[Senate Report 107-133]
[From the U.S. Government Publishing Office]



107th Congress                                                   Report
                                 SENATE                          
2d Session                                                       107-133
_______________________________________________________________________

                                     





         PHONY IDENTIFICATION AND CREDENTIALS VIA THE INTERNET

                               __________

                                 REPORT

                            PREPARED BY THE


                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                                 OF THE

         COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE





                                     

                February 4, 2002.--Ordered to be printed


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois          SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia                 PETE V. DOMENICI, New Mexico
THOMAS R. CARPER, Delaware           THAD COCHRAN, Mississippi
JEAN CARNAHAN, Missouri              ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota               JIM BUNNING, Kentucky
           Joyce A. Rechtschaffen, Staff Director and Counsel
         Hannah S. Sistare, Minority Staff Director and Counsel
                     Darla D. Cassell, Chief Clerk

                                 ------                                

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

CARL LEVIN, Michigan, Chairman       SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois          GEORGE V. VOINOVICH, Ohio
ROBERT G. TORRICELLI, New Jersey     PETE V. DOMENICI, New Mexico
MAX CLELAND, Georgia                 THAD COCHRAN, Mississippi
THOMAS R. CARPER, Delaware           ROBERT F. BENNETT, Utah
JEAN CARNAHAN, Missouri              JIM BUNNING, Kentucky
MARK DAYTON, Minnesota
          Linda J. Gustitus, Chief Counsel and Staff Director
                 Kim Corthell, Minority Staff Director
             Eileen M. Fisher, Investigator to the Minority
                     Mary D. Robertson, Chief Clerk


                            C O N T E N T S

                                 ------                                
Executive Summary................................................     1

I. Introduction..................................................     5
  A. Summary of Investigation....................................     5
  B. Methods of Using the Internet to Find False Identification 
  Materials......................................................     7
  C. Earliest Websites Offering False Identification Information.     8
  D. Legal Framework.............................................     9
     (1) Federal Legislative History.............................     9
     (2) Loopholes Caused by Advances in Technology..............    11
     (3) Internet False Identification Prevention Act of 2000....    12

II. The Subcommittee Investigation...............................    13
  A. Methods of Providing False Identification Materials by 
  Internet Sites.................................................    13
     (1) Some Websites Offer False Identification Information and 
  Tools..........................................................    14
     (2) Some Websites Offer to Manufacture False Identification.    14
  B. Types of False Identification Materials Available on the 
  Internet.......................................................    15
     (1) Templates and Other Tools...............................    15
     (2) False Identification Documents..........................    17
        (a) State Driver's Licenses and Identification Cards.....    17
        (b) Other Identity Documents.............................    18
        (c) ``Breeder'' Documents................................    20
  C. Marketing Practices.........................................    20
     (1) Message Boards and Chat Rooms...........................    20
     (2) Deceptive Practices.....................................    22
     (3) Search Engine Placement and Keywords....................    24
  D. Disclaimers Have Little or No Legal Impact..................    25
     (1) Claims of Novelty.......................................    25
     (2) Disclaimers Do Not Discourage Sales.....................    26
     (3) Operators Use Disclaimers as a Shield...................    27
     (4) Legal Challenges to Disclaimers.........................    29
  E. Role of the Internet........................................    30
     (1) GThe Internet Allows Instantaneous and Anonymous Sales 
  and Transfers of False Identification..........................    30
     (2) Website Operators Disguise Their Names and Locations....    33
  F. Websites Offering False Identification Materials Facilitate 
  Other Crimes...................................................    35
     (1) Identity Theft..........................................    37
     (2) GRecent Terrorist Acts May Have Been Facilitated by 
  False Identification...........................................    38
     (3) Infiltration of Federal Facilities Using Phony 
  Identification.................................................    39

III. Case Studies................................................    40
  A. The Sellers.................................................    40
     (1) Robert Sek: theidshop.com...............................    40
        (a) Business.............................................    40
        (b) Products.............................................    41
        (c) Subcommittee Purchase................................    41
        (d) Disclaimer...........................................    41
     (2) Brett Carreras: fakeid.net..............................    43
        (a) Business.............................................    43
        (b) Products.............................................    43
        (c) Disclaimer...........................................    44
        (d) Related Websites.....................................    44
     (3) Tim Beachum: bestfakeids.com............................    45
        (a) Business.............................................    45
        (b) Products.............................................    45
        (c) Subcommittee Purchase................................    46
        (d) Disclaimer...........................................    50
     (4) Tim Catron: fakeidzone.com..............................    50
        (a) Business.............................................    50
        (b) Products.............................................    50
        (c) Disclaimer...........................................    51
        (d) Other Online Activities..............................    51
     (5) Josh Dansereau..........................................    52
        (a) Business.............................................    52
        (b) Products.............................................    52
        (c) Disclaimer...........................................    53
        (d) Legal Situation......................................    53
  B. The Buyers..................................................    54
     (1) Thomas Seitz............................................    54
        (a) Legal Situation......................................    54
        (b) Internet Activities..................................    54
        (c) Creating False Documents.............................    56
     (2) Thana Barlee............................................    57
        (a) Background...........................................    57
        (b) Internet Activities..................................    57
  C. Referrals...................................................    58

IV. Conclusion...................................................    59
  A. GGeneral Services Administration Smart Card Technology for 
  Federal Facilities.............................................    59
  B. Law Enforcement's Response to Crimes Using False 
  Identification.................................................    60
  C. Implementing New Legislation................................    61

 
         PHONY IDENTIFICATION AND CREDENTIALS VIA THE INTERNET

                              ----------                              


                           Executive Summary

    The proliferation of false identification has become a 
serious public safety issue. False identification documents and 
credentials can enable criminals to commit a host of crimes 
ranging from identity theft to bank and credit card fraud and 
allow them to fund larger and more dangerous criminal 
activities. Phony identification can also enable criminals to 
obtain bona fide, yet unsupported and unauthorized, 
identification documents such as driver's licenses. Moreover, 
criminals may be able to evade law enforcement by hiding behind 
their false identities. Failing to curb the spread of false 
identification can have grave consequences, in fact, evidence 
indicates that some associates of the Al Qaeda terrorist 
organization may have used false identification and immigration 
documents.
    Also alarming is the ease with which General Accounting 
Office (GAO) investigators were able to breach security at 21 
of the most secure buildings in the United States, including 
the Central Intelligence Agency (CIA), the Federal Bureau of 
Investigation (FBI), and several airports by claiming--falsely, 
using easily-obtained phony identification--that they were 
armed law enforcement officers. GAO investigators displayed 
fake law enforcement badges and phony credentials that they 
themselves had crafted using graphics software and images 
culled from Internet websites, and which bore little 
resemblance to the genuine articles. When the investigators 
presented themselves at security checkpoints, they were waved 
around metal detectors and were not screened.
    In a similar operation at sensitive Defense Department 
facilities in May 2001 commissioned by Senator Susan M. 
Collins, GAO investigators easily penetrated the sites using 
readily-obtainable false identification--thus demonstrating 
their vulnerability to unauthorized access by criminals and 
terrorists. GAO's findings in these multiple penetration tests 
demonstrate that, in addition to the lax security measures in 
place at Federal facilities and airports, the Internet and 
computer technology allow nearly anyone easily to create 
convincing identification cards and credentials.
    In December 1999, under the chairmanship of Senator Susan 
M. Collins, the Permanent Subcommittee on Investigations began 
a 5-month investigation into the availability of false 
identification via the Internet. The Subcommittee's 
investigation was prompted in part by an e-mail message 
received by a Subcommittee investigator that solicited her to 
purchase counterfeit driver's licenses. The Subcommittee began 
investigating to determine the extent to which false 
identification could be obtained via the Internet and found 
that there are a myriad of websites offering false 
identification materials.
    The Subcommittee examined more than 60 websites offering 
false identification materials, issued 11 subpoenas for 
documents and depositions, and interviewed more than 40 
witnesses. The Subcommittee also conducted an undercover 
operation to purchase false identification materials--and 
received, in turn, several high quality products, including a 
counterfeit Oklahoma driver's license. Based on the results of 
this undercover operation, the Subcommittee focused its 
attention on three website operators each of whom offered high 
quality products that could be used to produce credible false 
identification and credentials.
    The Subcommittee's investigation found that false 
identification materials are distributed over the Internet 
through a number of methods. Some websites offer to make 
identification documents for customers which are then delivered 
by mail. Others offer the computer files, known as 
``templates,'' necessary to manufacture false identification 
documents. Customers may purchase access to the templates and 
download them to their own computers, or purchase a computer 
disk containing the template files. Still other operators 
simply offer the templates for free.
    Templates are typically graphic files which can be 
manipulated to hide and/or reveal images and text. Individuals 
can also add images and text, such as photographs or 
signatures, to templates in order to customize them. To make a 
driver's license, for example, an individual would insert a 
photo and signature, and type in the desired name and address. 
The individual would then print the document, and laminate it, 
thereby creating a highly realistic false identification 
document. A single software template can be used an infinite 
number of times, by an infinite number of individuals, and can 
be transmitted via computer disk, or in an instant via the 
Internet.
    As a result of its investigation, the Subcommittee has 
drawn three general conclusions. First, many Internet sites 
offer a wide variety of phony identification documents, some of 
which are of very high quality and include security features 
commonly used by government agencies to deter counterfeiting. 
These include driver's licenses from all 50 States, birth 
certificates, Social Security cards, military identification 
cards, student identifications, diplomas, press credentials, 
and Federal agency credentials such as those used by the FBI 
and CIA. The Subcommittee also found products such as Social 
Security number generators, bar code generators, and 
instructions for creating holograms.
    Second, the disclaimers that can be found on many websites 
are at odds with the marketing strategy pursued by the 
operators of those websites. The Subcommittee found that 
operators frequently attempted to shield themselves by claiming 
that their products were ``for novelty purposes only.'' At the 
same time, however, operators commonly implied that their 
products were so authentic in appearance as to be illegal--
something they clearly considered to be a marketing asset. For 
example, the Subcommittee found one website that offered a 
``New Identity Kit'' purporting to contain ``[e]verything you 
need to create a new identity for fun!!'' yet which encouraged 
Internet users to order quickly, ``before we are shut down by 
the authorities.'' Another website operator informed his 
customers that his products were for ``entertainment and 
educational purposes only,'' yet urged them to use the 
documents on his website to get a job.
    Third, the Internet has played a leading role in fostering 
the manufacture and the sale of high quality false 
identification, and has made these products available to a vast 
customer base with virtual anonymity for both the sellers and 
the buyers. This has, in turn, presented significant challenges 
for law enforcement. For example, one operator, in an attempt 
to disguise his true location, registered his website in the 
Philippines and provided an e-mail address that appeared to 
originate from another small country in the South Pacific. (The 
Subcommittee determined through his billing records, however, 
that he was actually located in Kansas.)
    The Subcommittee's investigation culminated in a hearing, 
entitled Phony IDs and Credentials Via the Internet--An 
Emerging Problem, which was held on May 19, 2000. The hearing 
witnesses were K. Lee Blalack, II, then-Chief Counsel and Staff 
Director of the Subcommittee; Agent David C. Myers from the 
Identification Fraud Coordinator for the State of Florida's 
Division of Alcoholic Beverages and Tobacco (now Lieutenant 
Myers); Thomas Seitz, a convicted felon; and the Hon. Brian 
Stafford, Director of the U.S. Secret Service.
    In his hearing testimony, Mr. Blalack outlined the scope of 
the Subcommittee's investigation, and discussed the 
Subcommittee's case studies of Brett Carreras, Tim Beachum and 
Tim Catron, who sold false identification materials over the 
Internet. Lieutenant Myers provided an overview of Internet 
sales of false identification documents, and detailed several 
investigations of website operators that he and his team had 
led, and that the Subcommittee also examined. Thomas Seitz 
testified about the false identification documents he was able 
to obtain over the Internet, and the crimes he was able to 
commit using these phony documents. (These actions resulted in 
his conviction on four felony counts, a 3-year State sentence 
and a 7-month Federal sentence.) Finally, Director Stafford 
testified about the proliferation of Internet crime and how the 
Internet facilitates identity theft and other serious crimes 
through the use of false identification documents. He also 
outlined the role of the U.S. Secret Service in trying to curb 
such activity.
    The Subcommittee's hearing made clear that technological 
developments during the past few years have significantly 
increased the dangers associated with the production and 
marketing of phony identification documents. Today, both the 
necessary skills and materials are well within the reach of a 
growing number of people. As then-Chairman Collins noted in her 
opening statement:

        ``These counterfeit documents are relatively easy to 
        manufacture. With only a modest understanding of the 
        Internet and $50 worth of supplies purchased from an 
        arts and crafts store, one can design authentic-looking 
        identification documents within a few hours or even 
        minutes.'' \1\
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    \1\ Phony IDs and Credentials Via the Internet: An Emerging 
Problem: Hearings before the Permanent Subcommittee on Investigations, 
Senate Committee on Governmental Affairs, 106th Congress, 2nd Session 
(May 19, 2000) [hereinafter ``Hearing record''], at 2 (remarks of 
Senator Collins).

Moreover, it is becoming even easier to obtain and create false 
identification documents, which can then be used for a wide 
variety of improper and illegal purposes. Senator Carl Levin 
noted in his opening statement, for example, that false 
---------------------------------------------------------------------------
identification documents are

        ``often now being used to carry out improper or 
        criminal activities--to obtain fraudulent loans, to 
        evade taxes, to establish a new identity, to steal 
        another individual's identity, to defraud Federal and 
        State Governments, to misrepresent one's residence or 
        place of birth or age for any variety of purposes.'' 
        \2\
---------------------------------------------------------------------------
    \2\ Id. at 4 (remarks of Senator Carl Levin).

    Indeed, a criminal can use phony identification documents 
and credentials as so-called ``breeder'' documents, as a means 
of gaining access to bona fide identification materials. Seitz 
obtained a phony birth certificate, for instance, to obtain a 
State identification card, which while itself authentic 
(insofar as it was properly issued by the relevant 
authorities), was based on false supporting documents and 
contained false information. Through these means, Seitz 
obtained unauthorized yet ``authentic'' documents, which are 
particularly difficult to detect. These ``authentic'' documents 
can then be used to commit a host of crimes, including bank 
fraud, as Seitz unfortunately demonstrated. Although at the 
time of this report investigations into the terrorist 
atrocities of September 11, 2001, are still in the early 
stages, it appears that some individuals associated with these 
acts may also have used false supporting documents to obtain 
``authentic'' false identification.
    The Internet has visibly changed the false identification 
industry. In his testimony before the Subcommittee, Lieutenant 
Myers estimated that 30 percent of the false identification 
documents his office seized during the year 2000 had been 
obtained via the Internet--up from only about 1 percent just 2 
years previously. Moreover, Lieutenant Myers expected this 
figure to rise to between 60 and 70 percent for 2001.\3\ 
Indeed, Trent Sands, the author of a recent book on false 
identification, claims that the Internet should be credited 
with reviving the false identification business:
---------------------------------------------------------------------------
    \3\ Id. at 20 (testimony of Lieutenant David C. Myers).

        ``The Internet has breathed new life into the world of 
        false identification. Many new companies are springing 
        up to meet the needs of those who want documentation 
        saying they are someone else. * * * The robust health 
        of the mail-order and Internet identification business 
        is in stark contrast to the situation of just a few 
---------------------------------------------------------------------------
        years ago.''

    Since the Subcommittee began its investigation and began 
contacting website operators, most of the individuals examined, 
including Tim Catron and Tim Beachum, have removed their 
websites from the Internet. Others, such as Brett Carreras, 
have curtailed their activities. The Subcommittee has also made 
referrals of potential violations of Federal and State law to 
the appropriate members of the law enforcement community, 
urging authorities to investigate further the activities of 
several individuals involved with manufacturing and 
distributing false identification documents. Nevertheless, 
operators continue to spring up to take the places of those who 
have closed their websites and offer false identification and 
credentials over the Internet, although most of these new 
operators are located abroad.
    Accordingly, the Subcommittee considered means of curbing 
this emerging problem, and in July 2000, then-Chairman Collins 
introduced legislation designed to address the problem of 
counterfeit identification documents. This legislation, the 
Internet False Identification Prevention Act of 2000 passed the 
Senate and the House of Representatives and was signed into law 
on December 28, 2000. This statute, Public Law 106-578, 
effected a number of changes in current law, including: (1) 
establishing a multi-agency coordinating committee charged with 
encouraging more enforcement of existing criminal laws by 
dedicating investigative and prosecutorial resources 
exclusively to this emerging problem; (2) modernizing several 
portions of existing Federal law to ensure that it is suited to 
the Internet age and the technology that is associated with it; 
and (3) making it easier to prosecute those criminals who 
manufacture, distribute, or sell counterfeit identification 
documents by closing the legal loophole that had allowed them 
to use easily-removable disclaimers in an attempt to shield 
their illegal conduct from prosecution through a claim of 
``novelty.'' Through aggressive law enforcement activity, and 
continued Congressional attention and oversight, the 
Subcommittee hopes and anticipates that it will be possible 
dramatically to decrease the number of crimes committed using 
false documents.
I. Introduction
  A. Summary of Investigation
    The Subcommittee's investigation was prompted in part by an 
e-mail message received by a Subcommittee investigator that 
solicited her to purchase counterfeit driver's licenses.\4\ The 
Subcommittee began investigating to determine the extent to 
which false identification could be obtained via the Internet. 
Unfortunately, it quickly became apparent that there are a 
myriad of websites offering false identification materials.
---------------------------------------------------------------------------
    \4\ This issue first came to the Subcommittee's attention when 
Subcommittee Investigator Eileen Fisher received an unsolicited e-mail 
message entitled, ``Authentic Confidential ID's!!'' The e-mail message 
stated as follows:

        L``Ever wanted a driver's license that pases [sic] all the 
``tests''? Now you can have a Driver's License from any State no 
questions asked! Former employees of the Department of Motor Vehicles 
are now making Driver's licenses exactly 100% like the ones the DMV 
makes, complete with Holgrams [sic] and Magnetic Strips.''

    The message asked Investigator Fisher to send $15 in payment for 
the fake driver's license. See Hearing record, supra, at Exhibit 22. 
The individual responsible for this e-mail, Greg Dodson, agreed to a 
consent judgment on May 19, 2000, in a lawsuit brought by ASD.com in 
the U.S. District Court for the Middle District of Tennessee. The terms 
of the consent judgment require Dodson to pay statutory damages under 
the Tennessee anti-spamming statute of $10,000 plus attorney's fees.
---------------------------------------------------------------------------
    From mid-December 1999 to mid-May 2000, the Subcommittee 
discovered approximately 60 websites offering to manufacture 
and sell false identification documents or to provide the means 
to manufacture false identification documents. These sites were 
not hard to find: the Subcommittee located them by using major 
search engines, examining the links on websites, and reviewing 
messages posted on several discussion boards. The websites 
primarily offered to manufacture or provide information about 
State driver's licenses, with some operations offering to 
manufacture or provide information about birth certificates, 
government identification cards, Social Security cards, college 
transcripts, and other identification documents.
    The Subcommittee then reviewed in great detail 
approximately 15 websites that offered false identification 
information. These websites were selected based on the type and 
quality of documents offered, the methods used to sell such 
documents, and the physical location of website operations. As 
part of the Subcommittee's review, the Subcommittee placed 
orders under an assumed name to seven websites for the false 
identification products that they offered. The Subcommittee 
received materials from three of the websites. A summary of 
these orders and results is provided in Table 1:

                                Table 1--Orders of False Identification Materials
----------------------------------------------------------------------------------------------------------------
            Company/Individual                    Product Ordered           Cost               Result
----------------------------------------------------------------------------------------------------------------
American Photo Company a.................  Georgia driver's license           $225  No product received.
                                            with hologram.
NoveltyID4Ua.............................  Social Security card........        $58  No product received.
Mike Burton..............................  Maine driver's                      $75  No product received.b
                                             license
The ID Shop/Robert Sek...................  Oklahoma driver's license...       $100  Received false
                                                                                     identification card closely
                                                                                     resembling an Oklahoma
                                                                                     driver's license.
J&J Enterprises/Josh Dansereau...........  Connecticut driver's license        $58  No product received.c
Bestfakeids/Tim Beachum..................  Novelty ID Kit                      $30  Downloaded files containing
                                                                                     identification documents.
Fakeid.net/Brett Carreras................  Monthly access to premium       $12.95/  The Subcommittee had access
                                            files.                           month   for several months to these
                                                                                     materials, which included
                                                                                     templates for 13 State
                                                                                     driver's licenses, the seal
                                                                                     of the Department of Health
                                                                                     and Human Services (which
                                                                                     is used on a Social
                                                                                     Security card), and a
                                                                                     template for a Canadian
                                                                                     driver's license.
----------------------------------------------------------------------------------------------------------------
a It appears that the same individual, John Carroll, operates both companies, and possibly several others
  including phonyid.com.

b When Subcommittee investigators contacted Burton, he admitted that he did not send the requested fake driver's
  license because he was attempting to defraud customers by taking their money without shipping the goods
  promised. Following the Subcommittee's referral of this case to the appropriate law enforcement authorities in
  Fond du Lac, Wisconsin, Burton was charged with petty theft by fraud and fined approximately $200. He also
  disestablished a website he had operated offering instructions on how to alter a driver's license, shredded
  his own altered Wisconsin driver's license at the direction of authorities, and returned $75 to the
  Subcommittee.

c Dansereau was arrested by Florida agents in November 1999. Nevertheless, the Subcommittee's money order was
  deposited into his account in February 2000. In June 2000, Dansereau signed a notarized affidavit confirming
  his statement to the Subcommittee that since his arrest he has returned all orders for false identification
  documents.

    The identification materials the Subcommittee received took 
different forms. After the Subcommittee mailed to the operator 
of one website a photograph representing a fictitious person 
with an address in Oklahoma, asking that the false 
identification document be delivered to an address in Maryland, 
the Subcommittee received a high quality identification card 
\5\ that closely resembled a driver's license of the State of 
Oklahoma. (This false identification document is further 
described in Section III.A.(1).) The Subcommittee used a credit 
card to purchase access to templates \6\ and information from 
two other websites that can be used to manufacture false 
identification documents. These websites are described in 
Sections III.A. (2) and (3) of this report. The Subcommittee 
also obtained templates and other information on false 
identification from websites that did not charge for their 
products.
---------------------------------------------------------------------------
    \5\ See Hearing record, supra, at Exhibit 9 (false Oklahoma 
driver's license).
    \6\ Templates are computer files that are frequently used to 
manufacture false identification documents. See Section II.B.(1).
---------------------------------------------------------------------------
    The Subcommittee experienced difficulty in locating and 
obtaining the cooperation of the operators of several of the 
websites under review. As detailed in Section III.E.(2) of this 
report, many of those responsible for these websites hid their 
associations with the website or, when identified, were 
unwilling to provide verifiable information to the 
Subcommittee. Some websites appear to be operated by 
individuals or companies located outside the United States, 
making it difficult for the Subcommittee to compel the 
production of information.
    In the cases of several websites, the Subcommittee found 
the sales of false identification materials to be significant, 
as illustrated in Table 2:


                  Table 2--Revenues/Orders of Websites Offering False Identification Materials
----------------------------------------------------------------------------------------------------------------
                                                                       Dates of Revenue/
                Company/Individual                    Est. Dates of           Order         Revenues     Orders
                                                        Operation         Information
----------------------------------------------------------------------------------------------------------------
The ID Shop/Robert Sek............................      11/30/99-2/00      11/30/99-2/00  $1,000,000    21,000 a
                                                                                                    a
fakeid.net/Brett Carreras.........................    7/28/98-present  10/18/98-12/22/98     $8,239 b       621b
Bestfakeids/Tim Beachum...........................     3/17/99-5/00 c    3/17/99-3/24/00    $31,305 d    1,294 d
Infoworld/Jeremy Martinez.........................       10/99-5/00 c     1/1/99-3/30/00    $23,728 d    1,177 d
fakeidzone/Tim Catron.............................         10/98-2/00         11/99-1/00    $12,250 b      652 b
J&J Enterprises/Josh Dansereau....................          6/99-9/99          6/99-9/99   $3,000 d -      100 e
                                                                                           $250,000 a

----------------------------------------------------------------------------------------------------------------
a Estimates from law enforcement reports.
b Information provided by Verotel, the company recording billing information.
c Website was operational as of May 19, 2000. However, it appears to have been taken down at some point between
  the Subcommittee's hearing and the release of this report.
d Company-supplied information.
e Dansereau claimed that he manufactured about 100 false identification documents. Law enforcement officials
  believe Dansereau failed to provide products to many customers.

