[House Report 108-528]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-528
======================================================================


 
                 IDENTITY THEFT PENALTY ENHANCEMENT ACT

                                _______
                                

  June 8, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1731]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 1731) to amend title 18, United States Code, to establish 
penalties for aggravated identity theft, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     3
Background and Need for the Legislation..........................     4
Committee Amendments.............................................     6
Hearings.........................................................     7
Committee Consideration..........................................     7
Vote of the Committee............................................     8
Committee Oversight Findings.....................................     8
New Budget Authority and Tax Expenditures........................     8
Congressional Budget Office Cost Estimate........................     8
Performance Goals and Objectives.................................     9
Constitutional Authority Statement...............................     9
Section-by-Section Analysis and Discussion.......................     9
Agency Views.....................................................    12
Changes in Existing Law Made by the Bill, as Reported............    13
Committee Jurisdiction Letters...................................    17
Markup Transcript................................................    19
Dissenting Views.................................................    65

                             The Amendment

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Identity Theft Penalty Enhancement 
Act''.

SEC. 2. AGGRAVATED IDENTITY THEFT.

    (a) In General.--Chapter 47 of title 18, United States Code, is 
amended by adding after section 1028, the following:

``Sec. 1028A. Aggravated identity theft

    ``(a) Offenses.--
            ``(1) In general.--Whoever, during and in relation to any 
        felony violation enumerated in subsection (c), knowingly 
        transfers, possesses, or uses, without lawful authority, a 
        means of identification of another person shall, in addition to 
        the punishment provided for such felony, be sentenced to a term 
        of imprisonment of 2 years.
            ``(2) Terrorism offense.--Whoever, during and in relation 
        to any felony violation enumerated in section 2332b(g)(5)(B), 
        knowingly transfers, possesses, or uses, without lawful 
        authority, a means of identification of another person or a 
        false identification document shall, in addition to the 
        punishment provided for such felony, be sentenced to a term of 
        imprisonment of 5 years.
    ``(b) Consecutive Sentence.--Notwithstanding any other provision of 
law--
            ``(1) a court shall not place on probation any person 
        convicted of a violation of this section;
            ``(2) except as provided in paragraph (4), no term of 
        imprisonment imposed on a person under this section shall run 
        concurrently with any other term of imprisonment imposed on the 
        person under any other provision of law, including any term of 
        imprisonment imposed for the felony during which the means of 
        identification was transferred, possessed, or used;
            ``(3) in determining any term of imprisonment to be imposed 
        for the felony during which the means of identification was 
        transferred, possessed, or used, a court shall not in any way 
        reduce the term to be imposed for such crime so as to 
        compensate for, or otherwise take into account, any separate 
        term of imprisonment imposed or to be imposed for a violation 
        of this section; and
            ``(4) a term of imprisonment imposed on a person for a 
        violation of this section may, in the discretion of the court, 
        run concurrently, in whole or in part, only with another term 
        of imprisonment that is imposed by the court at the same time 
        on that person for an additional violation of this section, 
        provided that such discretion shall be exercised in accordance 
        with any applicable guidelines and policy statements issued by 
        the Sentencing Commission pursuant to section 994 of title 28.
    ``(c) Definition.--For purposes of this section, the term `felony 
violation enumerated in subsection (c)' means any offense that is a 
felony violation of--
            ``(1) section 641 (relating to theft of public money, 
        property, or rewards), section 656 (relating to theft, 
        embezzlement, or misapplication by bank officer or employee), 
        or section 664 (relating to theft from employee benefit plans);
            ``(2) section 911 (relating to false personation of 
        citizenship);
            ``(3) section 922(a)(6) (relating to false statements in 
        connection with the acquisition of a firearm);
            ``(4) any provision contained in this chapter (relating to 
        fraud and false statements), other than this section or section 
        1028(a)(7);
            ``(5) any provision contained in chapter 63 (relating to 
        mail, bank, and wire fraud);
            ``(6) any provision contained in chapter 69 (relating to 
        nationality and citizenship);
            ``(7) any provision contained in chapter 75 (relating to 
        passports and visas);
            ``(8) section 523 of the Gramm-Leach-Bliley Act (15 U.S.C. 
        6823) (relating to obtaining customer information by false 
        pretenses);
            ``(9) section 243 or 266 of the Immigration and Nationality 
        Act (8 U.S.C. 1253 and 1306) (relating to willfully failing to 
        leave the United States after deportation and creating a 
        counterfeit alien registration card);
            ``(10) any provision contained in chapter 8 of title II of 
        the Immigration and Nationality Act (8 U.S.C. 1321 et seq.) 
        (relating to various immigration offenses); or
            ``(11) section 208, 811, 1107(b), 1128B(a), or 1632 of the 
        Social Security Act (42 U.S.C. 408, 1011, 1307(b), 1320a-7b(a), 
        and 1383a) (relating to false statements relating to programs 
        under the Act).''.
    (b) Amendment to Chapter Analysis.--The table of sections for 
chapter 47 of title 18, United States Code, is amended by inserting 
after the item relating to section 1028 the following new item:

``1028A. Aggravated identity theft.''.
    (c) Application of Definitions From Section 1028.--Section 1028(d) 
of title 18, United States Code, is amended by inserting ``and section 
1028A'' after ``In this section''.

SEC. 3. AMENDMENTS TO EXISTING IDENTITY THEFT PROHIBITION.

    Section 1028 of title 18, United States Code, is amended--
            (1) in subsection (a)(7)--
                    (A) by striking ``transfers'' and inserting 
                ``transfers, possesses,''; and
                    (B) by striking ``abet,'' and inserting ``abet, or 
                in connection with,'';
            (2) in subsection (b)(1)(D), by striking ``transfer'' and 
        inserting ``transfer, possession,'';
            (3) in subsection (b)(2), by striking ``three years'' and 
        inserting ``5 years''; and
            (4) in subsection (b)(4), by inserting after ``facilitate'' 
        the following: ``an act of domestic terrorism (as defined under 
        section 2331(5) of this title) or''.

SEC. 4. AGGREGATION OF VALUE FOR PURPOSES OF SECTION 641.

    The penultimate paragraph of section 641 of title 18 of the United 
States Code is amended by inserting ``in the aggregate, combining 
amounts from all the counts for which the defendant is convicted in a 
single case,'' after ``value of such property''.

SEC. 5. DIRECTIVE TO THE UNITED STATES SENTENCING COMMISSION.

    (a) In General.--Pursuant to its authority under section 994(p) of 
title 28, United States Code, and in accordance with this section, the 
United States Sentencing Commission shall review and amend its 
guidelines and its policy statements to ensure that the guideline 
offense levels and enhancements appropriately punish identity theft 
offenses involving an abuse of position.
    (b) Requirements.--In carrying out this section, the United States 
Sentencing Commission shall do the following:
            (1) Amend U.S.S.G. section 3B1.3 (Abuse of Position of 
        Trust of Use of Special Skill) to apply to and punish offenses 
        in which the defendant exceeds or abuses the authority of his 
        or her position in order to obtain unlawfully or use without 
        authority any means of identification, as defined section 
        1028(d)(4) of title 18, United States Code.
            (2) Ensure reasonable consistency with other relevant 
        directives, other sentencing guidelines, and statutory 
        provisions.
            (3) Make any necessary and conforming changes to the 
        sentencing guidelines.
            (4) Ensure that the guidelines adequately meet the purposes 
        of sentencing set forth in section 3553(a)(2) of title 18, 
        United States Code.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    In addition to any other sums authorized to be appropriated for 
this purpose, there is authorized to be appropriated to the Department 
of Justice, for the investigation and prosecution of identity theft and 
related credit card and other fraud cases constituting felony 
violations of law, $2,000,000 for fiscal year 2005 and $2,000,000 for 
each of the 4 succeeding fiscal years.

                          Purpose and Summary

    H.R. 1731, the ``Identity Theft Penalty Enhancement Act,'' 
addresses the growing problem of identity theft. Currently 
under 18 U.S.C. Sec. 1028 many identity thieves receive short 
terms of imprisonment or probation; after their release, many 
of these thieves will go on to use false identities to commit 
much more serious crimes. H.R. 1731 provides enhanced penalties 
for persons who steal identities to commit terrorist acts, 
immigration violations, firearms offenses, and other serious 
crimes. The bill also amends current law to impose a higher 
maximum penalty for identity theft used to facilitate acts of 
terrorism.

