ID thieves target dead children: Victims blame the federal government

WAUKESHA -- It's hard to imagine a crime more callous than exploiting a baby's death for personal profit, but it's happening all across the country, and victims say the federal government is to blame.

In January of 2010, Katy McDonald took her four-month-old boy, Elijah, to the emergency room because he was sick.  The infant was diagnosed with H1N1 influenza, otherwise known as 'swine flu.'  The hospital sent the baby home, and Katy figured everything was going to be alright.

"Kids get sick all the time, you know?" she thought.

Hours after returning home with Elijah, Katy's world was turned upside down.

"The last moment I remember him being alive was me giving him his little nebulizer treatment," Katy recalls. "I put the mask on and he was licking it and smiling and pushing it away.  Then, we laid down to nurse him, and... that's when he passed away."

One year later, Katy and her husband, Justin, are raising another baby boy, Zion.  They also have two older boys, but the pain of losing Elijah is still fresh, and last month, something happened that poured salt into an already very tender wound.

Just two days before the anniversary of her son's death, Katy sat down to do her taxes.  It was an emotional experience, she says, knowing it would be the last time she could enter Elijah's name as one of her dependents.

"It was the last time that I was going to be able to have him recognized as my child," she says.

The IRS rejected her form.

"I thought `Okay, maybe I just didn`t put in the right numbers or there was a goof up somehow,'" Katy said.

She tried to resubmit the form over and over again, but got the same result, and that's when she noticed an explanation buried in the fine print.  Someone else had already claimed Elijah as their own.

"The IRS, when I was talking to them, said, 'Do you have the right to claim him?'  And I was like 'Yes, he`s my child. Nobody has the right to claim him. Only we have the right to claim him,'" Katy said.

Katy wrote about her experience on the website for an infant loss support group.  Soon, she found out she was not alone.  All over the country, parents who've lost young children are finding the same thing has happened to them.

"It disgusts me to no end that somebody preyed upon my daughter`s death for his or her own gain," says Jonathan Agin, whose daughter Alexis died of brain cancer shortly before her fifth birthday.

Just like Elijah, Alexis was claimed as a dependent by an identity thief before her parents could do it.

"She was victimized twice,"  Agin says.  "Once by the cancer that stole her from this earth and then by a cold-hearted criminal who stalked her and utilized her death for profit."

Earlier this month (February 2nd), Agin told the members of a powerful Congressional committee that he believes the federal government is to blame, "for providing identity thieves the information to commit this crime."

The US Social Security Administration maintains a database of more than 87-million deceased Americans known as the "Death Master File."  It's often referred to as the Social Security Death Index.  Under the Freedom of Information Act, data in the index is routinely sold to private companies.  Some of those companies post the information on the internet where anyone can access it for free.

"Anybody sitting in this room with a computer can find my daughter`s social security number," Agin says.

Katy McDonald had no trouble finding her son's personal information on one such website.  It took her less than a minute.

"I got a whole list of all the babies that died from 2010 to 2011," Katy says.  "And was on the fourth page."

The index contains what is sometimes referred to as the "holy trinity" of personally identifying information - a person's name, date of birth and social security number.  Now, the National Consumers League and others are calling on Congress to restrict public use of the Death Master File.

"While NCL generally supports transparency of government data," says John Breyault, Vice President of Public Policy for the National Consumers League.  "In this case we believe the risk that DMF data can be used for nefarious purposes outweighs the benefit."

Ironically, many companies that rely on the death index use it to prevent fraud, but it's also a popular tool for family history researchers, like Arlene Brachman.

"If you know your roots, good, bad or indifferent," Brachman says," you have security."

Her Bayside basement is crowded with paper records, but the three-time president of the Milwaukee County Genealogical Society spends most of her time on the computer, searching the Social Security Death Index.

"Every day I do genealogy, four, five, six days a week. I use it virtually every day that I`m researching," Brachman said.

Brachman and other genealogists say it would be a travesty for the public to lose access to this treasure trove of historical information, but Katy McDonald is hardly sympathetic.

"If they sat in our shoes for one day they would be the ones fighting," she says.  "This is just ridiculous."

Even now, Elijah's personal information remains readily available to the public, but as far as the IRS is concerned, the identity of the person who tried to profit from his death is a closely guarded secret.

"Go to the police department, press charges on the person that did this," Katy recalls an IRS customer service representative saying.  "'Okay, well, who did it?' 'We can`t tell you that, ma`am. They have rights - privacy rights.' 'Okay, well, what rights do I have? What rights does my son have?' 'None.'"

That is something Katy wants to change.

"I don't want other parents to have to go through this.  It is hard enough losing your child and then having to relive the grief all over again," Katy says. "Something needs to change."

A 2008 audit of Social Security found that publication of the Death Master File has not only led to the identity theft of children and adults who've died, it has exposed the social security numbers of more than 20,000 people who are still alive.  That's because living people are mistakenly added to the database all the time.

The audit by the Inspector General of Social Security recommended that the agency limit the type of information contained in the public release of the Death Master File.  That, however, has yet to happen.  The agency says it would require an act of Congress.

HR 3475 - also known as the Keeping IDs Safe Act (KIDS Act) - is still pending before the House Ways and Means committee.

Meanwhile, some genealogy websites are now voluntarily limiting public access to the Social Security Death Index.  Ancestry.com recently moved the death index search engine from its free "RootsWeb" page to a page for paying subscribers.

CLICK HERE for the IRS Taxpayer Guide to ID Theft.

CLICK HERE to view video from the House Ways and Means Committee re: a hearing on social security death records.