  B. Methods of Using the Internet to Find False Identification 
        Materials
    The Internet offers users an ever expanding multitude of 
information.\7\ With over 35 million domain names registered as 
of June 4, 2001,\8\ the Internet provides users with an 
opportunity to find information on virtually any subject. 
Individuals across the world are using the Internet in ever 
increasing numbers, with one source estimating the number of 
Internet users worldwide as 414 million in 2000 and predicting 
an increase to 1.17 billion by the year 2005.\9\
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    \7\ The Internet is also called the World Wide Web, a term which is 
often shortened to simply ``the Web.'' It is a linked collection of 
electronic documents stored on computers called servers.
    \8\ Netnames Int'l Ltd., Netnames (visited June 4, 2001) http://
www.netnames.com.
    \9\ Computer Industry Almanac, Internet Users/Wireless Users 
(visited June 4, 2001) http://cyberatlas.internet.com.
---------------------------------------------------------------------------
    The vast array of information sources on the Internet means 
that most Internet users do not know the location of websites 
that may contain information on a topic of interest to 
them.\10\ Internet users thus routinely search for information 
using ``search engines,'' \11\ programs which automatically 
search large sections of the Internet in order to provide the 
user with a list of websites likely to contain information 
relevant to the user's request. After the user has entered one 
or more words describing the subject matter of interest, these 
search engines use different techniques to identify websites 
with a high probability of containing the requested 
information. Search engines may identify relevant websites 
through comparison of the user's word description with terms on 
a website or with descriptive terms, frequently called 
``keywords,'' provided by the creator of the website in order 
to guide or attract users to the website. Based on this 
comparison, search engines provide an Internet user with a list 
of websites. This list is often arranged in order of likelihood 
of containing relevant information, and may provide a short 
description of the information included on each site. The 
search engine results page displays the address of each page 
found as a result of the search, and allows the user to move 
directly to each site with a simple click of the mouse.\12\ As 
the Subcommittee demonstrated, these user-friendly and often 
very powerful search techniques make it easy for Internet users 
to discover and access websites offering a variety of false 
identification documents.
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    \10\ Websites, or pages, are located by an ``address'' known as a 
domain name, an Internet Protocol (IP) address, or a Universal Resource 
Locator (URL). This address is sometimes called the name of the site, 
its address, or its location. Entering the URL of a web page through a 
web browser or clicking on a link allows the user to access that page 
through its server.
    \11\ A ``search engine'' is a web page that uses computer 
technology to find and display other web pages relating to the 
information requested.
    \12\ See e.g., Hearing record, supra, at Exhibit 28 (search results 
for term ``fake ID'' when using Excite.com search engine, http://
www.Excite.com).
---------------------------------------------------------------------------
  C. Earliest Websites Offering False Identification Information
    The ever-changing nature of the Internet, and the fact that 
web pages are often not preserved for later retrieval, prevent 
documentation by the Subcommittee of the earliest websites 
created containing information about false identification 
materials. Website ``domain names'' are often sold or 
transferred to different individuals or companies, and may be 
used for an entirely different purpose at different times. The 
Subcommittee's investigation was thus unable to determine with 
great certainty which operators first used the Internet to 
offer false identification information.
    The earliest information about manufacturing false 
identification appears to originate from three websites. A site 
named ``Blur of Insanity,'' which currently describes itself as 
``The #1 College Entertainment Website,'' \13\ is mentioned on 
an Internet discussion board \14\ as having been one of the 
first sites to display identification templates.\15\ According 
to other messages on a discussion board,\16\ an individual 
using the name ``Cycore'' provided information about false 
identification materials on a site offered on a web page 
provided through America OnLine (AOL)--at least until that 
company allegedly dismantled the site. A third site, ``fake-
id.com,'' operated by John DeMayo, was registered with Network 
Solutions on October 2, 1997. This site reportedly contained a 
variety of templates and information about the driver's 
licenses of many different States. Individuals obtaining these 
templates and information about the formats of State driver's 
licenses would then have the ingredients needed to manufacture 
false identification. Although the Subcommittee was unable to 
obtain specific information about the false identification 
information presented on these early websites, it does appear 
that the use of the Internet to manufacture and market 
counterfeit identification documents dates at least to the mid-
1990s.
---------------------------------------------------------------------------
    \13\ See ``Blur of Insanity,'' (last visited Dec. 15, 2000), at 
http://www.blurofinsanity.com.
    \14\ See ``Fake ID Conversation,'' http://www.carreras.net/discus 
(post by ``Allfree'' on Oct. 15, 1999).
    \15\ A ``template'' is the term given to a document, often in the 
form of a computer file that is able to be manipulated, and may contain 
both graphic images and text, and that closely resembles the common 
features of an official identification document.
    \16\ See ``Fake ID Conversation,'' http://www.carreras.net/discus 
(post by ``Webhost'' on Oct. 16, 1999).
---------------------------------------------------------------------------
  D. Legal Framework
    (1) Federal Legislative History
    Almost 20 years ago, in the fall of 1982, the Subcommittee 
held 3 days of public hearings examining the use of counterfeit 
identity documents to defraud Federal benefit programs.\17\ 
These hearings came on the heels of a series of reports 
demonstrating the growing problems caused by false 
identification. Following the hearings, Congress enacted 18 
U.S.C. Sec. Sec. 1028 and 1738. These two laws are the primary 
Federal statutes that relate to the availability of false 
identification on the Internet. Section 1028 imposes penalties 
for the production or use of false identification documents, as 
well as for the possession of document making implements with 
the intent to use them for an illegal purpose. Section 1738, 
which was repealed in 2000, imposed a misdemeanor penalty for 
possessing certain identification documents that do not bear a 
specified disclaimer.
---------------------------------------------------------------------------
    \17\ See generally, Federal Identification Fraud: Hearings before 
the Permanent Subcommittee on Investigations, Senate Committee on 
Governmental Affairs, 97th Congress, 2nd Session (June 15-16, Sept. 23, 
1982).
---------------------------------------------------------------------------
    Section 1028 imposes felony sanctions of between 3 to 25 
years in jail, depending how the false identification document 
is used, for:

           Lthe knowing, unauthorized production of an 
        identification document, or false identification 
        document;

           Lthe transfer of an identification document 
        or false identification document, knowing that it was 
        stolen or produced without lawful authority;

           Lthe possession with intent to use 
        unlawfully or to transfer unlawfully five or more 
        identification documents (other than those issued 
        lawfully for the use of the possessor) or false 
        identification documents;

           Lthe possession of an identification 
        document (other than one issued lawfully for the use of 
        the possessor) or a false identification document with 
        the intent that such document be used to defraud the 
        United States;

           Lthe possession, production, or transfer of 
        a document-making implement with the intent that the 
        implement be used in the production of a false 
        identification document or another document-making 
        implement;

           Lthe possession of an identification 
        document that is or appears to be an identification 
        document of the United States, which is stolen or 
        produced without lawful authority, knowing that the 
        document was stolen or that its production was 
        unauthorized; and

           Lthe unauthorized transfer of a means of 
        identification of another person with the intent to 
        commit, aid, or abet any unlawful activity that 
        violates Federal law or is a felony under State law.

Section 1028 applies only where (1) the identification document 
or false identification document is or appears to be issued by 
or under the authority of the United States, or the document-
making implement is designed or suited to making such an 
identification document; (2) the offense involves the knowing 
possession of an identification document (other than one 
lawfully issued for the use of the possessor) or a false 
identification document intended to be used to defraud the 
United States; (3) the prohibited production, transfer, 
possession or use is in or affects interstate or foreign 
commerce; or (4) the means of identification, identification 
document, false identification document, or document-making 
implement is transported in the mail.\18\
---------------------------------------------------------------------------
    \18\ 18 U.S.C. Sec. 1028.
---------------------------------------------------------------------------
    Section 1738 made it a misdemeanor punishable by up to 1 
year in jail for anyone in the business of furnishing 
identification documents, acting in furtherance of that 
business, to use the mails for the

        ``mailing, carriage in the mails, or delivery of, or 
        [transportation] in interstate or foreign commerce, any 
        identification document * * * (1) which bears a birth 
        date or age purported to be that of the person named in 
        such identification document; * * * (2) knowing that 
        such document fails to carry diagonally printed clearly 
        and indelibly on both the front and back ``NOT A 
        GOVERNMENT DOCUMENT'' in capital letters in not less 
        than 12-point type.'' \19\
---------------------------------------------------------------------------
    \19\ 18 U.S.C. Sec. 1738(a).

An ``identification document'' is defined as ``a document which 
is of a type intended or commonly accepted for the purpose of 
identification of individuals and which is not issued by or 
under the authority of a government.'' \20\
---------------------------------------------------------------------------
    \20\ Id. at Sec. 1738(b).
---------------------------------------------------------------------------
    (2) Loopholes Caused by Advances in Technology
    The Subcommittee found that the substantial majority of 
false identification prosecutions have been brought under 
Sec. 1028, while no prosecutions have been brought specifically 
under Sec. 1738, perhaps because Sec. 1738 provided only for 
misdemeanor penalties. Moreover, the Subcommittee's review of 
the case law under Sec. 1028 did not find any prosecutions 
involving the sale of false identification documents over the 
Internet. Witness testimony at the Subcommittee's hearing 
indicated, however, that the number of crimes committed 
involving false identification is growing, and that the number 
of prosecutions has not kept pace. Not only did the statute 
need updating, the Subcommittee concluded, but law 
enforcement's attention also needed to be refocused on this 
crime.
    Under Sec. 1028, the courts have looked to statutory 
language, past decisions, and legislative history to determine 
the appropriate scope of the terms ``identification document'' 
and ``document-making implement.'' The cases indicate that the 
term ``identification document'' applied to completed and blank 
birth certificates, driver's licenses, and Federal and State 
identification cards.\21\ The statutory definition of a 
``document-making implement'' included
---------------------------------------------------------------------------
    \21\ See generally United States v. Alejandro, 118 F.3d 1518 (11th 
Cir. 1997); United States v. Rohn, 964 F.2d 310 (4th Cir. 1992).

        ``any implement, impression, electronic device, or 
        computer hardware or software, that is specifically 
        configured or primarily used for making an 
        identification document, a false identification 
        document, or another document-making implement.'' \22\
---------------------------------------------------------------------------
    \22\ 18 U.S.C. Sec. 1028(d)(1).

The case law suggests that this language has been applied to a 
wide range of materials outside the Internet context, but it is 
unclear whether the existing statutes would cover computer 
files or false-identification software template files. 
Specifically, it was unclear whether templates, which are used 
in a large number of those false identification documents 
transmitted over the Internet, constitute a document or a 
document-making implement--or whether they were covered at all 
under the original statutory definitions. The Subcommittee 
concluded that new legislation was needed to ensure that such 
computer technology is within the ambit of the statute, 
particularly because it is the method of choice of today's 
false identification manufacturers.
    The Subcommittee found that people producing false 
identification cited the disclaimer language in Sec. 1738 in 
claiming to be operating in compliance with the law. For 
example, Robert Sek of ``theidshop'' required that his 
customers sign an agreement not to tamper with the product he 
sent them. He then mailed his customers an identification card 
sealed in an easily-removable plastic pouch that bore the 
requisite disclaimers. The identification card inside the pouch 
bore merely a disclaimer in tiny print.\23\ Through these 
means, Sek sought to insulate himself from liability by 
creating a product that appeared to comply with Sec. 1738, but 
in fact was easily alterable to circumvent the statute.
---------------------------------------------------------------------------
    \23\ See Hearing record, supra, at Exhibit 10 (Fake ID Man Message 
Board http://pages.eidosnet.co.uk/fakeidman/ (post by ``Mexican311'' on 
Mar. 17, 2000)). This post details the ease with which the disclaimer 
on the identification card may be removed.
---------------------------------------------------------------------------
    For these reasons, it was apparent following the 
Subcommittee hearing that the statutory definitions of 
prohibited items needed to be updated to cover today's 
technology, and that law enforcement's attention need to be 
refocused on false identification crimes. Speaking from his 
position as one on the front lines of the effort to curb phony 
identification documents, for example, Lieutenant David C. 
Myers, the Identification Fraud Coordinator for the State of 
Florida's Division of Alcoholic Beverages and Tobacco, 
testified to the difficulties he encountered, noting that false 
identification website operators keep reappearing on the 
Internet, a problem he suspected rises from loopholes in the 
current legal code.\24\ After hearing this, Senator Collins 
noted:
---------------------------------------------------------------------------
    \24\ Id. at 22 (testimony of Lieutenant Myers).

        ``I am more convinced than ever that we need a crack-
        down by all levels of law enforcement on this area and 
        that we need to evaluate very closely whether Federal 
        law and penalties are sufficient to deter the 
        proliferation of these websites.'' \25\
---------------------------------------------------------------------------
    \25\ Id. at 30 (remarks of Senator Collins).
---------------------------------------------------------------------------
    (3) Internet False Identification Prevention Act of 2000
    On July 26, 2000, Senator Collins introduced S. 2924, the 
Internet False Identification Prevention Act of 2000, in an 
effort to curb the proliferation of websites that distribute 
counterfeit identification documents and credentials over the 
Internet. The bill was intended to accomplish this by promoting 
a coordinated effort to improve the Federal Government's 
ability to stem the use of false identification documents, 
creating a law enforcement coordinating committee to focus on 
false identification, updating existing law to reflect 
technological advances, and encouraging law enforcement to 
prosecute this serious and growing problem. On December 15, 
2000, after incorporating several minor modifications to the 
version that had previously passed the Senate, the U.S. House 
of Representatives passed the Internet False Identification 
Prevention Act of 2000. Thereafter signed by the President, 
this bill became Public Law 106-578 on December 28, 2000. It 
entered into effect on March 28, 2001.
    Among its provisions, the new law authorizes a multi-agency 
coordinating committee to investigate and prosecute the 
manufacture and distribution of false identification documents. 
The coordinating committee includes representatives from the 
Treasury Department, the Justice Department, the U.S. Secret 
Service, the FBI, the Social Security Administration, and the 
Immigration and Naturalization Service (INS). This coordinating 
committee is expected to operate like the Office of Internet 
Enforcement at the Securities and Exchange Commission (SEC), 
except that it would file criminal rather than civil actions 
and would be a multi-agency organization. This coordinating 
committee shall exist for at least 2 years, with the President 
having the authority to continue it for such additional time as 
may be deemed necessary. At the end of each year of the 
coordinating committee's existence, the Attorney General and 
Secretary of the Treasury shall report to the House and Senate 
Judiciary Committees on the investigation and prosecution of 
crimes involving false identification, and make recommendations 
for more effective investigation and prosecution.
    Second, the new law was designed to amend Sec. 1028 in 
order to bring this primary law on false identification in line 
with current technology in several ways. The legislation 
modifies the existing definition of ``document-making 
implement,'' for example, to include computer templates and 
files that are now frequently used to create counterfeit 
identification documents from the Internet.
    Third, the new law aims to close a loophole which allowed a 
person to transfer (e.g., through a website or e-mail), either 
false identification software templates or actual finished 
documents. The law's new provision thus expands the definition 
of ``transfer'' to include selecting, placing, or directing the 
placement of an identification document, false identification 
document, or document-making implement in an online location 
where it is available to others. This should ensure that 
offering a false identification document or template for 
download on a website is considered an illegal act.
    Fourth, the new law repeals Sec. 1738, thus ending 
individuals' ability to use alterable disclaimers in legally 
producing identification documents that include the age or 
birth date of an individual. The effect of repeal of Sec. 1738 
is that it will no longer be legal to manufacture and sell 
false identification products even if they display the 
previously-required ``NOT A GOVERNMENT DOCUMENT'' disclaimer. 
As the Subcommittee's hearing revealed, this type of disclaimer 
can be fashioned so as to be easily removable on both computer 
templates and counterfeit identification documents. It is now 
illegal to produce, possess, or sell any identification 
document that resembles an identification document issued by 
any government entity; any such activity will be a felony.
    It is the Subcommittee's hope that this new law will also 
focus attention on the growing problem of Internet-facilitated 
false identification. This alone may help rein in the more 
visible operators, for shedding light on this industry does 
appear to be at least a temporary deterrent. Lieutenant Myers 
testified at the hearing, for example, that:

        ``Probably the biggest impact that we have had on the 
        Internet as I monitor it and have for many years is the 
        work done by your own Subcommittee's investigators. 
        They had a dramatic impact on those on the Internet. 
        Not even knowing their investigation was going on, I 
        could see that the activity on the Internet as it 
        related to false ID was going through some changes.'' 
        \26\
---------------------------------------------------------------------------
    \26\ Id. at 21-22 (testimony of Lieutenant Myers).

The Subcommittee hopes that the combination of its work on the 
subject and the legislation to curb the manufacture and 
distribution of false identification documents over the 
Internet, along with renewed attention from law enforcement 
will decrease the number of crimes committed using the false 
documents.
II. The Subcommittee Investigation
  A. Methods Of Providing False Identification Materials By Internet 
        Sites
    The Subcommittee's investigation found two primary methods 
by which the operators of websites provide false identification 
materials: some simply provide their customers with the tools 
they need to produce their own false identification. These 
products are generally mailed in disk form to the customer, or 
more frequently, transmitted via the Internet, or available for 
downloading. Other website operators produce a completed false 
identification document for their customers themselves, which 
they deliver to the customer through the mail.
    (1) LSome Websites Offer False Identification Information and Tools
    Some website operators offer to mail customers a disk 
containing computer files. The operator of fakeidzone.com, Tim 
Catron, used the following language to promote his products:

        ``Our novelty id kit's allows anyone to make a new 
        identity. Maybe you would like to be able to spot fake 
        id's [sic] for your job, or you need a new novelty 
        birth certificate, or maybe you want to make some money 
        selling novelty id's. Everything you need is right 
        here! You will get full instructions with details on 
        how to use your kit--as well as hundreds of templates, 
        and tech support if needed.'' \27\
---------------------------------------------------------------------------
    \27\ See Hearing record, supra, at Exhibit 32b (Tim Catron, Fake ID 
Zone (visited Jan. 3, 2000) http://www.digitalhideout.com/idkit.html) 
(original punctuation and spelling preserved).

These website operators usually require payment by mail and 
provide the disk via return mail. Such sites are frequently 
unable or unwilling to use a third party for billing, and 
customers using such sites may not have credit cards or prefer 
to send their payment using untraceable methods such as cash or 
money order.
    The operator of the website fakeid.net, Brett Carreras, 
promoted his site as ``[t]he world's first and finest site 
devoted solely to fake ID information.'' This website contained 
free information such as State seals, coded numeric information 
on State issued identification, and templates that would assist 
an individual to create false identification. Fakeid.net also 
sold membership access to ``premium'' files containing high 
quality templates of State driver's licenses. Website operators 
offer files for the customer to download, maintain accounts 
with credit card or billing companies, and customers charge 
their purchase to a credit card, pay by telecheck, or pay 
through their telephone bill. Once the billing company has 
confirmed the purchase, an authorization code is provided to 
the customer for access to the files containing the information 
about false identification documents.
    Other websites offer, without charge, files available for 
downloading that contain false identification materials. For 
example, one website operator promoted the products offered 
with the following statement: ``Welcome to the Fake ID Archive! 
Here you will find everything you will need to make your own 
Fake ID.'' \28\ The Fake ID archive's product list included 
high quality, layered templates that customers could use to 
manufacture false identification. While the operators of these 
websites appear to be offering their products for free, their 
sites may generate income by linking to other web pages whose 
owners pay a fee for directing potential customers to them.
---------------------------------------------------------------------------
    \28\ Fake ID Archive (visited Apr. 21, 2000) http://
www.fakeids.cjb.net.
---------------------------------------------------------------------------
    (2) Some Websites Offer to Manufacture False Identification
    Some websites offer to make identification documents for 
customers. The operator of theidshop.com, Robert Sek, offered 
to provide customers with PVC plastic identification cards \29\ 
that closely resembled State driver's licenses. The 
Subcommittee purchased a phony Oklahoma driver's license from 
Sek, and found that the identification was high quality, and 
closely replicated a bona fide Oklahoma driver's license. The 
Subcommittee's purchase is detailed in Section III.A.(1). Sek's 
web page described his products as follows:
---------------------------------------------------------------------------
    \29\ Polyvinylchloride, commonly known as PVC, is a widely used 
type of plastic. PVC is frequently used to make cards such as 
identification badges and credit cards.

        ``The ID Shop is proud to be the first Id website to 
        ever offer PVC plastic holographic ID's. These are the 
        highest quality novelty ID's money can buy. They also 
        come with many added security options such as 
        holograms.'' \30\
---------------------------------------------------------------------------
    \30\ See Hearing record, supra, at Exhibit 31 (Robert Sek, PVC 
Plastic Id's (visited Jan. 27, 2000) http://www.theidshop.com).

The operator of fakeids.org, Josh Dansereau, similarly promoted 
---------------------------------------------------------------------------
his products as follows:

        All of are ID's are the new plastic credit card style, 
        they come with a working magnetic strip at no extra 
        charge. No one will question these Ids, even put to the 
        book test * * * they pass. We get e-mails everyday 
        about how great they work. Our Ids are made to very 
        strict standards, you will be completely satisfied.\31\
---------------------------------------------------------------------------
    \31\ Josh Dansereau, Gallery (visited Nov. 9, 1999) http://
www.fakeid1.com/gallery.htm (original punctuation and spelling 
preserved).

