According to USA TODAY, no one is safe from identity theft, not even the chairman of the Federal Reserve.

Chairman Ben Bernanke’s personal checking account was compromised in an identity-theft scheme after his wife’s purse, which contained her Social Security card, checkbook, credit cards and IDs, was stolen last August. Shortly after, a thief began cashing checks on their bank account. The thefts helped fuel an ongoing investigation into a major identity theft ring.

The ring was responsible for more than $2.1 million in fraudulent charges, which involved at least 10 financial institutions. Clyde Austin Gray Jr., a suspected ringleader in the scams, pleaded guilty on July 22 in a federal court in Virginia. Authorities believe that Gray hired pick pockets then made counterfeit IDs so that they could conduct fraudulent bank transactions.

“Identity theft is a serious crime that affects millions of Americans each year,” Bernanke said in a statement. “Our family was but one of 500 separate instances traced to one crime ring. I am grateful for the law enforcement officers who patiently and diligently work to solve and prevent these financial crimes.”

While the economic meltdown is causing problems for most, scammers are exploiting it for new fraud opportunities, say security experts.

The Chicago Tribune reports an increase in phishing, the scam that uses fake e-mails to get people to hand over personal financial information that can be used to commit identity theft.

Dave Marcus, director of security research at security company McAfee, says that the banking crisis, with its mergers and takeovers, gives scammers the opportunity to send out phishing e-mails claiming that personal account information is needed because of the changes. McAfee began seeing phishing reports related to the crisis shortly after the failure and sale of Washington Mutual Bank in late September.

Should federal prosecutors pursuing illegal immigrants using other people’s Social Security numbers be allowed to charge them with identity theft?

According to the New York Times, the federal appeals courts are divided on the issue. Some experts argue that workers who use false Social Security and alien registration numbers must know that they belong to a real person. Therefore, they should be subject to a two-year sentence extension for “aggravated identity theft.” Others argue that many illegal immigrants use counterfeit Social Security cards to get jobs but are unaware that they belong to real people.

A 2004 law makes it a crime to use knowingly, “without lawful authority, a means of identification of another person” in connection with a variety of other offenses. The United States Court of Appeals for the Eighth Circuit, in St. Louis, said that government needs to prove only a knowing use of false information and not that the defendant knew the fake number belonged to a real person. Two federal appeals courts — in Richmond, Va., and Atlanta — have agreed with the Eighth Circuit’s interpretation. Three — in Boston, San Francisco and Washington — have disagreed. They said prosecutors must prove the defendant knew the fake number belonged to someone else.

However, knowledge requirements often give rise to difficult issues in interpreting criminal statutes. Expect to see tighter legislation in the near future.

According to Computer World, a recent phishing scam targeted Apple Inc.’s .Mac and MobileMe online service users. Hundreds of people fell for the scam, handing over their credit card and other personal information.

The phishing scam took advantage of the recent migration Apple conducted for subscribers of its older .Mac online service to MobileMe, the successor that launched just over a month ago. The scammers sent an email asking people to enter their credit card and other confidential information to migrate to the new MobileMe service.
The MobileMe scam wasn’t the first time that phishers have used the Apple brand to trick consumers. In May, criminals hit iTunes users with sophisticated identity theft attacks, again claiming that credit card problems required them to re-enter information to update their accounts.

Less than one-third of U.S. banks will be fully compliant with the U.S. government’s identity theft prevention rules by the November 1 deadline, according to a new study by TowerGroup.

The study found that most U.S. financial services institutions have mistakenly considered compliance with the “Red Flags Rules,” which focus on how banks need to implement technological and procedural frameworks to support ongoing efforts to detect and prevent fraud, as merely an administrative exercise. As a result, according to the research, most banks will need to take rapid action to meet the more stringent regulatory demands.