Faking your identity
Passport to fraud
July 6 2003
By Gary Hughes
The document trail started with a tour of cemeteries to collect names and dates of the births and deaths of children from their tombstones.
The next step was to apply for death certificates through the mail and, using the information on them, to apply again through the mail for birth certificates.
The birth certificates were then used to accumulate collections of other documents in the various names, including Medicare cards, voting registration and memberships to clubs and libraries.
Next the proof of identity documents were presented at branches of the four major banks to open accounts in the various names.
By then the bank accounts and array of documentation from government agencies and other organisations were so comprehensive that the false identities were, to all intents and purposes, real people.
They were also valuable.
The false identities were sold to a range of criminals, who in a number of cases then used them to obtain Australian passports.
When police eventually began tracing the false identities they led to two Czech criminals living in Sydney who were wanted in their own country for firearm and economic offences, an Australian drug trafficker travelling through Asia on an Australian passport obtained using the purchased "package" of identity documents and a second Australian drug trafficker caught in Eastern Europe who was also travelling on a false Australian passport.
Members of the NSW Commercial Crime Agency finally caught up with the prime offender after the state's births, deaths and marriages registry detected a suspicious postal application for a birth certificate - the 27th he had applied for.
Identity fraud is a growth industry and as fast as Australian law enforcement agencies, government departments and financial institutions move to plug gaps and loopholes, the criminals find new ways to exploit a fundamentally flawed system based on old-fashioned paper and cumbersome, slow-moving bureaucracies.
As one investigator told The Sunday Age: "The criminals are always well ahead of the legislators."
Despite attempts to tighten up the issue of crucial "Proof of Identity" documents in recent years, new cases came to light on an almost weekly basis.
The Sunday Age last week reported continuing concern about dozens of new Australian passports that were continuing to be lost or stolen in the mail, despite attempts to tighten procedures after more than 2000 were lost in the mail in 12 months. More than 14,000 Australian passports - a prime identity document under Australia's 100 points Proof of Identity system used by government departments, agencies and financial institutions - were reported lost or stolen in the five months to May this year.
Last week it was revealed by ABC's Four Corners that corrupt Australian Tax Office officials had used false tax file numbers to allegedly claim $2 million through fake tax returns.
And just two months ago Australian Federal Police raided a Sydney house and found a number of complete "identity packages", including birth certificates, tax office group certificates, Australia Post forms and templates for bank statements and council rate notices - all legal Proof of Identity documents.
No one knows how widespread identity fraud is in Australia.
Paul Baker, the associate director for Investigations and Forensic Services at accounting firm PricewaterhouseCoopers and a former NSW fraud detective involved in the investigation of the case involving the 27 false birth certificates, says it is the recognition of identity fraud as a problem that has grown, rather than the crime itself.
There is, he believes, far more identity fraud going on than is being detected.
"I think there's been a growth in realisation (of it happening) rather than a growth in the actual fraud method. It may have grown somewhat as some of the crime gangs realise 'why run into a bank with a gun, just run in with a counterfeit cheque instead'."
Tony Burke, the co-ordinator of the Fraud Taskforce headed by the Australian Bankers Association and supported by federal and state police and law enforcement agencies, agrees that the level of identity fraud is virtually impossible to estimate because of the extent of undetected and unreported cases.
The taskforce has just completed a confidential survey of ABA members aimed at identifying the nature and scale of identity fraud.
The Australian Transaction Reports and Analysis Centre (Austrac), the federal agency responsible for enforcing financial transaction legislation and battling money laundering, is also waiting for a separate report on the scale and cost of identity fraud. The report, due to be handed over this month, is also expected to estimate for the first time the level of identity fraud going undetected.
There are two broad methods of identity fraud. You either falsely obtain genuine documents, or you counterfeit them.
Baker said that up until the late 1990s, the biggest problem was people falsely obtaining real documents, because the genuine items were difficult to counterfeit. But the improvements in computers, scanners and printers, and the tightening up in some states of the issuing of identity documents, has seen a shift in recent years to counterfeiting.
Fake forms of identity, including some targeted specifically at Australia, are increasingly available for sale through the internet. A search by The Sunday Age last week found a range of Australian and international student cards selling for upwards of $A35, driving licences from every state in the United States, an Australian driving licence for $US49, European identity cards and even fake identification for South Australian police and sheriff's officers.