    These websites ask the customer to send the information 
that he or she wants on the identification document along with 
a picture, signature, and payment. The operator of the website 
manufactures the new identification, makes no attempt to verify 
that the information is true, and sends the customer the false 
identification document via return mail.\32\
---------------------------------------------------------------------------
    \32\ Identification documents are sent by return mail, at least, 
when the operator of the website is not simply defrauding customers of 
their money by providing no product whatsoever. As noted in Table 1, 
for example, the website operated by Mike Burton was designed to elicit 
orders for false identification products that Burton never intended to 
provide. Such activity is not a false identification crime, but instead 
constitutes simple fraud.
---------------------------------------------------------------------------
  B. LTypes of False Identification Materials Available on the Internet
    (1) Templates and Other Tools
    Some websites offer template and other tools that aid 
individuals in the manufacture of false identification 
documents. Templates are computer files that are frequently 
used to manufacture false identification documents. Templates 
are typically layered graphic files that can be manipulated to 
hide and reveal images and text. Layering a template enables 
the customer to replicate closely a feature on a State driver's 
license, such as a signature or seal, that appears to cover a 
portion of a picture, as each layer contains a portion of the 
entire image, such as the seal or signature. Individuals can 
also add images and text such as photographs or signatures to 
templates in order to customize them. To make a driver's 
license, for example, an individual would insert a scanned 
photograph and signature, and type in the correct name and 
address. Then the individual would print the document and 
laminate it. Because templates are merely electronic code 
indicating the graphic patterns of the desired document, one 
template can effectively be used an infinite number of times, 
by an infinite number of individuals, and can be transmitted 
easily via computer disk, or virtually instantaneously over 
telephone lines via the Internet.
    In the case of the older versions of the Maine driver's 
license, for example, both the State seal and the signature of 
the Secretary of State overlap the picture of the license 
holder. This is a security feature that helps prevent the 
physical alteration of an actual license by the simple 
expedient of replacing the original picture, since such 
tampering would cover a portion of the seal and signature. A 
layered computer template allows a new picture to be inserted 
``under'' the seal and signature so that it duplicates an 
official license. A simple ``mouse click'' in the program 
deletes the seal and signature block. After the user inserts 
the desired picture, the seal and signature block are simply 
reapplied as a layer above the picture.\33\ In this manner, 
users are able to defeat many of the security features that 
authorities have put in place.
---------------------------------------------------------------------------
    \33\ See Hearing record, supra, at Exhibits 4 and 5. Exhibits 4 and 
5 show, respectively, a template for a Maine driver's license without a 
photo in the photo layer, and a template for a Maine driver's license 
with a photo in the photo layer.
---------------------------------------------------------------------------
    With sophisticated templates and printers available, it is 
within the reach of a growing number of people to produce false 
identification and credentials. As Senator Collins noted in her 
opening statement at the Subcommittee hearing:

        ``These counterfeit documents are relatively easy to 
        manufacture. With only a modest understanding of the 
        Internet and $50 worth of supplies purchased from an 
        arts and crafts store, one can design authentic-looking 
        identification documents within a few hours or even 
        minutes.'' \34\
---------------------------------------------------------------------------
    \34\ Hearing record at 2 (remarks of Senator Collins).

    Some websites offer other security features or devices 
that, when added to a template, result in a more realistic 
identification document. Websites provide bar codes, or 
computer programs that generate a bar code, which may then be 
used as part of a counterfeit driver's license. Lieutenant 
Myers noted in his testimony at the hearing that website 
operators are keeping pace with the security features that 
States have been adding to their identification documents. 
``Things like bar codes and even two-dimensional bar codes that 
some States are going to,'' he noted, ``are easily generated 
off the Internet. There are several sites that assist you in 
generating these security features.'' \35\ Other websites 
reproduce the seal or flag used by States on their driver's 
licenses.\36\
---------------------------------------------------------------------------
    \35\ Id. at 20-21 (testimony of Lieutenant Myers); see also, e.g., 
Jeremy Martinez, New Identity Kit (visited Dec. 10, 1999) http://
www.newid.ultramailweb.com.
    \36\ See e.g., Brett Carreras, Fake ID.Net (visited May 12, 2000) 
http://www.fakeid.net.
---------------------------------------------------------------------------
    Other websites provide a computer program that enables the 
user to generate a realistic driver's license number. Many 
States use special coding in their driver's license numbers, 
allowing verification of the license by matching the driver's 
license number with certain characteristics of the owner. For 
example, the first letter of the driver's license number may 
correspond to the first letter of the owner's last name. Other 
digits may correspond to the month and year of birth, sex, or 
eye color. These websites offer a program that replicates a 
driver's license number that corresponds to the code of the 
State selected for a phony driver's license.\37\
---------------------------------------------------------------------------
    \37\ See e.g., Tim Catron, Fake ID Zone 
http:www.digitalhideout.com/idkit.html; Jeremy Martinez, New Identity 
Kit http://internetwebhosting.com/newid/iddownload; Novelty Fake ID 
Info CD (item 286156827) http://www.ebay.com.
---------------------------------------------------------------------------
    Other websites offer Social Security number generators or 
explain the method used by the Social Security Administration 
in issuing actual Social Security numbers. This numerical 
coding, corresponding to the State and year of birth, provides 
another method to verify the apparent identity of an 
individual. Such information, when available and used by those 
manufacturing false identification documents, can be used to 
create a Social Security number that appears to match a 
counterfeit identity.\38\
---------------------------------------------------------------------------
    \38\ See e.g., Jeremy Martinez, New Identity Kit (visited Dec. 10, 
1999) http://www. newid.ultramailweb.com.
---------------------------------------------------------------------------
    (2) False Identification Documents
      (a) State Driver's Licenses and Identification Cards
    The Subcommittee found that many websites offer to 
manufacture, or provide information that would allow the 
customer to manufacture, a document that would closely 
replicate the driver's licenses of various States. Most such 
websites are illustrated by pictures of the products that they 
offer,\39\ usually images of State driver's licenses. These 
images often include the picture of an individual or appear to 
be actual licenses, with either the picture or name of the 
individual removed. In other instances, the images shown are 
copied from samples appearing in a book published for law 
enforcement and private sector businesses that describes the 
features of State driver's licenses and identification cards.
---------------------------------------------------------------------------
    \39\ See, e.g., Hearing record at Exhibit 31.
---------------------------------------------------------------------------
    The Subcommittee's investigation found that the quality of 
the materials manufactured or offered by each website varied 
considerably. Some websites produced documents that closely 
replicated the driver's license of a State in graphic images, 
size, shape, format, color, typeface, and placement of features 
such as State seals and signatures, while others clearly bore 
little resemblance to the genuine article. Lieutenant Myers 
noted in his testimony that phony identification documents are 
available via the Internet for all 50 U.S. States and many 
government agencies.\40\ Websites manufacturing high quality 
identification documents frequently attempt to duplicate 
security features such as ``ghost'' pictures, holograms, and 
bar codes or magnetic stripes. These security features are very 
valuable to manufacturers, as they contribute to the realistic 
look of the counterfeit document.
---------------------------------------------------------------------------
    \40\  Hearing record, supra, at 13 (testimony of Lieutenant Myers).
---------------------------------------------------------------------------
    As Lieutenant Myers testified at the hearing, these 
security features now pose little difficulty to counterfeiters:

        ``Some of the features on the license * * * such as the 
        what we call a ghost image picture, those were very, 
        very difficult to reproduce in years past due to the 
        technology that we had at that time. Now it is very 
        simple.'' \41\
---------------------------------------------------------------------------
    \41\ Id. at 20 (testimony of Lieutenant Myers).

In fact, Lieutenant Myers added, ``our [law enforcement] 
training programs have to be updated virtually every month to 
come up with new technologies that are being used.'' \42\ No 
longer are individuals who devote many hours of study and 
practice the only ones able to reproduce these once effective 
security features. Senator Collins observed during the hearing 
that
---------------------------------------------------------------------------
    \42\ Id. at 21 (testimony of Lieutenant Myers).

        ``Many States, such as Connecticut, have added * * * 
        security features * * * for example, one of the 
        security features is the shadow picture and the bar 
        code. But my staff was able to replicate that in a way 
        that makes it virtually indistinguishable from a real 
        Connecticut license.'' \43\
---------------------------------------------------------------------------
    \43\ Id. at 20 (remarks of Senator Collins).

    Some websites also offer documents that closely resemble a 
State driver's license, but are missing one or more security 
features. Such documents are still quite effective for 
commercial activities and also might be used to obtain other 
authentic documents, because only trained personnel are likely 
to notice the subtle differences. Trent Sands, author of the 
book, Fake ID by Mail and Modem, advises his readers to 
---------------------------------------------------------------------------
capitalize on this lack of training:

        ``Mail order documents can be used effectively in 
        situations where the ID cannot be verified by the 
        person you are presenting it to. Consider the case of 
        where an individual wants to open a bank account * * *. 
        The bank clerk will accept the document without any 
        problem if it looks real.'' \44\
---------------------------------------------------------------------------
    \44\ Trent Sands, Fake ID by Mail and Modem, at 23 (2000).

Moreover, there are a multitude of State identification cards 
in circulation, employing a wide variety of security features. 
This is a serious problem about which Lieutenant Myers 
---------------------------------------------------------------------------
testified at the hearing, noting that

        ``there are over 200 active State identification cards 
        and driver's licenses due to the fact that most States 
        have an ID card and driver's license and have valid 
        older formats also. So in order for a law enforcement 
        person to be able to recognize all these features in 
        areas like Florida, where we have a lot of out-of-State 
        people, it is almost impossible to have everyone at the 
        expert status in order to identify all these types of 
        legal identification.'' \45\
---------------------------------------------------------------------------
    \45\ Hearing record, supra, at 20 (testimony of Lieutenant Myers).
---------------------------------------------------------------------------
      (b) Other Identity Documents
    Some websites actually offer to manufacture a counterfeit 
Social Security card. The card issued by the Social Security 
Administration is not intended to be an identification 
document, and thus contains only an individual's name and 
Social Security number. Older Social Security cards feature no 
real security features, although recently issued cards are more 
resistant to forgery.\46\ The Subcommittee also found a wide 
range of other identity documents available from websites, such 
as press credentials, a travel agent card, a tax exempt card, a 
gun owner's permit, and a resident activity coordinator 
certificate.
---------------------------------------------------------------------------
    \46\ Chris Hibbert, What to do When They Ask for Your Social 
Security Number (Apr. 5, 1997) http://www.faqs.org/ (Internet FAQ 
Consortium, Internet FAQ Archives, Usenet FAQs, Filename privacy/ssn-
faq).
---------------------------------------------------------------------------
    Even more alarming is the availability online of government 
agency credentials. Lieutenant Myers noted that most law 
enforcement credentials are ``much easier to copy and 
counterfeit than driver's licenses.'' Unlike driver's licenses, 
most law enforcement credentials are ``merely a picture stuck 
on a card and laminated.'' \47\ The Subcommittee learned that 
in general, law enforcement credentials frequently use fewer 
security features than do State driver's licenses.
---------------------------------------------------------------------------
    \47\ Hearing record, supra, at 13 and 22 (testimony of Lieutenant 
Myers).
---------------------------------------------------------------------------
    Several investigations have shown the ease with which such 
technology can be used to gain unauthorized access to a variety 
of sensitive areas. This problem was highlighted at a House 
Judiciary Subcommittee hearing held on May 25, 2000,\48\ for 
example, which detailed how investigators from the U.S. General 
Accounting Office (GAO) Office of Special Investigations (OSI) 
used credentials they had made using the method described above 
by Lieutenant Myers to gain easy access to 19 secure Federal 
sites and 2 commercial airports.\49\ In a similar operation at 
certain sensitive Defense Department facilities in May 2001 
commissioned by Senator Collins, GAO/OSI investigators 
penetrated the sites using easily-obtainable false 
identification--thus demonstrating their potentially 
catastrophic vulnerability to unauthorized access by criminals 
or terrorists.\50\ GAO's findings in these multiple penetration 
tests demonstrate that, in addition to the lax security 
measures in place at Federal facilities and airports, the 
Internet and computer technology allow nearly anyone easily to 
create convincing identification cards and credentials.
---------------------------------------------------------------------------
    \48\ See generally, Breaches of Security at Federal Agencies and 
Airports: Hearings before the Subcommittee on Crime, House Committee on 
The Judiciary, 106th Cong., 2nd Sess. (May 25, 2000).
    \49\ See U.S. General Accounting Office, Security: Breaches at 
Federal Agencies and Airports, GAO/T-OSI-00-10 (May 25, 2000) 
(statement of Robert H. Hast) [hereinafter ``Hast statement''].
    \50\ This investigation demonstrated such a serious security 
vulnerability that the Defense Department classified the previously-
unclassified GAO report at the SECRET level in the wake of the 
September 11, 2001 terrorist attacks upon New York City and Washington, 
D.C. For this reason, it is not possible to provide any more details of 
the operation here.
---------------------------------------------------------------------------
    Various reviews of the security of identification documents 
have long noted the problems caused by the variety of different 
identification documents used in the United States. Reverend 
Theodore Hesburgh, past chairman of the Select Commission on 
Immigration and Refuge Policy, once described the United States 
as a ``document forgers'' paradise.'' \51\ According to one 
1989 estimate, basic civil documents are issued by over 7,000 
jurisdictions:
---------------------------------------------------------------------------
    \51\ David Simcox, Secure Information: The Weak Link in Immigration 
Control (May 1989) http://www.npg.org/forms/secure--id.htm (quoting 
Rev. Theodore Hesburgh).

        ``The lack of uniformity, uneven quality, and relaxed 
        rules of issuance of many of these documents guarantees 
        widespread abuse. Falsified or stolen vital statistics 
        records become ``breeder documents'' for a chain of 
        false documents that open the doors to highly prized 
        entitlements--legal resident status for illegal aliens, 
        social security, food stamps, unemployment 
        compensation, and guaranteed student loans.'' \52\
---------------------------------------------------------------------------
    \52\ Id.
---------------------------------------------------------------------------
      (c) ``Breeder'' Documents
    The Subcommittee found various Internet sites that offer a 
variety of other types of identification documents or 
information that could be used to create other false 
identification documents. Several websites offer to provide 
false birth certificates, for example, which can be then 
completed to create a new identity or be used for identity 
theft. Sands cautioned his readers in Fake ID by Mail and 
Modem,

        ``The smart use of a fake ID is as a stepping stone to 
        a new identity with REAL documents. It may be necessary 
        to use high quality fake ID in the interim to rent a 
        mailing address or open a bank account, but the final 
        goal should be to dispense with the fake ID as soon as 
        possible.'' \53\
---------------------------------------------------------------------------
    \53\ Sands, supra, at 5.

    Birth certificates, when accepted as authentic, can thus be 
what are called ``breeder'' documents,\54\ allowing the 
individual who creates a false birth certificate to obtain 
authentic identification documents from an authorized 
government agency. In one case reviewed by the Subcommittee, 
which is explained in further detail in Section III.B.(1), 
Thomas Seitz obtained a blank birth certificate from a website, 
completed the birth certificate with the biographical 
information of another person, and used it to obtain a valid 
identification card from the State of New Jersey. Seitz 
explained his reasons at the Subcommittee hearing:
---------------------------------------------------------------------------
    \54\ A breeder document is a document that can be used to obtain 
other valid forms of identification.

        ``[T]he birth certificate is sort of the key. That is 
        the preferred document of identity that most agencies, 
        DMV and other government agencies, like to see. That, 
        coupled with a second form, the W-2, enabled me to go 
        to the New Jersey Department of Motor Vehicles and 
        present those documents and they would, in turn give me 
        the top document there, which is a genuine photo 
        identification card.'' \55\
---------------------------------------------------------------------------
    \55\ Hearing record, supra, at 18 (testimony of Thomas W. Seitz); 
see also id. at Exhibit 12 (Seitz's fake birth certificate, W-2 form, 
and New Jersey identification card).

    The Subcommittee found a number of templates for documents 
that are not typically issued by government organizations. 
These supporting identification documents, while not as 
universally accepted as a driver's license or birth 
certificate, allow individuals to obtain other legitimate 
identification documents. For example, an individual could use 
a false press pass or travel agent card to obtain a legitimate 
library card or account with a telephone company bearing the 
desired false identification. With those cards and account 
information, or the names and addresses that appear on bills, 
the individual could then obtain other more universally 
accepted forms of identification.
  C. Marketing Practices
    (1) Message Boards and Chat Rooms
    Websites that offer false identification materials or 
documents market their products in a variety of ways. Some 
appeal to those seeking to change their identity. For example, 
the home page of photoidcards.com offers customers the 
opportunity to ``[d]isappear completely and start a new life!'' 
Some sites tout the ability of the customer, using the 
materials supplied by the company, to create a wide variety of 
false identification materials. The site fakeidzone.com markets 
products to younger age groups, offering not only driver's 
licenses that would allow a juvenile to purchase alcohol, but 
also college transcripts and college diplomas.\56\
---------------------------------------------------------------------------
    \56\ See Hearing record, supra, at Exhibit 6 (Tim Catron, Fake ID 
Zone http://www.digitalhideout.com/idkit.html).
---------------------------------------------------------------------------
    Internet discussion boards are a free and easy means of 
advertising both products and websites. A posting to the 
newsgroup ``alt.2600.fake-id'' by an operator of phonyid.com, 
referring to himself as ``Cybersario,'' stated as follows:

        ``Don't get ripped off ordering from those scam sites 
        on the net, order from the company that has been 
        selling online since 1994. Phonyid.Com has been 
        featured in everything from High Times to ABC News. We 
        supply the highest quality ids and we are the only site 
        which offers actual State holograms. Before you 
        purchase a fake id do a little research and you will 
        find that Phonyid.Com is the most trustworthy supplier 
        of fake ids on the net.'' \57\
---------------------------------------------------------------------------
    \57\ Forum alt.2600.fake-id http://www.deja.com/group/
alt.2600.fake-id (post by ``Cybersario'' on Dec. 15, 1999). This 
individual presented him/herself as a Phonyid.com customer.

The Subcommittee's investigation indicated that the operators 
of Phonyid.com posted as many as 600 messages on a variety of 
topics on news group message boards.\58\ Messages posted on 
discussion boards reach large numbers of people quickly at 
minimal or no cost to the individual posting the message. 
Moreover, they target the desired audience of people who are 
Internet and computer savvy, and who may be interested in 
purchasing products online, or in using computer files such as 
templates.
---------------------------------------------------------------------------
    \58\ See Domain Watch (visited Dec. 17, 1999) http://
www.domainwatch.com (posting history for [email protected]).
---------------------------------------------------------------------------
    Most of the individuals posting comments on the discussion 
boards sign their messages ``anonymous'' or make use of obvious 
pseudonyms. This allows individuals who sell false 
identification products to post messages purporting to be from 
their own ``satisfied customers.'' Again using the 
``Cybersario'' pseudonym, for example, the operators of 
Phonyid.com posted a number of messages in an attempt to assure 
potential buyers of their site's authenticity. In one instance, 
they posted a message saying ``http//www/phonyid.com. The ids 
cost about $200.00 but they are realistic.'' \59\ In another 
case, a posted message read:
---------------------------------------------------------------------------
    \59\ Forum alt.2600.fake-id http://www.deja.com/group/
alt.private.investigator (post by ``Cybersario'' on Aug. 25, 1999)

        ``Phonyid.com has really good ids. I use them when I 
        need to pick up something when I am carding....has 
        worked everytime [sic] so far. I think the price is 
        high but what i use them for it doesn't really matter, 
        i am getting rich anyway.'' \60\
---------------------------------------------------------------------------
    \60\ Forum alt.2600.fake-id http://www.deja.com/group/
alt.2600.fake-id (post by ``Cybersario'' on Nov. 30, 1999).

---------------------------------------------------------------------------
In a third instance, a message was posted saying:

        ``This site has the best id cards. Just got my id with 
        hologram and it is the [deleted]. Cards only $150.00 
        but the hologram makes it worth it. I back these guys 
        100%.'' \61\
---------------------------------------------------------------------------
    \61\ Id. (Post by ``Cybersario'' on Jan. 5, 2000).

Using similar tactics, an individual styling himself ``IMO'' 
posted comments about several of the websites that had recently 
closed, again, possibly in an effort to boost the legitimacy of 
---------------------------------------------------------------------------
the sites:

        ``Perhaps you people are unaware but all the major id 
        sites have had their offices raid [sic] within the past 
        few months. I would hold off on ordering for a little 
        while, because the site you order from might be the 
        next one busted. It started with Noveltyid4u.com, they 
        got busted about 2\1/2\ months ago when the secret 
        service raided them for making false government 
        documents. Phonyid.com got busted about 2 months ago 
        for making counterfeit driver's licenses and 
        passports.'' \62\
---------------------------------------------------------------------------
    \62\ Fakeidman's Discussion Forum http://network54.com/Hide?Forum 
(re-post entitled ``You were not scammed, THEY WERE BUSTED!!,'' posted 
on Apr. 3, 2000).

The Subcommittee believes that the individual or group of 
individuals responsible for the above series of postings are 
the operators of the website. Furthermore, the Subcommittee 
placed orders with two websites, American Photo Company and 
Noveltyid4u.com, that the Subcommittee now believes were 
operated by a small group of individuals and may have been 
wholly fraudulent. The Subcommittee never received any product 
in return for the $283 it sent these two websites, nor, it 
suspects, did many other of these sites' would-be customers.
    (2) Deceptive Practices
    Website operators frequently use deceptive advertising to 
entice potential customers. Some make claims about the 
credentials of their employees, while others tout features of 
their cards that are likely to be untrue. Experience at a State 
department of motor vehicles (DMV) is one of the main lures the 
website operators employ. For example, photoidcards.com, a 
company based in Canada, claims that ``all id cards are 
professionally designed by an ex-DMV staff,'' and that 
photoidcards.com has ``25 years of experience working with DMV 
offices worldwide.'' \63\ In fact, photoidcards.com includes 
commentary from the aforementioned alleged ``former DMV'' 
employee, who says of the photoidcards.com products that ``the 
finish and design of virtually every aspect is outstanding.'' 
\64\ Website operators tout the services of ``former DMV'' 
staff to attract customers, since many of the security features 
of State issued driver's licenses and the methods of making 
them are known only to DMV employees.
---------------------------------------------------------------------------
    \63\ Loren Marceau, Home Page (visited Dec. 12, 2000) http://
www.photoidcards.com.
    \64\ Loren Marceau, Frequently Asked Questions (visited Feb. 4, 
2000) www.photoidcards.com/faq.html.
---------------------------------------------------------------------------
    Website operators also claim that their products have 
certain hard-to-duplicate security features that are in high 
demand and lend authenticity to the counterfeit documents. For 
example, many websites boast that their fraudulent 
identification documents bear holograms, working magnetic 
strips, and markings that appear under ultra violet light. Josh 
Dansereau of Fakeids.org, for example, promoted his products by 
stating on his home page that ``all id's are digital id cards* 
with working mag stripes that really scan.'' \65\ In his 
``Frequently Asked Questions'' section, however, Dansereau 
admitted that the magnetic strips are not functional: ``Do you 
have the credit card type of id with the magnetic stripe on the 
back? Yes, our ID's are the credit card style. The magnetic 
stripe on the back is for looks only, it does not really scan, 
it just makes the id more realistic.'' \66\ Many States now 
encode a magnetic strip on the back of their driver's licenses 
with an individual's biographical information. This is of only 
limited utility, however, as most bars, banks and retail stores 
do not possess the equipment to test the authenticity of the 
magnetic strip on an identification card--and thus to tell a 
false identification with a non-functional strip from a real 
one.
---------------------------------------------------------------------------
    \65\ See Hearing record, supra, at Exhibit 30 (Josh Dansereau, Home 
Page (visited Jan. 3, 2000) http://www.freehosting2.at.webjump.com/
413a62646/fa/fakeids-org/gallery.htm).
    \66\ Josh Dansereau, Frequently Asked Questions (visited Jan. 27, 
2000) http://www.freehosting2.at.webjump.com/413a62646/fa/fakeids-org/
faqhelp.htm.
---------------------------------------------------------------------------
    Another prized security feature is the hologram. IDnow.com, 
for example, states that ``the holograms we use are DMV issued 
meaning they will match exactly with an original ID.'' \67\ 
Theidshop.com notes in the description of its PVC plastic 
identification documents:
---------------------------------------------------------------------------
    \67\ Welcome to Idnow.com (visited Jan. 3, 2000) http://
www.idnow.com/faq.html.