                Background and Need for the Legislation

    The terms ``identity theft'' and ``identity fraud'' refer 
to all types of crimes in which someone wrongfully obtains and 
uses another person's personal data in some way that involves 
fraud or deception, typically for economic or other gain, 
including immigration benefits. The Federal Trade Commission 
(``FTC'') received 161,819 victim complaints of someone using 
another's information in 2002. Of these, 22% involved more than 
one type of identity crime.
    For 2002, the FTC breakdown of types of identity theft 
shows that 42% of complaints involved credit card fraud, 22% 
involved the activation of a utility in the victim's name, 17% 
involved bank accounts opened in the victim's name, 9% involved 
employment fraud, 8% involved government documents or benefits 
fraud, 6% involved consumer loans or mortgages obtained in the 
victim's name, and 16% involved medical, bankruptcy, securities 
and other miscellaneous fraud.
    In 2003, the FTC randomly sampled households. A total of 
4.6 % of survey participants indicated that they had discovered 
they were victims of some type of identity theft in the past 
year. This result suggests that almost 10 million Americans 
were the victims of some form of identity theft within the last 
year, which means despite all the attention to this type of 
crime since September 11, 2001 the incidence of this crime is 
increasing.
    As international cooperation increases to combat terrorism, 
al-Qaida and other terrorist organizations increasingly turn to 
stolen identities to hide themselves from law enforcement. For 
example, according to testimony by Jim Huse, Inspector General 
of the Social Security Administration before a 2002 joint 
hearing of two Subcommittees of this Committee, five Social 
Security numbers associated with some of the terrorists 
appeared to be counterfeit and were never issued by the Social 
Security Administration, one was assigned to a child, and four 
of the terrorists were associated with multiple Social Security 
numbers. An FBI agent testified at the same hearing, 
``terrorists have long utilized identity theft as well as 
Social Security number fraud to enable them to obtain such 
things as cover employment and access to secure locations. 
These and similar means can be utilized by terrorists to obtain 
driver's licenses, and bank and credit card accounts, through 
which terrorism is facilitated.''
    Since September 11, 2001, Federal and State officials have 
taken notice of this crime because of the potential threat to 
security, but the cost to the consumer and corporations is 
equally alarming. The FTC estimates the loss to businesses and 
financial institutions from identity theft to be $47.6 billion. 
The costs to individual consumers are estimated to be 
approximately $5.0 billion.
    As this crime increases, we must try to find new ways to 
combat it. Websites developed by the FTC and consumer groups 
encourage consumers to protect themselves by shredding mail and 
keeping a close watch over their credit reports; yet, the FTC's 
statistics suggest that identity thieves are obtaining 
individuals' personal information for misuse not only through 
``dumpster diving,'' but also through accessing information 
that was originally collected for an authorized purpose. The 
information is accessed either by employees of the company or 
of a third party that is authorized to access the accounts in 
the normal course of business, or by outside individuals who 
hack into computers or steal paperwork likely to contain 
personal information.
    In one such case, the Justice Department charged a 33-year-
old customer service representative from Long Island, New York, 
with identity theft and fraud for using his position at a 
company that provided computer software and hardware to banks 
and lending companies to access personal consumer credit 
information from three credit reporting agencies. The scheme 
allowed him to access the personal information of over 30,000 
victims.
    The insider threat from identity theft and identity fraud 
is a threat to personal security as well as national security. 
The United States Attorney in Atlanta charged 28 people with 
participating in a fraud ring that supplied over 1,900 
individuals with fraudulent Social Security cards. The cards 
were supplied by a Social Security Administration clerk in 
exchange for $70,000 in payoffs.
    Under current law, many perpetrators of identity theft 
receive little or no prison time. That has become a tacit 
encouragement to those arrested to continue to pursue such 
crimes. The following are examples of instances in which 
persons involved in identity theft received little or no prison 
time:
    U. S. v. Amry. On October 15, 2003, Mohamed Amry, a former 
employee of a Bally's Health Club in Cambridge, Massachusetts, 
pleaded guilty to a multi-count indictment charging him with 
conspiracy to commit bank fraud (18 U.S.C. Sec. 371), bank 
fraud (18 U.S.C. Sec. 1344), conspiracy to commit access device 
fraud and access device fraud (18 U.S.C. Sec. 1029), and 
conspiracy to commit identity theft (18 U.S.C. Sec. 1028). 
Amry, using a skimmer to obtain credit-card data from members 
of the health club, provided stolen names, Social Security 
numbers, and credit-card information of at least 30 people to 
Abdelghani Meskini, who pleaded guilty to conspiracy in 
connection with the plot to blow up Los Angeles International 
Airport in 1999. Using victims' names, Amry reportedly assisted 
Meskini in creating false green cards and Social Security 
cards. Meskini used the information to open bank accounts in 
New York, where he deposited counterfeit checks. Amry was not 
charged with knowledge of the terrorists' intentions in 
obtaining and using the stolen identities. On January 17, 2003, 
Amry was sentenced to 15 months imprisonment.
    U. S. v. Scheller. Suzanne M. Scheller was a financial 
institution employee. Scheller accessed the financial 
institution's computer system and searched for potential 
customers for a friend who was starting a real estate business. 
After identifying prospects, Scheller then provided the friend 
with the customer account information. Scheller admitted that 
she knew her unauthorized access was against the policy of the 
financial institution. The investigation established that some 
of the information provided by Scheller was actually used by 
another individual unknown to her as part of an identity theft 
scheme. Imposters used the customer account information to 
steal the identity of the customers and conduct transactions at 
the financial institution. Scheller pleaded guilty to one count 
of obtaining unauthorized computer access to customer account 
information from a financial institution, in violation of 18 
U.S.C. Sec. Sec. 2, 1030(a)(2)(A), 1030(c)(2)(B)(i), 
1030(c)(2)(B)(iii). On November 30, 2001, Scheller was 
sentenced to 36 months probation.
    U. S. v. Opara. On February 7, 2002, Chuck Opara, after 
having pleaded guilty to multiple counts of submitting false 
claims and identity theft, was sentenced to 15 months 
imprisonment. According to court documents filed in this case, 
Opara engaged in a multi-million dollar fraud scheme. As part 
of the scheme, Opara stole the identities of 24 people, and he 
submitted bogus Federal income tax returns for those people 
that sought average refunds of $50,000. The fraudulent tax 
returns asked that refunds be mailed to two dozen mail-drops 
that Opara had acquired.
    U. S. v. Maxfield. On five separate occasions between 1996 
and 1998, William K. Maxfield used the Social Security number 
of a William E. Maxfield (no relation) to obtain loans and 
lines of credit. He was able to obtain the false Social 
Security number through his employment at an auto dealership. 
Maxfield defaulted on some of the loans but was timely on 
others. Ultimately, most of the lenders were paid; however, the 
more significant injury was to William E. Maxfield, who 
suffered harm to his credit rating and had great difficulty in 
clearing what appeared to be delinquent accounts. On January 9, 
2003, William K. Maxfield was sentenced to 10 months 
imprisonment.
    U. S. v. Rodriguez. While receiving Title II disability 
benefits, Dolores Rodriguez worked as a science teacher at a 
school under her husband's Social Security number. She received 
over $80,000 in disability benefits. She pled guilty to a 
violation of 18 U.S.C. Sec. 641. She was sentenced to 12 months 
home confinement, 5 years probation, and restitution.
    U. S. v. Fergerson. Diana Fergerson had stolen the identity 
of another person years earlier. She used the stolen identity 
to apply for and receive Social Security benefits. She also 
used the stolen identity to establish credit. She received over 
$45,000 in Social Security disability benefits. She pled guilty 
to several charges including violations of 18 U.S.C. Sec. 641 
and 18 U.S.C. Sec. 1028(a)(7). She was sentenced to 5 years 
probation and restitution.
    U. S. v. Benavides-Holguin. Porfirio Benavides-Holguin, a 
resident of Chihuahua, Mexico, received Title XVI benefits 
under the name and Social Security number of his former 
brother-in-law, a U.S. citizen. He pled guilty to both counts 
of a 2 count indictment alleging violations of 42 U.S.C. 
Sec. 1383(a)(2). He was sentenced to 10 months confinement, 3 
years of non-reporting supervised release, and restitution.
    U. S. v. Green-Jones. Arnetta Green-Jones received SSI 
benefits under her actual Social Security number while working 
as a seasonal temporary worker employed by the IRS using the 
Social Security number of another individual. She pled guilty 
to a violation of 42 U.S.C. Sec. 408(a)(7)(B), 42 U.S.C. 
Sec. 1383a(a)(3)(A) and 18 U.S.C. Sec. 1028(a)(4). She was 
ordered to serve 5 years probation and pay restitution.

                          Committee Amendments

    Amendments to this legislation were adopted both at 
Subcommittee and full Committee and incorporated into the 
version of the bill the Committee ordered reported. The 
Subcommittee adopted an amendment to allow the aggravated 
identity theft penalties to be applied to individuals who used 
fraudulent identities, in addition to those who used the 
identities of other persons, to commit a terrorist offense.
    The full Committee adopted two amendments. The first 
amendment added several Social Security fraud crimes and theft 
or embezzlement by a bank officer or employee to the list of 
crimes for which the enhanced penalties may be applied. 
Additionally, this amendment clarified that a crime prosecuted 
under 18 U.S.C. Sec. 641 that involved more than one incident 
could be aggregated for purposes of determining the penalties.
    Currently there is a split among the Federal district 
courts as to whether 18 U.S.C. Sec. 641 allows such 
aggregation. In those courts which do not allow aggregation, 
the use of this section has been limited to the prosecution of 
individuals who have fraudulently received public money, 
property, or records. The most common instance in which this 
has been a problem is in the improper receipt of monthly 
Federal benefits. Many times the individual monthly Federal 
benefit checks are less than $1,000, the threshold for a 
felony. This amendment clarifies that 18 U.S.C. Sec. 641 
applies and provides for the aggregation of a series of such 
payments to the individual.
    The first amendment also included a directive to the United 
States Sentencing Commission to require that the Federal 
Sentencing Guideline Sec. 3B1.3 (Abuse of Position of Trust of 
Use of Special Skill) be amended to apply to employees or 
directors who use access to information at their place of 
business to commit identity theft or fraud. This amendment will 
help address the problem of insiders who use their employment 
position to commit fraud or help others commit fraud. It will 
allow judges to apply additional penalties to these individuals 
under the sentencing guidelines.
    The second amendment adopted by the Committee authorized $2 
million per year for 5 years for the Department of Justice to 
investigate and prosecute identity theft and identity fraud 
cases.
    Significantly, the Committee rejected amendments which 
would have removed the mandatory consecutive sentences from the 
bill. At the Subcommittee and full Committee mark-ups Crime 
Subcommittee Chairman Coble noted, ``opponents of mandatory 
minimums would have a more compelling case if they could assure 
the Congress that the judges were faithfully following the 
Federal Sentencing Guidelines. And I think, sadly, there's 
evidence that doesn't support that.''

                                Hearings

    The Committee on the Judiciary Subcommittee on Crime, 
Terrorism, and Homeland Security held a hearing on H.R. 1731 
and H.R. 3693 on March 23, 2004. Testimony was received from 
four witnesses, representing four organizations, with 
additional material submitted.

                        Committee Consideration

    On March 30, 2004, the Subcommittee on Crime, Terrorism, 
and Homeland Security met in open session and ordered favorably 
reported the bill H.R. 1731, as amended, by a voice vote, a 
quorum being present. On May 12, 2004, the Committee met in 
open session and ordered favorably reported the bill H.R. 1731 
with an amendment by voice vote, a quorum being present.

