ChoicePoint Data Cache Became a Powder Keg

On the way out of the store with Decker, Oluwatosin dropped the paperwork he had just received from ChoicePoint and other forms for a company dubbed Gala Financial. At the time, he was carrying five cell phones, only one of them in his own name. Three credit cards bore the names of other people, including at least one woman.

At Decker's request, Oluwatosin shared his address in North Hollywood. Once there, Decker said he found a printout of a ChoicePoint search involving another name, that of a man he later learned had lost $12,000 to identity thieves. Decker also found a receipt for a public storage business not far away. Before long, searching in unit B-245, Decker found what he later told a state court judge were the tell-tale signs of an identity theft operation: new televisions, electric generators and other products in shipping boxes stripped bare of details about where the goods came from.

The paperwork offered other leads. Decker found addresses that turned out to be commercial mail services. Investigators asked to see the unopened mail at some of those locations. One clerk brought out two large bags containing credit card applications, financial statements and other mail that had been redirected from homes around the nation.

Driving to more than a dozen commercial mail services in one day, Decker and a postal inspector identified redirected mail from more than 700 people. Further investigation revealed links to 22 other ChoicePoint accounts that had been opened under false pretenses.

"I realized that this was just absolutely huge and out of control," Decker said.

Identity theft and fraud has become a national problem in a few short years. In 2003, federal authorities estimated that about 750,000 people fell victim to some identity scam. Now the prevailing estimate is close to 10 million.

Driving the rise is a growing number of clever criminals who use people's Social Security numbers and other facts of their lives to take on their personas to run up credit cards bills, empty bank accounts and commit other crimes. But consumer advocates say it's also the failure of so many information brokers, retailers and credit issuers to adequately protect records or do enough to stop swindlers by verifying the identities of customers.

Credit card companies, marketers and others have lost millions of files to hackers and identity thieves in recent years. Two years ago, ChoicePoint itself was hit by another identity theft scheme involving personal records of thousands of people.

ChoicePoint, based in Alpharetta, Ga., has assembled a huge trove of personal data in recent years. Much of that information, such as court rulings, driver records and real estate details, comes from government agencies. The company also purchases information from the three major credit bureaus and other information services.

Its ability to create and electronically transmit exhaustive dossiers on people makes it a favorite of many Fortune 500 companies, government agencies and law enforcement and Homeland Security authorities. Today, it has more than 100,000 customers and revenue approaching $1 billion, a large proportion based on the resale of details about individuals.

Before granting service, ChoicePoint typically requires a photocopy of a driver's license and business records on file with a state or local government agency. A ChoicePoint employee would then verify that such a person and company exists. Identity thieves skirted this system by using fake IDs and by setting up front companies on paper, registered with government agencies in phony names, according to court and company records.

Olatunji Oluwatosin pleaded no contest to identity theft in a California court last month. He was sentenced to 16 months in state prison. Authorities are still investigating who else may be involved in the scandal. They believe others, possibly many others, worked with him.