        ``The ID Shop is proud to be the first ID website to 
        ever offer PVC plastic holographic ID's. These ID's are 
        the highest quality novelty ID's money can buy. They 
        also come with many added security options such as 
        holograms.'' \68\
---------------------------------------------------------------------------
    \68\ See Hearing record, Exhibit 31.

    The difficult nature of obtaining realistic holograms is 
demonstrated by the high volume of postings on message boards 
concerning holograms. Most of these postings focus upon how to 
craft them or obtain them. Moreover, instructions on how to 
make a hologram are also frequently included on the 
identification kits that are marketed by many websites. (These 
instructions offer advice on what sort of reflective gold paint 
to buy, and how to craft stencils. Some suggest using gold eye 
shadow.)
    Another deceptive marketing technique frequently employed 
by false identification website operators is to urge potential 
customers to order before the website is closed down by 
authorities--thus building market appeal upon the suggestion 
that the documents provided are so realistic that the site is 
operating illegally. In the advertising copy designed to 
promote his ``New Identity Kit,'' for example, Jeremy Martinez 
stated that ``We are revealing the secrets that they don't want 
you to know. Order now, before we are shut down by 
authorities.'' \69\ Martinez offered products titled, ``99 Ways 
to Disappear,'' and ``Better Ways to Disappear.'' \70\ 
Promaster Cards, a website based in the United Kingdom, 
similarly boasts about the illegality of its products, noting 
that ``we continue to be a major headache to several DMV and 
Law Enforcement Agencies from around the world.'' \71\ 
Promaster Cards also states that ``we have been shut down 
several times by the FBI and Treasury Department under various 
forgery acts of US law.'' \72\ Finally, the website boldly 
adds,
---------------------------------------------------------------------------
    \69\ Jeremy Martinez, New Identity Kit (visited Jan. 20, 2000) 
www.vsub.com/newid./htm. Martinez ultimately was shut down by the 
authorities.
    \70\ Id.
    \71\ Promaster Cards (visited Dec. 20, 1999) http://
members.xoom.it/--XOOM/driverid/page2.html.
    \72\ Id.

        ``We are openly admitting that we are breaking State, 
        Federal and several European law [sic] by providing ID 
        that are exact replicas in every detail of the current 
        IDs provided from the countries in our list.'' \73\
---------------------------------------------------------------------------
    \73\ See Hearing record, supra, at Exhibit 13 (About Promastercard 
(visited Dec. 20, 1999) http://members.xooPromasm.it/--XOOM/driverid/
index.html).

Statements of this type are obviously designed to entice people 
into buying products that appear so real that they are 
outlawed.\74\ This, they clearly feel, is precisely what their 
customers seek.
---------------------------------------------------------------------------
    \74\ On bestfakeids.com/splash/splash.html, Tim Beachum also used 
the ploy that the product price will soon rise: ``The street price on 
our novelty fake id kit is $99.00, we sell the same kit online at a 
discount price of $39.97. If you order our kit before midnight [of a 
specific date] you only pay $29.97.'' The end-of-sale date changes 
automatically every day so that no matter when a would-be customer sees 
the site, the promotion will always appear to be nearly over.
---------------------------------------------------------------------------
    (3) Search Engine Placement and Keywords
    Many websites operators rely on the skillful use of 
keywords to place their websites high on search engine results 
lists. High search engine placement results in more visitors 
and, therefore, more customers. In his written response to a 
Subcommittee questionnaire, Jeremy Martinez explained the 
importance of using keywords effectively:

        ``Since I am good at web promotion in the search 
        engines, I am able to obtain prime spots in search 
        engines, whereby surfers find me first and purchase 
        from me instead of downloading [templates], from the 
        free sites.'' \75\
---------------------------------------------------------------------------
    \75\ Hearing record, supra, at Exhibit 17 (Martinez questionnaire 
response, at 3 (Mar. 30, 2000)). See Federal Trade Commission v. Jeremy 
Martinez, individually and d/b/a Info World, Case No. 00-12701, 
Complaint for Injunctive and Other Relief (U.S. District Court for the 
Central District of California, Dec. 5, 2000); ``Fake Ids'' City News 
Service (May 18, 2001). Martinez's use of keywords, or ``meta tags'' to 
lure in potential customers did not go unnoticed by the Federal Trade 
Commission (FTC). In December 2000, the FTC filed a complaint in the 
U.S. District Court for the Central District of California alleging 
that Martinez deliberately marketed his website to consumers who were 
searching the Internet to find false identification documents. The 
complaint noted Martinez's use of such meta-tags as ``illegal id,'' 
``fake id fraud,'' and ``forging documents.
    Pursuant to a May 2001 agreement approved by U.S. District Judge 
Christina A. Snyder to settle the FTC lawsuit, Martinez will pay 
$20,000. He also agreed permanently to shut down his website, which 
sold 45 days of access to fake ID templates for $29.99, and contained 
``high quality'' templates for the creation of fake California, 
Georgia, Florida, Maine, Nevada, New Hampshire, New Jersey, Utah, 
Wisconsin, and New York driver's licenses. (Martinez's website also 
contained a birth certificate template, programs to generate bar 
codes--required in some States to authenticate driver's licenses--and a 
program to falsify Social Security numbers.)

Tim Beachum, operator of bestfakeids.com, reinforced this point 
during his Subcommittee deposition, noting that keywords affect 
``relevancy and a search engine ranking.'' \76\ When asked 
which keywords he uses to market his site, Beachum suggested 
that he had found the words ``Novelty Ids, Ids, Ids spelled 
with different cases, apostrophe-S, without the apostrophe-S, 
noveltyfakeIDs as one word, hyphenated, press pass'' to be 
high-return keywords. Beachum acknowledged under cross-
examination that he also used the simple keyword ``fake IDs.'' 
\77\
---------------------------------------------------------------------------
    \76\ Subcommittee deposition of Timothy Beachum, at 11 (Apr. 5, 
2000) (``Beachum deposition'').
    \77\ Id. at 141.
---------------------------------------------------------------------------
    In fact, the Subcommittee examined the key words that 
several of the website operators used, and discovered that the 
use of the word ``fake'' and its variants appeared much more 
frequently than the word ``novelty,'' despite the website 
operators' claims that their products were solely for 
``novelty,'' ``entertainment,'' or ``educational'' purposes. 
Dansereau, for example, used approximately 22 keywords or 
phrases to advertise his website. The word ``fake'' (or a 
variant such as ``false'') appeared 12 times. Dansereau, in 
fact, did not use the word ``novelty'' to advertise his website 
at all.\78\ Similarly, Brett Carreras, operator of fakeid.net, 
used approximately 37 keywords to market his website. The 
keyword ``fake'' or its variants appear 9 times in Carreras' 
usage, and the word ``novelty'' appears only twice.\79\
---------------------------------------------------------------------------
    \78\ Josh Dansereau, Gallery (visited Nov. 9, 1999) http://
www.fakeid1.com/gallery.htm. Dansereau also used the keywords ``False, 
Forging and Illegal'' to advertise his website.
    \79\ Brett Carreras, fakeid.net (visited Dec. 21, 1999) 
www.fakeid.net/free.html. The keywords ``forge'' (or variants) and 
``phony'' (or variants) are each used twice.
---------------------------------------------------------------------------
    Tim Catron, the operator of fakeidzone.com, illustrated the 
effectiveness of keywords such as ``fake'' by making the 
results of his eXTReMe Tracking service available to the 
public.\80\ While nearly 36 percent of the visitors to Catron's 
website used the keyword ``fake'' when searching for false 
identification on the Internet, less than two-tenths of one 
percent used the keyword ``novelty.'' \81\ Despite the fact 
that the advertising copy on these websites may contain the 
word ``novelty,'' the websites clearly target those customers 
who are in search of authentic-looking false identification 
documents.
---------------------------------------------------------------------------
    \80\ See Extreme Digital (visited Jan. 24, 2000) http://
www.eXTRemeTracking. Extreme Tracking is a service offered by Extreme 
Digital that tracks visitor traffic to a client's website. The 
information gathered includes the numbers of visitors, geographical and 
domain information about the visitors, and the keywords visitors used 
in a search engine to find the client's website. Catron made these 
records public in an attempt to demonstrate the profitability of his 
website to potential buyers in connection with his effort to sell the 
site through an online auction.
    \81\  Id.
---------------------------------------------------------------------------
  D. Disclaimers Have Little or No Legal Impact
    (1) Claims of Novelty
    Websites offering to produce false identification documents 
occasionally post disclaimers stating that the documents they 
sell are for ``novelty'' use only and should not be used for 
illegal purposes. Companies providing templates also frequently 
require users of their products to ``agree'' that they will not 
use the materials for illegal purposes. Sites may also require 
those accessing the information to waive liability against the 
company for any illegal acts, and to state that the individual 
using the site is not a law enforcement officer and will not 
use the material offered on the site as evidence for any charge 
of violating Federal, State, or local laws. One website 
providing templates seeks to avoid liability by asserting that 
the consumer is the one who actually produces the fraudulent 
document.\82\
---------------------------------------------------------------------------
    \82\ See Tim Beachum, Best Fake ID's (visited Mar. 13, 2000) http:/
/www.bestfakeids.com.
---------------------------------------------------------------------------
    Many websites purport to sell ``novelty'' or ``fun'' 
products despite marketing that undermines their claims. For 
example, Martinez offered a ``New Identity Kit'' that contains 
``[e]verything you need to create a new identity for fun!!'' 
yet he encouraged Internet users to order ``before we are shut 
down by the authorities.'' \83\ On his website, 
Bestfakeids.com, Beachum continually referred to his product as 
a ``Novelty fake id kit,'' but adds as a selling point: ``Get a 
job as a Resident Activity Coordinator Guaranteed--good jobs 
are so hard to find and the system doesn't make it any 
easier.'' \84\ In his Subcommittee deposition, Beachum noted 
that it was not his intention that customers use the 
certificate to get a job. He claimed that although ``the whole 
site is a joke,'' \85\ he wanted his customers to think that 
the certificate ``looked like the real thing.'' \86\ 
Contradictory statements such as these undermine the website 
operators' contentions that they do not intend their products 
to be usable as authentic identification documents and clearly 
suggest that they wish to give regulators (and the 
Subcommittee) a rather different impression than would-be 
customers. Another example is Robert Sek, who operated 
``Theidshop,'' a producer of high-quality false identification 
documents ``with many added security options such as 
holograms.'' Sek frequently referred to his products as 
``novelty Ids.'' However, he also stated that ``Theidshop'' was 
no longer accepting or processing orders from the State of 
Florida because of the statewide false identification program 
there.\87\
---------------------------------------------------------------------------
    \83\ Jeremy Martinez, New Identity Kit (visited Jan. 20, 2000) 
www.vsub.com/newid./a.htm.
    \84\ Beachum deposition, Exhibit 15.
    \85\ Id. at 30.
    \86\ Id. at 74.
    \87\ Robert Sek, TheIDShop.com (visited Dec. 21, 1999) http://
www.theidshop.com.
---------------------------------------------------------------------------
  (2) Disclaimers Do Not Discourage Sales
    Obviously, the disclaimers on these websites do nothing to 
prevent illegal use. Many websites have an initial page that 
states that users must read the disclaimer in its entirety and 
agree to its terms before entering the site. Frequently, 
however, very little of the fine print disclaimer is visible 
without extensive screen ``scrolling,'' and nothing prevents 
users from simply hitting the ``agree'' button and proceeding 
directly to the main website pages without reading the 
disclaimer at all--although this is not uncommon with on-line 
software licensing and use agreements.
    Many Internet users are conditioned to accept or agree to 
posted disclaimers without reading them, and may believe that 
disclaimers are of minimal importance. For example, university 
student Thana Barlee, who was arrested for making false 
identification documents for university classmates, noted in an 
interview with the Subcommittee that when he originally began 
searching the Internet for materials to use, he routinely 
ignored the disclaimers he read on the various false 
identification websites. Barlee added that he would see the 
disclaimers first, and then move to the main pages. Barlee told 
the Subcommittee that he was aware of the penalties associated 
with creating false identification but that, when he was making 
the documents, he paid no heed to them.\88\ Seitz also recalled 
spotting a small disclaimer, and testified that
---------------------------------------------------------------------------
    \88\ Subcommittee staff interview with Thana Barlee in Washington, 
D.C. (Mar. 23, 2000) (hereinafter ``Barlee interview'').

        ``I frequently came across disclaimers on the 
        individual sites stating, `For novelty use only.' I 
        cannot think of any reason why a statement like that 
        would be there. It did not deter my actions in any 
        way.'' \89\
---------------------------------------------------------------------------
    \89\ Hearing record, supra, at 16 (testimony of Thomas Seitz).

    Not only do website visitors attach little importance to 
the disclaimers, but some websites openly mock the disclaimers. 
The following is a disclaimer on the drink.to/idtemps website, 
---------------------------------------------------------------------------
operated by an individual identified as ``Rustheriddler'':

        ``All information or files found on this site are for 
        informational, entertainment, or educational purposes 
        only. What you do with it is your responsibility and 
        only yours, no one else! If you are a government 
        employee or have anything to do with the government or 
        law or anything at all, then you can't enter this site. 
        You must be at least 3945 years old and may not be 
        either male, female, or both. If you have purple skin, 
        red hair with pink stripes, and wear pink leather pants 
        made from whale skin then you may enter.'' \90\
---------------------------------------------------------------------------
    \90\ Rustheriddler, Temps (visited Dec. 1, 2000) http://
hammer.prohosting.com/idtemps/.

    Some operators reacted to Subcommittee scrutiny by quickly 
providing additional disclaimers. Until the Subcommittee 
contacted Beachum, for example, his website contained only the 
---------------------------------------------------------------------------
briefest of disclaimers:

        ``Because our novelty fake id kit is distributed in a 
        digital format we do not of [sic] refunds. Our kit is 
        sold as is. All images found on this site is [sic] 
        copyrighted, and can not be used by any other web site 
        without the written consent of Best Fake ID's.'' \91\
---------------------------------------------------------------------------
    \91\ Tim Beachum, Activity Coordinator Training Project (visited 
Jan. 6, 2000) http://www. Bestfakeids.com.

After he first spoke with Subcommittee staff, however, Beachum 
---------------------------------------------------------------------------
quickly expanded his disclaimer to note that

        ``[t]he information contained in this website is 
        strictly for academic use alone. BEST FAKE ID's will 
        bear no responsibility for any use otherwise. All 
        information on this web site is for entertainment and 
        educational purposes only.'' \92\
---------------------------------------------------------------------------
    \92\ Tim Beachum, Best Fake ID's (visited Mar. 13, 2000) http://
www.bestfakeids.com.

The Subcommittee found that both the website operators and the 
users attach very little importance to these disclaimers--
unless, that is, they realize their activities are being 
studied by authorities.
    (3) Operators Use Disclaimers as a Shield
    Some website operators try to protect themselves from any 
sort of liability by using disclaimers on the materials they 
produce. Robert Sek, for example, shipped his false 
identification documents in a laminated and sealed pouch 
printed with the words ``not a government document'' in red ink 
on both sides. The document could be removed intact from this 
pouch easily and quickly. Sek's false identification cards also 
included a fine print disclaimer stating that the card was 
intended for novelty purposes only and that the card is in no 
way affiliated or associated with any government entity--but 
this was printed in a nearly unreadable approximately 2-point 
font, and placed it in such a way as to resemble the 
boilerplate explanation of restrictions found on the backs of 
many genuine ID cards. Moreover, in some cases, the disclaimer 
may be present, yet remain undetected. As Lieutenant Myers 
testified at the hearing:

        ``The word `novelty' we find on a large percentage of 
        identification cards that come off the Internet. It may 
        be printed so small that you need a magnifying glass to 
        read it, or it may be just part of the disclaimer that 
        comes across. I know of no lawful purpose for someone 
        to use a supposed novelty ID, and in hundreds and 
        hundreds of cases that we have investigated, we find 
        that the word `novelty' is right on the license 
        somewhere. It is just no one can take the time or has 
        the ability to even detect it.'' \93\
---------------------------------------------------------------------------
    \93\ Hearing record, supra, at 23 (testimony of Lieutenant Myers).

    Clearly, these types of illegible or easily removable 
disclaimers violate the terms set out in Sec. 1738. As 
explained in Section I.(D) of this report, Federal law defines, 
for practical purposes, what a novelty identification card must 
look like. Under Sec. 1738, any identification document bearing 
a birth date or age must ``carry diagonally printed clearly and 
indelibly on both the front and back `NOT A GOVERNMENT 
DOCUMENT' in capital letters in not less than 12-point type.'' 
\94\ The term ``identification document'' is defined as ``a 
type intended or commonly accepted for the purpose of 
identification of individuals and which is not issued by or 
under the authority of a government.'' \95\ The statute 
provides for imposition of a penalty of up to 1 year's 
imprisonment for transporting in interstate or foreign commerce 
identification documents that do not meet these statutory 
requirements.\96\ Because it was apparent that technology 
allowed some individuals to skirt this law, Sec. 1738 was 
repealed by the Internet False Identification Act of 2000. 
Criminals can no longer hide behind the shield of such 
disclaimers.
---------------------------------------------------------------------------
    \94\ 18 U.S.C. Sec. 1738 (a)(1)-(2).
    \95\ Id. at Sec. 1738(b).
    \96\ See id. at Sec. 1738(a).
---------------------------------------------------------------------------
    Virtually all of the identification documents that the 
Subcommittee examined over the course of its investigation did 
not satisfy the above definition of novelty identification 
under Federal law. Accordingly, the unilateral efforts of the 
distributors of such products to characterize them as 
``novelty'' identification in order to shield themselves from 
criminal liability are likely to be ineffective as a legal 
defense. Seitz, who used false identification documents to 
commit a crime, agreed that website operators post disclaimers 
merely in an attempt to protect themselves and mask their true 
intentions:

        ``They are pretty much trying to cover themselves, in 
        my opinion, because they do not necessarily go out of 
        their way to say, go use this for an illegal purpose, 
        but [by posting] the disclaimer, they are probably, in 
        my opinion, trying to cover themselves. It does not 
        discourage anyone.'' \97\
---------------------------------------------------------------------------
    \97\ Hearing record, supra, at 19 (testimony of Thomas Seitz).

    To be sure, there are true novelty identification sites on 
the Internet.\98\ The Subcommittee's investigation, however, 
did not focus upon such sites because of their obviously 
novelty nature. For example, a ``Super Secret Agent'' card or a 
``Backseat Driver's License'' is unlikely to assist anyone in 
committing bank fraud. The products that these sites offer bear 
little, if any, resemblance to the bona fide documents on which 
they are based. The sites that the Subcommittee targeted, by 
contrast, promote their products as being virtual, if not 
exact, replicas of bona fide identification documents.
---------------------------------------------------------------------------
    \98\ See e.g., Hearing record, supra, at Exhibit 23 (Coolcards--
Postcards from the Net (visited Nov. 29, 2000) http://
www.coolcards.com).
---------------------------------------------------------------------------
    It is also worth noting that some false identification 
websites do not carry any disclaimers whatsoever.\99\ The 
Subcommittee examined a number of such sites, but could not 
gain much information about the operators because, in large 
part, they appear to be located abroad. (As a result, the 
Subcommittee was unable to compel their compliance with a 
subpoena.) Other sites operating without disclaimers use 
anonymous e-mail and free web hosting services, which do not 
verify their customers' contact information. Many persons using 
such services submit false contact information, making it--as 
intended--more difficult to track down the true operators 
behind such websites. Nevertheless, it is noteworthy that some 
false identification sites made no effort to shield themselves 
from scrutiny by a false claim of novelty. (The fact that many 
such websites appeared to be located overseas also illustrates 
the wisdom of repealing Sec. 1738, which clearly seems to have 
functioned principally to provide United States-based false 
identification sites with a patina of legality through the use 
of ostensible ``novelty'' disclaimers.)
---------------------------------------------------------------------------
    \99\ See e.g., Hearing record, Exhibit 3 (Idsolution.com (visited 
Jan. 4, 2000) http://www. idsolution.com).
---------------------------------------------------------------------------
    (4) Legal Challenges to Disclaimers
    Several Internet discussion boards that the Subcommittee 
reviewed included messages on ``novelty'' identification.\100\ 
The Subcommittee found that assertions of ``novelty'' with 
regard to the type of websites the Subcommittee investigated 
are often understood to be thinly veiled attempts to hide the 
sites' true illicit nature. Clearly, the marketing of these 
websites is very much at odds with the disclaimers that they 
post. Tim Beachum's site was a prime example. Prior to the time 
the Subcommittee contacted Beachum, he had only a single 
disclaimer posted in fine print on his website. This disclaimer 
stood in stark contrast to his more general claim that, by 
purchasing his products, customers could ``create fake ids so 
real that you could fool your own mother.'' \101\ As noted 
above, it was only after the Subcommittee had contacted Beachum 
that he added a clearly worded and prominently displayed 
disclaimer. Nevertheless, even such prominent disclaimers would 
not insulate Beachum from liability even before the repeal of 
Sec. 1738, because the birth certificate and driver's licenses 
that he offered do not bear disclaimers within the parameters 
of the statute.
---------------------------------------------------------------------------
    \100\ See e.g., Hearing record, Exhibit 27 (FakeID.NetDiscussion 
Board http://www. carreras.net/discus (post by ``Webhost'' on Oct. 13, 
1999).
    \101\ Tim Beachum, Best Fake ID's (visited Mar. 13, 2000) http://
www.bestfakeids.com.
---------------------------------------------------------------------------
    Law enforcement has investigated and prosecuted website 
operators who rely on these disclaimers. For example, State and 
Federal law enforcement officials have investigated at least 
two operators of Internet websites--Josh Dansereau \102\ and 
Robert Sek \103\--despite lengthy and prominently displayed 
disclaimers on their sites and the presence of at least 
notional disclaimers on Sek's product and on the plastic 
pouches in which it was delivered. The U.S. Secret Service's 
investigation of Sek, which was conducted jointly with the 
Texas Alcoholic Beverage Control Board, resulted in the 
execution of search warrants at Sek's Austin residence on March 
10, 2000. Dansereau was sentenced to a term of probation after 
pleading guilty to violating a Florida statute criminalizing 
the distribution of false identification documents.
---------------------------------------------------------------------------
    \102\ See Josh Dansereau, Fake Id One http://wwwfakeidl.com.
    \103\ See Robert Sek, The ID Shop http://www.theidshop.com.
---------------------------------------------------------------------------
    Two of the website operators that the Subcommittee examined 
closely, Carreras and Catron, invoked their Fifth Amendment 
privilege against self-incrimination as the basis for refusing 
to answer any deposition or interrogatory questions. Both of 
these witnesses posted disclaimers on their websites similar to 
those Beachum utilized.
    All in all, the Subcommittee considers the posting of these 
disclaimers to be a disingenuous and ineffective effort to 
conceal the true purpose of such websites--namely, to 
distribute false identification documents by taking advantage 
of the speed, relative anonymity, and enormous client base the 
Internet offers.
  E. Role of the Internet
    (1) LThe Internet Allows Instantaneous and Anonymous Sales and 
        Transfers of False Identification
    Before the use of the Internet for commerce, businesses 
were largely limited to customers who could contact them (or 
whom they could contact) in person, by telephone, or through 
the mail. This placed some practical limits upon the size of 
one's customer base and imposed some largely unavoidable 
capital investment requirements. The Internet, however, makes 
geographic boundaries and overhead costs largely insignificant. 
Particularly in conjunction with credit-card-based payment 
systems, a customer in a remote location in one part of the 
world may now purchase materials from a business in a remote 
location in another part of the world, provided that both 
parties have access to the Internet. Indeed, the customer may 
not necessarily ever even know where the business is located, 
or anything more about it than the address of its website and 
whatever information happens to have been posted there. (As the 
Subcommittee also found in trying to track down the operators 
of false identification websites, the Internet provides 
powerful means by which to hide information about site 
operators.)
    Unfortunately, these developments have proven to be a great 
boon for the false identification business. When the product 
purchased over the Internet consists only of computer files 
such as a false identification template, for example, it can be 
delivered almost instantaneously, increasing the advantages of 
such transactions as compared to traditional methods of 
marketing and distribution. According to U.S. Secret Service 
Director Brian Stafford:

        ``Most of the false identifications either come from * 
        * * the template on the Internet or they actually come 
        from true identities that are scanned and then desktop 
        publishing is utilized and it is ultimately placed on 
        the Internet, where, as you know, a button can be 
        pushed and it can be sent anywhere in the world.'' 
        \104\
---------------------------------------------------------------------------
    \104\ Hearing record, supra, at 26 (testimony of Director 
Stafford).