                         Vote of the Committee

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee notes that there 
were no recorded votes during the Committee consideration of 
H.R. 1731.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives is inapplicable because this 
legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R.1731, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 20, 2004.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1731, the 
``Identity Theft Penalty Enhancement Act.''
    If you wish further details on his estimate, we will be 
pleased to provide them. The CBO staff contact is Lanette J. 
Walker, who can be reached at 226-2860.
            Sincerely,
                                       Douglas Holtz-Eakin.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
H.R. 1731--Identity Theft Penalty Enhancement Act.
    H.R. 1731 would authorize the appropriation of $2 million 
each of years 2005 through 2009 for the investigation and 
prosecution of identity theft and related credit card fraud. 
The estimated budgetary impact of H.R. 1731 is shown in the 
following table. CBO estimates that implementing H.R. 1731 
would cost $10 million over the 2005-2009 period, subject to 
the appropriation of the specified amounts.

                 By Fiscal Year, in Millions of Dollars
------------------------------------------------------------------------
                                        2005   2006   2007   2008   2009
------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization Level                        2      2      2      2      2
Estimated Outlays                          2      2      2      2      2
------------------------------------------------------------------------

    H.R. 1731 also would create new criminal penalties for 
knowingly possessing another person's means of identification 
and would increase the criminal fines for other acts of 
identity theft. Collections of criminal penalties are recorded 
in the budget as revenues. Under current law, those funds are 
deposited in the Crime Victims Fund and later spent. Therefore, 
enacting the bill could increase revenues and direct spending. 
CBO expects, however, that any additional revenues and direct 
spending as a result of enacting this bill would not be 
significant because of the relatively small number of cases 
involved.
    H.R. 1731 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on State, local, or tribal governments.
    On February 6, 2003, CBO transmitted a cost estimate for S. 
153, the Identity Theft Penalty Enhancement Act, as reported by 
the Senate Committee on the Judiciary on January 30, 2003. That 
bill did not authorize appropriations for investigation and 
prosecution of identity theft and other related credit card 
fraud; our cost estimates reflect that difference.
    The CBO staff contact for this estimate is Lanette J. 
Walker, who can be reached at 226-2860. The estimate was 
approved by Peter H. Fontaine, Deputy Assistant Director for 
Budget Analysis.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, 
H.R.1731, is intended to reduce the incidence of identity theft 
and fraud and address the most serious criminals by providing 
stronger penalties for those who would commit such crimes in 
furtherance of other more serious crimes.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8, of the Constitution.

               Section-by-Section Analysis and Discussion

    Unless otherwise noted, this discussion describes the bill 
as reported.
Section 1. Short Title. Table of Contents
    This section provides that this Act may be cited as the 
``Identity Theft Penalty Enhancement Act.''
Section 2. Aggravated Identity Theft
    This section amends Title 18 to provide for a mandatory 
consecutive penalty enhancement of 2 years for any individual 
who knowingly transfers, possesses, or uses the means of 
identification of another person in order to commit a serious 
Federal predicate offense (listed in the bill and including 
immigration violations, false citizenship crimes, firearms 
offenses, and other serious crimes). This 2-year penalty 
enhancement is in addition to any term of imprisonment for the 
underlying offense.
    This section also amends Title 18 to provide for a 
mandatory consecutive penalty enhancement of 5 years for any 
individual who knowingly transfers, possesses, or uses the 
means of identification of another person in the commission of 
any terrorism offense. This 5 year penalty enhancement is in 
addition to any term of imprisonment for the underlying 
offense.
    Additionally, this section contains several provisions to 
ensure the intent of this legislation is carried out. It 
mandates that the enhancement be imposed as a consecutive 
sentence and expressly prohibits a judge from ordering the 
sentence to run concurrently with that of the underlying 
offense. It prohibits the court from sentencing a convicted 
defendant to probation and from reducing the underlying term of 
imprisonment. It does, however, allow the court to impose 
concurrent sentences for additional violations of this section.
Section 3. Amendments to Existing Identity Theft Prohibition
    This section amends the existing identity theft laws to 
clarify that possession of the means of identification of 
another person with intent to commit an unlawful act can 
constitute a crime. This section will make it easier for 
prosecutors to convict identity thieves by allowing prosecution 
for simply possessing false identity documents with the intent 
to commit a crime.
    Currently, Sec. 1028(a)(7) prohibits only the knowing use 
or transfer, without lawful authority, of another person's 
means of identification. This means that Sec. 1028(a)(7) 
addresses only those situations in which a defendant can be 
proved to have obtained someone else's means of identification 
and actually put that means of identification to use, or to 
have transferred it to another person or location where it can 
be put to use. In some situations, however, law enforcement 
authorities may apprehend someone who has wrongly acquired 
another's means of identification, but has not yet put it to 
use or transferred it elsewhere.
    This section amends 18 U.S.C. Sec. 1028(a)(7) to allow 
prosecution of an individual who transfers, uses, or possesses 
the means of identification of another individual ``in 
connection with'' a violation of Federal law or a state felony 
law. Currently, section 1028(a)(7) requires proof, among other 
things, that the person engaged in an unauthorized use or 
transfer of another person's means of identification ``with the 
intent to commit, or to aid or abet, any unlawful activity. . . 
.'' Proof of specific intent to commit or aid and abet the 
unlawful activity in question may be less difficult in cases 
where the person engaging in identity theft can be shown to 
have received direct financial benefits through the use of the 
means of identification. In a number of cases, however, it may 
be difficult to prove that the person who wrongly used or 
transferred another's means of identification did so with the 
specific intent to engage in particular crimes such as fraud.
    The addition of the words ``in connection with'' would 
broaden the reach of section 1028(a)(7) in two important ways. 
First, it will make possible the prosecution of persons who 
knowingly facilitate the operations of an identity-theft ring 
by stealing, hacking, or otherwise gathering in an unauthorized 
way other people's means of identification, but who may deny 
that they had the specific intent to engage in a particular 
fraud scheme. Second, it will provide greater flexibility for 
the prosecution of section 1028(a)(7) offenses. With this 
proposed change, prosecutors would have the option of proving 
that the defendants either had the requisite specific intent to 
commit a particular unlawful activity or engaged in the 
prohibited use, transfer, or possession of others' means of 
identification in connection with that unlawful activity.
    Additionally, this section increases the possible penalty 
for certain identity theft crimes from three to 5 years and 
clarifies that the section allowing for increased penalties for 
identity theft related to international terrorism can also be 
applied to acts of domestic terrorism as defined in Title 18.
Section 4. Aggregation of Value for Purposes of Section 641
    This section clarifies that in a crime prosecuted under 18 
U.S.C. Sec. 641 that involves more than one incident, the 
values of the losses can be aggregated for purposes of 
determining the penalties. It amends 18 U.S.C. Sec. 641 to 
allow for the aggregation of all counts for which the defendant 
is convicted in a single case.
    Currently, there is a split among the Federal district 
courts as to whether 18 U.S.C. Sec. 641 allows such 
aggregation. In those courts which do not allow aggregation, 
the use of this section has been limited to the prosecution of 
individuals who have fraudulently received public money, 
property, or records. The most common instance in which this 
has been a problem is in the improper receipt of monthly 
Federal benefits. Many times the individual monthly Federal 
benefit checks are less than $1,000, the threshold for a 
felony. This amendment clarifies that 18 U.S.C. Sec. 641 
applies and provides for the aggregation of a series of such 
payments to the individual.
Section 5. Directive to the United States Sentencing Commission
    This section directs the United States Sentencing 
Commission to require that the Federal Sentencing Guideline 
Sec. 3B1.3 (Abuse of Position of Trust of Use of Special Skill) 
be amended to apply to employees or directors who use access to 
information at their place of business to commit identity theft 
or fraud. It will help to address the problem of insiders who 
use their employment position to commit fraud or help others 
commit fraud. It will allow judges to apply additional 
penalties to these individuals under the sentencing guidelines.
Section 6. Authorization of Appropriations
    This section authorizes $2 million per year for 5 years for 
the Department of Justice to investigate and prosecute identity 
theft and identity fraud cases.

                              Agency Views


         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                      TITLE 18, UNITED STATES CODE



           *       *       *       *       *       *       *
PART I--CRIMES

           *       *       *       *       *       *       *


CHAPTER 31--EMBEZZLEMENT AND THEFT

           *       *       *       *       *       *       *


Sec. 641. Public money, property or records

    Whoever embezzles, steals, purloins, or knowingly converts 
to his use or the use of another, or without authority, sells, 
conveys or disposes of any record, voucher, money, or thing of 
value of the United States or of any department or agency 
thereof, or any property made or being made under contract for 
the United States or any department or agency thereof; or
    Whoever receives, conceals, or retains the same with intent 
to convert it to his use or gain, knowing it to have been 
embezzled, stolen, purloined or converted--
    Shall be fined under this title or imprisoned not more than 
ten years, or both; but if the value of such property in the 
aggregate, combining amounts from all the counts for which the 
defendant is convicted in a single case, does not exceed the 
sum of $1,000, he shall be fined under this title or imprisoned 
not more than one year, or both.
    The word ``value'' means face, par, or market value, or 
cost price, either wholesale or retail, whichever is greater.

