Identity Theft and Fraud Prosecutions Under Federal Law.

Federal identity theft is prosecuted under 18 U.S.C. § 1028, and the maximum penalties that apply to an individual offense charged under this statute depend on the specific type of conduct involved. The statute also refers to several other federal identity theft crimes, and prosecution under one of the others is handled the same way as prosecution under the statute itself. Most other federal identity-theft-related offenses, however, are referred to as “aggravated identity theft,” and these carry a mandatory minimum sentence of two years, in addition to the penalties for the underlying predicate offense.

Unlike a conviction for most other federal criminal offenses, a conviction for aggravated identity theft carries not only sentencing consequences that can apply to individuals defendants but also financial obligations that can apply to those who have been wrongly implicated. Financial institutions that have suffered loss, individuals who have suffered financial or medical identity theft, and individuals that have devoted time to remediating the identity-theft harm they suffered all can seek restitution and restitution awards can potentially be substantial. In addition, some forms of identity theft that could be prosecuted as federal crimes may also carry penalties for a civil identity theft or fraud offense. A conviction for aggravated identity theft can also have repercussions outside of criminal court, and the penalties are not limited to those imposed at sentencing. For example, a conviction may limit your ability to obtain licensure for certain professional occupations and will limit your ability to obtain many types of employment.

When Does Identity Theft Become a Federal Crime?

The same conduct may be punishable under state identity theft statutes as well. Federal identity theft is primarily prosecuted under 18 U.S.C. § 1028. Section 1028(a)(7) of the statute makes it a crime, for example, to knowingly: “transfer, possess, or use, without lawful authority, a means of identification of another person.”

This statute applies to both individuals and financial institutions. If you face charges for identity theft, this provision is likely to be among those involved, and federal jurisdiction is likely to be asserted on the ground that the identity-theft conduct affected interstate or foreign commerce. Section 1028(c)(3) of the statute describes additional circumstances in which federal jurisdiction can also apply, providing that the statute reaches conduct where “the production, transfer, possession, or use prohibited by this section is in or affects interstate or foreign commerce, including the transfer of a document by electronic means,” or where “the means of identification, identification document, false identification document, or document-making implement is transported in the mail in the course of the production, transfer, possession, or use prohibited by this section.” While identity-theft-related conduct that takes place across state lines also implicates federal jurisdiction, it must still satisfy the jurisdictional requirements set forth in Section 1028. Section 1028 addresses multiple forms of prohibited conduct, not just identity theft per se. It is also one of several federal identity-theft laws that also cover unauthorized or unauthenticated identification features. Section 1028’s coverage includes:

Falsifying or manufacturing “identification documents”;

Using, transferring, possessing, or promoting “identification documents” falsely or without lawful authority;

Falsifying, manufacturing, knowingly possessing, knowingly transferring, and knowingly which means to make a “false identification document”;

Knowingly producing or possessing “qualifying identification documents” containing “false authentication features”;

Obstructing the removal of “qualifying identification documents” containing “false authentication features” from the market or from the use of others; and,

Conducting business with intent to use, transfer, or possibly sell “qualifying identification documents” containing “false authentication features.”

While similar in nature, “access-device fraud” is separately addressed under 18 U.S.C. § 1029. Thus, in order to understand the federal identity theft laws, it is important to distinguish between those criminal acts involving false or unlawfully-obtained means of identification and those involving the fraudulent use of access devices. These are two different federal criminal offenses, and criminal charges related to one may not necessarily preclude charges related to the other as well.

What is the Difference Between Sections 1028 and 1028A?

The key differences between Sections 1028 and 1028A are that Section 1028A (i) requires proof of an enumerated predicate offense in order to be charged and (ii) imposes a mandatory term of imprisonment that must run consecutively to the predicate offense. More specifically, these are the differences between Section 1028 and Section 1028A:

Section 1028A Requires a Predicate Felony, While Section 1028 Does Not

Unlike Section 1028, Section 1028A is not a standalone offense. Instead, Section 1028A is predicated upon a felony, the list of which is set forth in Section 1028A(c). While Section 1028A carries the additional burden of proof that the underlying offense is among those that satisfy its predicate requirements, this requirement provides an additional avenue for defense in many cases.

Section 1028A Mandatory Consecutive Sentences

Under Section 1028, defendants are sentenced for their underlying identity-theft offense. Under Section 1028A, defendants must serve an additional two-year term of imprisonment on top of whatever sentence they receive for their underlying predicate offense. While the term of imprisonment imposed under Section 1028A must run consecutively to the term of imprisonment imposed under the predicate offense, in cases involving multiple predicate offenses and multiple terms of imprisonment imposed under Section 1028A, the court has discretion to order the Section 1028A sentences to run concurrently.

