U. S. Secret Service - Investigations

Visitors Since Sept. 11, 2006

United States Secret Service Investigations

Telecommunication fraud losses are estimated at more than a billion dollars yearly. One of the largest "markets" for this type of fraud is the cloning of cellular telephones, a relatively simple procedure that can be done with the purchase of over-the-counter electronic equipment. When an individual transmits with a cellular telephone, the telephone emits a burst of electronic information. Within this burst of information is the electronic serial number (ESN), the mobile identification number (MIN) and other electronic identification signals, all of which can be illegally captured through the use of an ESN reader. Once captured, this information is transported through a computer onto microchips in the cellular telephones. These new telephones can be used for up to 30 days before the fraudulent charges are discovered. Cell telephones are being used extensively by organized criminal groups and drug cartels, as well as several Middle Eastern groups. Using acquired

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Telecommunications Fraud

investigative expertise and state-of-the-art electronic equipment, the Secret Service now has the ability to effectively investigate the use of such telephones. This is another example of law enforcement using technology to target criminal enterprise.

The Secret Service has become the recognized law enforcement expert in the field of telecommunications fraud. It works closely with other law enforcement agencies, as well as representatives of the telecommunications industry in conducting telecommunications fraud investigations. These types of investigations, in many instances, act as a nexus to other criminal enterprises, such as access device fraud, counterfeiting, money laundering, and the trafficking of narcotics. During fiscal year 1996, the Secret Service opened 555 cases and arrested 556 individuals for telecommunications fraud.

Program Fraud

The Program Fraud Investigations Branch was created to coordinate investigations related to fraud committed against government programs that are within the investigative jurisdiction of the Secret Service. This Branch is responsible for identifying systemic weaknesses in government programs that permit recurring criminal activity, and recommend corrective measures to strengthen these systems, (e.g., EBT, food stamps), During fiscal year 1996, the Secret Service arrested 1,102 individuals in all areas of program fraud.

Hundreds of millions of government checks and bonds are issued by the United States each year. This large number attracts criminals who specialize in stealing and forging checks/bonds from mail boxes in apartment houses and private homes. During a fraudulent transaction, a check/bond thief usually forges the payee's signature and presents false identification.

In March 1994, the Secret Service established "Operation TRIP," which was created to identify systemic weaknesses in the Treasury Department's disbursement systems and to subsequently suppress the associated fraudulent activities involving these systems worldwide.

In a cooperative effort with other government agencies, the Financial Crimes Division has assisted in establishing uniform standards of benefit recipient verification, developed anti-fraud disbursement procedures, and identified weaknesses in current verification systems and proposed acceptable alternatives to eliminate program fraud in this country and abroad.

To date, the Financial Crimes Division has assisted Operation TRIP, in the Philippines, Canada, Guam, Puerto Rico, Spain, Italy, Germany, Japan, Korea, and the United Kingdom.

Congress enacted the Food Stamp Act of 1977 to provide nutritional food to low-income families. It further directed the Secret Service to aggressively pursue fraud in the food stamp program. The possession or use of Food Stamp Coupons, Authorization to Participate cards, or Electronic Benefit Transfer cards by unauthorized persons compromises the integrity of the Food Stamp Program and is a criminal violation of the Food Stamp Act.

The Vice President's National Performance Review has designated the Electronic Benefits Transfer (EBT) card as the method of payment for the delivery of recurring government cash benefit payments to individuals without a bank account and for the delivery of noncash benefits such as Food Stamps. For individuals with bank accounts, Electronic Funds Transfer will continue as the preferred method of making federal benefit payments. The National Performance Review has created the Federal EBT Task Force to design and implement the new nationwide program which will annually deliver over $111 billion in benefits from government agencies, such as the US Department of Agriculture, Health and Human Services, Veterans Administration, Office of Personnel Management, and the Railroad Retirement Board.

The Federal EBT Task Force is attempting to design a system that will piggyback on the existing commercial credit/debit card infrastructure. The task force has proposed EBT payment services be provided by financial institutions designated as financial agents of the government. The new EBT card will be an online debit system with benefits periodically placed in a customer's account. Customers will use their cards to retrieve the cash benefits from Automated Teller Machines and food benefits from point-of-sale terminals at participating retail stores.