Testimony of John S. Pistole, Assistant Director, Counterterrorism
Division, FBI
Before
the House Select Committee on Homeland Security
October 1, 2003
"Fraudulent Identification Documents and the Implications
for Homeland Security"
Good
morning Chairman Cox, Ranking Member Turner, and members of
the Committee. On behalf of the Federal Bureau of Investigation
(FBI), I would like to thank the Committee for affording us
the opportunity to participate in this forum and comment on
the use of fraudulent identification documents and the implications
for homeland security.
As this
Committee is well aware, the FBI, along with other federal
law enforcement agencies, investigates and prosecutes individuals
who use false identities, or the identities of others, to
carry out violations of federal criminal law. These violations
include bank fraud, credit card fraud, wire fraud, mail fraud,
money laundering, bankruptcy fraud, computer crimes, and fugitive
cases. When these crimes are carried out using a false or
stolen identity, investigation of the offenses becomes much
more complicated. The use of a false or stolen identity enhances
the chances of success in the commission of almost all financial
crimes. The identity provides a cloak of anonymity for the
subject, while the groundwork is laid to carry out the crime.
This includes the rental of mail drops, post office boxes,
apartments, office space, vehicles, and storage lockers, as
well as the activation of pagers, cellular telephones, and
various utility services.
Identity
theft, and the use of false identities, is not new to law
enforcement. For decades fugitives have changed identities
to avoid capture and check forgers have assumed the identity
of others to negotiate stolen or counterfeit checks. What
is new today is the pervasiveness of the problem. The Federal
Bureau of Investigation does not view the use of false identities
and identity theft as a separate and distinct crime problem.
Rather, it sees this issue as a component of many types of
crimes, which we investigate.
Advances
in computer hardware and software, along with the growth of
the Internet, have significantly increased the role that identity
theft and false identities play in crime. For example, the
skill and time needed to produce high-quality counterfeit
documents has been reduced to the point that nearly anyone
can become an expert. Criminals and terrorists are now using
the same multimedia software used by professional graphic
artists. Today's software allows novices to easily manipulate
images and fonts, allowing them to produce high-quality counterfeit
documents. The tremendous growth of the Internet, the access
it provides to such an immense audience and the anonymity
it allows users result in otherwise traditional fraud schemes
becoming magnified when the Internet is utilized as part of
the scheme. This is particularly true with identity theft
related crimes. Computer intrusions into the databases of
credit card companies, financial institutions, on-line businesses,
etc. to obtain credit card or other identification information
for individuals have launched countless identity theft related
crimes.
The impact
is greater than just the loss of money or property. As the
victims of identity theft well know, it is a particularly
invasive crime that causes immeasurable damage to the victim's
good name and reputation in the community; damage that is
not easily remedied.
Today,
the threat is made graver by the fact that terrorists can
utilize identity theft as well as Social Security Number fraud
to enable them to obtain such things as cover employment and
access to secure locations. These and similar means can be
utilized by terrorists to obtain Driver's Licenses, and bank
and credit card accounts through which terrorism financing
is facilitated. Terrorists and terrorist groups require funding
to perpetrate their terrorist agendas. The methods used to
finance terrorism range from the highly sophisticated to the
most basic. There is virtually no financing method that has
not at some level been exploited by these groups. Identity
theft is a key catalyst fueling many of these methods.
The crucial
element in the acceptance of any form of identification is
the ability to verify the actual true identity of the bearer
of the identification. In today's post-9/11 world, this element
is all the more important because, in order to protect the
American people, we must be able to determine whether an individual
is who they purport to be. This is essential in our mission
to identify potential terrorists, locate their means of financial
support, and prevent acts of terrorism from occurring.
Foreign
nationals who are present in the U.S. legally have the ability
to use various alternative forms of identification, most notably
a passport, for the purposes of opening bank accounts, gaining
access to federal facilities, boarding airplanes, and obtaining
a state driver's license. In addition, foreign nationals who
are present in the United States, either legally or illegally,
have the ability to obtain a passport from their own country'
s embassy or consular office.
The FBI
is concerned about the issuance of driver's licenses by states
without adequate verification of identity. The criminal threats
stem from the fact that the driver's license can be a perfect
"breeder" document for establishing a false identity.
The use of a false identity can facilitate a variety of crimes,
from money laundering to check fraud. And of course, the false
identity serves to conceal a criminal who is already being
sought by law enforcement. Such false identities are particularly
useful to facilitate the crime of money laundering, as the
criminal is able to establish one or more bank accounts under
completely fictitious names. Accounts based upon such fraudulent
premises greatly hamper money-laundering investigations once
the criminal activity is discovered. As the Committee is well
aware, the FBI is particularly concerned about fraudulent
financial transactions in the post 9/11 environment, given
the fact that foreign terrorists often rely on money transferred
from within the United States.
The ability
of an individual to create a well-documented, but fictitious,
identity in the United States provides an opportunity for
terrorists to move freely within the United States without
triggering name-based watch lists that are disseminated to
federal, state and local police officers. It also allows them
to board planes without revealing their true identity and
in some cases purchase firearms. All of these threats are
in addition to the transfer of terrorist funds, mentioned
earlier.
