Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.news From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Thieves used House credit union records Date: Fri, 20 Nov 92 15:30:30 EST Message-ID: \SE A \HD Thieves used House credit union records \BY Paul M. Rodriguez \CR THE WASHINGTON TIMES Federal law enforcement authorities are investigating at least a dozen fraudulent loans and credit cards obtained using stolen confidential financial records from the House credit union, The Washington Times has learned. The records, physically removed from files maintained by the Wright Patman Congressional Federal Credit Union, figured in phony financial transactions in the District, Baltimore, and Howard and Anne Arundel counties, congressional and federal law enforcement officials confirmed. Robert Hess, president of the House credit union, told The Times yesterday that the files - containing the confidential credit reports of about a dozen account holders - do not involve congressmen or other senior congressional officials. "At this time, it looks like the records are being used to obtain small loans" in the range of $1,000 to $2,000, Mr. Hess said, adding that he is cooperating with both federal and local authorities. The stolen records were located in secure files in locked rooms at House Annex II, one of several office buildings patrolled 24 hours a day by the U.S. Capitol Police. Mr. Hess, president of the 30,000-plus-member credit union, said that based on an internal investigation, he doesn't believe the records were stolen by people working for him. "I think I'd know that, and I don't think that that's the case," Mr. Hess said, suggesting that someone outside of the credit union is responsible. He would not speculate on who it is, how the files were stolen or when the thefts occurred. Although credit union officials said they believe the thefts were limited to a few files, they were not certain. "It may involve a dozen or it could involve hundreds," said one employee. "We just won't know until there's been a complete investigation." Mr. Hess said the confidential credit reports were discovered missing after a Baltimore finance company alerted House officials in late September about a batch of suspicious loan applications involving credit union members. Based on the tip from Norwest Financial Co., House credit union officials contacted the FBI and confirmed through an internal audit that the records were missing. So far, between 50 and 60 credit union members have been alerted to the possibility that someone may be using their records to obtain illegal financial services. In a letter to credit union members mailed this week, a copy of which was obtained by The Times, Mr. Hess' office said the stolen reports compiled by Equifax Credit Information Services of Atlanta "were removed from our offices without the authorization or knowledge of any credit union employees." "The information in some of these credit reports was then used in attempts to obtain fraudulent loans and credit cards from various lenders," the letter continues, noting that the credit union is working with several law enforcement agencies. Mr. Hess said federal authorities have told him that the dozen or so applications processed by Norwest involved "personal-type loans." Norwest officials could not be reached for comment. Credit union and federal law enforcement officials said the confidential credit reports could be used to apply for not only loans and credit cards, but also such things as telephone services, auto rentals and appliance purchases. Mr. Hess, whose credit union has over $140 million in assets, said no money belonging to the credit union was involved in the fraudulent use of members' credit reports. Besides the FBI, Mr. Hess and Cheryl Pranger, internal auditor of the credit union, said the U.S. Secret Service and police officers from the District, Baltimore, Anne Arundel and Howard counties, among other law enforcement agencies, were working on the case. Spokesmen for the FBI, the Secret Service and other agencies said they either needed more time to investigate or had no comment. Congressional officials suggested that federal authorities are closing in on the people who stole the records. Credit union officials are waiting for results of further internal audits to determine if other records are missing. "What makes this case so intriguing is that physical documents were taken from secure files," said one official. "Normally what happens is that a computer hacker taps into the electronic files to steal these kinds of records. In this case, you have some one or some group of people actually breaking into files that should be under lock and key and stealing the files." "To play it safe," said one senior credit union official, "we decided to send out warning notices to everybody who filed any loan application with us over a two- or three-day time period [about six months ago] even though the information we have is that only a dozen or so credit files are involved." The credit union has avoided being directly tainted by scandal. The most recent audit report of financial activities showed that the organization, which includes lawmakers, staff, police and press, was operating in a sound manner. Earlier this year, however, there were allegations that congressional officials may have gotten loans from the credit union to cover bad checks and cash shortages at the now-closed House bank and the scandal-plagued House post office. Wright Patman officials denied allegations and rumors that the credit union may have been involved with money laundering or illegal loans to employees at the bank and the post office. Federal law enforcement sources said two probes - one by a special prosecutor for the Justice Department and one by U.S. Attorney Jay B. Stephens - are trying to determine whether the credit union's loans were used to cover up improper activities. Credit union officials, supervised by an executive committee composed of senior officers of the House, said the stolen files have not been linked in any fashion to problems at the bank or the post office. As a result of the stolen credit reports, however, stricter rules on handling confidential records have been implemented. 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