MINUTES OF THE
SENATE Committee on Judiciary
Seventy-second Session
March 31, 2003
The Senate Committee on Judiciary was called to order by Chairman Mark E. Amodei, at 9:30 a.m., on Monday, March 31, 2003, in Room 2149 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Mark E. Amodei, Chairman
Senator Maurice E. Washington, Vice Chairman
Senator Mike McGinness
Senator Dina Titus
Senator Valerie Wiener
Senator Terry Care
COMMITTEE MEMBERS ABSENT:
Senator Dennis Nolan (Excused)
STAFF MEMBERS PRESENT:
Nicolas Anthony, Committee Policy Analyst
Bradley Wilkinson, Committee Counsel
Jo Greenslate, Committee Secretary
OTHERS PRESENT:
Kevin Higgins, Chief Deputy Attorney General, Fraud Control Unit for Industrial Insurance, Office of the Attorney General
Janine Hansen, Lobbyist, Nevada Eagle Forum
Lynn Chapman, Lobbyist, Nevada Eagle Forum
Stan Olsen, Lieutenant, Lobbyist, Las Vegas Metropolitan Police, Nevada Sheriff’s and Chief’s Association/South
Mary Lau, Lobbyist, Retail Association of Nevada
Chairman Amodei:
The first and only bill up for today is Senate Bill (S.B.) 297.
SENATE BILL 297: Makes various changes relating to personal identifying information. (BDR 15-28)
Senator Valerie Wiener, Clark County Senatorial District No. 3:
I will read my written testimony into the record (Exhibit C).
Kevin Higgins, Chief Deputy Attorney General, Fraud Control Unit for Industrial Insurance, Office of the Attorney General:
I believe you have a letter from the attorney general in support of S.B. 297 (Exhibit D). He has asked me to read it into the record.
Senator Care:
What was your reasoning in making criminal activities contained in S.B. 297 category B and category C felonies? Those can be pretty stiff for a first-time offense. A young lady testified last week, who apparently at a young age committed a felony of some sort, and she is now earning a college degree. A 23-year-old sales clerk comes to mind, who makes a stupid mistake and runs the risk of 20 years in prison.
Senator Wiener:
In section 6 we are talking about, “Without the permission, … with the intent to defraud … .” In section 7, “the intent to use, … for an unlawful purpose,” which is a category C felony, but the person actually possesses with the intent. The actual use brings the category B felony conviction. Possession is one thing, even though they had the intent, they have not yet done the act. The actual use of, or transfer of, in defrauding is the higher felony. Again, I would like to stress, the public officer or employee has a minimum of 5 years versus a nonpublic employee, because often when public officers or employees ask for information, individuals do not have a choice of whether or not to comply.
Senator Care:
I do not dispute conduct of this nature should be illegal. If somebody committed identity theft today, without this bill, what would the criminal charge be?
Mr. Higgins:
There are crimes for possession and unauthorized use of credit cards. There are not crimes for possession of just the credit card number. In partial response to your prior question, commonly how this crime is committed is a waiter or hotel desk clerk has a secondary scanning device in their possession. It is not a matter of them scanning one card; they might scan 40 or 50 cards a day. They sell those card numbers to a wholesaler and get $25 to $30 apiece for a good credit card number. We are not talking about a one-time event with one credit card number, but a whole series of events. The one-time abuser such as the one you mentioned, Senator Care, obviously would be at the lower limit of sentencing. First-time felons do not get the maximum sentence on category B or C felonies and go to prison for 20 years. It would have to be someone with a significant prior criminal experience.
Senator Care:
You talk about the discretion of the court. What about the discretion of the prosecutor?
Mr. Higgins:
Prosecutorial discretion is always used in charging cases. Crimes are probational. A young girl who stole a couple of credit cards and gave them to her boyfriend could get probation.
Senator Care:
What if it was not a public employee? Is there anything in S.B. 297 regarding a conspiracy? Would conspiracy be included in your example of the young lady who stole a credit card for her boyfriend?
Mr. Higgins:
I believe we could use the general conspiracy statute regarding a crime already on the books.