One internet site boasted it could provide official certificates from any country in the world for $US189, including baptism and death certificates, and customs documentation for $US249.
The sites appear to evade prosecution by describing the fake identification as "novelty" merchandise and placing disclaimers on their sites that purchasers should not break the law.
Foreign passports, which are recognised under Australian laws as an official Proof of Identity document, are also available for sale over the internet.
For those wanting to obtain real Australian documentation in a false name, there are detailed instructions on how to set up a false identity within Australia from outside the country.
Reborn Overseas _ Identity Building in Europe, Australia and New Zealand provides step-by-step instructions, including the postal addresses of births, deaths and marriages registries in each state. It shows how to arrange a forwarding postal address in Australia and then research and apply for a birth certificate, Medicare card, enrol to vote and obtain a library card.
It even advises how to avoid the cross-referencing of births and deaths on single data bases now being carried out by NSW and Victorian registries by applying for a certificate for someone who was born in one state and died in another, or using the identity of someone who was born in Britain, but died in Australia.
Having obtained the basic documentation needed, the user is advised to send it on ahead to the Australian postal address ("never, ever cross an international border with more than one set of identity documents") and travel to Australia on a tourist visa, where the new identity can be assumed. The instructions then detail how to obtain more documentation, including a driver's licence, tax file number and Australian passport, open up bank accounts in the false identity and even create forged education records to get a job.
The instructions advise that Australia is an easy target for assuming a false identity because the concentration of population in the large metropolitan areas "is perfect for the new identity seeker because it allows you to become anonymous soon after arrival".
The dangers posed by identity fraud have been given new impetus by the rise in international terrorism since the September 11, 2001 attacks in the US and the fears that bundles of pre-packaged false identities could be sold to terrorists.
The international co-ordinating body on money laundering, the Financial Action Task Force, late last month issued 40 new recommendations for its member countries, including Australia, on combating terrorist financing. The recommendations include that as part of establishing identities, a financial institution must also "determine whether the customer is a politically exposed person" and take steps to establish the source of their wealth and funds.
A planned review of Australia's Financial Transactions Reporting Act, the key legislation aimed at preventing fraud and money laundering, has now been brought forward in light of the recommendations.
One of the greatest problems in the battle against identity fraud is the growing sophistication of the methods being used, which in most cases stay ahead of detection methods.
Paul Baker warns that attempts to prevent counterfeiting official documents by using security devices such as those on banknotes will not work.
"It hasn't deterred the currency counterfeiters," says Baker. "Watermarks or other devices within their letterheads will slow them (identity fraudsters) down for a little bit, but it's not going to stop them."
Tony Burke also concedes that it is hard to keep up with the latest hi-tech methods used by identity fraudsters, but says the gap is not as wide as some people claim.
"Yes, of course, the rapidity with which technology advances happen means the bad guys will take a step forwards. But banks and others are pretty quickly behind them."
The financial transactions legislation, details the documents required under the 100 points system of proof of identity, is now 15 years old and some critics believe the types of documents and the weight given to them - a birth certificate or passport are the most valuable and worth 70 points compared to 40 points for a driver's licence or student card and 25 points for an electricity, gas or water bill - are outdated.
Of particular concern is the weight given to birth certificates, which have proven relatively easy to obtain or forged and usually form the cornerstone of false identities.
Although NSW and Victoria have moved to tighten up the issuing and verification of birth certificates, there are still massive security gaps. Other states are lagging far behind in moving to computerised databases that can be cross-referenced, allowing fraudsters to obtain genuine birth certificates in one jurisdiction and use them to obtain other documentation in another.
Tony Burke admits there are concerns about the ability to authenticate birth certificates, but says they are now being used at a much lower rate as proof of identity.
The confidential survey just completed by the bankers' association also looks at the types of false documents most often presented. Burke says it is too early to say whether the ABA will recommended a change in the weighting given to birth certificates as part of a review of the FTR Act now underway, but concedes that "maybe the status of birth certificates will change".
Paul Baker says the use of birth certificates as a primary identity document leaves a "big hole" in the system, given that most states are yet to improve their registry systems. And there is the problem of not being able to quickly cross-reference people born in one state and dying in another.
"Because the birth certificate has such significant point value, it makes it basically the primary or principal document of identification," says Baker. "I've yet to have anyone explain to me why. You can't attach a photograph to it, obviously. Why it should it be worth so much?"
