Financial Fraud and Identity Theft Investigation and Prosecution Program Report (Washington Commerce, 2022)
Summary
Progress report of the Financial Fraud and Identity Theft Investigation and Prosecution Program, a Washington State Department of Commerce report to the Legislature issued pursuant to RCW 43.330.300(1)(c) and dated February 7, 2022. It reports for state fiscal year 2021 that the task forces conducted 2,482 investigations, charged 585 cases and 1,767 counts, and obtained 429 convictions. For 2011 through 2021 it reports 12,057 investigations and 5,491 convictions. The report states that UCC-1 fees increased to $15 beginning July 1, 2020, and that Commerce retains 10% of program revenue for administration. It lists recommended statutory changes, including making possession of a skimming device a felony.
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Financial Fraud and
Identity Theft Investigation
and Prosecution Program
Progress report: Performance and recommendations pursuant to
RCW 43.330.300(1)(c)
February 7, 2022
OFFICE OF FIREARM SAFETY
AND VIOLENCE PREVENTION /
PUBLIC SAFETY UNIT Report to the Legislature
Director Lisa Brown
V3.0
Acknowledgments
Washington State Department of Commerce
Diane Klontz, assistant director, Community
Services and Housing Division
Jasmine Vasavada, legislative and policy director
Kate Kelly, executive director, Office of Firearm
Safety and Violence Prevention/Public Safety Unit
Greater Puget Sound Financial Fraud and Identity
Theft Task Force
Mitch Mondala, task force co-chair
Boeing Employees Credit Union
Patrick Hinds, task force co-chair
Senior Deputy Prosecuting Attorney
King County Prosecutor's Office
Spokane County Financial Fraud and Identity Theft
Task Force
Inspector John Nowels, task force chair
Spokane County Sheriff's Office
Washington State Department of Commerce
Kate Kelly
Kate.kelly@commerce.wa.gov
Phone: 360-628-6846
OFFICE OF FIREARM SAFETY AND VIOLENCE
PREVENTION/PUBLIC SAFETY UNIT
1011 Plum St. SE
P.O. Box 42525
Olympia, WA 98504-2525
www.commerce.wa.gov
For people with disabilities, this report is available
on request in other formats. To submit a request,
please call 360-725-4000 (TTY-360-586-0772)
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report
Table of Contents
Executive summary...................................................................................................................................... 2
Program revenue and funding allocation ...................................................................................................... 4
Task force goals and performance ............................................................................................................... 6
Recommendations ....................................................................................................................................... 9
Appendix A: Task force members .............................................................................................................. 11
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 1
Executive summary
Overview
The Legislature created the Financial Fraud and Identity Theft Crime Investigation and Prosecution Program
(FFIT) in 2008 in the Department of Commerce (Commerce). The program strengthens cooperation between
law enforcement and financial industry investigators and increases the capacity to respond to financial fraud
and identity theft crimes. This report meets the statutory requirements in RCW 43.330.300(1)(c):
By December 31st of each year submit a report to the appropriate committees of the legislature and the governor
regarding the progress of the program and task forces. The report must include information regarding the use of
funds and funding needs to facilitate a biennial review of the program's funding. The report must also include
recommendations on changes to the program, including expansion.
Financial fraud and identity theft crimes are defined in RCW 43.330.300(4) as "check fraud, chronic unlawful
issuance of bank checks, embezzlement, credit/debit card fraud, identity theft, forgery, counterfeit instruments
such as checks or documents, organized counterfeit check rings, and organized identification theft rings."
Commerce supports two regional FFIT task forces consisting of the state's four largest counties: The Greater
Puget Sound Task Force, including King, Snohomish and Pierce counties, and the Spokane County Task Force.
The task forces include representatives from the attorney general's office, county prosecutors, law
enforcement agencies and financial institutions.
Both task forces direct grant funds to law enforcement investigations, forensic analysis and prosecutorial staff
dedicated to cases generated by investigations. Fees on Uniform Commercial Code-1 (UCC-1) filings fund the
FFIT program. The Department of Licensing collects and deposits UCC-1 fees into a dedicated FFIT account.
