Privacy and other federal laws generally prohibit pretexting, (the use of false pretenses), when contacting a U.S. bank, phone company or government agency for confidential information. One example of pretexting would be using a false identity while phoning a bank to elicit a bank customer’s personal account information. If an information broker, private investigator, etc. pretexts during an asset search, some of the following federal statutes might possibly apply:
- 15 U.S.C. § 45 (Unfair methods of competition unlawful; prevention by Commission): By relying on both 15 U.S.C. §45 and 15 U.SC. § 53 (False advertisements; injunctions and restraining orders), the Federal Trade Commission can sue pretexters for fraudulent, deceptive and unfair business practices.
- 15 U.S.C. § 6801 et. seq. (the Gramm-Leach-Bliley Act): makes it illegal to access private information by making pretext phone calls to a financial institution or its customers. As my post “The Gramm-Leach-Bliley Act & An Asset Search” further explains, 15 U.S.C. § 6821 also prohibits the use of false documents to obtain private customer information.
- H.R. 4709, 109th Congress (2006) (Telephone Records and Privacy Protection Act of 2006): This statute generally prohibits telephone record pretexting and the sale of illegally acquired telephone records.
- 18 U.S.C. § 1028 (Fraud and related activity in connection with identification documents, authentication features, and information): Both this statute & 18 U.S.C. §1028A. (Aggravated identity theft), prohibit a broad range of frauds in connection with identification documents.
- 18 U.S.C. § 1341 (Frauds and swindles): Covers frauds which use U.S. mail. It and 18 U.S.C. § 1343 (Fraud by wire, radio, or television), are the ubiquitous federal fraud statutes.
- 26 U.S.C. § 7213 (Unauthorized disclosure of information): Prohibits the unauthorized inspection or disclosure of U.S. tax returns or return information. Subsection (a) (4), entitled “Solicitation”, expressly covers the illegal sale and /or illegal receipt of tax return information.
- 42 U.S.C. § 1307 (Penalty for fraud): Among other things, covers misconduct like eliciting social security numbers through pretext calls to the U.S. Social Security Administration.
- 47 U.S.C. § 222 (The Telecommunications Act of 1996): Section (c) (2) of this Act generally prohibits telephone record disclosure absent “…affirmative written request by the customer, to any person designated by the customer”.
One who pretexts in violation of the foregoing statutes, may face a Federal Trade Commission lawsuit or even criminal indictment. In Federal Trade Commission v. Action Research Group, Inc. et. al. for example, information brokers ended up stipulating to a final order which permanently enjoined them from telephone record pretexting. In Federal Trade Commission v. Victor L. Guzzeta d/b/a Smart Data Systems, yet another information broker stipulated to a final judgment, which similarly enjoined him from financial record pretexting.
In the U.S. District Court in Tacoma however, Mr. and Mrs. Torrella are being criminally prosecuted for their pretext calls to the I.R.S., Social Security Administration, pharmacies, medical offices and various state labor departments. According to their indictment, the Torrellas made the pretext calls while performing asset searches and other services for the private investigators who are their co-defendants.
The Torrellas and /or their co-defendants are charged with Conspiracy and violating many of the above-cited federal statutes: 18 U.S.C. § 1343 (Wire Fraud); 42 U.S.C. § 1307 (Penalty for Fraud); 26 U.S.C. § 7213 (Unauthorized Disclosure of Information); and 18 U.S.C. §1028A (Aggravated Identity Theft). Based on their May 20, 2008 plea agreements, both Mr. and Mrs. Torrella await sentencing. According to a September 3, 2008 entry in their docket report, said sentencing has been scheduled by U.S. District Court Judge Ronald B. Leighton for February 13, 2009.
(Last Edited 11/3/08)
Copyright 2008 Fred L. Abrams