Austrac's deputy director of Money Laundering Deterrence, Liz Atkins, says the problem has always been the verification of documents, rather than the 100 points system itself. "The 100 points system is still a valid system of checking identity, but we need to look at ways of verifying the documents," she said.
The review of the FTR Act will include possible changes to the system, based on the findings on the two new reports on the scale and nature of identity fraud.
"We're not specifically saying the review will make changes to the 100 point system, although obviously it is on the table," says Atkins. "We certainly see it as an issue. The problem is that pending the study, a lot of our information is anecdotal."
The ABA-led Fraud Taskforce last month agreed to commission a feasibility study of a computerised nation-wide "electronic gateway" for verifying identity documents, which would see the linking of data bases of agencies and government departments that issue documents, such as motor vehicle licensing departments, births, deaths and marriage registries, Medicare, and the departments of Foreign Affairs and Immigration.
Banks and other organisations or government departments needing to verify whether documents were genuine would be able to access all the necessary data bases through the one secure "gateway".
Taskforce co-ordinator Tony Burke admits the gateway concept would be a massive undertaking, but believes it could grow slowly from an initial small hub of organisations. Other data bases would be brought online as agencies became fully computerised and met the required levels of security and other checks to ensure the authenticity of documents they issue.
Burke says the concept also needs the full support of state and federal governments, which would have to bear the cost of bringing their departments and agencies up to the required levels of security and document management.
Austrac's Liz Atkins says there are also policy issues for governments to work through involved in any electronic gateway, not least privacy concerns.
"Although my view has always been what's the bigger invasion of privacy, having your identity stolen or having someone be able to check your documents?" she adds.
An alternative to laborious cross-referencing and verification of documents is what's seen as the new generation in proof of identity, biometrics - the use of unique biological traits such as fingerprints or iris scans or, ultimately, DNA. The digital information would then be stored on chips embedded in identity documents.
But Tony Burke warns biometrics are not the panacea many people predict.
"There are certainly opportunities for biometrics to play a role," he says. "But if the wrong person turns up at the time the document is created with biometric evidence, then you've got a counterfeit document effectively operating forever."
http://www.theage.com.au/articles/2003/07/06/1057179212905.html
July 6 2003
By Gary Hughes
The document trail started with a tour of cemeteries to collect names and dates of the births and deaths of children from their tombstones.
The next step was to apply for death certificates through the mail and, using the information on them, to apply again through the mail for birth certificates.
The birth certificates were then used to accumulate collections of other documents in the various names, including Medicare cards, voting registration and memberships to clubs and libraries.
Next the proof of identity documents were presented at branches of the four major banks to open accounts in the various names.
By then the bank accounts and array of documentation from government agencies and other organisations were so comprehensive that the false identities were, to all intents and purposes, real people.
They were also valuable.
The false identities were sold to a range of criminals, who in a number of cases then used them to obtain Australian passports.
When police eventually began tracing the false identities they led to two Czech criminals living in Sydney who were wanted in their own country for firearm and economic offences, an Australian drug trafficker travelling through Asia on an Australian passport obtained using the purchased "package" of identity documents and a second Australian drug trafficker caught in Eastern Europe who was also travelling on a false Australian passport.
Members of the NSW Commercial Crime Agency finally caught up with the prime offender after the state's births, deaths and marriages registry detected a suspicious postal application for a birth certificate - the 27th he had applied for.
Identity fraud is a growth industry and as fast as Australian law enforcement agencies, government departments and financial institutions move to plug gaps and loopholes, the criminals find new ways to exploit a fundamentally flawed system based on old-fashioned paper and cumbersome, slow-moving bureaucracies.
As one investigator told The Sunday Age: "The criminals are always well ahead of the legislators."
Despite attempts to tighten up the issue of crucial "Proof of Identity" documents in recent years, new cases came to light on an almost weekly basis.
The Sunday Age last week reported continuing concern about dozens of new Australian passports that were continuing to be lost or stolen in the mail, despite attempts to tighten procedures after more than 2000 were lost in the mail in 12 months. More than 14,000 Australian passports - a prime identity document under Australia's 100 points Proof of Identity system used by government departments, agencies and financial institutions - were reported lost or stolen in the five months to May this year.
Last week it was revealed by ABC's Four Corners that corrupt Australian Tax Office officials had used false tax file numbers to allegedly claim $2 million through fake tax returns.