Section 1028 Graduated Maximum Penalties

Section 1028 imposes a more traditional structure of maximum penalties. For example, under Section 1028(b)(1), if the defendant has obtained or intends to obtain “a total value of $1,000 or more in proceeds” in a one-year period as a result of conduct falling within Section 1028(a)(7), the maximum term of imprisonment for such conduct is fifteen years. Section 1028(b)(2) provides for a maximum term of imprisonment of five years “for any other offense involving a violation of subsection (a)(7).”

Section 1028A is a Separate Crime (Rather than a Sentencing Enhancement)

Along with the unique penalty structure, Section 1028A establishes a unique criminal statute. When first enacted, some federal judges interpreted Section 1028A as a sentencing enhancement rather than a separate crime. However, subsequent federal court decisions clarified that Section 1028A creates a separate federal criminal offense with its own elements.

Section 1028A Forbids Reducing Predicate Sentences in Order to Offset the Mandatory Additional Sentence

The separate-offense status of Section 1028A allows the government to prosecute aggravated identity theft independently of the predicate offense, and it also bars courts from reducing the sentence for the predicate offense in order to offset the additional two-year term of imprisonment imposed under Section 1028A.

Congress Enacted Aggravated Identity Theft Under Section 1028A in 2004

Congress created the offense of aggravated identity theft under Section 1028A in 2004. In doing so, Congress intended to increase the penalties for individuals who commit identity theft by incorporating a mandatory sentencing provision.

Most Common Section 1028A Predicate Offenses are Mail Fraud, Wire Fraud, and Bank Fraud

While there are various federal criminal offenses that qualify as predicates under Section 1028A, the most common are mail fraud, wire fraud, and bank fraud. These offenses are prosecuted under the U.S. Code sections 1341, 1343, and 1344, respectively.

This is the point at which most people call a lawyer. Spodek Law Group takes federal criminal defense cases nationwide from its New York and Los Angeles offices.

How Long Could I Go to Prison for Identity Fraud?

The maximum statutory penalties discussed above are relevant only insofar as they provide a cap for what a federal judge can impose at sentencing. For the vast majority of defendants, however, the amount of prison time they ultimately face (if any) will depend on the Federal Sentencing Guidelines, a separate set of documents that calculate a suggested sentencing range based on the defendant’s criminal history and the specific offense involved.

With respect to offenses charged under Section 1028, federal sentencing guidelines are generally determined using Section 2B1.1, which governs sentencing for theft and fraud-related offenses. One important aspect of Section 2B1.1 is that it requires a calculation of actual and intended financial loss, a factor that can substantially increase a defendant’s exposed prison time in many identity-theft cases. If a defendant’s actual or intended loss under Section 1028 is substantial, this can quickly result in a recommended sentence at or near the statute’s statutory maximum, and challenging the prosecution’s loss calculations can be a critical component of an effective defense strategy.

Along with loss calculations, criminal history and the nature of the alleged offense conduct also serve as important factors that contribute to a defendant’s exposed prison time under Section 1028. While a conviction under Section 1028 may permit probation in an appropriate case, such a result is generally out of reach in most cases, and a conviction under Section 1028A precludes probation entirely.

Although the Sentencing Guidelines are highly influential, the U.S. Supreme Court determined in United States v. Booker, 543 U.S. 220 (2005) that they are advisory in nature. As a result, if convicted, a defendant can ask the sentencing court to grant a “variance” from the advisory guideline range based on any of the factors identified in 18 U.S.C. § 3553(a).

Under 18 U.S.C. § 3553(a), federal sentencing judges are permitted to consider a wide range of relevant factors in order to impose an “adequate” sentence. This includes taking into account the defendant’s criminal history (or lack thereof), a defendant’s personal characteristics and obligations, the need for restitution, the need for general and specific deterrence, the nature and circumstances of the offense, and other factors deemed appropriate by the sentencing court. In a federal identity-theft case, defendants can often use these factors to demonstrate why a variance is warranted and why a lenient sentence is appropriate.

If you enter into a plea agreement, there is a chance your sentencing range will be governed by Rule 11(c)(1)(B) of the Federal Rules of Criminal Procedure. When a plea agreement is entered into under Rule 11(c)(1)(B), the agreement binds the sentencing court to the facts presented, but it does not bind the court to the resulting sentencing recommendation. This means that, despite any recommendations in the plea agreement, your sentencing judge can still impose a sentence outside of the recommended range.

Plea agreements under Rule 11(c)(1)(C) are different. When a plea agreement is accepted under Rule 11(c)(1)(C), it binds the sentencing court to the agreement’s sentencing recommendation. Because of this, accepting a plea under Rule 11(c)(1)(C) instead of Rule 11(c)(1)(B) will often result in a more favorable sentencing outcome, as the sentencing judge will be forced to abide by the recommendation even if it is otherwise not warranted under the Sentencing Guidelines.