Key findings
State fiscal year 2021
2,482 investigations conducted (153 fewer than the previous fiscal year)
585 cases charged
1,767 counts charged (229% more than the previous fiscal year)
429 convictions (a 30% increase, or 100 more convictions than the previous fiscal year)
Task forces are identifying and prosecuting significantly more sophisticated multi-person criminal
organizations spanning multiple jurisdictions.
Cumulative findings in fiscal years 2011-2021
The FFIT task forces report performance quarterly to Commerce. In the years of active investigatory work
(2011 through 2021), the task forces have:
Conducted 12,057 investigations
Charged 5,931 cases
Charged 17,997 counts
Obtained 5,491 convictions
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 2
Statewide trends
Figure 1 below charts Washington's ranking from 2010 to 2020 among states by reported identity theft and
fraud crimes. A lower ranking indicates a higher reported crime rate (50 would be the best-ranked state, and 1
would be the worst). Although Washington's rankings have fluctuated significantly over 10 years, Washington
again ranks among the worst states with the most reported fraud and identity theft crimes.
Figure 1: Identity theft crime trends in Washington (state ranking) - 2010 to 2020
50
45
40
34
35 31
29
30
25 23 25 25
25
17 18
20 23 23
15 14
15
16 13
10 14 11
12
2
5 8 5
7
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
ID Theft Fraud
Source: Federal Trade Commission, Consumer Sentinel Network Data Books, 2010-2020, https://www.ftc.gov/enforcement/consumer-
sentinel-network/reports
Recommendations
The FFIT task forces recommend the Legislature consider statutory changes to strengthen law enforcement
and criminal justice response to financial fraud and identity theft crimes:
Elevate non-financially motivated identity theft to a first-degree charge
Create penalty enhancements when a victim is a vulnerable individual
Base the financial threshold for first-degree identity theft on the amount the suspect attempted to obtain
Make possession of a skimming device a felony
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 3
Program revenue and funding allocation
Both of the state's FFIT task forces direct grant funds to law enforcement investigations, forensic analysis and
prosecutorial staff dedicated to financial fraud and identity theft cases.
Fees on Uniform Commercial Code Financing Statement filings, also known as UCC-1 filings, fund the FFIT
program. The Department of Licensing collects the fees as surcharges on personal and corporate UCC-1
filings.1 Collected funds are transferred to Commerce monthly for the exclusive support of the activities of the
FFIT program.
History of UCC-1 fee collection
Fees collection began when the FFIT program was created in 2008. After accumulating fees for a year, the task
forces spent two years organizing, hiring and training staff before becoming operational. The three-year ramp-
up period explains why investigation and prosecution data began in 2011 while revenue collection began in
2008.
When the Legislature reauthorized the FFIT Program in 2015, UCC-1 fees were raised to $10. UCC-1 fees
increased to $15 beginning July 1, 2020, when the program was reauthorized in 2020.
Figure 2: Uniform Commercial Code-1 collections, SFY 2008 - 2021
Filings
$1,200,000 120,000
$1,000,000 100,000
$800,000 80,000
$600,000 60,000
40,000
$400,000
$200,000 20,000
$0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Number of Filings Surcharge Revenue
Source: Washington State Department of Licensing Monthly UCC-1 Surcharge Reports
1
Washington State Department of Licensing, "Paper filing and search fees: UCC,"
https://www.dol.wa.gov/business/UCC/uccpaperfees.html
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 4
Program revenue allocation
Commerce retains 10% of FFIT program revenue for administration. Task forces divide the remaining funding
in a manner agreed upon by the program partners and Commerce. The Greater Puget Sound Task Force
includes three counties (King, Pierce and Snohomish). The Spokane County Task Force includes only Spokane
County, resulting in a 3-to-1 ratio between the two task forces. After the 10% for administration, 67.5% of
program funding is allocated to the Greater Puget Sound Task Force and 22.5% is allocated to the Spokane
County Task Force. Figure 3 shows the allocation of the total funding.
