Financial Fraud and Identity Theft Investigation and Prosecution Program: Annual Report on Performance and Recommendations, February 2023
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Summary
The 2022 annual report on the Financial Fraud and Identity Theft Investigation and Prosecution Program, issued to the Washington State Legislature in February 2023 by the Department of Commerce under RCW 43.330.300(1)(c). It describes the program, created in 2008, and the two regional task forces it supports, covering King, Pierce, Snohomish and Spokane counties. For state fiscal year 2022 it reports 1,142 investigations, 281 cases charged, 665 counts charged and 375 convictions, with cumulative totals of 13,199 investigations and 5,866 convictions since 2011. It states that Uniform Commercial Code-1 filing surcharges fund the program, that the fee rose to $15 on July 1, 2021, and that 111,968 filings produced $1.5 million. The recommendations ask the Legislature to change identity theft charging thresholds under RCW 9.35.020 and to make possession of a skimming device a felony.
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“Financial Fraud and Identity Theft Investigation and Prosecution Program: Annual Report on Performance and Recommendations, February 2023.”
Original at app.leg.wa.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-commerce-reports-2022-ffit-report-final-89914604-1e95-4145-b4a1-121447/
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Financial Fraud and
Identity Theft Investigation
and Prosecution Program
Annual report on performance and recommendations pursuant to
RCW 43.330.300(1)(c)
February 2023
OFFICE OF FIREARM SAFETY
AND VIOLENCE PREVENTION /
COMMUNITY SAFETY UNIT Report to the Legislature
Kendrick Stewart, Interim Director
V3.1
Acknowledgments
Washington State Department of Commerce
Diane Klontz, Deputy Director of Division and
Program Alignment
Jasmine Vasavada, Legislative and Policy Director
Kate Kelly, Executive Director, Office of Firearm
Safety and Violence Prevention/Community 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/COMMUNITY 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)
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT
Table of contents
Executive summary...................................................................................................................................... 2
Program revenue and funding allocation ...................................................................................................... 5
Task force goals and performance ............................................................................................................... 7
Recommendations ..................................................................................................................................... 10
Appendix A: Task force members .............................................................................................................. 12
2022 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 comprising 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 the investigations. Fees on Uniform Commercial Code-1 (UCC-1) filings fund
the FFIT program. The Department of Licensing collects and deposits the UCC-1 fee payments into a dedicated
FFIT account.
Key findings
State fiscal year 2022 (July 1, 2021 - June 30, 2022)
1,142 investigations were conducted (1,334 fewer than the previous fiscal year)
281 cases charged (304 fewer than the previous fiscal year)
665 counts charged (1,102 fewer than the previous fiscal year)
375 convictions (54 fewer 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 2011-2022
The FFIT task forces report performance quarterly to Commerce. In the years of active investigatory work
(2011 through 2022), the task forces have:
Conducted 13,199 investigations
Charged 6,212 cases
Charged 18, 662 counts
Obtained 5,866 convictions
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 2
Statewide trends
State-level data on identity theft and fraud
The Washington Association of Sheriffs and Police Chiefs 2021 Crime in Washington report indicated that in
2021 there were 24,561 fraud offenses reported throughout the state.1 Identity Theft and Swindle/Con Games
totaled 14,321, or 58.3% of all financial crimes in Washington.
Where Washington fits among national trends
According to the Federal Trade Commission's Consumer Sentinel Network 2021 Data Report,2 there were 5.7
million cases of reported financial fraud. Identify theft cases totaled 1.43 million cases. Imposter scams
accounted for over 984,000 cases, costing $2.33 million. Washington ranks 37th with 170 identity theft reports
per 100,000 people, meaning 36 states had more reports per 100,000 people. Total identity theft cases in
Washington totaled 12,917, with an estimated total loss of $135.7 million for the state. A typical fraud case in
Washington resulted in a loss of $500 per case.
Figure 1 charts Washington's ranking from 2010 to 2020 among states by reported identity theft and fraud
crimes with trend lines. 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's rankings improved dramatically from 2020 to 2021, especially for reported identity theft.
Figure 1: Washington's state ranking, ID theft and fraud - 2010 to 2020
40
37
35
31 34
29
30
25 25 25
25 23
23
20 18 23 21
17
15 13
16
14 15 14
10
12
11
5 7 8 5
2
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
ID Theft Fraud Linear (ID Theft) Linear (Fraud)
Source: Federal Trade Commission, Consumer Sentinel Network Data Books, 2010-2021, https://www.ftc.gov/enforcement/consumer-sentinel-
network/reports
1 Washington Association of Sheriffs & Police Chiefs, "Crime in Washington 2021 Annual Report," https://www.waspc.org/crime-
statistics-reports
2 Federal Trade Commission, "Consumer Sentinel Network 2021 Data Report," https://www.ftc.gov/reports/consumer-sentinel-network-
data-book-2021
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 3
Other data points include:
Younger people reported losing money to fraud more often than older people. Those aged 20-29 reported
losing money in 41% of reports to the FTC. When people aged 70+ have a loss, the median loss was
much higher, from $500 to $1,500.
Government documents or benefits fraud tops the list of identity theft-type crimes. The FTC reported
receiving 395K reports from people who said their information was used to obtain government benefits.
Military consumers reported over 110K fraud complaints, including 449K imposter scams that cost them
over $103 million in losses.
Identity theft, imposter scams, and stolen data from credit bureaus are the top three types of financial
fraud. Washington ranks 3rd in imposter scams with 8,372 reported cases and a loss of $1.1 million.
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 4
Program revenue and funding allocation
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.3 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. When the
program was reauthorized again in 2020, UCC-1 fees were increased to $15, beginning July 1, 2021.
