From: "Vladimir Z. Nuri" <vznuri@netcom.com>
Date: Thu, 5 Nov 1998 06:17:41 +0800
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Subject: IP: [FP] L.A. DMV Tries to Stem the Tide of Fake Licenses
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From: "ScanThisNews" <mcdonalds@airnet.net>
Subject: IP: [FP] L.A. DMV Tries to Stem the Tide of Fake Licenses
Date: Mon, 2 Nov 1998 22:30:13 -0600
To: ignition-point@majordomo.pobox.com


SCAN THIS NEWS

[This is a little dated, but well worth reading]

--------------------------------------------

Sunday, April 5, 1998

DMV Tries to Stem the Tide of Fake Licenses

Crime: Demand for IDs fuels counterfeiting rings and corruption inside the
agency. Officials respond with anti-tampering features, more monitoring of
workers.

By VIRGINIA ELLIS, Times Staff Writer

SACRAMENTO - The California driver's license's preeminence as a form of
identification has spawned a thriving black market for fraudulent licenses
and a major corruption scandal in the state's motor vehicle department,
records and interviews show.

In recent years, as the lowly driver's license has been redesigned to make
it more tamper-resistant, the card has increasingly become the dominant
piece of identification for cashing checks, obtaining credit and securing
government services.

This, in turn, has caused the black market value for licenses to soar,
providing a catalyst for counterfeiting and bribery of Department of Motor
Vehicles employees. Scores of DMV workers in offices from San Diego to
Sacramento already have been caught illegally issuing driver's licenses, and
officials say many more are under investigation.

"We have, in effect, created a cottage industry," said Steve Solem, a DMV
deputy director. "A lot of different changes have been evolving over the
years that have made...people feel the need to get a driver's license at any
cost."

As a result, officials report that:

* Counterfeiting rings operate in every large city in the state, serving up
fake licenses of varying quality for sale on the streets. In Los Angeles,
business is so competitive that state investigators say a prospective
customer can bargain for the best price. A counterfeit identification
package, including a license, usually sells for $100, but state agents have
paid as little as $35.

* At many of the DMV's busiest offices, scam artists make use of loopholes
in procedures to get legitimate licenses, which are then peddled to
undocumented immigrants or suspended drivers. In Santa Clara County, a
four-month surveillance of DMV offices recently led to 26 felony and 16
misdemeanor arrests for using false documents to obtain driver's licenses.

* In the past two years, 144 DMV employees were fired or otherwise
disciplined for illegal activity, primarily driver's license fraud. Most
cases were referred for prosecution. The corruption affected more than a
third of the DMV offices.

"It's by far the biggest scandal and case of severe corruption in my 16
years here," said state Sen. Steve Peace (D-El Cajon), who heads a
legislative task force on personal privacy. "It's not a single organized
entity. It's a number of entrepreneurial criminal activities."

Late this year, officials plan to begin issuing new licenses with even more
sophisticated anti-tampering features to help stem the tide of
license-related crime. Among the features will be a tiny ghost image
designed to make it harder to substitute one person's photo for another.

"You've got to be as technologically alert as the criminals out there," said
DMV Director Sally Reed. "You've got to keep changing the license. You've
got to keep changing your practices."

Complicating the task is an overwhelming DMV workload. The department
licenses more than 20 million California drivers, issues more than 6 million
new licenses and identification cards a year, and operates 172 licensing
centers around the state.

How many fake and fraudulent licenses may be in circulation is impossible to
calculate. But state officials say the problem is rampant, its impact on
society insidious.

A fraudulent driver's license that is used to steal someone's identity can
cause years of frustration as the victim suddenly finds his or her credit
destroyed. Or the fake license can put a convicted drunk driver back on the
highway, where the next accident may cause someone's death.

The role of the driver's license in criminal activity was heightened not
only by the technological changes that made it so widely accepted, but by
governmental decisions to use it as a tool for punishment.

New laws have made a larger and larger pool of people susceptible to losing
their license for activities unrelated to driving. The license can be
suspended for spraying graffiti, failure to pay child support, truancy and
certain kinds of prostitution. And immigrants who lack proper proof of
residency cannot be issued one.

"If you're a drunk driver, you want a fake ID," said Alison Koch, a senior
special investigator for the DMV in Sacramento. "If you're in a gang, you
want a fake ID. If you're a deadbeat dad, you want a fake ID. If you're an
illegal alien, you want a fake ID. If you want to commit check or credit
card fraud, you want a fake ID.

"There is hardly a crime out there that doesn't demand some kind of
fraudulent identification."

For many minor crimes, she said, a bogus license - even a poor one - is all
the fraud artist needs. The quick glance that many business people give the
license before cashing a check or accepting a credit card is not enough to
discern that it's fake.

For more sophisticated crimes, said Vito Scattaglia, an area commander for
DMV investigators in Los Angeles, criminals want the real thing - and this
demand for legitimate licenses has put heavy pressure on low-level state
employees to commit fraud.

"When you have a technician who is making $2,000 to $2,400 a month and you
have an individual who is willing to pay $1,000 to process one driver's
license, you don't have to be a genius to figure out how tempting that is,"
he said.