Figure 3: Program revenue allocation
2021 Program Revenue: $1,115,800
$111,580.00
$251,055.00
$753,165.00
Department of Commerce Administration Greater Puget Sound Task Force Spokane Regional Task Force
Source: Department of Commerce
The Greater Puget Sound Financial Fraud and Identity Theft Task Force (King, Pierce and Snohomish counties)
uses the funds for salaries and benefits as follows:
0.5 FTE, deputy prosecuting attorney from the King County Prosecuting Attorney’s Office
0.75 FTE, detective from the King County Sheriff’s Office
0.5 FTE, deputy prosecuting attorney from the Pierce County Sheriff’s Office
0.92 FTE, analyst from the Redmond Police Department
1.0 FTE, deputy prosecuting attorney from the Snohomish County Prosecuting Attorney’s office
The Spokane Regional Financial Fraud and Identity Theft Task Force uses the funds for salaries and benefits,
as well as goods and services, as follows:
Investigative staff from the Spokane County Sheriff’s Office
Legal staff from the Spokane County Prosecuting Attorney’s Office
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 5
Task force goals and performance
The FFIT task forces submit quarterly performance reports to Commerce, then follow up with two semi-annual
narrative reports of ongoing operational successes and accomplishments. These reports describe the
planning and staffing of investigations, apprehension of suspects, prosecution of financial fraud and identity
theft crimes, and new and best practices.
Statewide performance goals
Statewide, the task forces' performance goal is achieving 92 convictions per quarter. Since establishing this
performance measure in 2011, the task forces have achieved an average of 125 convictions each quarter over
44 quarters, with 5,491 individuals convicted.
This data shows the task forces are far exceeding their original goal.
Task force performance
The FFIT task forces continue to make improvements in identifying, arresting and prosecuting individuals and
groups engaged in the criminal enterprise of financial fraud and identity theft. Each year, both task forces have
incrementally increased the scope of their investigations, pursuing larger and more complex criminal
enterprises.
In fiscal year 2021, the FFIT task forces produced a combined:
2,482 investigations
585 cases charged
Combined task force performance from state fiscal year 2011 through 2021 is presented in Figure 4. Data for
the two task forces are presented separately in Figures 5 and 6.
Figure 4: Statewide Task Force performance, SFY 2011-2021
3,500
3,000
2,500
2,000
1,500
1,000
500
-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
INVESTIGATIONS CASES CHARGED COUNTS CHARGED CONVICTIONS
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 6
Source: FFIT Task Force Quarterly Reports
During state fiscal year 2021, the Greater Puget Sound Task Force conducted 208 investigations, prosecuted
114 cases involving 275 counts, and obtained 162 convictions.
Figure 5: Greater Puget Sound Task Force performance, SFY 2011 – 2021
2,500
2,000
1,500
1,000
500
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
INVESTIGATIONS CASES CHARGED COUNTS CHARGED CONVICTIONS
Source: Greater Puget Sound Task Force Quarterly Reports
During state fiscal year 2021, the Spokane County Task Force conducted 2,274 investigations, prosecuted 585
cases involving 1,767 counts, and obtained 429 convictions.
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 7
Figure 6: Spokane County FFIT Task Force performance by SFY 2011-2021
2,500
2,000
1,500
1,000
500
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
INVESTIGATIONS CASES CHARGED COUNTS CHARGED CONVICTIONS
Source: Spokane County FFIT Task Force Quarterly Reports
Note on change in data collection for counts changed
In 2017, prosecutors began reporting all counts-charged data. Previously, law enforcement reported some of
the counts-charged data. Since prosecutors do not always prosecute every charge identified by law
enforcement, this change results in more accurate data beginning in state fiscal year 2017. It also accounts for
the reduced number of counts charged for both task forces in 2017 (Figures 5 and 6).
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 8
Recommendations
FFIT task forces developed the following recommendations to strengthen law enforcement and criminal
justice response to financial fraud and identity theft crimes.
Elevate non-financially motivated identity theft to a first-degree
charge
The FFIT task forces recommend a first-degree charge for identity theft motivated by the intent to avoid
apprehension by law enforcement. Currently, this crime is charged as Identity Theft in the Second Degree
under RCW 9.35.020. An increased penalty for this charge should deter individuals from using stolen identities
to avoid arrest for other, more serious crimes.
