Is Nothing Sacred? Identity Theft Hits Federal Reserve Bank of New York

February 17, 2010

Sometimes you just wonder where and when it all ends -- or whether it's just a bottomless cesspool and we're simply spending our time snorkeling in the filth. 

Thirty-five-year-old Curtis Wiltshire worked as an information and technical analyst at the Federal Reserve Bank of NY ("FRB-NY") in lower Manhattan, where he had access to the personal identification information (including names, dates of birth, Social Security numbers, and photographs) of many employees. In 2006, he stole identification information from FRB-NY and provided that to his forty-one-year-old brother Kenneth.  Both brothers then used that identification information, and additional identification information Kenneth had stolen elsewhere, to apply for, and obtain, educational loans in the names of the stolen identities. Over the course of the scheme, the brothers collectively sought student loans in an amount over $450,000.  In the course of this scheme, Kenneth sought loans in an amount over $525,000; and, separately, Kenneth engaged in another scheme using the stolen identification information and photographs, to apply for boat and recreational vehicle loans.

Among the actions taken in order to execute the fraudulent student, boat, and recreational vehicle loans schemes, were the following:

  • the creation of fake college and university transcripts and related documents;
  • the manufacture of fake identification documents, such as driver's licenses, some of which contained photographs of employees of the FRB-NY;
  • the creation of fake utility bills, tax returns, and W-2 documents;
  • the opening of bank and brokerage accounts into which the fraudulently obtained loan proceeds could be deposited; and
  • the use of prepaid cellular telephones, so that lenders could contact the Wiltshire brothers about the fraudulent loan applications in a way that would not be easily associated with the defendants.

On February 11, 2010, the U. S. Attorney's Office for the Southern District of New York announced that Curtis Wiltshire pleaded guilty to bank fraud and aggravated identity theft; and that Kenneth Wiltshire pleaded guilty to mail fraud and aggravated identity theft. Curtis was sentenced to forty months in prison, three years of supervised release, and was ordered to forfeit $200,000 (restitution will be decided at a later date). Kenneth was sentenced to 57 months in prison, three years of supervised release, and was ordered to pay over $1 million in restitution and to forfeit $525,160. The sentences included a mandatory minimum two-year sentence imposed on aggravated identity theft charges.

In imposing the sentences, United States District Judge P. Kevin Castel  described the Wiltshire brothers' schemes as a "special breach of trust" that "undermine faith in good, worthy programs" and  constitute a "tear in the public fabric."  Carefully selected words and well-crafted phrases that cut to the heart of the matter.  Judge Castel got it right when he elevated this case from its apparent banality.  This was not a crime that took place at "a" bank.  This was the venerable Fed. This was not merely the theft of a single check but a scheme to steal the personal identities of many Fed employees. This was not an unsophisticated heist used to fund a lavish lifestyle but a calculated crime that, in part, victimized an already over-burdened student-loan system. Frankly, if Judge Castel had added one or two zeroes to the end of the prison sentences, it would have been okay with me. 

The saddest part of this case is not that you come away in disbelief when you learn it happened at the Fed -- no, that's bad enough; the worst part is that you realize that you're not all that surprised to learn about what happened or where.  We've simply come to expect that this is the new normal.  At best, we shrug.