Collections from the new $15 surcharge started in November 2021. The chart below explains the fillings and
UCC Revenue collected from 2008-2022. For SFY 22, the state reported 111,968 filings and collected $1.5
million in UCC fees to support the FFIT Program.
Figure 2: Uniform Commercial Code-1 filings, SFY 2008 - 2022
120,000
111,580
104,381
111,968
100,000 88,668
87,448 87,914 85,303
82,926
80,000 89,763
86,586 87,545 87,129 88,810
83,531
60,000
40,000
20,000
8,798
0
2008 2010 2012 2014 2016 2018 2020 2022
3 Washington State Department of Licensing, "Paper filing and search fees: UCC,"
https://www.dol.wa.gov/business/UCC/uccpaperfees.html
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 5
Figure 3: Uniform Commercial Code-1 revenue, SFY 2008 - 2022
$1,600,000 $1,504,060
$1,400,000
$1,200,000
$1,043,810
$1,000,000 $871,290 $888,100
$1,115,800
$800,000 $897,630
$886,680
$600,000
$383,179 $392,095 $326,223
$346,319
$400,000
$388,428 $362,885
$200,000 $331,878
$39,409
$0
2008 2010 2012 2014 2016 2018 2020 2022
Source: Washington State Department of Licensing Monthly UCC-1 Surcharge Reports
Program revenue allocation
Commerce retains 10% of FFIT program revenue for administration. The remaining funding is divided between
the task forces 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 4: Program revenue allocation
10%
22.5%
67.5%
Department of Commerce Administration Greater Puget Sound Task Force Spokane Regional Task Force
Source: Department of Commerce
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 6
Task force goals and performance
The FFIT task forces submit quarterly performance reports to Commerce and 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 performance goal of the task forces is to achieve 92 convictions per quarter. Since establishing
this performance measure in 2011, the task forces have achieved an average of 125 convictions each quarter
over 48 quarters, with 5,866 individuals convicted.
This data shows the task forces are far exceeding their original goal.
Task force performance
The FFIT task forces continue to improve 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 2022, the FFIT task forces produced a combined:
1,142 investigations
281 cases charged
Combined task force performance from state fiscal year 2011 through 2022 is presented in Figure 4. Data for
the two task forces are shown separately in Figures 5 and 6.
Figure 5: Statewide Task Force performance, SFY 2011-2022
3,500
3,000
2,500
2,000
1,500
1,000
500
-
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
INVESTIGATIONS CASES CHARGED COUNTS CHARGED CONVICTIONS
Source: FFIT Task Force Quarterly Reports
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 7
During state fiscal year 2022, the Greater Puget Sound Task Force conducted 97 investigations, prosecuted
111 cases involving 258 counts, and obtained 202 convictions. Pierce and Snohomish County do not report
investigation numbers as they do not have dedicated investigators assigned to the task force. Pierce and
Snohomish County only report when the prosecutor's office charges cases. Due to COVID-19, court operations
continue to be impacted, resulting in fewer cases processed through the court.
Figure 5: Greater Puget Sound Task Force performance, SFY 2011 – 2022
2,500
2,000
1,500
1,000
500
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
INVESTIGATIONS CASES CHARGED COUNTS CHARGED CONVICTIONS
Source: Greater Puget Sound Task Force Quarterly Reports
During state fiscal year 2022, the Spokane County Task Force conducted 1,045 investigations, prosecuted 170
cases involving 407 counts and obtained 173 convictions.
Figure 6: Spokane County FFIT Task Force performance by SFY 2011-2022
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
INVESTIGATIONS CASES CHARGED COUNTS CHARGED CONVICTIONS
Source: Spokane County FFIT Task Force Quarterly Reports
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 8
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).
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 9
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 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 current threshold is "credit, money, goods, services, or anything else of value over $1,500 obtained
from identity theft [RCW 9.35.020(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.
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
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 10
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.
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 11
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
King County Prosecuting
Margo Marin, Deputy Prosecuting Attorney
Attorney's Office
Mitch Mondala, BECU Security - Financial Crimes Unit, GPS-FFIT Executive Board
Boeing Employees Credit Union
Co-Chair
Redmond Police Department Martin Fuller, Lieutenant
Redmond Police Department Nicole Perry, Analyst
Pierce County Sheriff's Office Doug Shook, Sergeant
Pierce County Sheriff's Office Bill Foster, Detective
Pierce County Prosecuting
Brook Burbank, Deputy Prosecuting Attorney/Assistant Chief Criminal Deputy
Attorney's Office
Pierce County Prosecuting
Matt Thomas, Deputy Prosecuting Attorney
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
Snohomish County Prosecutor's
Hall Hupp, Deputy Prosecuting Attorney
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 Jon Mattsen, Major
King County Sheriff's Office Robin Fry, Detective
United States Attorney's Office Vacant (TBD)
Federal law enforcement Vacant (TBD)
Salal Credit Union John Fick, Fraud Manager
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 12
Table 2: Spokane County FFIT Task Force members
Entity Representative
Spokane County Sheriff's Office John Nowels, Undersheriff/Chair
Spokane County Sheriff's Office Thomas Hendren, Captain
Spokane County Prosecutor's Mark Lindsay, Deputy Prosecuting Attorney
Office
Spokane Police Department Vacant (TBD)
Numerica Credit Union Roger Fitzpatrick, Legal/Compliance Manager
Washington State Attorney Lisa Jangaard, Investigator/Analyst
Small towns and cities Vacant (TBD)
Representative
2022 FINANCIAL FRAUD AND IDENTITY THEFT INVESTIGATION AND PROSECUTION PROGRAM REPORT 13
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