    Moreover, the quality of the product is not affected by 
this transmission. As Lieutenant Myers testified at the 
hearing, ``The graphics that can be produced on the computer, 
they can be electronically transmitted to anyone in the world 
in that same quality.'' \105\ (Use of such readily-obtainable 
templates, of course, is decidedly superior to traditional 
false-identification techniques, which may have involved such 
crude expedients as using a razor blade or other instrument to 
alter identification documents individually.) For businesses 
promoting false identification materials, and for customers 
seeking such products, the Internet also allows an almost 
instantaneous transaction. An individual who uses the Internet 
can locate and produce the desired false identification 
document in an amazingly short period of time. Thomas Seitz 
testified during the hearing that he found the templates and 
created the fraudulent birth certificates that he utilized in 
``a matter of minutes.'' \106\
---------------------------------------------------------------------------
    \105\ Id. at 20 (testimony of Lieutenant Myers).
    \106\ Id. at 18 (testimony of Thomas Seitz).
---------------------------------------------------------------------------
    Using the Internet thus enables operators to keep their 
costs and risks at a minimum, while offering a product of 
consistently high quality with unprecedented rapidity and 
efficiency. All in all, this has proven to be a business 
bonanza. In fact, Trent Sands wrote in Fake ID by Mail and 
Modem that:

        The Internet has breathed new life into the world of 
        false identification. Many new companies are springing 
        up to meet the needs of those who want documentation 
        saying they are someone else. * * * The robust health 
        of the mail-order and Internet identification business 
        is in stark contrast to the situation of just a few 
        years ago.\107\
---------------------------------------------------------------------------
    \107\ Sands, supra, at 1.

    Websites selling ``memberships'' or access to password 
protected information may acquire customers who purchase 
continuing memberships using credit cards that are billed 
monthly by a third party with the understanding that the 
website operator will provide new information or additional 
services through the website. One Website offering access only 
to ``members'' promised, ``More Updates Coming Soon! More being 
added all the time!'' \108\ Such up-to-date information can be 
useful in circumstances where a State modifies the design of or 
adds security features to a driver's license.
---------------------------------------------------------------------------
    \108\ Jeremy Martinez, Homepage (visited Jan. 5, 2000) 
newid.ultramailweb.com.
---------------------------------------------------------------------------
    Elimination of the distance barriers for transactions 
involving false identification materials presents new 
challenges for law enforcement. Bruce Schneider, Chief 
Technology Officer at Counterpane Internet Security, observed, 
``The Net changes the nature of crime. * * * This is the death 
of distance: Crime is no longer based on proximity.'' \109\ Law 
enforcement agencies in the United States face particular 
jurisdictional and other obstacles when criminal activity based 
in another country affects United States citizens. The Internet 
compounds these problems because of its ability to promote 
commerce and communication between distant locations, combined 
with the ability to conceal users' identities.
---------------------------------------------------------------------------
    \109\ ``Foil the Hackers? A Security Maven Discusses the 
Impossible,'' Business Week (Mar. 6, 2000), at 32F-32J (interview of 
Bruce Schneider, Chief Technology Officer, Counterpane Internet 
Security Inc., San Jose, California).
---------------------------------------------------------------------------
    A report of the President's Working Group on Unlawful 
Conduct on the Internet described the jurisdictional problems 
facing law enforcement agencies seeking to investigate crimes 
committed using the Internet:

        ``The challenge to law enforcement is identifying that 
        location [of a computer] and deciding which laws apply 
        to what conduct. The question is how sovereign nations 
        can meaningfully enforce national laws and procedures 
        on a global Internet. Inconsistent substantive criminal 
        laws are only part of the problem, for investigative 
        techniques are also controlled by national (or local) 
        law. For example, law enforcement agencies must 
        consider such issues as transborder execution of search 
        warrants.'' \110\
---------------------------------------------------------------------------
    \110\ U.S. Department of Justice's, Report of the President's 
Working Group on Unlawful Conduct on the Internet, at 20 (Mar. 9, 
2000).

    Concealment of one's identity provides those engaging in 
criminal activities another tool to avoid detection by law 
enforcement. In a statement delivered to the Senate Judiciary 
---------------------------------------------------------------------------
Committee, a Justice Department official noted that a

        ``fundamental issue facing law enforcement involves 
        proving a criminal's identity in a networked 
        environment. In all crimes--including cybercrimes--we 
        must prove the defendant's guilt beyond a reasonable 
        doubt, but global networks lack effective 
        identification mechanisms. Indeed, individuals on the 
        Internet can be anonymous, and even those individuals 
        who identify themselves can adopt false identities by 
        providing inaccurate biographical information and 
        misleading screen names. Even if a criminal does not 
        intentionally use anonymity as a shield, it is easy to 
        see how difficult it could be for law enforcement to 
        prove who was actually sitting at the keyboard and 
        committing the illegal act. This is particularly true 
        because identifiable physical attributes such as 
        fingerprints, voices, or faces are absent from 
        cyberspace, and there are few mechanisms for proving 
        identity in an electronic environment.'' \111\
---------------------------------------------------------------------------
    \111\ Internet Crimes Affecting Consumers: Hearings before the 
Subcommittee on Technology, Terrorism and Government Information of the 
Senate Judiciary Committee, 105th Congress, 1st Session (Mar. 19, 1997) 
(statement of Robert S. Litt, Deputy Assistant Attorney General, 
Criminal Division, U.S. Department of Justice).
---------------------------------------------------------------------------
(2) Website Operators Disguise Their Names and Locations
    The Subcommittee found that several websites use a variety 
of tactics to make it difficult for law enforcement to discover 
their identities. Most websites on the Internet use simple 
addresses, such as yahoo.com, that allow companies to be easily 
identified through Network Solutions, the company responsible 
for registering most commercial websites in the United States. 
Domain names are usually accompanied by registration 
information that is publically available. This information 
normally contains the name of the company or individuals 
registering the website, their address, telephone number, and 
e-mail address.
    Some operators of websites that offer false identification 
materials cloak their identities by providing false or 
erroneous information when their domain name is registered. For 
example, one website offering false identification materials 
registered its domain name listing a fictitious address and 
telephone number in Mexico.\112\ Other sites operate using free 
server space from a web host, usually placing advertisements on 
the screens of users of such pages. For example, one website 
offering false identification material, Promaster Cards,\113\ 
uses a web hosting service called Xoom,\114\ which prevents 
public identification of the company or persons responsible for 
the site through Network Solutions. Such actions make it more 
difficult for law enforcement to contact such companies about 
their activities and, if the operations are run from foreign 
countries, render apprehension even more difficult.
---------------------------------------------------------------------------
    \112\ Network Solutions, Registration of idsolution.com (visited 
Dec. 12, 1999) http://www.networksolutions.com.
    \113\ See Hearing record, supra, at Exhibit 13.
    \114\ Xoom is owned by NBCi.com. Promaster Cards actually uses an 
Italian subsidiary of Xoom. See http://members.xoom.it/--XOOM/driverid/
index.html.
---------------------------------------------------------------------------
    Companies or individuals may also use a series of different 
web hosts and e-mail addresses to remain hidden from detection, 
akin to moving the location of a business every few weeks. This 
practice would be impossible for conventional businesses with 
physical locations because the cost would be prohibitive. It is 
simple to accomplish, however, on the Internet. Lieutenant 
Myers testified that on many occasions he has shut down a 
website, only to find the same site reappear at a new web 
address: ``these people will be right back, and we have found 
in many cases that we have even arrested people for [violations 
of false identification statutes], then we find them back on 
the Internet.'' \115\
---------------------------------------------------------------------------
    \115\ Hearing record, supra, at 22 (testimony of Lieutenant Myers).
---------------------------------------------------------------------------
    Websites offering false identification materials also 
frequently use post office boxes or the address of a commercial 
mail-receiving agency to receive mail. Such addresses can be 
established using intermediaries, thus masking the identity as 
well as the location of the actual operator of the business. In 
addition, such addresses can be quickly changed, and the 
address change can be made on the web page in a matter of 
minutes, allowing website operators to avoid detection by law 
enforcement. This method of preserving anonymity works for 
customers as well. Trent Sands, in his book on false 
identification, advises his readers to ``[a]lways use a mail-
receiving service to order any document from a false ID vendor. 
Never use your real name when ordering documents. Always pay by 
money order.'' He suggests that this safeguard will help 
protect the customer from law enforcement crackdowns on false 
identification manufacturers--which may lead to authorities' 
acquisition of the names of and contact information for illegal 
manufacturers' customers.\116\
---------------------------------------------------------------------------
    \116\ Sands, supra, at 8 (emphasis in original).
---------------------------------------------------------------------------
    Many operators of websites offering false identification 
materials use e-mail accounts that can be obtained anonymously, 
and thus hinder easy identification of the operator. An 
individual may obtain a virtually unlimited number of e-mail 
accounts from sources that are free, and may avoid detection by 
frequently changing e-mail accounts.
    Persons using the Internet to distribute false 
identification documents often use computer technology and 
features unique to the Internet to protect their anonymity and 
avoid law enforcement. For instance, one individual posted a 
message on the discussion board at fakeid.net, advising those 
who manufacture counterfeit documents how to avoid detection:

        ``Never work at home, if possible and you have the 
        means, never work in your own State or sell to people 
        in your own State. Keep moving. Work out of hotels, 
        your car or an Apartment in another name. (Laptops 
        essential) Encrypt. They don't really need hard 
        evidence, but you damn sure don't need to give them 
        any.Keep nothing on hard drives and clean your free 
        space often. * * * Keep business dealings separate. Ten 
        people don't need to know you and each other. You 
        should be known as a different name to each person. 
        Have a new ID (a real one) on standby. Don't use it for 
        [deleted] until you need it. Mandatory.Self 
        explanatory. When you get out of jail you are now a 
        convicted felon, life is now a [deleted].'' \117\
---------------------------------------------------------------------------
    \117\ Hearing record, supra, at Exhibit 25 (FakeIDNet Message Board 
http://www.carreras.net/discus (post by ``Risingson'' on Oct. 13, 
1999)) (original punctuation and spelling preserved).

    As the Subcommittee has found with other Internet-related 
investigations, anonymity is a key element for many of the 
operators of websites conducting illegal activities. During 
this investigation, the Subcommittee found websites offering 
false identification documents that never stated the company's 
name, address, or telephone number.\118\ Some operators of 
websites request customers to communicate only by e-mail \119\ 
or require a purchase to be made by credit card over the 
Internet. Some companies intentionally locate outside of the 
United States or use mailing addresses in Canada or an overseas 
location in order to insulate themselves from investigation by 
law enforcement agencies in the United States. The web page of 
one company, Promaster Cards, stated as follows:
---------------------------------------------------------------------------
    \118\ For example, the web page of fakeid.net has no company name, 
address, or phone number. See FakeID.Net http://www.fakeid.net.
    \119\ Hearing record, supra, at Exhibit 25.

        ``Already we have been shut down several times by the 
        FBI and Treasury Department under various forgery acts 
        of US law. * * * We have now moved our web site to the 
        UK but continue to process orders for our clients from 
        around the world from our studios in the New York area. 
        In the next few months we expect to be shut down again 
        but we will bound back as always from another part of 
        the net. Hopefully in the UK they will take a little 
        bit longer to catch on.'' \120\
---------------------------------------------------------------------------
    \120\ Id. at Exhibit 13.
---------------------------------------------------------------------------
  F. Websites Offering False Identification Materials Facilitate Other 
        Crimes
    While it is a crime in and of itself to manufacture and 
sell a counterfeit identification document, false 
identification documents can also be used to further engage in 
other illegal activities. Indeed, this is presumably the 
principal source of demand for such documents. When the 
Subcommittee commenced its investigation into the increasing 
availability of false identification and credentials over the 
Internet, it aimed to curb the use of false identification 
principally because of the host of other crimes ranging from 
underage drinking to credit card and bank fraud to identity 
theft that are facilitated by false identification. Senator 
Levin noted in his opening statement, for example, that false 
identification documents are:

        ``often now being used to carry out improper or 
        criminal activities--to obtain fraudulent loans, to 
        evade taxes, to establish a new identity, to steal 
        another individual's identity, to defraud Federal and 
        State Governments, to misrepresent one's residence or 
        place of birth or age for any variety of purposes.'' 
        \121\
---------------------------------------------------------------------------
    \121\ Id. at 4 (remarks of Senator Carl Levin).

This sentiment was confirmed by Director Stafford, who noted 
that there is a false identification component to nearly every 
financial crimes arrest the Secret Service makes, including 
bank fraud, credit card fraud, telecommunications fraud and 
computer fraud.\122\
---------------------------------------------------------------------------
    \122\ Hearing record, supra, at 26 (testimony of Director 
Stafford).
---------------------------------------------------------------------------
    Bank fraud and identity theft may be more serious crimes 
than the manufacture of false identification, however, it is 
often the manufacture of phony identification that allows bank 
fraud or identity theft to occur. Moreover, as worrisome as 
crimes such as bank fraud and identity theft clearly are, in 
the wake of the terrorist atrocities of September 11, 2001, it 
now appears that the dangers of false identification are 
greater than most observers have imagined.
    The Subcommittee found significant evidence of the criminal 
motivations of users of false identification from messages 
posted on various Internet discussion boards, a forum that has 
blossomed as the Internet itself has grown. For example, the 
following messages were exchanged on an Internet discussion 
board about false identification on March 15-16, 2000:

        ``Who would pay 225$ for an Id with a holo[gram]??? 
        thats just a waste of money and only losers would pay 
        for it. And who would buy an id withouht a holo? only 
        losers who just suck. Wizz is a good guy but if u wanna 
        make money you should get authentic looking holos and 
        not some crappy ones that are not part of the state and 
        then mad people gonna buy. and whoever is stupid enough 
        to buy an Id without a Holo then you're gonna be 
        [deleted] cause u will get caught.

        Will

        Will,

        I would have to disagree with you. When i can get them, 
        i pay $300.00 for them with true holo's all the time. I 
        have to have holo's on mine. Just to give you an idea, 
        i am closer to being 40 years old than being 21 years 
        old. So I am not using them to buy alcohol or get into 
        clubs. I am using them at banks.(they have to pass the 
        book check) So to pay $300.00 for one that looks exact 
        is a no brainer. I would feel more comfortable paying 
        $300.00 for a quality one, then trying to save myself 
        some money by buying one for $25.00 and get nailed. 
        This is one of those things that i truly believe that 
        you get what you pay for. I do agree with you regarding 
        the holo's though, if they are not the correct ones for 
        that State then don't even bother putting them on, you 
        will end up getting your [deleted] thrown in jail.

        --Ed'' \123\
---------------------------------------------------------------------------
    \123\ Id., Exhibit 26 (Fakeidman Is ID List http://
www.pages.eidosnet.co.uk/fakeidman/ (post by ``Will'' and ``Ed'' on 
Mar. 17, 2000)) (original punctuation and spelling preserved).

    The Subcommittee discovered the following posting on a 
website containing a discussion boards that center on false 
---------------------------------------------------------------------------
identification materials:

        ``+++URGENT+++

        ``I need an american or canadian fake id, birth 
        certificate and social security card that will get me 
        from canada to the u.s. and will make it through 
        immigration and border patrol

        --any State will work

        --high priority, money no problem, must be very well 
        done and professional

        --please email me right away at [e-mail address 
        deleted]'' \124\
---------------------------------------------------------------------------
    \124\ Fake ID Zone http://www.fakeidzone.com (post by ``tulip'' on 
Feb. 21, 2000).

    Another post by the web host of one site offering false 
identification materials stated as follows: ``There are people 
out there that aren't 17 years old, snaking past that 80-year-
old bar guy to snag a 40 oz. [beer]. There are people out there 
that craft stuff better than DMVs and more untraceable.'' \125\ 
This same post advises others about tricks to avoid legal 
problems: ``Use your language appropriately * * * integrate 
words like ``novelty'', ``educational'' and ``informational'' 
as often as possible.'' \126\ Such users are clearly 
anticipating using their phony identification for a host of 
illegal activities, and are not intending to use their phony 
identification and credentials ``for novelty purposes only,'' 
as the website operators suggest.
---------------------------------------------------------------------------
    \125\ Hearing record, supra, at Exhibit 27.
    \126\ Id.
---------------------------------------------------------------------------
    (1) Identity Theft
    Identity theft is reported to be one of the fastest growing 
crimes in the United States, and led to the introduction of S. 
1399, the Identity Theft Prevention Act of 2001 by Senators 
Feinstein, Shelby, Corzine, Kyl, and Grassley in September 
2001. Identity theft is possible without false identification 
documents, but it is much more difficult.
    Individuals who seek to engage in identity theft may find 
the Internet a valuable tool. In addition to using the Internet 
to gain personal information about an individual whose identity 
they may wish to steal, the Internet facilitates identity theft 
through the production of quality counterfeit identification 
documents. According to Norman A. Willox, Jr., Chief Executive 
Officer of the National Fraud Center,

        ``The computer and, more recently, the Internet have 
        brought identity theft to a much more insidious level. 
        They have allowed the identity thief to obtain personal 
        identifiers of multiple persons quicker; to access 
        higher quality fake identification tools (driver's 
        licenses, birth certificates, social security cards, 
        etc.) and, through e-commerce, to render the credit 
        transaction completely impersonal. The potential harm 
        caused by an identity thief using the Internet is 
        exponential.\127\
---------------------------------------------------------------------------
    \127\ National Fraud Center, Inc. and Norman A. Willox, Jr., White 
Paper: Identity Theft: Authentication As a Solution 5 (Mar. 16, 2000) 
(presented at National Summit on Identity Theft).

    Not only was Thomas Seitz, who testified at the hearing 
about his use of false identification to commit identity theft, 
able to gather information on his potential victims by 
searching the Internet, but he was also able to obtain online 
the false identity documents he needed to commit identity 
theft. Seitz testified that it was largely because he was able 
to find personal information about other people, as well as the 
means to create false identification, that he committed the 
---------------------------------------------------------------------------
criminal acts for which he has been convicted:

        ``Although at first I did not have the intent to 
        defraud anyone, I started searching the Internet again 
        and determined that there were a large number of sites 
        that offered the means to make false identification and 
        the opportunity presented itself.'' \128\
---------------------------------------------------------------------------
    \128\ Hearing record, supra, at 15 (testimony of Thomas Seitz).

