Identity Theft a Primary Means of Committing Fraud

Using the stolen identities and documentation of U.S. citizens is the  primary tactic of those fraudulently applying for U.S. passports. Passport fraud is often linked to  other crimes. Various Other Methods Used to Fraudulently Obtain Passports

Applicants commit passport fraud through other means, including  submitting false claims of lost, stolen, or mutilated passports; child  substitution; and counterfeit citizenship documents. According to Diplomatic Securityofficials, concerns exist within  the law enforcement and intelligence communities that passport fraud  could also be used to help facilitate acts of terrorism. Other leaders of alien smuggling rings have also been  recently convicted. Limited interagency information sharing between State and law  enforcement and other agencies makes it more difficult to protect U.S.  citizens from terrorists, criminals, and others who would harm the United  States. State’s CLASS Name-Check System Does Not Include Names of All Fugitives Wanted by Federal and State Law Enforcement Authorities

Because the FBI and other law enforcement agencies do not currently  provide State with the names of all individuals wanted by federal law  enforcement authorities, State’s CLASS name-check system does not  contain the names of many federal fugitives, some wanted for murder and  other violent crimes; these fugitives could therefore obtain passports and  potentially flee the country. State officials became aware  of this situation when the union representing passport examiners brought  to their attention that a number of individuals on the FBI’s Ten Most  Wanted list were not in CLASS. Insufficient Fraud Prevention Staffing, Training, Oversight, and Investigative Resources Make Fraud Detection More Difficult

Limited fraud prevention staffing, training, oversight, and investigative  resources pose additional challenges to fraud detection efforts. Effect of New Examiner Performance Standards on Fraud Detection Remains Unclear

Although State’s approach to developing new nationwide passport  examiner production standards, which were implemented in January 2004,  raises a number of methodological concerns, subsequent changes to the  standards make an assessment of their impact on fraud detection  premature. State intended that the new nationwide standards would make  performance expectations and work processes more uniform among its 16  issuing offices. Because State has modified the 2004 production standards in response to  management, union, and examiner concerns, the standards’ effect on fraud  detection is unclear. Conclusions

Maintaining the integrity of the U.S. passport is an essential component of  State’s efforts to help protect U.S. citizens from those who would harm the  United States. Recommendations for Executive Action

To improve the coordination and execution of passport fraud detection  efforts, we recommend the Secretary of State take the following six  actions:   Expedite, in consultation with the U.S. Attorney General, Director of the  Federal Bureau of Investigation, and Secretary of Homeland Security,  arrangements to enhance interagency information sharing, and reach  agreement on a plan and timetable for doing so, to ensure that State’s  CLASS system for passports contains a more comprehensive list of  individuals identified in the Terrorist Screening Center database as well  as state and federal fugitives and that such information is made  available to State in an efficient and timely manner. To identify and assess the key challenges State faces in detecting passport  fraud, we directly observed State’s fraud detection efforts at 7 of its 16  domestic passport-issuing offices; tested State’s use of electronic databases  for fraud detection; analyzed fraud referral statistics from the Bureaus of  Consular Affairs and Diplomatic Security; and interviewed cognizant  officials in both of these bureaus.
Why GAO Did This Study

Maintaining the integrity of the U.S. passport is essential to the State Department's efforts to protect U.S. citizens from terrorists, criminals, and others. State issued about 8.8 million passports in fiscal year 2004. During the same year, State's Bureau of Diplomatic Security arrested about 500 individuals for passport fraud, and about 300 persons were convicted. Passport fraud is often intended to facilitate other crimes, including illegal immigration, drug trafficking, and alien smuggling. GAO examined (1) how passport fraud is committed, (2) what key fraud detection challenges State faces, and (3) what effect new passport examiner performance standards could have on fraud detection.

What GAO Found

Using the stolen identities of U.S. citizens is the primary method of those fraudulently applying for U.S. passports. False claims of lost, stolen, or damaged passports and child substitution are among the other tactics used. Fraudulently obtained passports can help criminals conceal their activities and travel with less scrutiny. Concerns exist that they could also be used to help facilitate terrorism. State faces a number of challenges to its passport fraud detection efforts, and these challenges make it more difficult to protect U.S. citizens from terrorists, criminals, and others. Information on U.S. citizens listed in the federal government's consolidated terrorist watch list is not systematically provided to State. Moreover, State does not routinely obtain from the Federal Bureau of Investigation (FBI) the names of other individuals wanted by federal and state law enforcement authorities. We tested the names of 67 federal and state fugitives and found that 37, over half, were not in State's Consular Lookout and Support System (CLASS) database for passports. One of those not included was on the FBI's Ten Most Wanted list. State does not maintain a centralized and up-to-date fraud prevention library, hindering information sharing within State. Fraud prevention staffing reductions and interoffice workload transfers resulted in fewer fraud referrals at some offices, and insufficient training, oversight, and investigative resources also hinder fraud detection efforts. Any effect that new passport examiner performance standards may have on State's fraud detection efforts is unclear because State continues to adjust the standards. State began implementing the new standards in January 2004 to make work processes and performance expectations more uniform nationwide. Passport examiner union representatives expressed concern that new numerical production quotas may require examiners to "shortcut" fraud detection efforts. However, in response to union and examiner concerns, State eased the production standards during 2004 and made a number of other modifications and compromises.