What Defenses Can Defeat Aggravated Identity Theft Charges?

Various circumstances can render a defense that can defeat aggravated identity theft charges under 18 U.S.C. § 1028A. As noted above, the key differences between Sections 1028 and 1028A include the requirement of a predicate felony, a mandatory consecutive sentencing provision, and a unique criminal statute. Along with the additional requirements of showing identity misuse, the requirements of showing “unlawful use” under Section 1028A are more extensive, and defendants charged with violating the statute have numerous defense options available in many cases.

Among those options is, in some cases, arguing that the defendant did not have knowledge that the means of identification allegedly used in a fraudulent or criminal scheme belonged to an actual person. This defense has its roots in Flores-Figueroa v. United States, 556 U.S. 646 (2009), when the Supreme Court determined that Section 1028A(a)(1) requires the government to prove that the defendant knew the means of identification he or she transferred, possessed, or used belonged to another actual person. Writing for the Court, Justice Breyer explained that the word “knowingly” in Section 1028A(a)(1) modifies the phrase “of another person,” so the government must prove that the defendant knew the means of identification he or she transferred, possessed, or used belonged to another actual person.

In cases involving fabricated numbers or other identifiers, or cases involving so-called “synthetic identities,” which incorporate identifiers derived from real people (such as Social Security numbers) combined with fabricated information, the issue of whether a defendant knew that a means of identification belonged to an actual person can be a meaningful defense. However, an actual person’s identification may also be used in a synthetic identity, and proving that a defendant had knowledge that the means of identification they used belonged to a real person can often be achieved through circumstantial evidence.

Another potential defense to aggravated identity theft is based on the Dubin v. United States, 599 U.S. 110 (2023). ___ (2023). In Dubin, the Supreme Court narrowed the scope of Section 1028A’s application in order to align the statute with similar federal fraud statutes. The Court determined that “Section 1028A(a) applies to criminal offenses during which a defendant uses another person’s means of identification in order to commit a crime,” stating that “the fraudulent use of another’s identification has to be more than just an incident to the offense.” This means that the prosecution will have to prove that the identity misuse was a “core component of the offenses charged.”

Finally, defendants who use someone’s identification can also potentially argue that they are actually authorized to use the identification, and this can also serve as a viable defense in identity-theft cases. The fact that an identity was fraudulently used may also raise questions about the legitimacy of other transactions, and the fact that someone obtained a new identity can have implications for the identity theft and fraud investigation as well.

Flores-Figueroa v. United States was a unanimous decision that affirmed several important aspects of the meaning of Section 1028A. Even though the U.S. Supreme Court has since decided additional cases that further clarify aspects of the law, Flores-Figueroa remains an important case to keep in mind when crafting a defense strategy for individuals facing allegations of identity theft and fraud.

When Should I Hire a Federal Identity Theft Lawyer?

If you are being accused of a federal offense under Section 1028 or Section 1028A, you should preserve any documents or other records and all communications that relate to the identification or identity identifiers that may be at issue in your case. Then, promptly retain federal criminal-defense counsel to review any target letters or grand-jury subpoenas you received and to help protect you against potential criminal charges.

A federal identity theft lawyer should also help you in the event you are charged or indicted. While pre-indictment advocacy can potentially avoid indictment, post-indictment defense will be necessary in many cases. In many cases, an indictment alone can significantly increase the likelihood of a sentencing outcome involving significant prison time, and defendants need experienced defense counsel to help negotiate a favorable outcome. If convicted, a federal sentencing hearing will be necessary as well, and defendants will need an experienced federal white-collar defense attorney to handle this aspect of their case as well.

While the most experienced federal identity theft lawyers charge more for their services, their fees should still remain within a reasonable range. While the supplied sources do not provide a representative range of fees for representation by a federal fraud defense attorney, your federal lawyer will be able to discuss your options and the fee structure that they offer.

If you are a victim of identity theft and fraud, you will want to make sure that the crime is reported to the appropriate law enforcement agencies. You will want to make sure that your credit monitoring company helps you with any steps it recommends as well. If you are a victim of a crime that becomes subject to federal prosecution, 28 U.S.C. § 3771 gives you the right to “confer with the prosecutor” as well as the right to “be informed of the defendants’ rights” as well. However, you will want to discuss your options with your own legal counsel before you talk to any prosecutors or federal agents.

Talk to Spodek Law Group

Every case turns on its own facts, and general information is no substitute for advice about yours. Todd Spodek, managing partner of Spodek Law Group, and the firm's attorneys defend federal criminal and white collar matters nationwide. Reach the firm at 212-300-5196.