And just two months ago Australian Federal Police raided a Sydney house and found a number of complete "identity packages", including birth certificates, tax office group certificates, Australia Post forms and templates for bank statements and council rate notices - all legal Proof of Identity documents.
No one knows how widespread identity fraud is in Australia.
Paul Baker, the associate director for Investigations and Forensic Services at accounting firm PricewaterhouseCoopers and a former NSW fraud detective involved in the investigation of the case involving the 27 false birth certificates, says it is the recognition of identity fraud as a problem that has grown, rather than the crime itself.
There is, he believes, far more identity fraud going on than is being detected.
"I think there's been a growth in realisation (of it happening) rather than a growth in the actual fraud method. It may have grown somewhat as some of the crime gangs realise 'why run into a bank with a gun, just run in with a counterfeit cheque instead'."
Tony Burke, the co-ordinator of the Fraud Taskforce headed by the Australian Bankers Association and supported by federal and state police and law enforcement agencies, agrees that the level of identity fraud is virtually impossible to estimate because of the extent of undetected and unreported cases.
The taskforce has just completed a confidential survey of ABA members aimed at identifying the nature and scale of identity fraud.
The Australian Transaction Reports and Analysis Centre (Austrac), the federal agency responsible for enforcing financial transaction legislation and battling money laundering, is also waiting for a separate report on the scale and cost of identity fraud. The report, due to be handed over this month, is also expected to estimate for the first time the level of identity fraud going undetected.
There are two broad methods of identity fraud. You either falsely obtain genuine documents, or you counterfeit them.
Baker said that up until the late 1990s, the biggest problem was people falsely obtaining real documents, because the genuine items were difficult to counterfeit. But the improvements in computers, scanners and printers, and the tightening up in some states of the issuing of identity documents, has seen a shift in recent years to counterfeiting.
Fake forms of identity, including some targeted specifically at Australia, are increasingly available for sale through the internet. A search by The Sunday Age last week found a range of Australian and international student cards selling for upwards of $A35, driving licences from every state in the United States, an Australian driving licence for $US49, European identity cards and even fake identification for South Australian police and sheriff's officers.
One internet site boasted it could provide official certificates from any country in the world for $US189, including baptism and death certificates, and customs documentation for $US249.
The sites appear to evade prosecution by describing the fake identification as "novelty" merchandise and placing disclaimers on their sites that purchasers should not break the law.
Foreign passports, which are recognised under Australian laws as an official Proof of Identity document, are also available for sale over the internet.
For those wanting to obtain real Australian documentation in a false name, there are detailed instructions on how to set up a false identity within Australia from outside the country.
Reborn Overseas _ Identity Building in Europe, Australia and New Zealand provides step-by-step instructions, including the postal addresses of births, deaths and marriages registries in each state. It shows how to arrange a forwarding postal address in Australia and then research and apply for a birth certificate, Medicare card, enrol to vote and obtain a library card.
It even advises how to avoid the cross-referencing of births and deaths on single data bases now being carried out by NSW and Victorian registries by applying for a certificate for someone who was born in one state and died in another, or using the identity of someone who was born in Britain, but died in Australia.
Having obtained the basic documentation needed, the user is advised to send it on ahead to the Australian postal address ("never, ever cross an international border with more than one set of identity documents") and travel to Australia on a tourist visa, where the new identity can be assumed. The instructions then detail how to obtain more documentation, including a driver's licence, tax file number and Australian passport, open up bank accounts in the false identity and even create forged education records to get a job.
The instructions advise that Australia is an easy target for assuming a false identity because the concentration of population in the large metropolitan areas "is perfect for the new identity seeker because it allows you to become anonymous soon after arrival".
The dangers posed by identity fraud have been given new impetus by the rise in international terrorism since the September 11, 2001 attacks in the US and the fears that bundles of pre-packaged false identities could be sold to terrorists.
The international co-ordinating body on money laundering, the Financial Action Task Force, late last month issued 40 new recommendations for its member countries, including Australia, on combating terrorist financing. The recommendations include that as part of establishing identities, a financial institution must also "determine whether the customer is a politically exposed person" and take steps to establish the source of their wealth and funds.
A planned review of Australia's Financial Transactions Reporting Act, the key legislation aimed at preventing fraud and money laundering, has now been brought forward in light of the recommendations.