           *       *       *       *       *       *       *


                 CHAPTER 47--FRAUD AND FALSE STATEMENTS

Sec.
1001.  Statements or entries generally.
     * * * * * * *
1028A.  Aggravated identity theft.
     * * * * * * *

Sec. 1028. Fraud and related activity in connection with identification 
                    documents, authentication features, and information

    (a) Whoever, in a circumstance described in subsection (c) 
of this section--
            (1) * * *

           *       *       *       *       *       *       *

            (7) knowingly transfers, possesses, or uses, 
        without lawful authority, a means of identification of 
        another person with the intent to commit, or to aid or 
        abet, or in connection with, any unlawful activity that 
        constitutes a violation of Federal law, or that 
        constitutes a felony under any applicable State or 
        local law; or
    (b) The punishment for an offense under subsection (a) of 
this section is--
            (1) except as provided in paragraphs (3) and (4), a 
        fine under this title or imprisonment for not more than 
        15 years, or both, if the offense is--
                    (A) * * *

           *       *       *       *       *       *       *

                    (D) an offense under paragraph (7) of such 
                subsection that involves the transfer, 
                possession, or use of 1 or more means of 
                identification if, as a result of the offense, 
                any individual committing the offense obtains 
                anything of value aggregating $1,000 or more 
                during any 1-year period;
            (2) except as provided in paragraphs (3) and (4), a 
        fine under this title or imprisonment for not more than 
        [three] 5 years, or both, if the offense is--
                    (A) * * *

           *       *       *       *       *       *       *

            (4) a fine under this title or imprisonment for not 
        more than 25 years, or both, if the offense is 
        committed to facilitate an act of domestic terrorism 
        (as defined under section 2331(5) of this title) or an 
        act of international terrorism (as defined in section 
        2331(1) of this title);

           *       *       *       *       *       *       *

    (d) In this section and section 1028A--
            (1) * * *

           *       *       *       *       *       *       *


Sec. 1028A. Aggravated identity theft

    (a) Offenses.--
            (1) In general.--Whoever, during and in relation to 
        any felony violation enumerated in subsection (c), 
        knowingly transfers, possesses, or uses, without lawful 
        authority, a means of identification of another person 
        shall, in addition to the punishment provided for such 
        felony, be sentenced to a term of imprisonment of 2 
        years.
            (2) Terrorism offense.--Whoever, during and in 
        relation to any felony violation enumerated in section 
        2332b(g)(5)(B), knowingly transfers, possesses, or 
        uses, without lawful authority, a means of 
        identification of another person or a false 
        identification document shall, in addition to the 
        punishment provided for such felony, be sentenced to a 
        term of imprisonment of 5 years.
    (b) Consecutive Sentence.--Notwithstanding any other 
provision of law--
            (1) a court shall not place on probation any person 
        convicted of a violation of this section;
            (2) except as provided in paragraph (4), no term of 
        imprisonment imposed on a person under this section 
        shall run concurrently with any other term of 
        imprisonment imposed on the person under any other 
        provision of law, including any term of imprisonment 
        imposed for the felony during which the means of 
        identification was transferred, possessed, or used;
            (3) in determining any term of imprisonment to be 
        imposed for the felony during which the means of 
        identification was transferred, possessed, or used, a 
        court shall not in any way reduce the term to be 
        imposed for such crime so as to compensate for, or 
        otherwise take into account, any separate term of 
        imprisonment imposed or to be imposed for a violation 
        of this section; and
            (4) a term of imprisonment imposed on a person for 
        a violation of this section may, in the discretion of 
        the court, run concurrently, in whole or in part, only 
        with another term of imprisonment that is imposed by 
        the court at the same time on that person for an 
        additional violation of this section, provided that 
        such discretion shall be exercised in accordance with 
        any applicable guidelines and policy statements issued 
        by the Sentencing Commission pursuant to section 994 of 
        title 28.
    (c) Definition.--For purposes of this section, the term 
``felony violation enumerated in subsection (c)'' means any 
offense that is a felony violation of--
            (1) section 641 (relating to theft of public money, 
        property, or rewards), section 656 (relating to theft, 
        embezzlement, or misapplication by bank officer or 
        employee), or section 664 (relating to theft from 
        employee benefit plans);
            (2) section 911 (relating to false personation of 
        citizenship);
            (3) section 922(a)(6) (relating to false statements 
        in connection with the acquisition of a firearm);
            (4) any provision contained in this chapter 
        (relating to fraud and false statements), other than 
        this section or section 1028(a)(7);
            (5) any provision contained in chapter 63 (relating 
        to mail, bank, and wire fraud);
            (6) any provision contained in chapter 69 (relating 
        to nationality and citizenship);
            (7) any provision contained in chapter 75 (relating 
        to passports and visas);
            (8) section 523 of the Gramm-Leach-Bliley Act (15 
        U.S.C. 6823) (relating to obtaining customer 
        information by false pretenses);
            (9) section 243 or 266 of the Immigration and 
        Nationality Act (8 U.S.C. 1253 and 1306) (relating to 
        willfully failing to leave the United States after 
        deportation and creating a counterfeit alien 
        registration card);
            (10) any provision contained in chapter 8 of title 
        II of the Immigration and Nationality Act (8 U.S.C. 
        1321 et seq.) (relating to various immigration 
        offenses); or
            (11) section 208, 811, 1107(b), 1128B(a), or 1632 
        of the Social Security Act (42 U.S.C. 408, 1011, 
        1307(b), 1320a-7b(a), and 1383a) (relating to false 
        statements relating to programs under the Act).

           *       *       *       *       *       *       *


                     Committee Jurisdiction Letters


                           Markup Transcript



                            BUSINESS MEETING

                        WEDNESDAY, MAY 12, 2004

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:00 a.m., in 
Room 2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner, Jr. [Chairman of the Committee] presiding.
    Chairman Sensenbrenner. The Committee will be in order. A 
quorum is present.
    The first item on the agenda is H.R. 1731, the ``Identity 
Theft Penalty Enhancement Act.'' The Chair recognizes the 
gentleman from North Carolina, Mr. Coble, the Chairman of the 
Subcommittee on Crime, Terrorism, and Homeland Security.
    Mr. Coble. Mr. Chairman, the Subcommittee on Crime, 
Terrorism, and Homeland Security reports favorably the bill 
H.R. 1731, with a single amendment in the nature of a 
substitute and moves its favorable recommendation to the full 
House.
    Chairman Sensenbrenner. Without objection, the bill will be 
considered as read and open for amendment at any point, and the 
Subcommittee amendment in the nature of a substitute, which the 
Members have before them, will be considered as read, 
considered as the original text for purposes of amendment, and 
open for amendment at any point.
    [The Subcommittee Amendment in the Nature of a Substitute 
follows:]
      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


    Chairman Sensenbrenner. The Chair recognizes the gentleman 
from North Carolina, Mr. Coble, to strike the last word and for 
5 minutes.
    Mr. Coble. I thank the Chairman.
    Mr. Chairman and colleagues, recently the Subcommittee on 
Crime, Terrorism, and Homeland Security conducted a hearing and 
markup on H.R. 1731, the ``Identity Theft Penalty Enhancement 
Act,'' to examine the growing problem of identity theft. This 
legislation will establish penalties for aggravated identity 
theft when the theft is related to or in the furtherance of 
certain other criminal acts. Identity theft and identity fraud 
are terms used to refer to all types of crimes in which an 
individual's personal or financial data is misused, typically 
for economic gain or to facilitate another criminal activity. 
Identity crime is not directed at one demographic. It affects 
all types of individuals, regardless of age, gender, 
nationality, or race.
    In 1998, at the direction of Congress, the Federal Trade 
Commission established a central repository for identity theft 
complaints. In 2002, the FTC received 161,819 victim complaints 
of compromised personal information. The FTC estimates that the 
loss to businesses and financial institutions due to identity 
theft to be approximately $47.6 billion. The costs to 
individual consumers are estimated to be approximately $5 
billion. Additionally, victims have a difficult time consuming 
an expensive task of repairing a damaged credit history as well 
as their respective reputations.
    As identity crime increases, we must find new ways to 
protect consumers from the compromise of their personal 
information. I believe this legislation is an important step 
forward in addressing the problem. I thank our colleagues on 
this Subcommittee, Representative Carter, the distinguished 
gentleman from Texas, and Representative Schiff, the 
distinguished gentleman from California, for having introduced 
the bill and bringing this important matter to our attention. I 
hope the colleagues--my colleagues can support this important 
bill and with--I ask unanimous consent, Mr. Speaker, to--Mr. 
Chairman, to include in the record a statement from the 
National President of the Grand Lodge of Fraternal of Police.
    Chairman Sensenbrenner. Without objection.
    [The information follows:]
    
    
    Mr. Coble. And I yield back the balance of my time.
    Chairman Sensenbrenner. The gentleman from Virginia, Mr. 
Scott.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Chairman, I'm opposed to H.R. 1731, the ``Identity 
Theft Penalty Enhancement Act,'' because of its mandatory 
minimum sentences which deny probation and concurrent 
sentences, and by doing so, the bill imposes unnecessary and 
unproductive restrictions on the ability of the Sentencing 
Commission and judges in individual cases to assure a rational 
and just system of sentencing as a whole and for individuals.
    Congress is not in a better position to determine what the 
appropriate sentences is in individual cases before the crime 
occurs than a judge is when he has heard the evidence and 
applies the guidelines established in--established by 
sentencing professionals.
    Mandatory minimum sentences not only defeat the rational 
sentencing system that Congress adopted, but make no sense in 
our separation of powers scheme of governance. Moreover, the 
notion that mandating a 2- or 5-year sentence to someone who is 
willing to risk a 15-year sentence already is not likely to add 
any deterrence.
    Mandatory minimum sentences violate common sense. If the 
sentence required by the mandatory minimum is the appropriate 
sentence, then it will--then it can be imposed. On the other 
hand, even if it makes no sense in the particular case, it has 
to be imposed, anyway.
    Mandatory minimum sentences have been studied extensively 
and have been shown to be ineffective in preventing crime. They 
distort the sentencing process, discriminate against minorities 
in their application, and they waste money. In a study report 
entitled ``Mandatory Minimum Drug Sentences: Throwing Away the 
Key or the Taxpayers' Money,'' the Rand commission concluded 
that mandatory minimum sentences were less effective than 
either normal, traditional discretionary sentencing or drug 
treatment in reducing drug-related crime and far more costly 
than either. And the Judicial Conference of the United States 
has reiterated its opposition to mandatory minimum sentences 
over a dozen times to Congress, noting that they severely 
distort and damage the Federal sentencing system, undermine the 
Sentencing Guideline regime established by Congress to promote 
fairness and proportionality, and destroy honesty in sentencing 
by encouraging charge, in fact, plea bargains.
    The U.S. Sentencing Commission indicated its opposition to 
the sentencing--the U.S. Sentencing Commission indicated its 
opposition to the Senate bill, which is virtually identical to 
the bill before us for similar reasons. Both the Judicial 
Center and its study entitled ``General Effects of Mandatory 
Minimums Prison Terms,'' a longitudinal study of Federal 
sentences imposed, and the U.S. Sentencing Commission in its 
report entitled ``Mandatory Minimum Penalties in the Federal 
Criminal Justice System'' found that minorities are 
substantially more likely than whites in the comparable 
situations to receive mandatory minimum sentences. The 
Sentencing Commission study also reflected that mandatory 
minimum sentences increased the disparity in sentencing for 
like offenders with no--with no evidence that mandatory minimum 
sentences had any more crime reduction impact than 
discretionary sentences. That's why Chief Justice Rehnquist has 
spoken so often and loudly about these wasteful cost increases: 
``Mandatory minimums are perhaps a good example the law of 
unintended consequences.''
    H.R. 1731 does nothing to address the consumer identity 
theft. We have here, Mr. Chairman, a--and I'll ask unanimous 
consent to have it introduced in the record.
    Chairman Sensenbrenner. Without objection.
    [The information follows:]
    
