Deportations of illegal immigrants has been in the news quite a bit since Donald Trump took office.
Possession of stolen Social Security numbers by the those detained or deported have played a role in some of the cases. A recent, well-publicized, deportation involved Guadalupe Garcia de Rayos. She was arrested in Arizona and returned to Mexico for a 2009 felony conviction stemming from a stolen SSA number she used. Her case was reviewed by ICE seven times after the conviction. A removal order was issued in 2013.
One source reported the actual owner of the number was a young man in Tucson. While I cannot confirm that, even if Garcia de Rayos had created one from randomly selected digits there would have been at least a 50% chance of it belonging to a citizen, living or deceased. As of 2014, approximately 450 million numbers had been issued out of one-billion possible numeric combinations.
The remaining 50% will be issued over the next several decades. The current rate is 5.5 million per year (there are blocks of numbers which are unavailable). Eventually, all illicitly used random numbers will, in effect, be stolen.
That begs the question: if you are aware that an action you have taken has a 50% chance of amounting to theft, are you guilty of a felony? There is no easy answer, but it at least can be considered some form of fraud or misrepresentation. It would be enough for me to lose my CPA license (or worse) if I filed a tax return for a client who I knew was using a W2 with an unauthorized SSA number.
SSA numbers are stolen for two purposes: financial gain, as in taking out a fraudulent loan in the name of the person to whom it is legally assigned, or for purposes of obtaining employment. The former can create significant harm to a person’s credit and reputation; the latter can create other problems, such as impeding a background check or delaying the payment of a federal entitlement. The most vulnerable victims in either case are children. Until they are old enough to enter the job market or apply for certain federal benefits, they will not be aware of the theft.
Thefts for financial gains will always be a problem. Nothing short of persistent, proactive measures by the government and other institutions who possess SSA numbers will make a dent in this form of criminal activity. Even then, sophisticated hacking will occasionally breach any firewall. It is ultimately up to individuals to prevent or limit damage by practicing relentless vigilance. Take any seemingly legitimate communication you receive from a financial institution with a grain of salt. Carefully scrutinize all requests for information appearing to originate from a government body.
Preventing the use of SSA numbers for employment purposes is difficult to stop, too, maybe even more so because theft can be accomplished using low tech resources. Illegal immigrants normally use their own names for the stolen numbers. Creating authentic-looking documents is fairly easy. However, they will not accrue benefits if the number is fictitious or has already been assigned. The Social Security Administration screens employer W2 filings for mismatches or no evidence of issuance. Employee contributions will be held in the Earnings Suspense File.
In 2010, it was estimated that these suspense dollars provided around $12 billion to the Social Security and Medicare trust funds. While that is a windfall, it is a pittance compared to the funding needs of the two programs. The contributions are likely more than offset by the uncompensated services provided by emergency rooms across the nation to those who are not authorized to be here. That’s according to the American College of Emergency Physicians.
I would not rule out future benefit claims against previously unmatched contributions by those who may one day attain legal status, or through a class action. If that occurs, the windfall effect could be greatly diminished. The United States could be facing a growing contingent liability that could bite a large chunk from the Retirement and Medicare trust funds when we least expect it, and when less prepared to deal with the fallout. The Suspense File has accumulated $1.2 Trillion through 2012 from 333 Million unmatched W2s. Claims against a fraction of that could easily exceed $100 Billion.
Except through a small pilot program, neither the IRS nor SSA will notify you if your Social Security number pops up as a mismatch. It is important for you to compare your earnings against those shown on your annual Social Security Statement. Do not depend on the SSA to catch all fraudulent W2s and assign them to the Suspense File.
The most sensible line of defense against illicit use of SSA numbers for employment purposes would be to increase the use of the E-Verify system. There must be penalties for employers who do not perform reasonable due diligence in screening hires.
There are concerns about mandatory use and the cost of the system to businesses. My suggestion would be to use it as an audit tool – not everyone would be required to use it. Employers submitting too many W2s with mismatched SSA numbers would have to as long as the problem persists…..and suffer consequences for their carelessness if it did not cease. In time, it may be practical to require widespread use as efficiency is improved through experience.
Ultimately, we need to come to grips with the primary cause of employment-purposed SSA number theft. There are some jobs Americans will not do at current levels of compensation, in some cases kept artificially low by the availability of cheap labor. Rooting out unauthorized SSA number use could open up some labor segments to American citizens. Then there are those jobs most citizens will shun at almost any rate of pay. Do not expect to find more than a few Americans picking crops or working in a poultry processing plant. That was not the case in days gone by, but that train left the station many decades ago, and it is not returning.
There should be regulated guest worker programs, subject to the protection of labor laws, for certain industries and jobs when needs are proven. Employees will not get rich, but could earn a path to citizenship and all the opportunities that has to offer. Costs of certain products would rise, but the use of unauthorized SSA numbers could significantly diminish.
If the integrity of the SSA database is compromised by a steady inflow of bogus information, the ramifications will be painful to the economy and greatly diminish trust in the institutions responsible for our financial and physical well being. That pain will be far worse than what would be felt by taking steps to deal with the problem now.