    In July 2000, the Subcommittee learned of a case in which 
an individual used false identification that he very likely 
obtained from website operator Robert Sek to perpetrate 
identity theft and a host of financial crimes. After finding a 
wallet belonging to Dr. Charles Glueck, Benito Castro used 
false identification in Glueck's name to commit bank fraud, 
credit card fraud, and insurance fraud, eventually racking up 
$35,000 in debt on ten credit cards that Castro obtained in 
Glueck's name. Castro told Louisiana State Police Lieutenant 
Kermit Smith, who investigated the crime, that after he bought 
the identification over the Internet, the seller offered him a 
job as a sales representative. The Subcommittee examined 
Castro's fake identification and found it to be virtually 
identical to the one the Subcommittee bought undercover from 
Robert Sek, right down to the disclaimer-bearing plastic pouch 
in which the identification was packaged.\129\
---------------------------------------------------------------------------
    \129\ For more information on the Subcommittee's undercover 
purchase, see Section III.A.(1)(c).
---------------------------------------------------------------------------
    Castro's document, like the Oklahoma identification 
document the Subcommittee obtained from Sek directly, was 
printed on stiff white plastic, and closely resembled in its 
design, coloring and fonts, a Louisiana driver's license. 
Again, like the Subcommittee's document, this false 
identification document omitted the words ``driver's license'' 
and included a fine print disclaimer on the back. On August 9, 
2000, in the 19th Judicial District Court of Louisiana, Benito 
Castro pled guilty to 10 counts of identity theft, one count of 
theft, and one count of bank fraud.\130\ Castro, who is the 
first man sentenced under Louisiana's 1999 Identity Theft law, 
is currently serving a 10-year term of incarceration at hard 
labor without possibility of parole at a Louisiana State 
correctional facility.\131\
---------------------------------------------------------------------------
    \130\ State of Louisiana v. Benito Castro, Case No. 09-00-680 
(Nineteenth Judicial District Court for the Parish of East Baton Rouge, 
State of Louisiana, Aug. 9, 2000) (Information). More specifically, 
Castro was convicted of 10 counts of identity theft under Louisiana 
Revised Statute 14:67.16(C)(1), one count of theft of over $500 under 
Louisiana Revised Statute 14:67(B)(1), and one count of bank fraud 
under Louisiana Revised Statute 14:71.1.
    \131\ Keith O'Brien, ``Identity Thief Gets 10 Years in Jail'' Times 
Picayune (Aug. 10, 2000).
---------------------------------------------------------------------------
  (2) Recent Terrorist Acts May Have Been Facilitated by False 
        Identification
    The consequences of failing to curb the spread of false 
identification are grave indeed, and go potentially far beyond 
simply facilitating under-age drinking--in fact, evidence 
indicates that some associates of the Al Qaeda terrorist 
organization may have used false identification and immigration 
documents. False identification documents and credentials can 
enable criminals to gain unauthorized access to secure areas in 
airports and to open bank and credit card accounts under false 
identities in order to finance their activities. In addition, 
phony identification enables criminals to obtain bona fide, yet 
unsupported and unauthorized, identification documents such as 
driver's licenses. Their efforts to hide behind such false 
identities makes it much harder for law enforcement and 
intelligence officials to identify them.
    One week after the horrific September 11 attacks, Federal 
agents arrested three men who may be associated with the 
terrorists' network on charges of possessing false 
identification. The identification documents, which are in the 
name of another individual alleged to be an associate of bin 
Laden who was arrested later, include a U.S. Immigration and 
Naturalization Service Form I-94 and a U.S. Immigration and 
Naturalization Service alien identification card (both of which 
have been confirmed as false by the U.S. Immigration and 
Naturalization Service), and a United States visa (which has 
been confirmed as false by a State Department Diplomatic 
Service agent). The documents, which the suspects told agents 
were false, also included a U.S. Social Security Administration 
card, and a ``World Service Authority'' passport.\132\ In 
addition, two of the individuals are alleged to have obtained 
driver's licenses in both Ohio and Michigan, apparently using 
false supporting documents.
---------------------------------------------------------------------------
    \132\ See United States of America v. Ahmed Hannan, Case No. 01-
80778; United States of America v. Karim Koubriti, Case No. 01-80779; 
United States of America v. Farouk Ali-Hamoud, Case No. 01-80780 (each 
in U.S. District Court, Eastern District of Michigan, Sept. 18, 2001) 
(affidavit of Special Agent Robert Pertuso in support of Criminal 
Complaints), and Tamar Lewin, ``A Nation Challenged: The Charges: 
Accusations Against 93 Vary Widely,'' New York Times (Nov. 28, 2001), 
at B6. ``World Service Authority'' passports are not government-issued. 
See www.worldservice.org.
---------------------------------------------------------------------------
    The FBI is investigating whether some of the terrorists who 
crashed American Airlines Flight 77 into the Pentagon obtained 
bona fide Virginia identification cards using false supporting 
documents, such as false sworn statements attesting to their 
Virginia residency.\133\ In a case that was opened prior to 
September 11, 2001, investigators are looking into how 
approximately 20 individuals in seven States obtained licenses 
that permitted them to haul explosives and hazardous materials 
such as dynamite, gases, and toxic or radioactive waste. It is 
unclear what they may have intended to do using these 
credentials.\134\
---------------------------------------------------------------------------
    \133\ Brooke A. Masters, ``Hijackers Exploited DMV Loophole,'' 
Washington Post (Sept. 21, 2001), at A15, and Tamar Lewin, ``A Nation 
Challenged: The Charges: Accusations Against 93 Vary Widely,'' New York 
Times (Nov. 28, 2001), at B6, and Matthew Barakat, ``Fourth Person 
Charged With Helping Hijackers Gain Fake Ids,'' Associated Press (Oct. 
25, 2001), and Alexandra R. Moses, ``Attacks Investigation Points to 
Pocket of Terrorist Support,'' Associated Press (Nov. 17, 2001).
    \134\ John Mintz and Allan Lengel, ``FBI Arrests Liquor Store 
Clerk,'' Washington Post (September 21, 2001) at A14.
---------------------------------------------------------------------------
    (3) Infiltration of Federal Facilities Using Phony Identification
    Shortly after the Subcommittee's hearing on false 
identification, the House Judiciary Subcommittee on Crime held 
a hearing on May 25, 2000, which detailed the results of a GAO 
undercover operation and underscored the Subcommittee's 
findings about the dangers posed by the widespread availability 
of false identification. GAO investigators from the Office of 
Special Investigations (OSI) were able to breach security at 21 
of the most secure buildings in the United States, including 
the CIA, the FBI, and several airports by claiming that they 
were armed law enforcement officers. The investigators 
displayed phony law enforcement badges and phony credentials 
that they had crafted themselves using graphics software and 
images culled from Internet websites, and which bore little 
resemblance to the genuine articles. When the investigators 
presented themselves at security checkpoints, they were waved 
around metal detectors and were not screened.
    In a similar operation at certain sensitive Defense 
Department facilities on May 10, 2001 commissioned by Senator 
Collins, GAO/OSI investigators penetrated the sites using 
easily-obtainable false identification--thus demonstrating 
their potentially catastrophic vulnerability to unauthorized 
access by criminals or terrorists.\135\ Upon learning that OSI 
had confirmed the suspected vulnerability of these facilities, 
Senator Collins immediately contacted Deputy Defense Secretary 
Paul Wolfowitz to notify him of these problems so that the 
Department could promptly begin corrective action. Though such 
improvements are now underway, GAO's findings in these multiple 
penetration tests demonstrate that Internet and computer 
technologies allow nearly anyone easily to create dangerously 
convincing identification cards and credentials.\136\ (This 
problem is compounded by the vast array of law enforcement 
identification cards currently in use.)
---------------------------------------------------------------------------
    \135\ As noted above, this investigation demonstrated such a 
serious security vulnerability that the Defense Department classified 
the previously-unclassified GAO report at the SECRET level.
    \136\ Hast statement, supra.
---------------------------------------------------------------------------
III. Case Studies
    The pages that follow contain brief summaries of the 
evidence that the Subcommittee collected over the course of its 
5-month investigation about specific websites that manufacture 
and market counterfeit identification documents. This report 
also includes a brief summary of two instances that the 
Subcommittee examined where criminals went online to obtain 
false identification materials to further other illegal 
behavior.
  A. The Sellers
    1. Robert Sek: theidshop.com
      (a) Business
    Robert Sek, of Austin, Texas, was born in 1979. In April 
1998 Sek used the alias Arthur Biscay (a combination of his 
middle name and his parent's street address) to register the 
domain name theidshop.com.\137\
---------------------------------------------------------------------------
    \137\ Network Solutions http://www.networksolutions.com/whois/.
---------------------------------------------------------------------------
    Sek told Lieutenant Myers that he owned approximately 
$30,000 worth of equipment which he used to manufacture false 
identification documents.\138\ In March 2000, while executing a 
search warrant at Sek's Austin residence, authorities seized a 
computer, photographic quality printer, lamination machine, 
identification booklets, printed identification cards, customer 
orders for identification products, money orders,\139\ and 
other evidence--including a Century United safe containing 
hologram film and approximately $16,000 in cash.\140\
---------------------------------------------------------------------------
    \138\ Affidavit of Clarke Skoby, Special Agent, U.S. Secret 
Service, at 1 (Mar. 9, 2000) [hereinafter ``First Skoby affidavit''].
    \139\ Affidavit of Clarke Skoby, Special Agent, U.S. Secret 
Service, at 1 (Mar. 13, 2000) [hereinafter ``Second Skoby affidavit''].
    \140\ In re A Black Century Fire Safe, Case No. A-00-111M (W. D. 
Tex. Mar. 13, 2000) (affidavit of Special Agent Clarke Skoby submitted 
in support of application for search warrant).
---------------------------------------------------------------------------
    Sek told Lieutenant Myers that he sold his products for 
approximately $50 each, and that he generated approximately 
$600,000 in revenue annually. In addition, Sek told Lieutenant 
Myers that he made approximately 1,000 false identification 
documents each month.\141\ Indeed, after searching Sek's trash 
on January 19 and February 7, 2000, investigators retrieved 
approximately 300 envelopes addressed to the ID Shop.\142\
---------------------------------------------------------------------------
    \141\ First Skoby affidavit, supra, at 1.
    \142\ Id. at 3-4.
---------------------------------------------------------------------------
    In addition, Sek told Lieutenant Myers that his operation 
was extensive, employing at least 17 sales representatives 
across the United States. In fact, Sek advertised for employees 
on the ``job openings'' page of his website, which stated that

        ``if you are the type of person who likes easy money, 
        then this job is for you. We currently have 70 sales 
        reps all over the United States making salaries ranging 
        from $200 to $2000 a WEEK. The majority of our current 
        sales rep's [sic] are college or high [school] 
        students.'' \143\
---------------------------------------------------------------------------
    \143\ Robert Sek, The ID Shop Job Openings http://
www.theidshop.com.
---------------------------------------------------------------------------
      (b) Products
    On his website, Sek advertised identification documents for 
the following States: Arizona, Arkansas, Colorado, Connecticut, 
Georgia, Hawaii, Kansas, Louisiana, Maryland, Massachusetts, 
New Mexico, New York, North Carolina, Oklahoma, Oregon, 
Pennsylvania, South Dakota, Virginia, and Wyoming.\144\ 
Customers had a choice of two types of identification cards: a 
PVC card which cost $100, with an optional hologram for an 
additional $20, or a 3M process card which cost $60. The PVC 
cards all bore State-specific backings, while the 3M Process 
cards all used an identical backing. (Sek did not offer 
holograms on the 3M Process cards.) \145\
---------------------------------------------------------------------------
    \144\ First Skoby affidavit, supra, at 2.
    \145\ See Hearing record, supra, at Exhibit 31; Robert Sek, The ID 
Shop (visited Dec. 21, 1999) http://www.theidshop.com/products.htm.
---------------------------------------------------------------------------
      (c) Subcommittee Purchase
    During its investigation, the Subcommittee purchased 
undercover a phony Oklahoma driver's license from ``The ID 
Shop'' for $100, using a false name and the photograph of 
Subcommittee Investigator Kirk Walder. The fake license arrived 
approximately 3 weeks later in a plain white envelope with a 
return address of ID Enterprises, located at a postal mail box 
in Austin, Texas. The document itself appeared to be made of 
stiff, white plastic measuring 3\3/8\ by 2\1/8\ inches on which 
was printed the photograph of Investigator Walder, along with a 
virtually identical representation of an Oklahoma driver's 
license, including the State seal, but omitting the words 
``driver's license'' on its face. The document arrived encased 
in a clear, flexible plastic pouch which was sealed on all four 
sides, but not physically attached to the document. The pouch 
measured 3 by 2\1/2\ inches. Lining the inside walls of the 
pouch were two clear plastic sheets on which were printed 
diagonally in red ink ``NOT A GOVERNMENT DOCUMENT'' in 
approximately 20-point type and in capital letters. 
Investigator Walder was able to remove the document from the 
pouch bearing this disclaimer, however, simply by snipping open 
the pouch with a pair of scissors. This removal process took no 
more than a few seconds.
      (d) Disclaimer
    As noted previously, Robert Sek took several calculated 
steps in an effort to insulate himself from criminal liability. 
As part of the ordering process, Sek's customers had to sign a 
contract stating that they

        ``understand fully that this instrument (novelty ID) is 
        not representative of any State government affiliation, 
        either local, State, or Federal, and is not issued or 
        endorsed by any State or Federal Government agencies or 
        departments.'' \146\
---------------------------------------------------------------------------
    \146\ See Hearing record, supra, at Exhibit 24 (Robert Sek, 
Ordering (visited Jan. 27, 2000) http://www.theidshop.com/ordering).

Moreover, the customers had to promise ``not [to] alter or 
deface the ID in any way (from its' [sic] original State when 
it was mailed***).'' \147\ In addition, as described above, Sek 
packaged his products in the laminated pouches described above 
bearing the ``NOT A GOVERNMENT DOCUMENT'' disclaimer. Sek also 
included a disclaimer in approximately 2-point type on the back 
of the identification cards themselves. This tiny disclaimer 
provided:
---------------------------------------------------------------------------
    \147\ Id.

        ``I, without reservation or restriction understand 
        fully that this instrument is not representative of any 
        government affiliation, either local or State, or 
        Federal, and is not issued or endorsed by any State or 
        Federal Government agencies or departments. I 
        understand that this instrument's sole purpose is for 
        novelty use only. I agree to accept complete 
        responsibility for any fraudulent use of this 
        instrument as states in the original agreement between 
        myself and the manufacturer/vendor. The vendor does not 
        provide any warranties of merchantability for a 
        particular purpose of noninfringement. The vendor shall 
        not be liable under any theory or for any damages 
        suffered by the bearer of this instrument. I further 
        attest and affirm that my signature on the front of 
        this instrument serves as evidence that I, the bearer/
        purchase, agree to the aforementioned agreement in its 
        entirety.'' \148\
---------------------------------------------------------------------------
    \148\ Id.

    Each of these purported safeguards was easily circumvented. 
The customer's promise to behave appropriately, of course, 
provided no guarantee that Sek's customers would not misuse his 
products--particularly since, as we have seen, the market for 
false identification is apparently based upon their value in 
facilitating illicit activity. As described above, the plastic 
pouch bearing the disclaimer was easily removed. In addition, 
the fine print disclaimer on the reverse side of the 
identification card is itself easily removable, perhaps by 
design, as a message posted on an Internet discussion board 
---------------------------------------------------------------------------
demonstrated:

        ``OK, the IDShop sends their ID in a white envelope, 
        exactly as they describe on their Web page. When you 
        open this envelope, the ID has a laminated wrap, 
        extending well over the edge of the ID. It also has 
        printed, NOT A GOVERNMENT DOCUMENT printed across the 
        lamination in Red. This slip is easy to remove with a 
        scissors, and takes less than a minute. Next the ID 
        itself has a paragraph on the back explaining how the 
        ID is not a government document and cannot be used as 
        such, etc. Now everybody is telling you that this is 
        hard to get rid of, but let me tell you, from firsthand 
        experience I simply took a tough eraser, one found on 
        the back of a pencil would do fine, and rubbed it 
        tightly against the words. After a few mins, the 
        writing starts to fade and in less than 5 minutes the 
        writing is completely gone.'' \149\
---------------------------------------------------------------------------
    \149\ Id, supra, at Exhibit 10.
---------------------------------------------------------------------------
    2. Brett Carreras: fakeid.net
      (a) Business
    Brett Carreras, a graduate of Loyola College in Baltimore, 
Maryland, was born in 1978. The Subcommittee's investigation 
indicates that Carreras registered the domain name fakeid.net 
on July 28, 1998. At that time, John DeMayo, a self-professed 
pioneer in the Internet false identification business, began 
directing Internet users to Carreras' new site, as DeMayo 
claimed to be leaving the false identification business.\150\ 
Carreras paid DeMayo a fee for every thus-referred customer who 
purchased a product from Carreras's site. In late December 1999 
or early January 2000, Carreras bought an additional domain 
name, fake-id.com, from DeMayo for $10,000. DeMayo estimated 
that Carreras earned between $5,000 and $10,000 per month from 
the website fakeid.net. (DeMayo told the Subcommittee that 
fake-id.com was a popular site and that he had received between 
50 and 100 e-mail messages each day before he sold the site to 
Carreras.) \151\ Billing records obtained by the Subcommittee 
indicate that, between mid-October 1999 and mid-December 1999, 
Carreras received 621 orders at his fakeid.net website that 
generated roughly $8,239 in revenue.\152\
---------------------------------------------------------------------------
    \150\ Subcommittee staff telephone interview with John DeMayo (Mar. 
30, 2000) [hereinafter ``DeMayo interview''].
    \151\ Id.
    \152\ Letter from Paul Kraaijvanger, Co-founder/Director, and Matt 
Walker, Controller, Verotel, to Kirk Walder, Investigator, Senate 
Permanent Subcommittee on Investigations (Jan. 6, 1999), at 2.
---------------------------------------------------------------------------
      (b) Products
    As a free service, fakeid.net offered low quality driver's 
license templates in a format compatible with Adobe 
Photoshop \153\ for all 50 U.S. States. However, the 
site offered ``premium'' templates designed to be used with 
Adobe Photoshop, including an ``ultimate'' 
New Jersey license, an ``ultimate'' Maine license, as well as 
templates for Wisconsin, Utah, Ohio, Arizona, Connecticut, 
Michigan, Idaho, Iowa, Louisiana, New York, and the Canadian 
province of Saskatchewan. These ``premium'' templates \154\ 
were available to members for a monthly fee payable by credit 
card of $14.95.\155\
---------------------------------------------------------------------------
    \153\ Adobe Photoshop is graphic design 
software that allows users to edit and create images. The software uses 
a system of layers, each containing a different portion of the image. 
Layers allow users to overlay one portion of an image over another; for 
example, a signature can overlay a photograph. Users can also remove or 
hide layers. Users are able to edit almost all aspects of an image, 
including color, size, and transparency, as well as add text.
    \154\ These templates are layered, and therefore, able to be 
manipulated relatively easily using software such as Adobe 
Photoshop.
    \155\ Brett Carreras, States (visited Dec. 9, 1999) http://
www.fakeid.net/states.
---------------------------------------------------------------------------
    After the Subcommittee contacted Carreras, he modified the 
site, advising visitors that the templates had been removed and 
that he would not answer questions about them. It appears that 
Carreras made this statement in an attempt to convince both the 
Subcommittee and law enforcement that the premium templates, 
which were the only revenue-earning portion of the website, had 
been removed and that the website was out of business. In fact, 
however, the templates were still accessible on the fakeid.net 
website through a different series of links for several more 
months, although many paying customers may have been unaware 
that the templates were still available. Following customer 
complaints posted on the fakeid.net message board,\156\ 
Carreras posted information on the message board informing 
regular customers of this ``back door'' to the templates: 
``There are all types of members services availiable [sic] to 
users who paid and were not able to download the files. Go to 
members services, and click on all of the links. take care.'' 
\157\
---------------------------------------------------------------------------
    \156\ See e.g., Fake ID Net Message Board http://
carreras.netldiscus (post by ``Anonymous'' on Mar. 24, 2000; post by 
``Reaper'' on Mar. 25, 2000).
    \157\ Id. (post by ``Webhost'' on Mar. 27, 2000).
---------------------------------------------------------------------------
      (c) Disclaimer
    Initial access to Carreras' website was through a page 
containing the following advisory: ``For my protection, and 
yours, you MUST read the below disclaimer BEFORE entering. 
Thank You.'' The referenced disclaimer is in a small box, and 
the only readily visible portion of the text reads:

        ``1. LThis page is to be used purely for reference/
        education/novelty purposes.
         2. LI am at least 18 years of age, and realize that I 
        am individually responsible for my actions.
         3. LI understand that the act of downloading 
        information * * *.'' \158\
---------------------------------------------------------------------------
    \158\ Brett Carreras, FakeID.Net (visited Dec. 17, 1999) http://
www.fakeid.net/intro.htm.

Although the viewer may scroll down the text to read it in its 
entirety, it is not necessary to do so in order to gain access 
to the rest of the website. Instead, the visitor may simply 
click on the following statement: ``LET ME IN!'' \159\
---------------------------------------------------------------------------
    \159\ Id.
---------------------------------------------------------------------------
      (d) Related Websites
    In February 2000 the Subcommittee discovered that the 
fakeid.net web host was planning to introduce two new websites 
in the near future: Illegalimmigrant.com and fake-id.com. Both 
domain names are registered to Carreras. Illegalimmigrant.com 
would purportedly specialize in ``identity documents such as 
passports, social security cards, green cards, SSN lists, 
generators, prove-it cards, resident alien cards, birth 
cirtificates [sic] . . . and many more!'' \160\ At fake-id.com, 
it was said,
---------------------------------------------------------------------------
    \160\ Brett Carreras, Power Point Presentation (visited Feb. 15, 
2000) http://carreras.net/welcome.

        ``professionals will create licenses from any State you 
        choose, based on our custom-made templates, These will 
        be the finest ID documents on the planet, and will be 
        backed by the professionalism of FakeID.Net!'' \161\
---------------------------------------------------------------------------
    \161\ Id.

Notably, these ventures stand in sharp contrast to the 
information posted on the ``frequently asked questions'' page 
---------------------------------------------------------------------------
of fakeid.net, where it was claimed that

        ``We do NOT sell IDs from this site, nor do we know of 
        places which sell IDs. Be wary of any site that says 
        you can buy an ID from them. No site on the internet is 
        endorsed by this site, or recommended by this site's 
        proprietors. Furthermore the proprietor of this site 
        has NEVER created a fake and/or novelty ID.'' \162\
---------------------------------------------------------------------------
    \162\ Brett Carreras, Frequently Asked Questions (visited Dec. 17, 
1999) http://www.fakeid.net/faq.htm.

    Carreras declined to answer the Subcommittee's 
questionnaire after invoking his Fifth Amendment privilege 
against self-incrimination. In addition, at his Subcommittee 
deposition, Carreras invoked the Fifth Amendment in response to 
every question except his name, date of birth, and current 
address.
    (3) Tim Beachum: bestfakeids.com
      (a) Business
    Tim Beachum, who was born in 1969, registered 
bestfakeids.com on May 25, 1999, using the company name 
Executive Computer Designs, which is located in Virginia Beach, 
Virginia. As of May 19, 2000, the website was still active, but 
Beachum had changed some of the content. By November 2000, 
however, the website appeared to have been taken down.
    On April 5, 2000, Beachum voluntarily submitted to a 
Subcommittee deposition. Beachum testified that he established 
bestfakeids.com with an unnamed friend after they had a 
discussion about websites that sell novelty identification 
documents.\163\ Beachum had discovered that there were more 
than 100,000 webpages referring to the subject of false 
identification. Beachum opined that, if there were that many 
websites pertaining to false identification, there must be a 
market for the service.\164\ Throughout his deposition, Beachum 
provided limited information and changed some of the answers he 
had previously provided to the Subcommittee during telephone 
interviews.
---------------------------------------------------------------------------
    \163\ Beachum deposition, supra, at 26.
    \164\ Id. at 44.
---------------------------------------------------------------------------
    In addition to bestfakeids.com, Beachum owned ECD Inc., 
which he said offered ``electronic information'' and 
``marketing products,'' Payless Web Hosting, and Bulletproof 
Marketing, which Beachum said were not yet operational.\165\ 
Beachum could or would not break down the approximate monthly 
income that he receives from each of his websites, although he 
estimated in his response to the Subcommittee's questionnaire 
that bestfakeids.com provided 90 percent of his website 
revenue.\166\
---------------------------------------------------------------------------
    \165\ Id. at 16-20; see ECD Inc. http://www.ecdinc.com/mb/.
    \166\ See Hearing record, supra, at Exhibit 17.
---------------------------------------------------------------------------
      (b) Products
    The home page of bestfakeids.com contained a smaller 
version of the same logo used by fakeidzone.com. The site 
promoted its sole product--online access to a ``fake id kit''--
as follows:

        ``Novelty fake id's are quickly becoming a big business 
        online. Although our competitors spend most of the time 
        claiming to have the best fake id's, and slandering the 
        competitions [sic] name. We have decided to take a 
        different approach and let our product speak for 
        itself. We sell 40+ kits a day--that's almost 3 times 
        what any other fake id site sells. Here is why the all 
        new and improved ``Best Fake ID's'' site out sells the 
        competition 3 to 1: We don't sell novelty fake ids we 
        show you how to create your own using your home 
        computer. We provide you with templates and step by 
        step instructions on what you need to create fake ids 
        so real you could fool your own mother. As a BONUS you 
        will receive a super high quality birth certificate 
        that can be printed in the privacy of your own home. 
        You will be given access to download 50+ templates that 
        you can use to create your own fake ids. Our templates 
        consist of drivers license, gun license, back stage 
        passes, and much more. As of 12/1/1999 our collection 
        of templates has been totally updated. Templates are 
        created and added upon your request! (No other site on 
        the Internet offers this service). No shipping and 
        handling . . . You will be given instant access to your 
        fake id kit, and your bonus birth certificate as well 
        as our online threaded message board.'' \167\
---------------------------------------------------------------------------
    \167\ Beachum deposition, supra, at Exhibit 15.

