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Immigration & Identity Theft

Presentation for LLS 2900 - 2/18/13
by Kim Howe on 25 February 2013

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Transcript of Immigration & Identity Theft

required employers to verify immigration status and made it illegal to knowingly hire unauthorized immigrants.

Must provide proof of identity + eligibility to work: green card, social security card, photo ID card (such as driver's license, state ID card, or school ID).

No centralized system for checking validity, however, so employers have no way of confirming identity and it is very easy to use a false identity, and even a totally invented one. Why do undocumented immigrants need false identities? Immigration Reform and Control Act (IRCA) of 1986: The Supreme Court has ruled that it is only a misdemeanor, not a felony, to work under a false identity, as long as the perpetrator did not know the identity already belonged to someone else. Immigration & Identity Theft Whose identities are being used? How are they obtained? How are they used? Why is it so hard to stop? How does it affect the victim? How should we think about this issue? 98% of immigrant identity theft is "SSN-only,” using a false SSN but using the immigrant's real name.

Numbers are often made up randomly (one SSA study showed thousands of workers using numbers like 123-45-6789 and 999-99-9999), but since half of all possible SSNs have already been issued, there's a strong likelihood it belongs to someone else.

Children under 18 are common victims due to the low likelihood of discovery. In Arizona, police have uncovered hospital workers stealing the SSNs of newborns for resale. An estimated 1.1 million children have had their identities used in this way in AZ alone.

Because names are not linked, SSNs are used by many people simultaneously - an average of 30 times. Numbers are often passed around families and neighborhoods. Establish a Separate Identity In general, the perpetrator wants to avoid entangling themselves with another real person's identity as much as possible. Purpose of Traditional Identity Theft Traditional Theft It requires that the perpetrator obtain credit under someone else's name in order to shift liability for fraudulent purchases. Purpose of Immigration-Based
Identity Theft Basic identity packets with a false Social Security card and photo ID are available for about $150 from corner black market dealers in most immigrant neighborhoods. "They take you to have your picture taken, and you give them half of the money. ... About one to two hours later, you meet at a second spot, and then they give you your card." - Ramon, immigrant from El Salvador, Minneapolis Original documents, like a stolen birth certificate or passport, cost upwards of $1,500 and take about a week for delivery. False identities are used mainly for obtaining work. SSA estimates that up to 80% of mismatched Social Security contributions come from agriculture, food service, construction, and hospitality, with California, Texas, and Illinois accounting for 70% of all instances. Over time, however, many immigrants rely on these constructed identities to build a life in the United States: obtaining credit, seeking medical care, and taking out loans for homes, cars, and small businesses. Immigration Law & Latinos
Spring 2013
Kim Howe Title II requires employers to submit earnings reports to the SSA and IRS. Wages are credited to an employee's "Master Earnings File" to determine the amount of benefits due at retirement. Baby Jane is born
in Massachusetts and receives her SSN.
A few years later her 9 digits are randomly selected by a black market ID dealer
in Iowa. The dealer uses
Jane's SSN to create
several dozen ID "kits." He meets Jose, an undocumented worker from Honduras, at a Home Depot and charges Jose $100 to take his picture and create a photo ID and fake Social Security card
to match Jane's
number. Jose gets a job
at a local factory. Human Resources has him complete an
i-9 and signs off on his documents. The company begins deducting taxes from each paycheck. Over the next 6 years, Jose takes out a loan on a car while sending money to his mom and sister
in Honduras.

Jane turns 9! After 10 years of work,
Jose has contributed $25,000 in income taxes, $15,000 to Social Security, and $4,000 to Medicare. He's just received a home loan and put a down payment on a small house.

Jane is just starting
7th grade. Income earned by an SSN that does not match the name on file with the Social Security Administration is credited to a limbo account called the "Earnings Suspense File." No benefits can be paid to the unmatched names and numbers in this file. The file has grown dramatically since 1986, reaching $217 billion in 1997 and over $500 billion by 2006. This represents $6-7 billion per year in revenue for Social Security and about $1.5 billion for Medicare. This doesn't mean there's a lot of extra cash available, however. The file is basically a big IOU... legally it must be left untouched in case those unmatched SSNs turn out to be errors, and the SSA has to pay out benefits. SSA is aware that up to 80% of these wages are from undocumented workers, but due to privacy laws, that information cannot be released to the original owner of the SSN. The SSA can notify the individual using the mismatched record and request a voluntary correction, but there are no penalties for not doing so. The government requires a 9 digit number to work, but doesn't seem to care what number you use. They'll take your taxes any way you like to give them.

Employers have you fill out forms attesting to the accuracy of employment documents, but intentionally avoid knowing too much.

Lenders will hide potential credit risks in order to encourage business until they need to collect.

Immigrant earnings are critical to the U.S. economy and the system is set up so that identity is no more than a hoop to jump through. The Government Benefits Business Benefits Credit activity under your SSN but a different name will NOT show up on your credit report or trigger an alert.  Instead, the credit reporting bureaus will simply start a second file with that number/name combo. Lenders can request reports that show all activity under a single SSN, regardless of name, but these reports are not available to individual consumers. While privacy rules prevent bureaus from warning consumers, lenders can still use the combined report to make a credit determination. [1] For this reason, you may be denied credit and never understand why. Banks & Lenders Employers Lenders benefit from immigrants buying cars and homes, and opening lines of credit. Employers benefit from access to an affordable workforce. In 2003, the SSA sent almost 1 million letters to employers with large numbers of mismatched SSNs. In many cases, employers did nothing,... ... unless employees were starting to organize. Then the employers could use the false identification as leverage. One day at work,
Jose is injured badly and is laid
up for 2 months. He gets minimal healthcare through his employer, but without disability insurance, the medical bills start to pile up.

