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What is synthetic identity fraud
|Thanks for visiting Spodek Law Group. We’re a second-generation law firm managed by Todd Spodek – with over 40 years of combined experience handling federal criminal cases that other firms won’t touch. You might know us from the Netflix series about Anna Delvey, or the Ghislaine Maxwell juror misconduct case. If you’re reading this, you’re probably facing synthetic identity fraud charges or under investigation – and you need to understand what federal prosecutors are building against you.
Synthetic identity fraud isn’t regular identity theft. It’s worse, it’s more sophisticated, and federal prosecutors are treating it like organized crime in 2025. This article explains what synthetic identity fraud actually is, why the DOJ prioritizes these prosecutions, what charges you’re facing, and what happens next if you don’t handle this correctly.
What Makes Synthetic Identity Fraud Different
Most people think identity theft means someone steals your entire identity – your name, Social Security number, address, everything. That’s not synthetic identity fraud. Synthetic identity fraud is Frankenstein fraud. Criminals take a real Social Security number from one person, pair it with a fake name, add a fake address, throw in a fake date of birth – and create an entirely new person who doesn’t exist.
The victim often has no idea they’re a victim. According to the Department of Justice, criminals prefer Social Security numbers from people least likely to check their credit – children and elderly individuals. A seven-year-old kid isn’t monitoring their credit report. An 85-year-old grandmother who doesn’t use credit cards won’t notice fraudulent accounts. That’s the window criminals exploit, sometimes for years.
Once they’ve got that synthetic identity, they build it. They apply for credit cards, make payments, establish credit history. They open bank accounts, utility accounts, create employment records. Over months or years, this fake person looks real to banks. Credit scores go up, credit limits increase – everything looks legitimate until the “bust-out.”
The Bust-Out and Why Federal Prosecutors Get Involved
The bust-out is when criminals cash in. After building credit for months or years, they max out every credit line – sometimes hundreds of thousands across multiple accounts – and disappear. Banks are left holding worthless debt tied to a person who never existed. According to the Federal Reserve Bank of Boston, synthetic identity fraud losses crossed $35 billion in 2023, and it’s accelerating in 2025 because generative AI makes creating fake documents easier.
Generative AI changed everything. Creating fake IDs used to require skill – Photoshop expertise, access to templates, security feature knowledge. Now AI tools generate realistic driver’s licenses, utility bills, pay stubs in minutes. The Federal Reserve Bank of Boston warned that AI is acting as “a volatile accelerant” for synthetic identity fraud. Defense arguments that “this was just a small mistake” don’t work – prosecutors argue AI tools made these schemes deliberate and sophisticated.
Federal prosecutors don’t handle every fraud case – most fraud stays in state court. Synthetic identity fraud triggers federal jurisdiction because it crosses state lines, involves federally insured banks, and requires sophisticated conspiracies. When you’re creating multiple synthetic identities across different states, involving interstate wire transfers, hitting multiple financial institutions, the FBI and Secret Service take notice.
Recent federal indictments show the scale prosecutors target. In 2020, federal authorities charged defendants with using synthetic identities to steal $24 million from COVID relief programs. Another case involved 11 defendants accused of making $3 million in charges across credit cards, then purchasing residential properties in Queens. These aren’t small-time scams – federal prosecutors view synthetic identity fraud as organized financial crime.
Federal Charges You’re Facing
If you’re charged with synthetic identity fraud, you’re looking at multiple federal felonies stacked together. This isn’t one charge – it’s conspiracy plus substantive counts for every fraudulent transaction.
18 U.S.C. § 1028 covers fraud related to identification documents – up to 15 years if the offense facilitates drug trafficking or violence. Prosecutors never charge just § 1028 alone, they stack charges.
18 U.S.C. § 1028A is aggravated identity theft, and this is where mandatory minimums come in. If you used someone’s identification during bank fraud or wire fraud, you face a mandatory two-year consecutive sentence. Consecutive means it runs after whatever other sentence the judge imposes. Even if the judge wants to give you a break, that two years is mandatory by law.
Bank fraud under 18 U.S.C. § 1344 carries up to 30 years imprisonment and fines up to $1 million. Wire fraud is 20 years. Mail fraud is another 20 years. Conspiracy adds five years. Prosecutors pile these counts on – one count for each victim, each transaction, each institution. In a recent 2025 case, defendants faced a maximum of 30 years for bank fraud conspiracy involving synthetic identities.
Loss amount drives sentencing. A scheme involving $150,000 gets you to offense level 16. Over $1.5 million puts you at level 22. Over $25 million is level 30. Number of victims matters – if synthetic identities defrauded ten banks, prosecutors argue for enhancements. Targeting vulnerable victims, many synthetic identities use children’s Social Security numbers, that’s another enhancement.
Why Defense Strategy Matters From Day One
The biggest mistake people make when they’re under investigation for synthetic identity fraud is talking to investigators without a lawyer. Federal agents – FBI, Secret Service, postal inspectors – are skilled at making you think cooperation will help you. Don’t fall for it. Anything you say will be used to build the case against you, and federal prosecutors have a conviction rate over 90% once charges are filed.
By the time federal agents show up, they’ve spent months building the case. They’ve subpoenaed bank records, credit applications, IP addresses, surveillance footage, phone records. They’ve identified the synthetic identities, traced the money. They’re not investigating – they’re confirming what they already believe. Your statements won’t talk them out of charging you.
The other critical mistake is waiting to hire a lawyer until after you’re indicted. Once the indictment is filed, your options narrow dramatically. Pre-indictment is when you have leverage – that’s when we can negotiate with prosecutors, present evidence that might prevent charges, or prepare a defense strategy. After indictment, you’re reacting instead of planning.
Why You Need Federal Criminal Defense Experience
Synthetic identity fraud cases are federal cases, and federal court operates nothing like state court. The sentencing guidelines are mandatory considerations even after Booker. Prosecutors are career Assistant U.S. Attorneys with resources and experience. Your lawyer needs to know how federal fraud cases work – how to challenge loss calculations, argue for mitigating role reductions, negotiate cooperation agreements that benefit you.
At Spodek Law Group, we handle federal fraud cases across the country. We’ve represented clients in cases prosecutors said were unwinnable. Todd Spodek’s background as a second-generation criminal defense lawyer, combined with our team’s experience, means we understand how to find defenses in complex financial crime cases.
Many people charged with synthetic identity fraud got involved because they needed money, or because someone convinced them it was victimless. Federal prosecutors don’t care – but those facts matter at sentencing when we’re arguing for the lowest possible sentence.
If you’re under investigation or you’ve been charged, time matters. Contact Spodek Law Group – we’re available 24/7. Federal synthetic identity fraud cases are serious, the penalties are severe, and you need a legal team that knows how to fight these charges.