    
    Mr. Scott. A report on the identity theft case in which 
Senator Domenici was the victim. It involves about $800 worth 
of fraudulent credit card purchases, and we've checked with the 
FBI. No action was taken in that case because of resource 
limitations. If you think what we do or don't do sends a 
message to criminals, what do you think that message is? It is 
important that we continue--it is that you can continue to scam 
people, no matter who they are, with impunity. This bill does 
nothing to discourage consumer identity theft, which the FTC 
reports bilked almost 30 million Americans out of approximately 
$50 billion over the last 5 years, with about $5 billion of 
that out-of-pocket, unrecovered losses to consumers.
    We had a bill before the consumer--before the Subcommittee, 
H.R. 3693, cosponsored by myself and the rank--and the 
Chairman, Mr. Coble, and Ranking Member of the full Committee, 
Mr. Conyers, and several others which will provide money for 
the Department of Justice for consumer identity theft 
investigation and prosecution. I'll offer an amendment to 
provide $10 million to DOJ to send a message to identity 
theft--to identity thieves that you will be prosecuted because 
you will be pursued.
    We did this to discourage corporate copyright and trademark 
infringement. We can do it for consumers.
    Thank you, Mr. Chairman. I yield back the balance of my 
time.
    Chairman Sensenbrenner. Without objection, all Members may 
insert opening statements in the record at this point.
    [The prepared statement of Ms. Jackson Lee follows:]
    
    
    Chairman Sensenbrenner. Are there amendments? And the Chair 
recognizes the gentleman from Texas, Mr. Carter, for an 
amendment.
    Mr. Carter. Thank you, Mr. Chairman.
    Mr. Chairman, I have an amendment at the desk.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. Amendment to the Subcommittee amendment in the 
nature of a substitute to H.R. 1731, offered by Mr. Carter. 
Page 3, line 17----
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read.
    [The amendment follows:]
    