He misses several payments on his house, and creditors begin
calling Jane's parents.
She's 14. If your SSN is being used in immigration-based identity theft, it is very likely that you may never find out. No one has to tell you, and your taxes, social security, and credit may never be impacted. However, it is possible that you might be affected and discover it in a number of ways... If you apply for government unemployment or other benefits but your SSN is shown as being employed elsewhere or in a higher income bracket, you may be denied. If you and someone else using your SSN both happen to be in the same private database (i.e. both of you working for the same company or part of a membership group), these private databases may be able to alert you. If the individual fails to pay taxes, the IRS may seek back taxes from you. If the individual defaults on a loan or line of credit, or if they fail to pay bills (even parking tickets) creditors may come after you or seek to have your wages garnished. If the individual using your SSN is arrested, that may show up on your background check. Just Playing the Game A comprehensive immigration reform plan, including legal access to work.

A centralized means for checking ID authenticity (E-verify).

An IRS/social security system for tracking and notifying individuals if their numbers are being used.

Revisions to privacy guidelines for the credit bureaus, IRS, and social security as they relate to identity theft.

Overall, a less hypocritical reliance on immigrant earnings while insisting that they stay off of the "official" books. Is there a way out? In a few years,
Jane will be ready to
get her first job and apply for school loans.

Will Jose's attempt to build a life destroy hers? Will he lose everything he's worked so
hard for? Green cards, or work visas, run around $150-$200. They're more valuable than a Social Security card because the green card indicates someone can legally live and work in the U.S. Baxter, A. and Espinoza, A. (2007). "False Documents: A Lucrative Business." Minnesota Public Radio. February 28. http://minnesota.publicradio.org/display/web/2006/12/22/fakeids

Bernstein, N. (2007). "Tax Returns Rise for Immigrants in U.S. Illegally." New York Times. April 16. http://www.nytimes.com/2007/04/16/nyregion/16immig.html?pagewanted=print

Gallegly, E. (2012). "Fraud by illegal immigrants destroying children’s lives." The Hill. April 26. http://thehill.com/blogs/congress-blog/homeland-security/223971-fraud-by-illegal-immigrants-destroying-childrens-lives

Germano, R. (2012). "Do Illegal Immigrants Pay Taxes?" RoyGermano.com August 24. http://roygermano.com/2011/02/28/do-illegal-immigrants-pay-taxes

Leland, J. (2006). "Immigrants stealing U.S. Social Security numbers for jobs, not profits." International Herald Tribune. September 4. http://www.nytimes.com/2006/09/04/world/americas/04iht-id.2688618.html?pagewanted=all&_r=1&

Loller, T. (2008). "Many Illegal Immigrants Pay Up at Tax Time." Associated Press. April 11. http://usatoday30.usatoday.com/money/perfi/taxes/2008-04-10-immigrantstaxes_N.htm

Mehta, C., Theodore, N., and Hincapie, M. (2003). Social Security Administration’s No-Match Letter Program: Implications for Immigration Enforcement and Workers’ Rights. November 20. http://www.nilc.org/document.html?id=8

Mims, B. (2006). “ID Theft is the No. 1 runaway U.S. crime.” Salt Lake Tribune. May 3. http://www.sutherlandinstitute.org/news/news_details.asp?c=1&id=72.

Mortensen, R. (2009) "Illegal, but Not Undocumented: Identity Theft, Document Fraud, and Illegal Employment." Center for Immigration Studies. July. http://www.cis.org/IdentityTheft

Ninety Ninth Congress. (1986). Immigration Reform & Control Act (Pub. L99-603). November 6. http://www.uscis.gov/ilink/docView/PUBLAW/HTML/PUBLAW/0-0-0-15.html

Porter, E. (2005). "Illegal Immigrants Are Bolstering Social Security with Billions." New York Times. April 5. http://www.nytimes.com/2005/04/05/business/05immigration.html

Porter, E. (2006). "Here Illegally, Working Hard, Paying Taxes." New York Times. June 19. http://www.nytimes.com/2006/06/19/business/19illegals.html?pagewanted=3&_r=0

SCFTB [State of California Franchise Tax Board0. (2008). 2008 e-file Handbook Supplement for Authorized e-file Providers (FTB Pub. 1345A). https://www.ftb.ca.gov/forms/misc/1345A.pdf

SSA OIG [Social Security Administration, Office of the Inspector General] (1997). Audit Report: Activity Related to the Suspense File (A-03-96-31001). September 15. http://oig.ssa.gov/sites/default/files/audit/full/html/96-31001.html

SSA OIG [Social Security Administration, Office of the Inspector General] (2002). Congressional Response Report: Status of the Social Security Administration’s Earnings Suspense File (A-03-03-23038). November.

SSA OIG [Social Security Administration, Office of the Inspector General] (2003). Congressional Response Report: Social Security Administration Benefits Related to Unauthorized Work (A-03-03-23053). March 18.

Sullivan, B. (2006). "The Hidden Cost of Illegal Immigration: I.D. Theft." MSNBC.com. April 4. http://www.nbcnews.com/id/12157299

Sullivan, B. (2005). "The Secret List of ID Theft Victims." MSNBC.com. January 29. http://www.nbcnews.com/id/6814673

USCIS [U.S. Citizenship & Immigration Services, Department of Homeland Security]. Form I-9, Employment Eligibility Verification (OMB No.1615-0047). http://www.uscis.gov/files/form/i-9.pdf

U.S. Supreme Court. (2009). FLORES-FIGUEROA v. UNITED STATES. May 4. http://www.supremecourt.gov/opinions/08pdf/08-108.pdf Nevertheless, the SSA accounts for this money in its projected budgets and uses these funds to cover current claims. If the SSA was ever required to pay benefits to earners in this file, the agency would not be able to do so.
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