Senator Care:
In section 19, subsection 2, page 5, line 30, it states, “Some of the acts constituting elements of the crime did not occur in this state or that where such acts did occur they were not a crime or elements of a crime.” Would you explain this subsection?
Mr. Higgins:
Subsection 2 takes care of a defense that could be proffered. I will give an example from my experience. There was an inmate on a fire crew. The fire crew followed the fire across the State line at Lake Tahoe into California, and the inmate walked away. He was caught 1 year later, and he said he was not subject to prosecution in Nevada. His reasoning was he did not escape from custody in Nevada, he escaped from custody in California, and Nevada did not have jurisdiction over his escape in California. People can actually commit crimes outside the State of Nevada that are crimes inside the State. This bill makes the law clear, especially in the Internet age. If somebody is wholesaling credit card numbers to Belarus, we can still prosecute locally because some of the elements of the crime did, in fact, happen in Nevada.
Regarding Senator Wiener’s credit card number theft, the fact the card was stolen here and transmitted to Spain would still be a crime in the State of Nevada. We have had reports of people buying Porsches in Macedonia on credit cards owned by Nevada residents who have never been to Macedonia. Arguably, there is a way, based on case law, to argue this issue. Senate Bill 297 makes it abundantly clear there is no defense.
Senator Care:
Arguably, you could be charged in both jurisdictions, if the other state had a similar statute, it would not be double jeopardy.
Mr. Higgins:
No, they are separate sovereigns. Theoretically, it could be charged federally also.
Janine Hansen, Lobbyist, Nevada Eagle Forum:
Our vice president, Lynn Chapman, would like to testify, and I will follow up with a few words.
Lynn Chapman, Lobbyist, Nevada Eagle Forum:
We support S.B. 297. I was looking through the Privacy Rights Clearinghouse report dated May 2000. I would like to read some interesting statistics (Exhibit E). I would also like to read an article from the Reno Gazette-Journal dated April 17, 2002, about a Mendocino, California lawyer who was a victim of identity theft (Exhibit E). Nevada really needs bolstered laws to protect individuals from identity theft, and that is why we support S.B. 297 and urge you to do the same.
Ms. Hansen:
I am the State president of the Nevada Eagle Forum. Eagle Forum has been a leader nationally, and I am their national privacy chairman. During last session you all voted for A.J.R. No. 9 of the 71st Session, which was the privacy issue calling upon Congress to protect our social security numbers. Such protection has not taken place. We support S.B. 297. I particularly wanted to mention we always support restitution in crimes. I believe restitution is one of the best things we can do to not only help the victim, but also aid the defendant in restoring his life. Page 4, line 43, of S.B. 297 mentions the issue of possessing versus selling personal identifying information. I have a copy of page 13 of the 2002 Election issue of Nevada Families Voter Guide (Exhibit F) that contains Eagle Forum’s answer to A.J.R. No. 9 of the 71st Session. I will read it to you and leave this with the committee. I believe it important, as we continue to look at the abuses taking place with regard to identity theft, which is the No. 1 growing crime in America today, we look at other ways beyond this to protect individuals from identity theft.
Senator Care:
I know Eagle Forum frequently concerns itself with individual liberty and the tension between that and the role of the State. Are you comfortable with the category B and category C felonies attached to the conduct in S.B. 297?
Ms. Hansen:
I must admit I am not familiar with all the penalties with regard to felonies. I do think it is important to note the 1-year sentence is an insignificant penalty when the identity theft can destroy a person’s whole life. I heard the testimony earlier by the deputy attorney general who said a person who had stolen a couple of credit cards one time would not have been sentenced to a long incarceration. I do not believe I am adequately informed to be able to distinguish between a category B and a category C sentence, but I do believe it is important in regard to government employees that their penalties be higher in terms of the public trust.
Several of my family members do not have social security numbers, and it has become an issue to protect their identities when involved with government agencies. People can be abused for not having a social security number; my brother was incarcerated. My nephew was denied the right to vote. We went to court and the Nevada Supreme Court cited on his side. I cannot answer about the felony categories in S.B. 297, but I was more comfortable believing those convicted might receive a lower sentence than 20 years. I do think 20 years is extreme unless it was an abhorrent crime by a syndicate or something of that nature.