    
    Chairman Sensenbrenner. The gentleman from Texas is 
recognized for 5 minutes.
    Mr. Carter. Thank you, Mr. Chairman.
    Mr. Chairman, I'd like to thank you for allowing my 
legislation, H.R. 1731, the ``Identity Theft Penalty 
Enhancement Act,'' to be considered by the Committee. I would 
also like to thank my colleague Mr. Schiff for his support as 
lead cosponsor of this bill.
    Identity theft is a very serious problem. For 4 years in a 
row, the Federal Trade Commission has reported identity theft 
as the number one consumer-reported complaint filed with the 
Commission; 214,905 identity theft complaints were reported in 
2003, an increase of 161,836 complaints over the year 2002.
    Just as concerning--just as concerning, the traffic of 
identity aids terrorist crimes. Terrorists can move more freely 
in the United States with illicit IDs, credit cards, and other 
documentation. Insufficient legislation and prosecution has 
allowed a situation to arise where identities are easy to steal 
without any fear of reprisal.
    The Identity Theft Penalty Enhancement Act gives 
prosecutors greater power in convincing--in convicting and 
sentencing an identity thief. First, it creates a new and 
separate crime--an aggravated identity theft--for any person 
who uses the identity of another person to commit certain 
felonies, including terrorist acts.
    Second, if the thief uses a stolen identity in connection 
with another Federal crime and the intent of the underlying 
Federal crime is proven, the prosecutor need not prove the 
intent to use the false identity in a crime. This lessens the 
burden on the prosecution, making convictions easier.
    Mr. Chairman, my amendment addresses the use of ID theft to 
receive Social Security, Medicare, and other Federal benefits 
and to commit bank theft and embezzlement. My amendment also 
addresses the prevalent occurrence of insider identity theft. 
First, my amendment adds 18 U.S.D. section 641 and sections 811 
and 1632 to the Social Security Act as felonies that can be 
considered as aggravated identity theft. These sections would 
address those individuals who provide another person means of 
identification in order to fraudulent receive Social Security, 
Medicare, disability, veterans, and other Federal benefits.
    Second, my amendment allows for the aggregation of any 
Social Security payments illegally obtained as a result of ID 
theft. This is a particular problem whereas many Social 
Security monthly payments are under $1,000. Without the ability 
to aggregate the payments, the enhanced penalties of my 
legislation would not apply.
    Last, my amendment addresses a prevalent mode of identity 
theft which is committed by insiders of organizations who 
illegally use or transfer individuals' identity information 
which has been entrusted to them. A recent report by 
researchers at Michigan State University estimates about half 
of all identity crimes are the result of personal information 
being stolen from corporate databases. While I am sure many 
companies are doing what they can to stem the risk by investing 
in new data firewall technologies, insider theft is an 
increasing problem which we must protect all consumers from.
    Consumers create literally millions of records shopping on 
the Internet and using their credit cards. All of this 
information is stored in databases which thousands of employees 
can access. It takes only a few clicks on a keyboard to steal 
thousands of identities and send them around the world in 
seconds on the Internet. My amendment directs the U.S. 
Sentencing Commission to amend its guidelines to appropriate 
punishment ID theft offenses involving an abuse of position.
    I urge my fellow colleagues to favorably support this 
amendment, and I thank you, Mr. Chairman, for bringing this 
legislation before the Committee. I yield back the balance of 
my time.
    Chairman Sensenbrenner. The gentleman from Virginia, Mr. 
Scott.
    Mr. Scott. Mr. Chairman, to save time, I'd like here to 
incorporate by reference my comments against mandatory 
minimums, and this is more of the same. And so for the same 
reasons, I would oppose this amendment.
    Chairman Sensenbrenner. Without objection, the comments are 
incorporated.
    The question is on the adoption of the amendment offered by 
the gentleman from Texas, Mr. Carter.
    Mr. Schiff. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from California, Mr. 
Schiff.
    Mr. Schiff. Move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Schiff. I'd like to thank the distinguished Chairman, 
Mr. Sensenbrenner, for allowing this legislation that I joined 
Mr. Carter in introducing to be before the Committee today. 
Identity theft has topped the list of consumer complaints filed 
with the FTC for the last 4 years in a row, impacting millions 
of Americans and costing consumers and businesses billions of 
dollars. In fact, the home States of several Members of the 
Committee are at the top of the list of identity theft victims 
in 2003, with Arizona ranking one, Texas ranking four, Florida 
ranking five, and New York ranking six nationally. My own home 
State of California ranks number three in the number of victims 
of identity theft per capita, with over 37,000 complaints 
reported by consumers costing over $40 million last year.
    Nationally, California cities crowd the top ten list of 
metropolitan areas with the highest per capita rates of 
identity theft reported. L.A.-Long Beach metropolitan area that 
includes my district is particularly prone to such crimes, 
ranking number two nationally, with over 13,000 victims.
    A victim of identity theft usually spends a year and a half 
working to restore his or her identity and good name. Many of 
my constituents and, I know, many of yours have urged Congress 
to act and crack down on this growing epidemic. For that 
reason, I have joined with my colleague Mr. Carter in 
introducing the Identity Theft Penalty Enhancement Act, 
legislation that will make it easier for prosecutors to target 
those identity thieves who steal an identity for the purpose of 
committing other serious crimes. The bill will stiffen 
penalties to deter such offenses and strengthen the ability of 
law enforcement to go after identity thieves and prove their 
case.
    I'm very mindful of the reservations that my colleague Mr. 
Scott has expressed about mandatory minimums in general. From 
my point of view, this case made an appropriate exception both 
because of the epidemic nature of the crime and because of the 
fact that this sentencing enhancement is based on the fact that 
identity theft requires a predicate offense to be an aggravated 
theft. It has to be committed in connection with some other 
offense. And, generally, for the purposes of sentencing, the 
predicate, the underlying offense, and the identity theft are 
merged, giving prosecutors little incentive to charge identity 
theft and having little impact on the ultimate sentence. And I 
think this sentencing practice doesn't reflect the impact on 
the victims, but more only affects the value of the loss of the 
financial institution.
    This legislation also makes changes to close a number of 
gaps identified in current Federal law. Identical legislation 
was introduced by Senators Feinstein and Kyl, passing by 
unanimous consent in the Senate in January of last year. H.R. 
1731 has also been endorsed by the Justice Department and FTC.
    I was pleased to work with Mr. Carter, as well as the 
Senate sponsors, to make some additional improvements to the 
bill that are offered by Mr. Carter's amendment. These 
improvements respond to specific concerns that were raised by 
the Social Security Administration. In addition, they respond 
to the ever growing problem of insider theft. A peer-reviewed 
study will be coming out later this year that will show that 
around half of identity theft cases that were tracked were 
facilitated through the workplace.
    In order to protect against homeland security concerns, to 
protect the good credit and reputation of hard-working 
Americans, the time for stronger legislation cracking down on 
identity theft is now, and I want to thank the Chairman again 
and urge my colleagues to support this measure.
    I yield back the balance of my time.
    Mr. Smith. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Texas, Mr. 
Smith.
    Mr. Smith. Thank you, Mr. Chairman.
    The amendment in the nature of a substitute offered by my 
Texas colleague, Congressman Carter, deserves our support, Mr. 
Chairman. In 2003, over a million and a half consumers were a 
victim of fraud and identity theft complaints. The Federal 
Trade Commission, in fact, indicated that identity theft is one 
of the fastest growing crimes in America.
    Identity theft occurs when an individual's personal 
information is stolen and then used fraudulently for economic 
gain. Identity thieves easily obtain personal information in 
numerous ways. They can steal documents from the trash, hack 
into computers to steal personal information, or even steal 
mail.
    Once an identity theft has the personal information of 
another, the possibilities for abuse are endless. Identity 
thieves often open up credit cards or bank accounts in another 
person's name, go on spending sprees, and leave the victim with 
damaged credit. Identity theft is a serious crime and should be 
punished accordingly.
    Mr. Chairman, this amendment enhances the penalties for 
identity theft and fraud. It ensures that the enhanced 
provisions are actually enforced so that identity thieves 
cannot get off easily.
    Mr. Chairman, I urge my colleagues to support the amendment 
in the nature of a substitute and yield back the balance of my 
time.
    Chairman Sensenbrenner. The question is on the amendment--
--
    Mr. Watt. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from North Carolina, 
Mr. Watt.
    Mr. Watt. I move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Watt. Thank you, Mr. Chairman.
    I certainly don't question the sincerity of Mr. Carter or 
Mr. Schiff, the introducers of the bill, or this proposed 
amendment. And I don't question the magnitude of the problem 
related to identity theft.
    The concern I have is that every time we have passed 
mandatory minimum sentences or enhanced mandatory minimum 
sentences, the identical arguments could have been made, were 
made. There was some kind of emergency, there was some kind of 
exigent circumstances that justified the Judiciary Committee in 
micromanaging and imposing our judgment to the exclusion of the 
judgment of judges who hear the evidence in these cases. If 
there are exigent circumstances--and certainly the use of 
identity theft as a means for terrorism or as an enhancement to 
the opportunity for terrorism would be an exigent 
circumstance--the judge will take that into account and 
exercise discretion to do that.
    The question is whether we ought mandate in every single 
case where there might not be an exigent circumstance or where 
there might be some other circumstances that ought to be taken 
into account, the use of mandatory minimums. And that's the 
problem that we have gotten ourselves into and the problem that 
judges are now expressing themselves about, people who 
administer the jails are expressing themselves about. Mandatory 
minimums are having unintended consequences. When they have the 
intended consequences and punish people, those are the 
circumstances where the court would acknowledge that they 
should be the intended consequence. The unintended consequences 
are always coming in circumstances where we have taken 
discretion away from judges, and I think we owe it to ourselves 
and owe it to our prison systems and owe it to our criminal 
justice system to continue to allow these judgments to be more 
personalized and to force ourselves to--not to micromanage 
everything that's going on in the world, sitting here on these 
chairs in the Judiciary Committee.
    It is clear every single study that has been done about 
mandatory minimums confirmed the deleterious effect on the 
judicial system, on the criminal justice system, and yet every 
time it seems politically expedient and convenient for us to do 
so, we express ourselves by doing something that we know has 
been documented to be a bad idea. And I think we are doing that 
yet again today, and I encourage us not to do that in this case 
and to restrain ourselves from continuing to try to micromanage 
the court system in this way.
    I yield back.
    Chairman Sensenbrenner. The question is now----
    Mr. Delahunt. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Massachusetts, 
Mr. Delahunt.
    Mr. Delahunt. I share some of the concerns that were 
expressed by the gentleman from North Carolina, and I'd like to 
ask my friend and colleague, Mr. Schiff, or for that matter Mr. 
Carter: Has it been--has there been a problem with the 
sentences imposed regarding identity theft that you've been 
able to ascertain? And I yield to the gentleman.
    Mr. Schiff. I thank the gentleman for yielding. I don't 
think the sentences have been sufficient to even slow the rate 
of acceleration of identity theft. So they have not had the 
desired impact, and I think part of the problem is that 
identity theft, as we've defined it, really requires a 
predicate offense, that it's identity theft committed in 
connection with a subsequent crime, for the purpose of 
facilitating another crime.
    When the Sentencing Commission reviews a situation like 
that, it looks at the underlying conduct to determine the 
guideline range. It doesn't consider one guideline for this, a 
second guideline for the identity theft, which doesn't give 
prosecutors much of an incentive to charge identity theft and 
doesn't make much of a difference in the ultimate sentence or 
the discharge.
    Mr. Delahunt. Reclaiming my time, is there any empirical 
data at all, has there been a study done on this particular 
issue? If you're aware of any.
    Mr. Schiff. You know, there have been studies done in terms 
of the frequency, the amount of time that it takes a victim to 
clear their name. A study that determines the--what role 
sentencing plays in the number of these cases, I don't think 
there is any. And I'm not sure that would be easily 
ascertainable.
    Mr. Delahunt. Have you had a--have you had an opportunity 
to consult with the Sentencing Commission or anyone regarding 
this particular proposal?
    Mr. Schiff. I haven't consulted with the Sentencing 
Commission. I did meet with the Judicial Conference just this 
morning, although not on this issue per se, but on the issue of 
mandatory minimums and other issues.
    Mr. Delahunt. Did this issue come up during that meeting?
    Mr. Schiff. No. But, you know, I would say, if I could very 
briefly, if the gentleman would yield further, I think the 
issue you raise is a very legitimate one. I think we should be 
very circumspect about mandatory minimums. In some cases--and I 
realize there's--it requires some restraint by the Committee, 
but in the case of 924(c), mandatory minimums for carrying a 
firearm, in the case where we have sort of out-of-control 
proliferation of a crime, and this compressing of the predicate 
crime and the identity theft, I think there are appropriate 
exceptions from my point of view. I think this is one of them. 
But I certainly understand the other point of view.
    Mr. Delahunt. Yielding further to the gentleman, why the--
what was the methodology used to ascertain the number of--the 
penalty itself, the 2 years, the 5 years?
    Mr. Schiff. Well, this is something that we've worked with 
the Senate on to arrive at an adequate deterrent but not an 
excessive deterrent. We don't want to clog the prisons----
    Mr. Delahunt. I understand that, but was there any 
particular basis, rationale for the penalty itself? Or was this 
just done because the Senate indicated they felt it was a good 
number?
    Mr. Schiff. Well, you know, I think it was a common 
conclusion with a number that would provide a sufficient 
deterrent but not be out of proportion to the nature of the 
crime.
    Mr. Delahunt. I yield back. I thank the gentleman.
    Chairman Sensenbrenner. Does the gentleman from 
Massachusetts yield back?
    The question, once again, is on adopting the Carter 
amendment to the amendment in the nature of a substitute. Those 
in favor will say aye? Opposed, no?
    The ayes appear to have it. The ayes have it, and the 
amendment to the amendment is agreed to.
    Are there further amendments? The gentleman from Virginia, 
Mr. Scott.
    Mr. Scott. Mr. Chairman, I have an amendment at the desk, 
number 45.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. Amendment to the amendment in the nature of a 
substitute to H.R. 1731, offered by Mr. Scott. Section 4, In 
addition to any other sums authorized to be appropriated for 
this purpose, there is authorized to be appropriated to the 
Department of Justice, $10 million for the investigation and 
prosecution of identity theft and----
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read.
    [The amendment follows:]
    
    
    Chairman Sensenbrenner. The gentleman from Virginia is 
recognized for 5 minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Chairman, earlier in the discussion, I entered by 
unanimous consent an article involving Senator Domenici. Let me 
just read two or three sentences out of that article.
    ``New Mexico Senator Pete Domenici's credit card bill took 
a hit after he lost his wallet during a visit to Albuquerque 
last month. A spokesman for the well-known Republican said 
today that two or three credit cards were in his wallet. Before 
Domenici could cancel the cards, someone purchased a $500 
appliance, charged $300 worth of groceries, and bought a tank 
of gasoline.''
    Mr. Chairman, an appliance was probably delivered 
somewhere, but that, in fact, to solve that crime would take 
investigation and resources. At a hearing on the bill, the 
Department of Justice admitted that they do not have resources 
for cases like this, and we have ascertained from the 
Department of Justice that, to the best of their knowledge, 
this case has not been investigated. The credit card companies 
have decided not to hold the Senator responsible for the money 
charged to his credit cards.
    Mr. Chairman, this bill provides an increase in penalties. 
It only applies to those who have been investigated, arrested, 
prosecuted, convicted, and then kicks in at sentencing. It 
cannot be effective for cases that aren't even investigated to 
begin with. This amendment will provide resources so that we 
could begin that process.
    Thank you, Mr. Chairman. I yield back.
    Mr. Schiff. Would the gentleman yield?
    Mr. Scott. I'm sorry. I yield to the gentleman from 
California.
    Mr. Schiff. I thank the gentleman for yielding.
    Very briefly, Mr. Chairman, I just wanted to add my voice 
of support for this amendment by Mr. Scott. One approach that 
we've taken in the base bill is to augment the penalties as a 
way of deterring the commission of the crime. But, of course, 
the penalties are only one facet. Having the resources to 
actually investigate and prosecute these cases is another 
issue. And for that reason, I would join in support of the 
gentleman's amendment.
    Mr. Coble. Mr. Chairman?
    Mr. Scott. I thank the gentleman, and I yield back.
    Mr. Coble. Would the gentleman yield to me?
    Mr. Scott. I'm sorry. I yield.
    Mr. Coble. Mr. Chairman, I thank the gentleman for 
yielding. I would urge the Members on the Committee to accept 
this, but I say to the gentleman from Virginia, I think we 
should include the caveat that in the event that the Budget 
Committee may express concerns about the increase in spending, 
we may have to visit it another time. But for the moment, I'd 
be willing to accept this.
    Mr. Scott. Reclaiming my time--Mr. Chairman, reclaiming my 
time, this would be an authorization. If it doesn't fit in the 
budget, it would not be appropriated.
    Mr. Carter. Mr. Chairman?
    Chairman Sensenbrenner. Does the gentleman from Virginia 
yield back?
    Mr. Scott. I yield back. Thank you.
    Mr. Carter. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Texas, Mr. 
Carter.
    Mr. Carter. Move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Carter. And it won't take 5 minutes. I, too, join in 
this. I think this is a good idea, but subject to the same 
caveat that the Chairman of the Subcommittee talked about, Mr. 
Coble, subject to the Budget Committee.
    I'm always for things that help the prosecutors do their 
job so we can call them on the carpet when they don't, so I can 
support this.
    Chairman Sensenbrenner. Does the gentleman yield back? Does 
the gentleman yield back?
    Mr. Carter. Yes.
    The question is on the amendment of the gentleman from 
Virginia, Mr. Scott, to the amendment in the nature of a 
substitute. Those in favor will say aye? Opposed, no?
    The ayes appear to have it. The ayes have it, and the 
amendment to the amendment is agreed to.
    Are there further amendments? The gentleman from Virginia, 
Mr. Scott.
    Mr. Scott. Mr. Chairman, I have an amendment at the desk.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    Mr. Scott. Number 42.
    The Clerk. Amendment to the amendment in the nature of a 
substitute to H.R. 1731, offered by Mr. Scott of Virginia. On 
the first page, line 16, strike ``2'' and insert ``up to 5.'' 
Page 2, line 8, strike ``5'' and insert ``up to 10.''
    [The amendment follows:]
    
