ID theft scams target Canada=E2=80=99s health-care = system

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ID theft scams target Canada's health-care system

Pauline Tam , The Ottawa Citizen

Published: Monday, = November=20 03, 2008

OTTAWA - Criminals are exploiting lax security in government = databases to=20 assume false identities and take advantage of Canada's health-care = system, warns=20 a leading expert in identity fraud.

But such scams go largely unprosecuted because there is no concerted = effort=20 by government agencies to go after bogus health-care claimants, says = former=20 Edmonton police detective Joe Pendleton.

Mr. Pendleton, who helped uncover one of the country's most notorious = identity-theft schemes, told an Ottawa conference of privacy experts = Monday that=20 existing federal and provincial privacy laws hamper criminal = investigations by=20 keeping even the most basic patient health records out of the reach of = police.=20

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The situation is made worse by a lack of cooperation from health = officials,=20 who don't appear to take the problem seriously, said Mr. Pendleton, who = now=20 works as a security consultant.

"I don't see any resolve within the existing medical paradigm to = ferret out=20 and address identity fraud," he said. "I don't see any real urge on the = part of=20 the community to work with traditional law enforcement to solve the = problem. And=20 I think that, in fact, health information privacy legislation actually = works=20 against the police and works against the mitigation of these particular=20 crimes."

Mr. Pendleton recounted the case of William Skupowsky, a U.S. citizen = who was=20 arrested in Calgary in 2001 for using a Canadian passport that he had = obtained=20 by assuming the identity of a dead nine-year-old boy from British = Columbia.

Police later determined that Mr. Skupowsky, a San Francisco resident = who went=20 by the name of Randy Klassen, had used his alias to get elective surgery = at a=20 Calgary hospital. He also confessed to belonging to a ring of bogus = health-care=20 claimants from that city.

"He said, 'You people have free health care in Canada. That's pretty = well=20 known ... I'm part of an underground railway of people coming up from = San=20 Francisco to have their medical problems taken care of in Canada,' " = said Mr.=20 Pendleton.

But when Mr. Pendleton tried to investigate Mr. Skupowsky's = activities, he=20 found himself stymied by the Alberta government's refusal to disclose = any of Mr.=20 Skupowsky's health records without a search warrant.

Applying for warrants is such an onerous task, often taking months of = work,=20 that investigations all but grind to a halt as a result, said Mr. = Pendleton.

In the Skupowsky case, the accused eventually pleaded guilty to = passport=20 fraud and was jailed for two weeks before being deported to the U.S., = where he=20 also faced drug charges.

The case was one of dozens of identity scams that came to light as = part of a=20 wider criminal investigation into William Ernest Black, an Edmonton man = who was=20 arrested in 1999 after police discovered a canvas bag stuffed with = nearly 280=20 Canadian documents - from birth certificates to passports - in the names = of 83=20 people.

Mr. Black eventually pleaded guilty to eight counts of passport fraud = and one=20 of possession of stolen property and was sentenced to nine years in = prison.

His scam demonstrated a thorough knowledge of the government = bureaucracy that=20 tracks the lives of Canadians. Using archival material easily available = at=20 libraries, Mr. Black assembled identity profiles based on newspaper = obituaries.=20 In particular, he exploited a specific type of death: those of children = who died=20 outside the provinces in which they were born.

Although police managed to arrest Mr. Black, many of the people who = bought=20 his false documents for as much as $37,000 were never caught. The few = who were=20 turned out to have extensive connections to organized crime, said Mr.=20 Pendleton.

For a time, "the competition for dead children was so fierce that we = had=20 situations where two and three different crime groups were accessing the = same=20 dead child's identity," said Mr. Pendleton.

He cited another example of medical fraud involving a tourist from = the Middle=20 East who used her Canadian relative's identity to get medical treatment = from a=20 hospital. In a third case, a woman suffering from complications as a = result of=20 breast-enhancement surgery used her sister's health insurance to claim = benefits.=20

"I assure you that this sort of thing is going on," said Mr. = Pendleton. "And=20 what I can tell you is that they all have one thing in common. None of = them were=20 ever prosecuted. Even when we had detected them, they were never = prosecuted. And=20 I got the distinct impression that nobody really cared."

And because so few cases of medical identity fraud reach the = country's=20 courts, there is no clear picture of just how widespread the problem is, = said=20 Khaled El Emam, a University of Ottawa professor who holds the Canada = Research=20 Chair in electronic health information.

In the U.S., where a for-profit health-care system creates incentives = for=20 hospitals and insurance companies to root out identity theft, an = estimated 15=20 per cent of claims are considered fraudulent, said Mr. El Emam.

Many provinces are trying to store more patient information in = digital form=20 so a patient's different health providers can read and update it more = easily. As=20 more health records are stored in computerized databases, privacy = experts are=20 wrestling with how to strike a balance between keeping patient = information=20 secure, while allowing police and health planners reasonable access to = such data=20 for investigative or research purposes.

=C2=A9 The Ottawa Citizen 2008

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