Beachum supplemented the copy cited above with numerous 
illustrations of his products, as well as lengthy testimonials, 
complete with photos, from what purported to be ``satisfied 
customers.''
      (c) Subcommittee Purchase
    The Subcommittee purchased undercover access to Beachum's 
``kit'' on February 9, 2000. The kit consisted of several 
scanned State driver's licenses from various States; templates 
for driver's licenses from Wyoming, Alabama, and ``Pureto [sic] 
Rico;'' a press pass template; a blank birth certificate from 
Victory Memorial Hospital in Waukegan, Illinois; and two 
resident activity coordinator certificate files.\168\ Despite 
the representation on his website, however, the kit did not 
contain a template for a gun license.
---------------------------------------------------------------------------
    \168\ See id. at Exhibits 16-20.
---------------------------------------------------------------------------
    The driver's license templates allowed an individual to 
produce his own driver's license by filling in the blanks. The 
Subcommittee found that it would indeed be possible to produce 
credible driver's licenses from the templates on Beachum's 
site.
    The press pass template included space for an individual's 
photograph and personal information. It also bore a bar code 
and a background reflecting the legend ``American Press 
Association.'' \169\ Beachum promoted the press pass on his 
website with testimonials from three ``satisfied customers'' 
who had supposedly created press passes for themselves using 
Beachum's template, and then used the passes to gain access to 
backstage areas at various events. Under questioning during his 
deposition, Beachum admitted that the testimonials were 
fictitious:
---------------------------------------------------------------------------
    \169\ See id. at Ex's. 8-11.

        ``Q: LWhat is that?
         A: LIt's a novelty testimonial page for the press 
        pass.
         Q: LOkay. Are you familiar with the text?
         A: LYes. Yes. It looks familiar.
         Q: LIs any of it true?
         A: LNo.
         Q: LNone of it's true?
         A: LNo.'' \170\
---------------------------------------------------------------------------
    \170\ See id. at 91-92.

Beachum also claimed during his deposition that the press pass 
template, like the other files in the kit, was not capable of 
producing a physical press pass because he had ``pixelated'' 
\171\ the template so that when it was printed out, the image 
would be distorted. The following exchange is excerpted from 
his Subcommittee deposition:
---------------------------------------------------------------------------
    \171\ A pixel (from ``picture element'') is the basic unit of 
visual information on a computer display or in a computer image. The 
more pixels an image contains, the clearer the image will be, and the 
higher the resolution is said to be. Images that contain few pixels, 
and thus less visual information, tend to appear granulated when they 
are enlarged. Although Beachum never explained fully what he meant by 
``pixelated,'' the Subcommittee understood him to mean that he had 
lowered the resolution, and that the image would thus appear on screen, 
or in print, in a granulated manner when enlarged.

        ``Q: LDo you think it's possible for anyone to actually 
        use that, your press pass, to get into a concert?
         A: LNo. For a fact, no.
         Q: LWhy not?
         A: LWell, especially when I printed it, it's too 
        small. I mean, you can't manipulate that.
         Q: LThat cannot be manipulated?
         A: LNot into a larger format, no.
         Q: LAgain, why not?
         A: LIt would become pixelated.'' \172\
---------------------------------------------------------------------------
    \172\ Beachum deposition, supra, at Exhibits 86-88.

Beachum's claims that the template would become useless if 
actually printed, however, were false: The Subcommittee was 
easily able to print a press pass that was not distorted.
    The Subcommittee learned from officials at Victory Memorial 
Hospital in Waukegan, Illinois, that the birth certificate 
Beachum offered is an exact replica of a birth certificate 
format used by the hospital before 1990.\173\ The birth 
certificate depicted a sketch of the hospital and calligraphic 
text preceding blanks for the infant's name, the doctor's name, 
and dates to be filled in by hand after printing the 
certificate. The kit included a text file which offered 
specific instructions on how best to replicate an authentic 
birth certificate from Victory Memorial Hospital, including the 
type of paper on which to print the certificate, and what types 
of gold seals to use. For example, the text notes that:

    \173\ See Hearing record, supra, at Exhibit 7a.

        ``* LThe Administrators [sic] name during the era this 
        certificate was issued was Donald Wasson. The Attending 
        Physician's name was W. M. Smith.
         * LDonald Wasson's signature is signed with a blue 
        inked fountain pen.
         * LAll ohter [sic] handwriting is done in black ink 
        with a fine point pen (i.e. Bic).
* * *

        ``Now in case you missed it, to the left and right of 
        the picture of the hospital, are BLACK INKED FOOTPRINTS 
        OF AN INFANT. These foot prints of course are not on 
        the scan (get you [sic] own damn baby!). The foot 
        prints each face inward toward the horizontal center of 
        the document, and lie adjacent to either horizontal 
        side of the picture of the hospital. Remeber [sic], the 
        footprints face inward (as in heel near the edge of the 
        document, with toes closest to the picture.'' \174\
---------------------------------------------------------------------------
    \174\ Beachum deposition, supra, at Exhibit 7.

    Beachum testified that he intentionally corrupted the 
background of the birth certificate by adding a ``digital 
watermark'' \175\ to the certificate file that would cause it 
to print in a distorted manner, which he claimed would prevent 
customers from actually using it. In the following dialogue 
excerpted from his Subcommittee deposition, Beachum explained 
this purported distortion process:
---------------------------------------------------------------------------
    \175\ A digital watermark is digital data embedded either visibly 
or invisibly into an image or other type of digital document (film, 
photograph, etc.) which is designed to make counterfeiting the document 
more difficult.

        ``Q: LAfter receiving that certificate from that site, 
        did you make any changes or alterations--
         A: LNo.
         Q: L--to the certificate?
         A: LYes, yes, yes. I digitally encrypted the 
        background of the certificate.
         Q: LHow did you do that?
         A: LI forget, but it's a plug-in from Photo Shop that 
        does it.
         Q: LWhy did you do that?
         A: LIn case someone tried to increase the dpi, it 
        would pixelate the picture, the image.
         Q: LAnd the purpose of causing the picture to be 
        pixelated is what?
         A: LTo keep someone from trying to pass it off as a 
        real thing.'' \176\
---------------------------------------------------------------------------
    \176\ See Beachum deposition, supra, at 78-79.

In addition, Beachum testified that the certificate had been 
---------------------------------------------------------------------------
pixelated the entire time it was on his website:

        ``Q: LSo for the entire time that that file has been on 
        your website and offered to customers on your website, 
        it's had the distortion element you described?
         A: LYes.'' \177\
---------------------------------------------------------------------------
    \177\ See id.

The Subcommittee subsequently determined that Beachum's 
testimony was possibly perjurious, since the certificate files 
on the kit which the Subcommittee had purchased undercover 
before Beachum's deposition generated actual hard copy 
documents that did not bear a digital watermark. Computer 
experts consulted by the Subcommittee confirmed that the 
certificate files had not been altered in the fashion described 
by Beachum.
    The kit included two activity coordinator certificate 
files, which Beachum testified that he created by digitally 
scanning the original certificates awarded to his mother.\178\ 
One certificate appeared to be issued by Kent State 
University,\179\ while the other was purportedly issued by the 
Ohio Health Care Association.\180\ Both certificates bore 
blanks for the user to record the name of the person who had 
obtained the certificates, and the date on which the 
certificates had been issued. Beachum's site claimed that the 
completed certificates would enhance one's ability to obtain 
employment as an activity coordinator, which the site described 
as a person who plans activities for individuals in nursing 
homes or for pre-school children. The site claimed that, in 
order to obtain a genuine certificate, an individual must take 
a course costing ``a thousand plus dollars.'' \181\
---------------------------------------------------------------------------
    \178\ Id. at 48.
    \179\ See Hearing record, supra, at Exhibit 8a (Tim Beachum, Kent 
State University Certificate).
    \180\ See id. at Exhibit 8b (Tim Beachum, Ohio Resident Activity 
Coordinator Training Project Certificate of Attendance).
    \181\ Beachum deposition, supra, at Exhibit 15.
---------------------------------------------------------------------------
    Despite these representations on his website, Beachum 
testified that the activity coordinator certificate files were 
for ``novelty'' purposes only. Beachum explained that the 
certificates were offered only in ``thumbnail'' \182\ format, 
and could not be downloaded in their full sizes. In the 
following exchange, Beachum insisted that if a customer were to 
download and enlarge the certificates, they would be useless 
because they would be hopelessly distorted:
---------------------------------------------------------------------------
    \182\ A thumbnail is a picture of a graphic image. Thumbnails do 
not contain enough pixels, or picture information, to be enlarged or 
altered without significant distortion. Thumbnails are only used to 
indicate what an image looks like, and are not layered templates as 
described earlier.

        ``Q: LIs it your testimony that those documents, 
        Exhibits 3 and 4, then could not be made to look like 
        authentic documents?
         A: LNo. No way they could be.
* * *
         Q: LWhy not?
         A: LI intentionally corrupted the background of all 
        the documents so that they couldn't be used.
         Q: LHow did you corrupt the background of the 
        documents?
         A: LI put a watermark, what is called a digital 
        watermark in the background to give the paper an 
        intentional crinkle or wrinkled look.
         Q: LSo it is your testimony that is someone--well, 
        maybe you could explain for me, if someone tried to 
        print out these documents, what would happen?
         A: LIt would have a distorted look, like--the 
        background of this has like a yellow tint to it and 
        it's a real distorted look in the background. In my 
        opinion, there's no way it would look authentic.
         Q: LHow long have you had that distortion on these 
        products?
         A: LAlways.'' \183\
---------------------------------------------------------------------------
    \183\ See Beachum deposition, supra, at 70-71.

Despite these protestations, however, the Subcommittee 
successfully printed full-size certificates with the use of 
software such as Adobe Photoshop. Thus, it 
appears as if Beachum may have committed perjury during his 
deposition testimony in this respect as well.
      (d) Disclaimer
    Until the Subcommittee contacted Beachum, his website 
contained only the briefest of disclaimers:

        ``Because our novelty fake id kit is distributed in a 
        digital format we do not of [sic] refunds. Our kit is 
        sold as is. All images found on this site is [sic] 
        copyrighted and can not be used by any other web site 
        without the written consent of Best Fake ID's.'' \184\
---------------------------------------------------------------------------
    \184\ Id. at Exhibit 11.

After he first spoke with Subcommittee staff, Beachum expanded 
---------------------------------------------------------------------------
his disclaimer to include the following:

        ``The information contained in this website is strictly 
        for academic use alone. BEST FAKE ID'S will bear no 
        responsibility for any use otherwise. All information 
        on this web site is for entertainment and educational 
        purposes only.'' \185\
---------------------------------------------------------------------------
    \185\ Id. at Exhibit 12.
---------------------------------------------------------------------------
    (4) Tim Catron: fakeidzone.com
      (a) Business
    Tim Catron is a Kansas resident who registered the domain 
name fakeidzone.com on October 2, 1998, providing as contact 
information an address in the Philippines. At this website, 
Catron offered a kit on a CD-ROM that he called ``Fake ID Kit 
Ver. 2.0.'' He told the Subcommitte that he was reselling this 
kit for Brett Carreras.\186\ Catron also said that he had 
previously ``partnered up'' with Carreras, the operator of 
fakeid.net, and Tim Beachum, the operator of bestfakeids.com, 
but that he had recently ceased all contact with those 
individuals.\187\ Catron sold the CD-ROM kit for between 
approximately $19.95 and $39.95, payable by cash or money 
order. For a 2-month period, however, Catron accepted payment 
by credit card. Billing records obtained by the Subcommittee 
from his credit card processor indicate that, from November 
1999 to January 2000, Catron earned $12,250 from 652 
transactions.\188\
---------------------------------------------------------------------------
    \186\ Subcommittee staff telephone interview with Tim Catron (Mar. 
23, 2000).
    \187\ Id.
    \188\ Letter from Paul Kraaijvanger, Co-founder/Director, and Matt 
Walker, Controller, Verotel, to Kirk Walder, Investigator, Senate 
Permanent Subcommittee on Investigations (Jan. 6, 1999), at 2.
---------------------------------------------------------------------------
      (b) Products
    The CD-ROM disk that Catron marketed on his website 
contained more than 100 templates for a wide variety of 
identification documents, including driver's licenses, Social 
Security cards, green cards, and high school and college 
diplomas and transcripts, as well as what Catron referred to as 
``novelty templates'' for documents such as a concealed weapons 
permit.\189\ Catron's kit also included ``step by step 
instructions on what you need to create fake ids so real you 
could fool your own mother,'' \190\ as well as instructions for 
making both ``a fake drivers [sic] license'' and a hologram for 
the driver's license.\191\ In addition to such tools as a bar 
code generator and a Social Security number verifier, the kit 
included instructions on how to ``get a New ID: Complete report 
shows you how to do this by adopting the identity of a deceased 
child or infant.'' \192\ To complete the kit, Catron sold paper 
designed for printing diplomas and birth certificates.\193\
---------------------------------------------------------------------------
    \189\ See Hearing record, Exhibit 6.
    \190\ See id.
    \191\ Tim Catron, Fake ID Zone (visited Jan. 3, 2000) http://
www.digitalhideout.com/idkit.html.
    \192\ Id.
    \193\ See Tim Catron, Placing a Order [sic] (visited Jan. 5, 2000) 
http://www. digitalhideout.com/cashorder.html.
---------------------------------------------------------------------------
      (c) Disclaimer
    Catron posted the following disclaimer at the bottom of his 
home page, in fine print:

        ``Although our fake id kit gives you step by step 
        instructions along with templates on how to produce 
        realistic looking fake drivers license, birth 
        certificates, back stage passes, and much more. It is 
        only meant to be a novelty item. Do not under any 
        circumstances try to pass them for the real thing. That 
        would be illegal.'' \194\
---------------------------------------------------------------------------
    \194\ See Hearing record, Exhibit 6.

In addition, Catron referenced the above disclaimer on his 
order form, and requested that customers sign the order form as 
an acknowledgment that they had read and understood the 
disclaimer.
    Despite his novelty claim in the disclaimer, Catron refused 
to answer the Subcommittee's questionnaire by invoking his 
Fifth Amendment privilege against self-incrimination. He also 
stated in an affidavit that he would invoke the Fifth Amendment 
in response to every question except his name and address if 
the Subcommittee chose to depose him.\195\
---------------------------------------------------------------------------
    \195\ See id. at Exhibit 18 (affidavit of Tim Catron, Apr. 21, 
2000).
---------------------------------------------------------------------------
      (d) Other Online Activities
    In January 2000, Catron attempted to sell his two websites, 
fakeidzone.com and fakeid.cc,\196\ through an online auction at 
an offering price of $5,000. He noted in the auction 
description that the winning bidder would receive the domain 
names as well as the graphics and designs for his sites. Catron 
explained that although the site had been very profitable, he 
had decided to sell it in order to dedicate time to other 
(unidentified) sites.\197\ Although it is not clear whether 
Catron successfully sold the websites, it does appear that he 
is no longer the owner of the domain names.
---------------------------------------------------------------------------
    \196\ Subcommittee staff was unable to find evidence that fakeid.cc 
was ever operational.
    \197\ See E-Bay http://www.ebay.com (description of auction item 
244333201, posted Jan. 23, 2000).
---------------------------------------------------------------------------
    (5) Josh Dansereau: fake-ids.com
      (a) Business
    Josh Dansereau is a resident of Tallahassee, Florida, who 
was born in 1979. He originally became involved in the false 
identification business after he created a fake driver's 
license for himself.\198\ In mid-April 1999, Dansereau 
registered the domain names fake-ids.com, fakeidshop.com, and 
fakeids.org. In mid-September 1999 he registered fakeidone.com 
and fakeid1.com.\199\ Dansereau used these five websites, which 
were mirror sites containing the same information, in an effort 
to gain more website traffic.\200\
---------------------------------------------------------------------------
    \198\ Subcommittee staff telephone interview with Joshua Dansereau 
(Apr. 4, 2000) [hereinafter ``Second Dansereau interview''].
    \199\ Network Solutions http://www.networksolutions.com/whois/; see 
also Hearing record, Exhibit 17 (Dansereau Questionnaire Response, at 1 
(undated; returned to Senate Permanent Subcommittee on Investigations, 
Mar. 27, 2000)).
    \200\ Second Dansereau interview, supra.
---------------------------------------------------------------------------
    Dansereau began selling false identification documents from 
fakeids.com in June 1999. He sold approximately 10 to 12 false 
identification documents per week at a price of approximately 
$30 to $35 each.\201\ Dansereau used a high speed computer and 
monitor, a state of the art card printer, and a scanner to 
manufacture these documents.\202\ Dansereau told the 
Subcommittee that he had made a total of 100 to 200 false 
identification documents, and as many as 50 in one peak month 
alone. Dansereau added that he had earned a total of 
approximately $3,000 to $5,000.\203\ Lieutenant Myers believes 
that Dansereau earned closer to $250,000 from his false 
identification operation, and noted in his testimony during the 
hearing that when his team searched Dansereau's home, they 
found 85 fake identification documents ready to be mailed to 
customers. Lieutenant Myers noted that these 85 phony 
identification documents represented approximately $7,000 in 
income for Dansereau.\204\
---------------------------------------------------------------------------
    \201\ David Myers, Draft Training Materials: Joshua Dansereau Case 
Report 3 (Nov. 12, 1999) (unpublished report on file with Florida 
Division of Alcoholic Beverages and Tobacco Fraudulent Identification 
Unit, Enforcement and Training) [hereinafter ``Dansereau Case 
Report''].
    \202\ Dansereau Case Report, supra, at 3.
    \203\ Second Dansereau interview, supra.
    \204\ Hearing record, supra, at 15 (testimony of Lieutenant Myers).
---------------------------------------------------------------------------
      (b) Products
    Dansereau offered driver's licenses from all U.S. States 
with the exception of Florida.\205\ Lieutenant Myers described 
the cards as high quality and noted that, of the 85 false 
identification documents his office confiscated from Dansereau, 
many were for older adults from a variety of States, including 
Florida.\206\ On his website, Dansereau described his products 
as
---------------------------------------------------------------------------
    \205\ See Joshua Dansereau, Gallery (visited Jan. 3, 2000) http://
www.freehosting2.at. webjump.com/413a62646/fa/fakeids-org/gallery.htm.
    \206\ Dansereau Case Report, supra, at 3.

        ``The best novelty fake ID's you can buy. When held up 
        to real State ID's, it's hard to tell the difference! 
        You can be any age you want and you can be whomever you 
        want. If you're looking for the most realistic fake 
        ID's you can buy that will pass the book test, you have 
        come to the right place.'' \207\
---------------------------------------------------------------------------
    \207\ Joshua Dansereau, Fake ID One Home Page (visited Jan. 3, 
2000) http://www. freehosting2.at.webjump.com/413a62646/fa/fakeids-org/
gallery.htm.

Dansereau distinguished his false identification documents from 
that of his competitors by noting that ``all of are [sic] ID's 
are the new plastic credit card style, they come with a working 
magnetic strip at no extra charge.'' \208\ In the ``Frequently 
Asked Questions'' section of the website, however, Dansereau 
acknowledged that the magnetic strips were not actually 
functional.\209\ Dansereau accepted cash and money orders for 
his products, and suggested that customers wishing to pay with 
cash ``wrap the money in a couple pieces of paper or 
something.'' \210\
---------------------------------------------------------------------------
    \208\ Joshua Dansereau, Gallery (visited Jan. 3, 2000) http://
www.freehosting2.at. webjump.com/413a62646/fa/fakeids-org/gallery.htm.
    \209\ Josh Dansereau, Frequently Asked Questions (visited Jan. 3, 
2000) http://www. freehosting2.at.webjump.com/462b02686/fa/fakeids-org/
faqhelp.htm.
    \210\ Id.
---------------------------------------------------------------------------
      (c) Disclaimer
    Dansereau posted a lengthy disclaimer in fine print on the 
doorway page of his websites. The disclaimer was the same as 
that which was posted on Robert Sek's website, theidshop.com, 
see Section III.A.(1)(d). In addition, Dansereau posted the 
following statement on his home page:

        ``Note: we are not recommending the use of the novelty 
        ids to purchase alcohol or tobacco. That is illegal. 
        When you purchase a novelty id. You assume all 
        responsibility for the misuse of the product.'' \211\
---------------------------------------------------------------------------
    \211\ Josh Dansereau, Fake ID One Home Page (visited Jan. 3, 2000) 
http://www. freehosting2.at.webjump.com/413a62646/fa/fakeids-org/
gallery.htm.