    
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Chairman, very simply, this amendment increases the 
total time, but eliminates the mandatory minimum nature--or the 
mandatory time to be given. This means that only in tough cases 
can you be at least--in tough cases, you can be twice as tough 
as under the mandatory sentence in the underlying bill.
    One of the primary difficulties for those who propose 
mandatory sentences to be tough on crime is they impose 
ceilings on toughness. This means that in the worst cases, the 
worst offenders are required to get less time than they 
deserve, while lesser offenders are required to get more than 
they deserve. This socks it to the bit player while giving the 
ring leader a huge discount. What sense does that make for a 
tough-on-crime advocate?
    Such a crackdown on lesser offenders while discounting 
sentences for the hard--for the worst offenders has no place in 
any rational sentencing scheme. These sentencing schemes are 
not only irrational but also seem to be counterproductive.
    In the 1984 Sentencing Reform Act, which eliminated parole, 
good-time credits, and individualized sentences based on the 
seriousness of the crime and criminal history and role of 
offender in favor of a one-size-fits-all determinant 
sentencing. Just before the Act took place, we had 
approximately 25,000 Federal prisoners. Today, 20 years later, 
177,000 Federal prisoners, a seven-fold increase. The increase 
of prisoners for the 50 years prior to the mandatory minimums 
was 4,000 prisoners, despite hippies, marijuana, LSD, heroin, 
cocaine, and everything else that happened in the 1960's, 
1970's, and 1980's.
    So what do we think happened to the crime rate after all of 
this new incarceration? The fact is crime has increased 
significantly over the past 20 years and remains high--drug 
offenses, for example. Prior to mandatory minimum sentences, 
drug offenders made up less than 15 percent of the Federal 
prison population. Today, more than half of the Federal 
prisoners are there for drug offenses, and drugs are more 
plentiful, more potent, more pure, and cheaper than they were 
before.
    Despite the clear reasons for questioning the effectiveness 
of mandatory minimum sentences and all of the evidence from 
credible studies, with no credible studies on the contrary, 
proponents put blinders on and continue to pass mandatory 
minimum sentences. We owe future victims of crime and the 
taxpayer a better rationale for socking it to them than it 
sounds good and therefore it must be good.
    I would hope that we would now consider to show in the face 
of clear evidence of what not to do, at least not do more of 
it. I would hope that we would pass this amendment to allow the 
application of a rational sentencing policy so that the more 
serious offenders will get more time and then less punishment 
for the lesser offenders.
    Thank you, Mr. Chairman. I yield back.
    Chairman Sensenbrenner. The gentleman from North Carolina, 
Mr. Coble.
    Mr. Coble. Mr. Chairman, I will be very brief, but I will 
have to----
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Coble.--oppose this amendment. I'm revisiting our 
markup, and I believe it was Mr. Feeney, the distinguished 
gentleman from Florida, I believe was the one who addressed 
this, and I recall that he said that the opponents of mandatory 
minimum sentences would have a more compelling case if they 
could assure the Congress that the judges were faithfully 
following the Federal Sentencing Guidelines. And I think, 
sadly, there's evidence that doesn't support that.
    I believe I'm correct, I say to my friend from Virginia, I 
think this bill sponsored by Senator Feinstein in the other 
body, I think it passed by unanimous consent, so that's a 
pretty good message we get from them, which rarely is the case.
    Mr. Scott. Would the gentleman yield?
    Mr. Coble. I'll yield to my friend.
    Mr. Scott. Either that's a pretty good indication or a 
pretty bad indication. [Laughter.]
    Mr. Coble. No comment. I thank the gentleman. I yield back 
my time.
    Chairman Sensenbrenner. The Chair admonishes Members to 
resist temptations to cast aspersions on the other body, even 
though they may be true. [Laughter.]
    The question is on the amendment to the amendment in the 
nature of a substitute offered by the gentleman from Virginia, 
Mr. Scott. Those in favor will say aye? Opposed, no?
    The noes appear to have it. The noes have it, and the 
amendment is not agreed to.
    Are there further amendments? The gentleman from Virginia, 
Mr. Scott.
    Mr. Scott. Mr. Chairman, I have an amendment at the desk, 
number 43.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. Amendment to the amendment in the nature of a 
substitute to H.R. 1731, offered by Mr. Scott of Virginia. 
Beginning on page 2, strike subsection (b) and redesignate 
subsections accordingly.
    [The amendment follows:]
    
    
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    Very simply, this removes the section prohibiting probation 
and concurrent sentence applications. Like mandatory minimums, 
this measure also circumvents the established system of 
sentencing by those in the best position to do so, the 
Sentencing Commission and the judges, and has Congress 
sentencing everybody on the front end without regard to the 
differences and facts and circumstances of the case and the 
roles and backgrounds of the individual defenders. There is no 
reason to have this because basically with this provision in 
here, you essentially have the sentencing done by the 
prosecutor in leveling the charges. Whatever he charges you 
with will be the sentence at the end, and he can decide by 
adding on charges or eliminating charges what the penalty will 
be. That sentencing decision really ought to be with the judge, 
with the direction of the Sentencing Commission, and not by the 
prosecutor. And I would hope that the amendment would, 
therefore, be adopted.
    Chairman Sensenbrenner. The gentleman from North Carolina, 
Mr. Coble.
    Mr. Coble. Mr. Chairman, I'll be brief again. I speak in 
opposition. The current penalties for identity theft and 
identity fraud will still be available.
    I said the current penalties for identity theft and 
identity fraud will still be available for prosecution of 
individuals in other less serious cases under 18 U.S.C. 1028. 
However, this legislation recognizes that the perpetrators of 
identity theft in certain cases are simply stealing another 
identity with the intent to commit in many instances a much 
more serious crime. The mandatory minimums, consecutive 
sentences, and limit on probation are all designed to send a 
message that Congress believes those who steal identities to 
commit further crimes should be dealt with more harshly than 
those who commit a regular identity theft. And I oppose it and 
yield back my time, Mr. Chairman.
    Chairman Sensenbrenner. The gentleman from New York, Mr. 
Nadler.
    Mr. Nadler. Mr. Chairman, I rise in support of the 
amendment.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Nadler. Thank you. I won't spend 5 minutes.
    You know, Mr. Coble says this is intended to send a message 
about the severity of the crime, and crimes may indeed be 
severe and they may deserve severe punishment. But certain 
discretion has to be left to judges because a given crime may 
have extenuating circumstances; a given crime may not be as 
severe as a different crime described in the same statutory 
language; a certain crime may be more severe than a different 
crime described by the same statutory language.
    Now, what this language really does without Mr. Scott's 
amendment is to shift power from the judge to the prosecutors. 
We elect or appoint judges to exercise judgment. That's why 
they're called judges. That's why we have them. To give the 
prosecutor the power to determine the sentence by his 
determining the charges, he can determine whether to charge 
four identity thefts or five identity thefts. And if you say no 
concurrent sentences, the same crime might have different 
consequences, very different consequences, determining--he can 
determine the severity of the charge. He can determine the 
number of counts of the charge, and that would govern the 
sentence. I think you have to leave some discretion to a judge; 
otherwise, why bother having judges at all.
    So we can express our message and our statutory decision as 
to the severity of a crime by what the sentence--by what the 
penalty for a crime is. But whether sentences are concurrent or 
are consecutive, whether probation can be imposed, what the 
circumstances are in a given case, you have to leave that to a 
judge because, otherwise, you impose an inhuman system, and we 
will all find cases where there are inhuman results. We have--
and there's no reason and there's no ability to make the system 
so specific by law as to fit individual cases.
    So I support Mr. Scott's amendment, and I urge its 
adoption.
    Mr. Scott. Would the gentleman yield?
    Mr. Nadler. Yes, I will yield.
    Mr. Scott. I would say to the gentleman that the discussion 
that he just had about the prosecutor actually doing the 
sentencing occurred in the Enron case when a plea bargain was 
struck with a defendant based on certain charges, and the judge 
rejected the plea bargain. The prosecutor went back, dismissed 
those cases, indicted--re-indicted the person on other charges 
for which the guidelines produced the desired result, and the 
person was sentenced under that new indictment.
    That gives the prosecutor the ability, essentially, to beat 
the sentencing authority, not the judge who ought to have that 
authority.
    I thank the gentleman for his support.
    Mr. Nadler. I thank the gentleman. I thank him for offering 
the amendment, and I hope the Committee Members will see the 
wisdom of this amendment, and I yield back.
    Chairman Sensenbrenner. The question is on the Scott 
amendment to the amendment in the nature of a substitute. Those 
in favor will say aye? Opposed, no?
    The noes appear to have it. The noes have it; the amendment 
is not agreed to.
    Are there further amendments? If there are no further 
amendments, without objection, the Subcommittee amendment in 
the nature of a substitute laid down as the base text as 
amended is adopted. A reporting quorum is present. The question 
occurs on the motion to report the bill H.R. 1731 favorably as 
amended. Those in favor will say aye? Opposed, no?
    The ayes appear to have it. The ayes have it; the motion to 
report favorably is adopted.
    Without objection, the bill will be reported favorably to 
the House in the form of a single amendment in the nature of a 
substitute incorporating the amendments adopted here today. 
Without objection, the Chairman is authorized to move to go to 
conference pursuant to House rules. Without objection, the 
staff is directed to make any technical and conforming 
changes----
    Mr. Scott. Mr. Chairman? Mr. Chairman, reserving the right 
to object, do we have time to insert other items into the 
record at this point on the bill?
    Chairman Sensenbrenner. If the gentleman would like to ask 
unanimous consent.
    Mr. Scott. I'd ask unanimous consent that a statement 
from--two statements be entered into the record.
    Chairman Sensenbrenner. Without objection.
    [The statements follow:]
    