One of the greatest problems in the battle against identity fraud is the growing sophistication of the methods being used, which in most cases stay ahead of detection methods.
Paul Baker warns that attempts to prevent counterfeiting official documents by using security devices such as those on banknotes will not work.
"It hasn't deterred the currency counterfeiters," says Baker. "Watermarks or other devices within their letterheads will slow them (identity fraudsters) down for a little bit, but it's not going to stop them."
Tony Burke also concedes that it is hard to keep up with the latest hi-tech methods used by identity fraudsters, but says the gap is not as wide as some people claim.
"Yes, of course, the rapidity with which technology advances happen means the bad guys will take a step forwards. But banks and others are pretty quickly behind them."
The financial transactions legislation, details the documents required under the 100 points system of proof of identity, is now 15 years old and some critics believe the types of documents and the weight given to them - a birth certificate or passport are the most valuable and worth 70 points compared to 40 points for a driver's licence or student card and 25 points for an electricity, gas or water bill - are outdated.
Of particular concern is the weight given to birth certificates, which have proven relatively easy to obtain or forged and usually form the cornerstone of false identities.
Although NSW and Victoria have moved to tighten up the issuing and verification of birth certificates, there are still massive security gaps. Other states are lagging far behind in moving to computerised databases that can be cross-referenced, allowing fraudsters to obtain genuine birth certificates in one jurisdiction and use them to obtain other documentation in another.
Tony Burke admits there are concerns about the ability to authenticate birth certificates, but says they are now being used at a much lower rate as proof of identity.
The confidential survey just completed by the bankers' association also looks at the types of false documents most often presented. Burke says it is too early to say whether the ABA will recommended a change in the weighting given to birth certificates as part of a review of the FTR Act now underway, but concedes that "maybe the status of birth certificates will change".
Paul Baker says the use of birth certificates as a primary identity document leaves a "big hole" in the system, given that most states are yet to improve their registry systems. And there is the problem of not being able to quickly cross-reference people born in one state and dying in another.
"Because the birth certificate has such significant point value, it makes it basically the primary or principal document of identification," says Baker. "I've yet to have anyone explain to me why. You can't attach a photograph to it, obviously. Why it should it be worth so much?"
Austrac's deputy director of Money Laundering Deterrence, Liz Atkins, says the problem has always been the verification of documents, rather than the 100 points system itself. "The 100 points system is still a valid system of checking identity, but we need to look at ways of verifying the documents," she said.
The review of the FTR Act will include possible changes to the system, based on the findings on the two new reports on the scale and nature of identity fraud.
"We're not specifically saying the review will make changes to the 100 point system, although obviously it is on the table," says Atkins. "We certainly see it as an issue. The problem is that pending the study, a lot of our information is anecdotal."
The ABA-led Fraud Taskforce last month agreed to commission a feasibility study of a computerised nation-wide "electronic gateway" for verifying identity documents, which would see the linking of data bases of agencies and government departments that issue documents, such as motor vehicle licensing departments, births, deaths and marriage registries, Medicare, and the departments of Foreign Affairs and Immigration.
Banks and other organisations or government departments needing to verify whether documents were genuine would be able to access all the necessary data bases through the one secure "gateway".
Taskforce co-ordinator Tony Burke admits the gateway concept would be a massive undertaking, but believes it could grow slowly from an initial small hub of organisations. Other data bases would be brought online as agencies became fully computerised and met the required levels of security and other checks to ensure the authenticity of documents they issue.
Burke says the concept also needs the full support of state and federal governments, which would have to bear the cost of bringing their departments and agencies up to the required levels of security and document management.
Austrac's Liz Atkins says there are also policy issues for governments to work through involved in any electronic gateway, not least privacy concerns.
"Although my view has always been what's the bigger invasion of privacy, having your identity stolen or having someone be able to check your documents?" she adds.
An alternative to laborious cross-referencing and verification of documents is what's seen as the new generation in proof of identity, biometrics - the use of unique biological traits such as fingerprints or iris scans or, ultimately, DNA. The digital information would then be stored on chips embedded in identity documents.
But Tony Burke warns biometrics are not the panacea many people predict.
"There are certainly opportunities for biometrics to play a role," he says. "But if the wrong person turns up at the time the document is created with biometric evidence, then you've got a counterfeit document effectively operating forever."
http://www.theage.com.au/articles/2003/07/06/1057179212905.html
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