The FBI,
since 9/11/2001, has investigated numerous incidents where
terrorists have utilized false or stolen identifications.
For example, an Al-Qa'ida terrorist cell in Spain used stolen
credit cards in fictitious sales scams and for numerous other
purchases for the cell. They kept purchases below amounts
where identification would be presented. They also used stolen
telephone and credit cards for communications back to Pakistan,
Afghanistan, Lebanon, and other countries. Extensive use of
false passports and travel documents were used to open bank
accounts where money for the mujahadin movement was sent to
and from countries such as Pakistan and Afghanistan.
While
the 9/11 hijackers did not utilize fraudulent identification,
they did obtain US identification cards in their true names.
These are "legitimate" identification cards, but
they are not issued by any state or federal agency. Some of
the vendors the hijackers received these cards from were involved
in fraudulent identification cases--they were subsequently
charged and arrested. In Virginia, some of the hijackers used
a loophole to apply for, and receive, legitimate state identification
cards and Driver's Licenses.
Investigation
and interviews of detainees have included the following instances
of fraudulent documents and use of false identification related
to terrorism matters: 1) A Pakistani detainee who served as
a doctor and guard for the Taliban was detained at JFK for
attempting to enter the US on a forged passport; 2) An Iraqi
detainee purchased a false Moroccan passport for approximately
$150.00 in US currency, and used it to enter Turkey where
he was arrested; 3) An Algerian detainee requested asylum
in Canada after entering that country on a false passport;
4) A Yemeni detainee acquired a false Yemeni passport and
was able to get a Pakistani visa; and 5) An Algerian detainee
obtained a French passport in an alias name and used it to
travel to London. The cost for this false passport was 3,000
French Francs (about $530 US, according to the Council of
Economic Advisors).
The FBI
has seen other examples of document and identification fraud
in our investigations related to terrorism, to include: 1)
the April 2003 arrest of William Joseph Krar in Tyler, Texas.
Krar is the subject of a fraudulent identification matter,
which was initiated in August 2002 based upon information
developed following the delivery of a package of fake identification
cards to the wrong address. The package, which contained numerous
false identifications, had been mailed from Krar in Tyler,
Texas to an individual in New Jersey, an admitted member of
the New Jersey Militia. The identities included a Defense
Intelligence Agency identification, a United Nations Observer
Badge and a Federal concealed weapons permit; 2) former Top
Ten Most Wanted fugitive Clayton Lee Waagner was found to
have in his possession fraudulent US Marshal's badges and
a significant amount of equipment for making fraudulent identification
cards, in addition to bomb making materials and large amounts
of currency; and 3) The investigation of the bombing of the
Oklahoma City Murrah Federal Building was a collaborative
effort between by the FBI and many other federal, state, and
local law enforcement agencies. The evidence developed and
presented in court led to the convictions of both Timothy
McVeigh and Terry Nichols by two separate juries of their
peers. McVeigh and Nichols, like others planning to commit
criminal acts, utilized aliases. McVeigh was also known to
utilize fraudulent identification.
The FBI
has implemented a number of initiatives to address the various
fraud schemes being utilized by terrorists to fund their terrorist
activities. One involves targeting fraud schemes being committed
by loosely organized groups to conduct criminal activity with
a nexus to terrorist financing. The FBI has identified a number
of such groups made up of members of varying ethnic backgrounds,
which are engaged in widespread fraud activity. Members of
these groups may not themselves be terrorists, but proceeds
from their criminal fraud schemes have directly or indirectly
been used to fund terrorist activity and/or terrorist groups.
By way of example, the terrorist groups have siphoned off
portions of proceeds being sent back to the country from which
members of the particular group emigrated. We believe that
targeting this type of activity and pursuing the links to
terrorist financing will likely result in the identification
and dismantlement of previously unknown terrorist cells. Prior
to 9/11, this type of terrorist financing often avoided law
enforcement scrutiny. No longer. The FBI will leave no stone
unturned in our mission to cut off the financial lifeblood
of terrorists.
Another
initiative has been the development of a multi-phase project
that seeks to identify potential terrorist related individuals
through Social Security Number misusage analysis. The Terrorist
Financing Operations Section of the FBI works with the Social
Security Administration's Office of the Inspector General
for SSN verification. Once the validity or non-validity of
the number has been established, investigators look for misuse
of the SSNs by checking immigration records, Department of
Motor Vehicles records, and other military, government and
fee-based data sources. Incidents of suspect SSN misusage
are then separated according to type. Predicated investigative
packages are then forwarded to the appropriate investigative
and prosecutive entity for follow-up.
The events
of 9/11 forever changed our world. As unpleasant as it may
be, we must face the realities of our current world as they
relate to protecting the people of the United States. This
requires continual vigilance, particularly when it comes to
being able to detect and deter those who might abuse the system
to directly cause harm, or those who might aid and abet the
financing of terrorist operations.
I again
want to thank you for your invitation to speak here today,
and on behalf of the FBI, look forward to working with you
on this very important topic.
|