    
    Chairman Sensenbrenner. All Members will be given 2 days, 
as provided by House rules, in which to submit additional, 
dissenting, supplemental, or minority views.
                            Dissenting Views

    These views are in dissent to the Judiciary Committee 
Report on H.R. 1731, the ``Identity Theft Penalty Enhancement 
Act.''
    The bill prescribes a mandatory minimum sentence of 2 
years' imprisonment for knowingly transferring, possessing, or 
using, without lawful authority, a means of identification of 
another person during and in relation to specified felony 
violations (including felonies relating to theft from employee 
benefit plans, Social Security benefit programs and various 
fraud and immigration offenses), in addition to the sentence 
for the underlying crime or crimes. It also provides for a 
mandatory minimum sentence of 5 years' imprisonment for 
knowingly taking such action during and in relation to 
specified felony violations pertaining to terrorist acts, in 
addition to the punishments provided for such felonies.
    Moreover, the bill prohibits a court from: (1) placing any 
person convicted of such a violation on probation; (2) reducing 
any sentence for the related felony to take into account the 
sentence imposed for such a violation; or (3) providing for 
concurrent terms of imprisonment for a violation of this Act 
and any other violation, except, in the court's discretion, an 
additional violation of this section.
    Further, the bill expands the existing identify theft 
prohibition to: (1) cover possession of a means of 
identification of another with intent to commit specified 
unlawful activity; (2) increase penalties for violations; and 
(3) include acts of domestic terrorism within the scope of a 
prohibition against facilitating an act of international 
terrorism.
    By adding mandatory minimum sentences and denying probation 
and concurrent sentences, the bill imposes unnecessary and 
unproductive restrictions on the ability of the Sentencing 
Commission and the judges in individual cases to assure a 
rational and just system of sentencing as a whole and for 
individuals. Congress is not in a better position to determine 
what the appropriate sentence is in individual cases, before 
the crime occurs, than the judge who has heard the case, 
applying guidelines established by sentencing professionals. 
Mandatory minimum sentences not only defeat the rational 
sentencing system that Congress adopted, but make no sense in 
our separation of powers scheme of governance. Moreover, the 
notion that mandating a 2-year or 5-year sentence to someone 
who is willing to risk a 15-year sentence is not likely to add 
any deterrence.
    Mandatory minimum sentences violate common sense. If the 
sentence required by the mandatory minimum is the appropriate 
sentence, it will be the sentence imposed. On the other hand, 
even if it makes no sense in the particular case, it still must 
be imposed.
    Mandatory minimum sentences have been studied extensively 
and have been shown to be ineffective in preventing crime. They 
distort the sentencing process, discriminate against minorities 
in their application and waste money. In a study report 
entitled ``Mandatory Minimum Drug Sentences: Throwing Away the 
Key or the Tax Payers Money?,'' the Rand Commission concluded 
that mandatory minimum sentences were less effective than 
either discretionary sentencing or drug treatment in reducing 
drug related crime, and far more costly than either. And the 
Judicial Conference of the U.S. has reiterated its opposition 
to mandatory minimum sentencing schemes over a dozen times to 
the Congress, noting that they ``severely distort and damage 
the Federal sentencing system, . . . undermine the Sentencing 
Guideline regimen'' established by Congress to promote fairness 
and proportionality, and ``destroy honesty in sentencing by 
encouraging charge and fact plea bargains.'' The U.S. 
Sentencing Commission indicated its opposition to the Senate 
bill, which is virtually identical to H.R. 1731, for similar 
reasons.
    Both the Judicial Center in its study report entitled ``The 
General Effects of Mandatory Minimum Prison Terms: A 
longitudinal Study of Federal Sentences Imposed,'' and the 
United States Sentencing Commission in its study report 
entitled ``Mandatory Minimum Penalties in the Federal Criminal 
Justice System,'' found that minorities were substantially more 
likely than whites under comparable circumstances to receive 
mandatory minimum sentences. The Sentencing Commission study 
also reflected that mandatory minimum sentences increased 
disparity in sentencing of like offenders, with no evidence 
that mandatory minimum sentencing had anymore crime reduction 
impact than discretionary sentences. Chief Justice Rehnquist 
has spoken often and loudly about these wasteful cost 
increases:

        ``Mandatory minimums are perhaps a good example of the 
        law of unintended consequences . . .''.

    Not only do such sentencing schemes violate common sense, 
but they appear to be counter productive. The 1984 Sentencing 
Reform Act eliminated parole, good time credits and 
individualized sentences based on the seriousness of the crime 
and the criminal history and role of the offender in the crime, 
in favor of one-size-fits-all determinate sentencing. In the 
two decades since, we have passed a slew of harsher and harsher 
mandatory minimum sentences to add to even more time to 
sentences. Just before the Act took effect, we had 
approximately 25,000 Federal prisoners. Today, 20 years later, 
we have over 177,000 Federal prisoners, a seven-fold increase. 
Take drug offenses, as an example. Prior mandatory minimum 
sentences, drug offenders made up less than 15 percent of the 
Federal prison population. Today, drug offenders make up 54 
percent of the prison population, and drugs of all types have 
never been more plentiful, more potent or pure, or cheaper. The 
increase in the prison population for the 50 years prior to the 
Act and mandatory minimum sentences was 4,000 prisoners, 
despite the ``Hippie'', Marihuana, LSD, Heroine and Cocaine 
binges of the 60's, 70's and 80's. Yet, the crime rate over the 
past 20 years, compared to the prior 50 years, has increased 
significantly and remains high.
    Despite these clear reasons for questioning the 
effectiveness of mandatory minimum sentencing, and all the 
evidence from credible studies with no credible studies to the 
contrary, proponents put on blinders and continue to pass 
mandatory minimum sentences because they sound good. We owe the 
future victims of crime and the taxpayer a better rationale for 
socking it to them than ``it sounds good, so it must be good.'' 
During the Committee markup of the bill, Subcommittee Ranking 
Member Scott offered an amendment to replace the 2-year and 5-
year mandatory minimum sentences with 5-year and 10-year 
maximum sentences, respectively. This would mean that on the 
tough cases, the additional sentence could be at least two 
times tougher than the mandatory sentence. One of the primary 
difficulties for those who propose mandatory sentences as a way 
to show they are tough on crime is that such sentences impose 
ceilings, as well as floors, on toughness. The impact of this 
is that the worse offenders are required to get LESS time than 
they deserve, while the lesser offenders are required to get 
MORE time than they deserve. This socks it to the bit player 
while giving the ringleader a huge sentencing discount. What 
sense does that make for a tough on crime advocate, or anybody 
else? Such a crack down on lesser offenders while discounting 
sentences for hard worse offenders has no place in any rational 
sentencing scheme.
    Identity theft is a huge problem in this country. The FTC 
reports that identity thieves bilked almost 30 million 
Americans out of approximately $50billion dollars over the past 
5 years, with about $5 billion of that out-of-pocket and 
unrecovered losses to the victims. During the markup, Ranking 
Member Scott introduced an article on an identity theft case in 
which U.S. Senator Pete Domenici was the victim. The case 
involved about $800 worth of fraudulent credit card purchases. 
Yet, the FBI reported that no action is being taken on this 
case because of resource limitations. If what the Congress does 
or doesn't do sends any message to criminals, the message this 
sends is that criminals can continue to scam people, no matter 
who they are, with impunity. A bill before the Subcommittee, 
H.R. 3693, sponsored by Ranking Member Scott, Chairman Coble, 
Ranking Member Conyers and nine other members, which would 
provide $100 million to the Department of Justice for consumer 
identity theft investigation and prosecution, was not scheduled 
for markup.
    However, while much of the bill does little, if anything, 
to address consumer identity theft, the Committee did adopt an 
amendment offered by Ranking Member Scott which would provide 
$10 million to the Department of Justice, $2 million over each 
of the next five fiscal years, to investigate and prosecute 
consumer identity theft. While this does not overcome the 
counterproductive impact of the mandatory minimum sentences in 
the bill, the $10 million would at least let identity thieves 
know they can no longer assume impunity.

                                   John Conyers, Jr.
                                   Jerrold Nadler.
                                   Robert C. Scott.
                                   Melvin L. Watt.
                                   Sheila Jackson Lee.
                                   Maxine Waters.
                                   William D. Delahunt.
                                   Tammy Baldwin.

                                  
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