A suspect will sometimes give an identity theft victim's name to police in an attempt to avoid arrest. Unless
law enforcement books the suspect into jail, where fingerprints can confirm identity, the victim – rather than
the suspect – may receive a criminal citation. This deception could result in an arrest warrant, creating a
criminal history for the victim of identity theft. However, so long as the "loss" is less than $1,500, only a charge
of Identity Theft in the Second Degree under RCW 9.35.020 is currently allowable against the suspect for this
type of crime.
Create penalty enhancements when a victim is a vulnerable
individual
The task forces recommend the Legislature create penalty enhancements that may be added for financial
fraud and identity theft crimes when the victim is a senior or vulnerable individual.
Base the financial threshold for first-degree identity theft on the
amount the suspect attempted to obtain
The task forces recommend the Legislature change the financial threshold for Identity Theft in the First
Degree. The threshold is currently "credit, money, goods, services, or anything else of value in excess of $1,500
obtained from identity theft."2 The task forces recommend changing the first-degree charge to be based on
what the defendant attempted to obtain by misusing the victim's identity rather than what they obtained.
Currently, a defendant who uses a stolen identity to attempt an unsuccessful high-dollar value crime can only
be charged with Identity Theft in the Second Degree. Basing the level of identity theft on the amount the
defendant attempted to obtain, rather than on the amount the defendant obtained, avoids rewarding suspects
who use stolen identities to attempt to commit the most serious crimes and are unsuccessful only because
they are caught or because their plans otherwise fail.
2
RCW 9.35.020(2)
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 9
Make possession of a skimming device a felony
The task forces recommend making possession of a skimming device with criminal intent to commit identity
theft a felony under RCW 9.35.020. This statutory change will strengthen prosecutorial tools in all jurisdictions
in Washington. Increasingly, skimming is a problem in identity theft cases. Skimming devices allow people to
obtain financial and personal information directly from credit and debit card magnetic stripes. There are
legitimate reasons to use skimmers, such as when small businesses use such devices on mobile phones to
sell goods and services. However, identity thieves use skimming devices and card re-encoders to retrieve an
individual's financial information to make counterfeit credit cards. Currently, the only charge available for
possessing a skimmer with intent to commit a crime is Attempted Identity Theft in the Second Degree, a gross
misdemeanor. The task forces believe this is an inadequate charge for such a sophisticated crime.
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 10
Appendix A: Task force members
Table 1: Greater Puget Sound FFIT Task Force members
Entity Representative
King County Prosecuting Patrick Hinds, senior deputy prosecuting attorney, GPS-FFIT executive board co-
Attorney's Office chair, grantee representative
Mitch Mondala, BECU Security - Financial Crimes Unit, GPS-FFIT executive board
Boeing Employees Credit Union
co-chair
Redmond Police Department Lieutenant Martin Fuller
Pierce County Sheriff's Office Sergeant Teresa Burg
Pierce County Prosecuting
Brook Burbank, deputy prosecuting attorney/assistant chief criminal deputy
Attorney's Office
Columbia Bank John Fick, vice president/fraud investigations unit manager
Snohomish County Prosecutor's
Michael Held, deputy prosecuting attorney/chief of staff
Office
Sound Credit Union Angie May, senior fraud investigator, GPS-FFIT executive board secretary
Washington State Attorney
Barbara Serrano, assistant attorney general
General's Office
JP Morgan Chase Barbara VanArshall, JPMC Security - National Vulnerable Adult Investigations
Bank of America Tim Whitesitt, vice president/senior investigator
King County Sheriff’s Office Major Jon Mattsen
United States Attorney's Office Vacant (TBD)
Federal law enforcement Vacant (TBD)
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 11
Table 2: Spokane County FFIT Task Force members
Entity Representative
Spokane County Sheriff's Office John Nowels, Undersheriff/Chair
Spokane County Sheriff's Office Rob Sherar, inspector
Spokane County Prosecutor's Steve Garvin, senior prosecutor
Office
Spokane Police Department Brad Arleth, captain
Spokane Teachers Credit Union Jim Fuher, fraud prevention manager
Washington State Attorney Mark Porter, investigator
General's Office
Small towns and cities Vacant (TBD)
Representative
2021 Financial Fraud and Identity Theft Investigation and Prosecution Program Report 12
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