These disclaimers, however, did not prevent Dansereau's 
prosecution by the State of Florida.
      (d) Legal Situation
    On November 12, 1999, Dansereau was charged with a felony 
for violating a Florida State law prohibiting the falsification 
of identification cards or documents purporting to contain an 
applicant's age or date of birth.\212\ Dansereau pled guilty of 
the felony charge and, pursuant to a pretrial intervention 
agreement,\213\ was sentenced to serve a 6-month term of 
probation starting in January 2000. He also forfeited the 
equipment he used to manufacture the false identification 
documents.\214\
---------------------------------------------------------------------------
    \212\ See Florida Stat. ch. 877.18.
    \213\ See Florida Stat. ch. 948.08.
    \214\ Dansereau Case Report, supra, at 4.
---------------------------------------------------------------------------
    Dansereau told the Subcommittee that he voluntarily shut 
down his false identification websites in either January or 
February 2000,\215\ although one site, fakeid1.com, appeared 
still to be functional as of April 2000. Dansereau swore in an 
affidavit to the Subcommittee that when he shut down his false 
identification websites, he began returning orders that he had 
received to potential customers without opening them.\216\ On 
February 4, 2000, as part of the Subcommittee's undercover 
operation, however, the Subcommittee mailed to Dansereau an 
order for a fake Connecticut driver's license. Despite two e-
mail messages sent to addresses posted on Dansereau's website 
inquiring about the order, the Subcommittee did not receive the 
card and the money has not been returned.
---------------------------------------------------------------------------
    \215\ Telephone Interview with Joshua Dansereau (Mar. 17, 2000) 
[hereinafter ``First Dansereau interview''].
    \216\ See Hearing record, supra, at Exhibit 19 (affidavit of Joshua 
Dansereau, June 7, 2000).
---------------------------------------------------------------------------
    In July 2000, because the Florida Division of Alcoholic 
Beverages and Tobacco Fraudulent Identification Unit (Florida 
ABT) suspected that Dansereau was still involved in producing 
or promoting false identification documents, his probation was 
extended until August 2000. As part of its ongoing monitoring 
of false identification on the Internet, Florida ABT determined 
that Dansereau had not shut down fakeid1.com, despite his 
assurances to the Subcommittee. Florida ABT then found that 
Dansereau had continued cashing and depositing money orders and 
cashiers checks that he received from individuals wishing to 
purchase false identification from fakeid1.com. As a result, 
Dansereau was arrested and again charged with a felony for 
violating Florida's false identification statute in August 
2000.\217\ Dansereau pleaded no contest to one count of failure 
to comply with requirements for sale of identification on May 
23, 2001.\218\ He was sentenced to a 3-year term of probation, 
ordered to pay $808 in court costs, and sentenced to perform 15 
days of county work.\219\
---------------------------------------------------------------------------
    \217\ Affidavit of Jeff Yonce, Special Agent, Florida Division of 
Alcoholic Beverages and Tobacco Fraudulent Identification Unit, at 1-2 
(Aug. 16, 2000) [hereinafter ``Yonce affidavit''].
    \218\ See Florida Stat. ch. 877.18.
    \219\ Florida v. Joshua Dansereau, Case No. 00-3279 (Florida 2nd 
Judicial Circuit Court, May 23, 2001), and telephone interview with 
Special Agent Jeff Yonce, Florida Division of Alcoholic Beverages and 
Tobacco Fraudulent Identification Unit (Dec. 1, 2000).
---------------------------------------------------------------------------
  B. The Buyers
    (1) Thomas Seitz
      (a) Legal Situation
    Thomas Seitz, born in 1977, is a resident of New Jersey. In 
April 1999 local police in New Jersey arrested Seitz on charges 
of theft by deception and presentation of false information 
after he purchased a car on credit using an assumed identity. 
After pleading guilty, he was convicted in New Jersey State 
court of one count of theft by deception, two counts of 
forgery, and one count of uttering forged instruments.\220\ 
Seitz was sentenced to a 3-year State term of incarceration for 
these four felony convictions.\221\ On February 22, 2000, Seitz 
entered a plea of guilty to one count of bank fraud in the U.S. 
District Court for the Middle District of Florida for the same 
conduct that gave rise to the State charge. In June 2000, Seitz 
was duly sentenced to a 7-month term of incarceration to be 
served concurrently with his New Jersey State sentence, 
followed by a 60-month term of supervised release.
---------------------------------------------------------------------------
    \220\ See New Jersey Stat. ANN. Sec. Sec. 2C:1a(2),(3).
    \221\ See New Jersey v. Thomas W. Seitz, Case No. 99-06-00613-1 
(New Jersey Superior Court Law Division, Sept. 27, 1999).
---------------------------------------------------------------------------
      (b) Internet Activities
    In an interview with the Subcommittee, Seitz said that he 
is very experienced with computers and the Internet. Seitz 
added that he has been using computers since the sixth grade, 
that he has worked as a computer network engineer, and that he 
was certified in the use of Microsoft products.\222\
---------------------------------------------------------------------------
    \222\ Subcommittee staff interview with Thomas Seitz at the Baker 
County Jail, Macclenny, Florida (Apr. 6, 2000) [hereinafter ``Seitz 
interview''].
---------------------------------------------------------------------------
    At the hearing, Seitz testified that he was looking at 
various websites and discovered that he could obtain the names 
and Social Security numbers of other people from the Internet. 
Seitz knew that bank, credit, and tax information is tied often 
to an individual's Social Security number,\223\ and that this 
information that can be put to many uses, including identity 
theft. Accordingly, he found names and Social Security numbers 
on the websites for Congress and the Securities and Exchange 
Commission (SEC). By using search engines on the congressional 
website, Seitz was able to access the Congressional Record, 
where he found names, Social Security numbers, and military 
branches and ranks of members of the United States military 
being considered for promotion.\224\ Seitz also found names and 
Social Security numbers of many individuals in the quarterly 
reports of publicly traded companies on the SEC's website. He 
focused his information-gathering efforts on at least two 
individuals, Joseph A. Parisi and Richard D. Clasen, both of 
California. He obtained these individuals' addresses and 
telephone numbers through online directories.\225\
---------------------------------------------------------------------------
    \223\ Seitz interview, supra.
    \224\ Names, complete Social Security numbers, and military branch 
and rank information of United States military officers under 
consideration for promotion were available through the Congressional 
Record until 1995. Since 1996, most entries--and since 1997, 
apparently, all entries--have contained only the last four digits of 
the Social Security number in addition to name, rank, and military 
branch information.
    \225\ Seitz interview, supra.
---------------------------------------------------------------------------
    Seitz then used Internet search engines to obtain 
information on fake identification documents, including birth 
certificates, Social Security cards, and driver's license or 
identification cards. Seitz recalled to the Subcommittee that 
while he was searching for false identification materials that 
he could use in conjunction with the personal information he 
had collected on Clasen and Parisi, he visited one site that 
posed the question: ``Do you need a new identity?'' Seitz 
downloaded templates including a birth certificate template 
from three or four free sites. Although one website Seitz 
visited stated that its products were for novelty purposes 
only, and another posted a small disclaimer, Seitz testified 
that he ignored both statements. Indeed, he wondered why anyone 
would put such templates on the web in the first place except 
in order to facilitate precisely the sort of illegal uses the 
disclaimers purported to disclaim--and for which he himself 
sought access to them. Seitz could see, for instance, no 
legitimate ``novelty'' use for a false birth certificate.\226\
---------------------------------------------------------------------------
    \226\ Id., see also Hearing record, supra, at 16 (testimony of 
Thomas Seitz).
---------------------------------------------------------------------------
    Seitz conducted these Internet searches at a local library 
in an effort to avoid detection. He told the Subcommittee that 
he knew that the Internet Protocol address of a computer that 
had been used to visit a particular website could be traced. He 
explained, however, that

        ``I used the computer in a public library to conduct my 
        search. Dozens of people use the computers there every 
        day and they also do not necessarily keep logs of who 
        is using the computer. I had no fear of detection as I 
        was searching.'' \227\
---------------------------------------------------------------------------
    \227\ Hearing record, supra, at 19 (testimony of Thomas Seitz).

    Using the stolen personal identification data that he had 
obtained from the SEC website, Seitz submitted 14 fraudulent 
car loan applications to Nations Bank via the Internet, 
including applications in the names of Clasen and Parisi. Seitz 
sought to obtain fraudulently a total of $540,000 in loan 
proceeds, but he received checks for only the two loans for 
which he had applied in the names of Parisi and Clasen.
      (c) Creating False Documents
    After the loans were approved, Seitz used his home computer 
to complete a fake New Jersey birth certificate template that 
he had obtained from the Internet using the library computer. 
He made two different birth certificates using the identities 
of Parisi and Clasen, printing them on heavy green paper, but 
omitting the raised seal that the certificates were supposed to 
contain. The entire process took approximately 30 minutes. 
Seitz also obtained blank W-2 forms from the Internal Revenues 
Service website, and completed these documents using the stolen 
identities.
    Seitz then used the counterfeit birth certificate to obtain 
an identification card in Parisi's name at the New Jersey 
Department of Motor Vehicles (DMV). He chose to obtain an 
identification card instead of a driver's license because he 
knew that only two pieces of identification were required for 
an identification card, and that he would not, in applying for 
one, have to wait long or take a driving test. As he 
anticipated, the DMV issued Seitz an authorized identification 
card in Parisi's name very quickly: It took about 30 minutes. 
Seitz also told the Subcommittee that DMV did not examine the 
W-2 forms that he provided as additional support.\228\
---------------------------------------------------------------------------
    \228\ Seitz interview, supra.
---------------------------------------------------------------------------
    Seitz attempted to use his false identification card in 
Parisi's name to buy a car at a dealership in North Brunswick, 
New Jersey, but was unsuccessful because the dealership 
required an actual driver's license in order to make a 
purchase. Because Seitz did not possess a driver's license in 
Parisi's name, he abandoned his attempt to buy a car at that 
dealership.\229\ Instead, Seitz scanned his New Jersey license 
into a computer, and used a software program to change the 
identifying information to that of Richard Clasen. This process 
took approximately 30 minutes. Seitz did not laminate this 
card, but simply printed it and photocopied the printout.\230\ 
Armed with this merely photocopied driver's license, Seitz went 
to a different car dealership, located in the Township of Old 
Bridge, New Jersey, and selected a new car to purchase. Seitz 
presented to the dealership a photocopy of his altered driver's 
license, and recited aloud the Social Security number of an 
individual residing in California that he had obtained from the 
Internet. The dealership employees did not ask to see his W-2 
forms or his birth certificate.\231\
---------------------------------------------------------------------------
    \229\ Id.
    \230\ Id.
    \231\ Id.
---------------------------------------------------------------------------
    Seitz was thus able to buy a car and drive it off the 
dealership lot successfully because the dealership employees 
did not verify his documents immediately. Although Seitz 
applied for, and received loans from Nations Bank, he was also 
able to finance the car through the dealership itself at a 
lower interest rate. New Jersey police discovered Seitz's crime 
in less than 2 weeks, however, because the number that Seitz 
inserted into the phony driver's license he manufactured in 
Clasen's name did not match an actual New Jersey driver's 
license number.\232\ As a result, Seitz's fraudulent scheme was 
exposed when the dealership submitted the phony license number 
to the DMV to obtain the vehicle's registration. State police 
apprehended Seitz shortly thereafter.
---------------------------------------------------------------------------
    \232\ Id.
---------------------------------------------------------------------------
    (2) Thana Barlee
      (a) Background
    Thana Barlee entered a community college in Maryland after 
he was expelled from George Washington University during his 
freshman year in 1999 for manufacturing and selling counterfeit 
Maine and New Jersey driver's licenses in his dormitory room.
      (b) Internet Activities
    Barlee initially decided to create false identification 
documents in September 1999, after he was turned away from a 
local nightclub because he was not old enough to gain 
admission. Upon his return to campus, he started searching the 
Internet and discovered a wealth of information and resources 
related to false identification materials. Barlee found free, 
layered templates and instructions on a website operated by an 
individual whom he recalled as ``Mo Mann.'' \233\ Using these 
templates and such materials as reflective paint, paper, and 
lamination packs that he bought for about $40 to $60 at an 
office supply store, Barlee was able to create a fake driver's 
license that same weekend. Although this first fake license was 
sufficiently realistic to enable him to purchase alcohol at a 
nearby liquor store, Barlee worked to perfect his techniques 
over the next few weeks. He already owned a functional printer, 
but with investment backing from several other students, he 
upgraded to a higher-quality $600 printer, and bought a 
lamination machine as well. Barlee also used the Internet to 
purchase additional supplies for his operation, such as gold 
ink for making holograms.\234\
---------------------------------------------------------------------------
    \233\ See http://yohello.freeyellow.com/index.html.
    \234\ Barlee interview, supra.
---------------------------------------------------------------------------
    Barlee initially manufactured New Jersey driver's licenses 
because the general consensus on Internet discussion boards was 
that New Jersey licenses were the easiest to duplicate. The 
first weekend that Barlee was in business he sold approximately 
15 to 20 phony driver's licenses to fellow students. He charged 
$20 to $100 for each license; the price he charged depended 
upon such factors as whether he knew the buyer and how quickly 
the buyer wanted the license. Barlee decided to diversify his 
manufacturing operation to include Maine driver's licenses 
because he thought it would look suspicious for so many college 
students to present New Jersey driver's licenses to a bouncer 
at a night club. He chose to duplicate Maine licenses because, 
like New Jersey licenses, they then had a reputation for being 
among the easiest to replicate.\235\ With only about 20 minutes 
of experimentation, Barlee produced a high quality Maine 
driver's license.\236\
---------------------------------------------------------------------------
    \235\ Maine has since changed the appearance of its driver's 
licenses.
    \236\ Barlee interview, supra.
---------------------------------------------------------------------------
    Barlee told the Subcommittee that he would not have 
manufactured and sold false identification documents had it not 
been for the ease with which the Internet enabled him to do so. 
On the ``Mo Mann'' website, he found templates he could use to 
manufacture phony driver's licenses; step-by-step instructions 
for how to make and improve the quality of false identification 
documents; and a list of materials that he would need. Barlee 
saw the disclaimers on the websites but ignored them because 
such disclaimers are commonplace on the Internet.\237\
---------------------------------------------------------------------------
    \237\ Id.
---------------------------------------------------------------------------
  C. Referrals
    Following the hearing, the Subcommittee referred several of 
the individuals and websites it investigated to proper law 
enforcement agencies pursuant to Rule 19 of the Subcommittee's 
rules of procedure--which provides that when there is

        ``reasonable cause to believe that a violation of law 
        may have occurred, the Chairman and Ranking Minority 
        Member by letter, or the Subcommittee by resolution, 
        are authorized to report such violation to the proper 
        State, local and/or Federal authorities.'' \238\
---------------------------------------------------------------------------
    \238\ Rules of Procedure, for the Senate Permanent Subcommittee on 
Investigations of the Committee on Governmental Affairs as Adopted 
(March 8, 2001), S. Prt. 107-16 (March 2001), at Rule 19.

The individuals thus referred include Mike Burton, Josh 
Dansereau, and the operators of NoveltyID4U.com and 
Phonyid.com--all of whom accepted orders and payment from the 
Subcommittee yet did not deliver a product. In addition, it is 
the Subcommittee's opinion that the activities of other 
individuals, including Robert Sek, Brett Carreras, Tim Beachum, 
and Tim Catron, warrant further investigation by law 
enforcement, as these individuals may have violated United 
States law. The offenses these individuals may have committed 
range from violations of Sec. 1028 to perjury and mail fraud.
    Unfortunately, little has been done in terms of 
prosecutions, although Josh Dansereau's term of probation was 
extended after Florida law enforcement learned that he had 
continued cashing customers' checks, including the 
Subcommittee's. In addition, the Fond du Lac, Wisconsin Police 
Department retrieved the $75 that the Subcommittee had sent 
Mike Burton for a false driver's license, and fined Burton 
approximately $200. However, it appears that the law at the 
time that Brett Carreras, Tim Catron, Tim Beachum, Robert Sek, 
and other individuals were operating their websites was not 
sufficient to prosecute them. With the exception of Brett 
Carreras, the individuals appear to have closed their websites 
and moved on to different ventures.
    During the course of the Subcommittee investigation of 
false identification websites and their operators, at least 
seven websites closed down, including bestfakeids.com,\239\ 
fakeidzone.com,\240\ ultimate-id.com,\241\ 
newid.ultramailweb.com,\242\ noveltyid4u.com,\243\ the 
``Fakeidman'' message board, and promasteridcards.com. \244\ In 
fact, hours after the hearing concluded, Promasteridcards.com 
posted the following message on its website:
---------------------------------------------------------------------------
    \239\ Bestfakeids (last visited Nov. 30, 2000) http://
www.bestfakeids.com.
    \240\ Fake ID Zone (last visited Nov. 30, 2000) http://
wwwfakeidzon.com.
    \241\ Ultimate Id (last visited Nov. 30, 2000) http://www.ultimate-
id.com.
    \242\ New Identity Kit (last visited Nov. 30, 2000) http://
www.newid.ultramailweb.com.
    \243\ Novelty ID 4U (last visited Dec. 10, 1999) http://
www.noveltyid4u.com.
    \244\ Fakeidman (last visited Nov. 30, 2000) http://
pages.eidosnet.co.uk/fakeidman.

        ``PromasterCards Ltd creased [sic] trading following 
        the outcome of the Senate Governmental Affairs 
        Permanent Subcommittee on Investigations on: ``False 
        ID's and the Internet'' [sic] Any orders will be 
        ``returned to sender'' 19th May 2000.'' \245\
---------------------------------------------------------------------------
    \245\ Promaster Cards (last visited May 19, 2000) http://
www.promastidcards.mcmail.com.
---------------------------------------------------------------------------
IV. Conclusion
  A. General Services Administration Smart Card Technology for Federal 
        Facilities
    In response to the results of the Subcommittee's 
investigation, coupled with recent terrorist assaults on the 
United States by individuals whose acts, and the preparation 
therefor, may have been facilitated by false identification, 
and GAO's findings that detail the weaknesses of security 
measures at Federal facilities, the Subcommittee has begun 
exploring methods of providing identification that cannot be so 
readily counterfeited. This exploration led the Subcommittee to 
the General Services Administration (GSA), which is currently 
in the final stages of developing so-called ``smart card'' 
technology.
    Smart cards are credit card sized cards that contain a 
microprocessor. This computer chip is able to store, retrieve 
and process a variety of information that may be used for 
security purposes, including identification, entrance to 
buildings, and access to computers. The smart card can allow 
use of a range of biometric measurements for identification 
purposes, including fingerprints, hand geometry, iris (eye) 
scan, face measurements, and voice verification. Once an 
individual has enrolled his or her features, they are stored in 
a template that may be verified when the individual presents 
himself or herself at a security checkpoint. Smart cards can be 
used for many military applications as well as Federal 
employment applications such as equipment tracking, training 
updates, medical information, and accounting functions, thus 
eliminating the need for many different cards or forms. Smart 
cards may contain magnetic stripes, bar codes, and digitized 
photos.
    At the request of the Office of Management and Budget 
(OMB), GSA first began working on coordinating a government 
wide adoption of smart cards in 1996. President Clinton's 
Fiscal Year 1998 budget demonstrated the administration's 
intention that every Federal employee be able to use a single 
card for building access, travel, small purchases, and other 
purposes. At this time, OMB directed GSA to work with Federal 
agencies, including the Department of Treasury and the 
Department of Defense, to develop a smart card. The GSA team 
responsible for this project met with representatives from 
industry and government agencies, then began conducting a pilot 
program within GSA and other agencies. On May 19, 2000, GSA 
awarded a Common Access ID Contract worth a total of $1.5 
billion over 10 years to five firms. Several Federal agencies 
have expressed interest in the smart card, including the 
Veterans Administration, the Department of State, and the 
Department of Defense, which has stated that it intends to use 
smart card technology for both military and civilian 
identification purposes.
    One of the smart card's main strengths is its government-
wide interoperability. It is GSA's intention that the cards be 
accepted at any participating Federal facility, so that, for 
example, cards issued by the Department of Defense will be 
compatible with the security measures at the Department of 
State. This should eliminate much of the confusion and 
potential for counterfeiting that stems from the multitude of 
cards used by Federal agencies, which has been highlighted by 
GAO's recent undercover operations. GSA's smart card 
incorporates cryptographic and biometric technology to encode 
an individual's information in a computer chip.
  B. Law Enforcement's Response to Crimes Using False Identification
    It is impossible to quantify the criminal activities that 
have been committed using false identification documents 
obtained via the Internet. The Subcommittee met with officials 
from the FBI, the U.S. Secret Service, the Social Security 
Administration, and various State law enforcement agencies. 
These officials indicated that, when they encounter cases 
involving false identification documents, they usually do not 
investigate the source of the documents, and frequently do not 
prosecute the false-identity crime itself because they 
concentrate instead on the offense that resulted from the use 
of the counterfeit documents. Director Stafford acknowledged 
that investigating the source of false identification is not 
the Secret Service's primary tactic in curbing the use of false 
identification:

        ``We do not monitor specifically for false 
        identification. We feel that we prioritize and focus 
        our investigations primarily on crimes that involve 
        false identification, primarily our core violations. We 
        feel that through prioritizing, through addressing 
        large dollar amount, high-impact cases that affect our 
        community, whether it be credit cards or bank fraud or 
        bank loans, all of which possess some form of 
        counterfeit or fraudulent identification, that we can 
        make an impact even with our limited funding and 
        resources in this area.'' \246\
---------------------------------------------------------------------------
    \246\ Id., at 27 (testimony of Director Stafford).

    Moreover, anecdotal evidence exists indicating that the 
Internet has become a significant source of the false 
identification documents that are used illegally. Lieutenant 
Myers estimated that about 30 percent of the fraudulent 
identification documents that he reviewed in 2000 had been 
created via the Internet.\247\ This figure, he said, had risen 
from slightly less than 1 percent in 1998, and approximately 5 
percent in 1999. In addition, Lieutenant Myers testified that 
he expects that 60 to 70 percent of the false identification 
documents that his office will seize in 2001 will have come 
from the Internet.\248\ (This includes identification documents 
produced by website operators and identification documents 
produced through files transmitted over the Internet.)
---------------------------------------------------------------------------
    \247\ Subcommittee staff interview with David Myers, Lead Fraud 
Investigator, Division of Alcoholic Beverages and Tobacco, State of 
Florida, in Jacksonville, Florida (Apr. 7, 2000) [hereinafter ``Myers 
interview''].
    \248\ Hearing record, supra, at 20 (testimony of Lieutenant Myers).
---------------------------------------------------------------------------
    As shown by the case study of Thomas Seitz, explained in 
Section III.B.(1), individuals seeking false identification to 
further criminal activities are increasingly likely to use the 
Internet to obtain false identification documents. In fact, 
Seitz testified that were it not for the ease of the Internet, 
he may not have searched for another source of false 
identification, adding, ``I do not know any other places to go 
to get fake identification as good as on the Internet.'' \249\
---------------------------------------------------------------------------
    \249\ Id. at 18 (testimony of Thomas Seitz).
---------------------------------------------------------------------------
    It is vital that law enforcement focus its attention on 
this serious and growing problem, and in particular make every 
effort to curb the manufacture and distribution of false 
identification documents because, as K. Lee Blalack, II, then-
Chief Counsel and Staff Director of the Subcommittee, 
testified:

        ``the distribution of these counterfeit identification 
        materials is growing because of the expanding 
        technology of the Internet. This new technology could 
        very well result in a flood of phony identification 
        documents and counterfeit credentials if steps are not 
        taken to curb this emerging problem. It will be no easy 
        task to maintain the integrity of the identification 
        documents on which both the government and the private 
        sector rely.'' \250\
---------------------------------------------------------------------------
    \250\ Id. at 12 (testimony of K. Lee Blalack, II).
---------------------------------------------------------------------------
C. Implementing New Legislation
    It is the Subcommittee's hope that the Internet False 
Identification Prevention Act of 2000, as well the 
Subcommittee's hearing, will focus attention on this emerging 
problem. Indeed, focusing attention upon this industry can 
itself help impede its operations. Lieutenant Myers testified 
at the Subcommittee's hearing, for example, that

        ``Probably the biggest impact that we have had on the 
        Internet as I monitor it and have for many years is the 
        work done by your own Subcommittee's investigators. 
        They had a dramatic impact on those on the Internet. 
        Not even knowing their investigation was going on, I 
        could see that the activity on the Internet as it 
        related to false ID was going through some changes.'' 
        \251\
---------------------------------------------------------------------------
    \251\ Hearing record, at 21-22 (testimony of Lieutenant Myers).

    Welcome though it is, however, such dissuasion through 
scrutiny and public attention is far from enough. The Internet 
False Identification Prevention Act of 2000 should help arm law 
enforcement officials with the tools needed to curb the 
manufacture and distribution of false identification documents 
over the Internet. Diligent efforts by the U.S. law enforcement 
community to employ these tools are now needed. As then-
---------------------------------------------------------------------------
Chairman Collins noted during the Subcommittee's hearing:

        ``One of the troubling findings of this investigation 
        is that law enforcement officials, perhaps 
        understandably, have focused on the crime committed 
        with the phony IDs, but if we could somehow crack down 
        on the manufacture and marketing of those IDs, some of 
        the subsequent crimes would never be committed.'' \252\
---------------------------------------------------------------------------
    \252\ Hearing record, at 27 (statement by Senator Collins).

Through aggressive law enforcement activity, and continued 
Congressional attention and oversight, the Subcommittee hopes 
and anticipates that it will be possible dramatically to 
decrease the number of crimes committed using false documents.
    The following Senators, who are Members of the Permanent 
Subcommittee on Investigations, have approved this report:

Carl Levin                          Susan M. Collins
Daniel K. Akaka                     Ted Stevens
Richard J. Durbin                   George V. Voinovich
Robert G. Torricelli                Pete V. Domenici
Max Cleland                         Thad Cochran
Thomas R. Carper                    Robert F. Bennett
Jean Carnahan                       Jim Bunning
Mark Dayton

    Other Senators, who are Members of the Committee on 
Governmental Affairs, approving this report are:

Senator Lieberman                   Fred Thompson
      

                                
