidence of child identity theft for employment purposes.

The uptick in rates in 2010 may be the result of outreach activities by Utah's Attorney General and other law enforcement, community, and business leaders to convince illegal immigrants that they had nothing to fear from weak E-Verify requirements and other illegal immigration provisions passed by the legislature.

Utah — Employment Related Identity Fraud Trends
Source: Federal Trade Commission

Year Employment-Related Identity Fraud as a Percentage of Total Identity Fraud Percentage Increase/Decrease from One Year to the Next
2002 8 % -
2003 9 % +12 %
2004 13 % +44 %
2005 12 % (-8 %)
2006 13 % +8 %
2007 13 % 0 %
2008 16 % +23 %
2009 E-Verify (public employers and contractors only - July) 16 % 0 %
2010 E-Verify (private employers 15 or more employees - July) 17 % +6 %
2011 13 % (-23 %)
Source: Federal Trade Commission

Recommendations and Conclusion

Given the already existing high rates of Social Security number-only employment-related child identity theft and the continuing hiring of people using children's Social Security numbers, a mandatory, nationwide E-Verify program with extremely strong employer sanctions should be implemented immediately in order to protect the futures of American children.

Employers should be required to use E-Verify to check the status of all current employees as well as new hires in order to identity individuals who are stealing our children's identities.

In addition, victims of employment-related identity theft should be allowed to sue employers for damages if employers fail to carry out proper employment verifications.

In conclusion, it is imperative that the United States government does everything possible to protect children who are America's future from massive, employment-related document fraud and child identity theft. The mandatory use of E-Verify can play a key role in defending our children's future.


Appendix A: "Illegal, but Not Undocumented: Identity Theft, Document Fraud, and Illegal Employment"

Appendix B: "Illegal Aliens: Turning the Dreams of American Children into Nightmares"

Appendix C: Selected References

Ronald Mortensen, "Illegal but Not Undocumented: Identity Theft, Document Fraud and Illegal Employment", www.cis.org/identitytheft.

Ronald Mortensen, "Illegal Aliens: Turning the Dreams of American Children into Nightmares", http://www.cis.org/mortensen/dreams.

Richard Power, Distinguished Fellow, Carnegie Mellon CyLab, "Child Identity Theft: New Evidence Indicates Identity Thieves are Targeting Children for Unused Social Security Numbers", http://www.cylab.cmu.edu/files/pdfs/reports/2011/child-identity-theft.pdf.

Employers Paying Wages to SSNs of [Utah] Children, http://www.citizensfortaxfairness.org/pdf/Identity%20Theft%20-%20Karen%2....

Video: Two-year-old Utah child ID theft victim including the arrest of the perpetrator, http://www.youtube.com/watch?v=agZamwVZkVo&feature=related.

Video: Illegal immigrant acknowledging use of fraudulently obtained Social Security number, http://www.youtube.com/watch?v=sHQ9sg4LRvc&feature=related.

Video, Denied internship because someone using ID had bad credit, http://www.youtube.com/watch?v=B2m_r_DJ0yQ.

Bob Sullivan, MSNBC, "What's it like to share your SSN with 50 people? Follow a victim's struggle", http://redtape.msnbc.msn.com/_news/2011/11/07/8687299-whats-it-like-to-s....

Bob Sullivan, MSNBC, "The secret list of ID theft victims Consumers could be warned, but U.S government isn't talking", http://www.msnbc.msn.com/id/6814673/#.T3-7YvBYunY.

Bob Sullivan, MSNBC, "Two lives, one Social Security number", http://redtape.msnbc.msn.com/_news/2008/05/27/6345863-two-lives-one-soci....

"Identity Theft And Your Social Security Number", SSA Publication No. 05-10064, ICN 463270, August 2009, http://www.ssa.gov/pubs/10064.html.

John Leland, The New York Times, "Stolen Lives: Some ID Theft Is Not for Profit, but to Get a job", http://www.nytimes.com/2006/09/04/us/04theft.html?_r=1&oref=slogin.

Bob Mims, Salt Lake Tribune, "ID theft is the No. 1 runaway U.S. crime", http://www.sltrib.com/business/ci_3778628.