But Peace, the state senator, said high-level officials did not recognize
how extensively their department had been infiltrated by criminals until an
embarrassing KCBS-TV Channel 2 report last year caught a DMV employee on
camera processing illegal licenses.

Until the Los Angeles broadcast, only a handful of DMV investigators had
been monitoring employee fraud, and they were struggling with a huge
backlog.

Then Reed temporarily assigned 213 DMV investigators to employee fraud and
announced that it would be the agency's No. 1 priority.

The results were staggering. Using everything from surveillance to
informants, investigators caught dozens of DMV employees around the state
processing illegal licenses. Many were teamed up with grifters on the
outside, who usually worked the DMV parking lots, preying mostly on
immigrants who would be guaranteed a license for about $1,000 to $2,000.

Typical was the case of an 18-year Torrance employee who was targeted after
a DMV computer in Sacramento showed irregularities in licenses he had
issued. After investigators interviewed dozens of his customers, the
employee was charged with computer fraud and altering public records.

"The first person I interviewed, I knew I was on the right trail," recalled
Ken Erickson, a senior DMV special investigator. "The customer was honest.
He said, 'Yeah, I'm here illegally and I can't read or write either English
or Spanish.'"

But, Erickson said, data the Torrance employee had entered into the DMV
computer stated that the man was a legal resident of California who had
passed the written driver's test in English.

Investigators searched the employee's car and found $14,280 in cash stashed
behind the front seat, Erickson said. They estimated that over a 15-month
period he had improperly issued at least 70 licenses. After pleading no
contest to two felony counts, he was fined $14,280 and placed on three years
probation. He also was fired and barred from future government employment.

The employee fraud, Peace said, is "not some sort of single grand conspiracy
with a godfather sitting on top pulling levers."

"What it has been is a culture within the department that has allowed for a
whole variety of entrepreneurial criminal behavior. It was a culture which
says, 'I've got my little deal and you've got yours. Don't mess with mine
and I won't mess with yours.'"

Although the problem predated Reed's appointment as director, Peace faulted
her for initially disbelieving it and being "slow to react" until the
television report.

Reed acknowledged the bad publicity was a wake-up call but disputed Peace's
contention the DMV has a culture of corruption, saying the vast majority of
the DMV's 8,600 workers are law-abiding.

A spokesman for the California State Employees Assn., which represents DMV
employees, accused the department of overreacting. He said the crackdown has
destroyed worker morale and become so broad that "it could very likely be
called a witch hunt."

Investigators concede that corruption within the DMV probably pales compared
to that on the outside.

Richard Steffen, chief consultant for a legislative task force investigating
state government, said crime rings are able to get legitimate licenses
simply by knowing how to work the system.

He said they know, for example, that photos and thumbprints are not taken
until the end of the licensing procedure, a process tailor-made for the use
of ringers. The ringer takes the driver's test, then the customer comes in
the next day and completes the process. "There is a pattern here that is
known on the street," said Steffen, who is preparing to release a report on
the DMV. "It's not like masterminds come up with this."

Birth certificates, which the DMV requires, are easily counterfeited, and
phony ones are hard to spot, officials said. The appearance of birth
certificates varies from state to state and sometimes, as in California,
from county to county. Adding to the problem is California's open birth
certificate procedure, which allows virtually anyone to get a certified copy
of anyone else's birth record.

One team of ringers arrested by the California Highway Patrol was found with
counterfeit birth certificates from Oklahoma, Utah, New York and Texas,
according to Bruce Wong, a senior DMV investigator in San Jose.

"They were driving up the state from Southern California, stopping at
different DMV offices and submitting license applications under different
names," he said. "In one day of driving, they had accumulated eight
different instructional permits, which they could then sell along with the
counterfeit birth certificate."

Solem said some loopholes in licensing procedures will be closed when the
department begins issuing the new licenses and taking photos and thumbprints
at the beginning of the process.

"But this is a problem that's going to be with us," he added. "Government
does something and the crooks figure a way around it and then government
catches up. It goes on and on."

Scattaglia said much of the counterfeiting may have its roots south of the
border, but no one knows for sure because investigators have only been able
to arrest the sellers, not the suppliers.

"We have gone into places and recovered sheets and sheets of holograms and
state seals - literally a setup [for] putting a license together," he said.
"But we've never found the commercial facility that has the printing presses
and all the orders. The informants we have all indicated that that place is
somewhere in Mexico."

Beth Givens, director of the San Diego-based Privacy Rights Clearinghouse, a
consumer information and advocacy program, predicted that driver's license
fraud will always be difficult to control because it's not a violent crime
and punishment is light.

"If these criminals happened to break and enter or use a gun, it would be
one thing," she said. "But because they're using paper and documents,
they're not seen as a threat to society."

Banking officials are starting to rethink their heavy reliance on the
driver's license. "That's certainly a trend that's underway because they are
increasingly fake," said Gregory Wilhelm, lobbyist for the California
Bankers Assn.

Los Angeles Times

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