Stan Olsen, Lieutenant, Lobbyist, Las Vegas Metropolitan Police, Nevada Sheriff’s and Chief’s Association/South:
We support S.B. 297. A few years ago we captured a guy for a misdemeanor, and in his possession he had several sheets of paper, covered with lines of credit card numbers. He also had hundreds of credit card blanks. We could charge him with nothing other than a misdemeanor. We did seize the property, and discovered he obtained the numbers and blanks from his girlfriend who was employed by Citibank. She was terminated, and that was the extent of it. As far as the 20-year incarceration Ms. Hansen was talking about, these criminals, whether it is one person or a syndicate, financially destroy people’s lives for years and sometimes for life. I believe 20 years is a good way to go with this bill. We support it as written.
Senator McGinness:
I am wondering what type of resources law enforcement has. Is your agency prepared to deal with this complicated crime?
Lieutenant Olsen:
We have a fraud unit with a primary goal of preventing identity and credit card theft. They are overworked, but everyone in law enforcement in southern Nevada is overworked due to growth. We work closely with federal agencies and international law enforcement in addressing these issues. As was mentioned, these issues go across state and national lines on a daily basis. It is not unusual for credit card numbers to be posted on the Internet for sale. The buyer contacts the seller and buys as many credit card numbers as desired. I, too, have been the victim of identity theft. Mine happened in Canada. The bank was not as good as that mentioned by Senator Wiener. The bank charged my account $1000. When I questioned it, they said they believed I had made the purchases and offered to show me the documentation. They sent me the documentation and the signature was not even my name. I had to retain an attorney to get my $1000 returned.
Senator Care:
I know there are other existing statutes such as possession with intent. How do you demonstrate intent? I guess the possession itself speaks volumes. Where do you run into that? Burglary tools, I suppose, and what else?
Lieutenant Olsen:
I have not worked that detail and am unable to give you a technical answer. There are a lot of laws that apply if the person has the actual credit card. If the person has the numbers or the blanks, we can do nothing, and we catch people with credit card numbers on a regular basis. Intent can be relatively easy to prove depending upon the situation. If a woman tries to use a credit card containing a man’s name, and is carrying other credit cards not belonging to her, that is obviously possession with intent.
Mary Lau, Lobbyist, Retail Association of Nevada:
I am executive director of the Retail Association of Nevada testifying in support of S.B. 297. I have been a member of various associations connected with credit card fraud for years. I was also formerly a credit manager. I attended a seminar at which the Federal Bureau of Investigation passed out the newest and best in technology for preventing fraud, which was the hologram. Unfortunately, what he was distributing had been seized in a raid earlier. Thieves had hologram credit cards before they even hit the street. I left the handouts I planned to bring at home, and I would like to submit them for the record later. The scanning device looks similar to a pager. It can be as small as a cellular telephone that fits into a pocket. Normally when a waiter swipes your credit card at a restaurant, he just walks away. Later when he is off shift or between shifts, he could dial a telephone number, download through a modem, and create a large number of credit cards for processing. We are finding most of this activity takes place offshore. Senate Bill 297 is an answer to one technique and another way to give law enforcement and loss prevention managers tools to help protect their consumers.
Senator Care:
What did we do in a previous session regarding this issue?
Lieutenant Olsen:
That was concerning bar code fraud. The thief would make false bar codes on a computer and tape them onto products. For example, when the bar code was scanned, the price of $2 would come up for a 25-inch television set.
Chairman Amodei:
For the record, Jim Nadeau, on behalf of the Washoe County Sheriff’s Office, signed the attendance roster as being in favor of S.B. 297.
I will close the hearing on S.B. 297. What is the pleasure of the committee?
SENATOR WIENER MOVED TO DO PASS S.B. 297.
SENATOR TITUS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NOLAN WAS ABSENT FOR THE VOTE.)
*****
Chairman Amodei:
If there is no other business to come before the committee, we are adjourned at 10:21 a.m.
Jo Greenslate,
Committee Secretary
APPROVED BY:
Senator Mark E. Amodei, Chairman
DATE: