'She Stole My Life' — How Millions Fall Victim to Identity Theft

Names of victim and perpetrators have been changed.

En español | FOR ALICE LIPSKI, pulling a job high on meth was a fever dream: tingling skin, twitchy nerves, the mind jump-cutting, almost cinematically, from idea to action. And the action, well, the action was the problem, wasn’t it? The drug was like having a ravenous beast inside, always screaming, “Go, go, go.” Even now, as she stood at the department store counter with bags full of nearly $2,000 worth of merch piled around her (sunglasses, killer boots, silk scarves), her methamphetamine brain urged her on to greater audacity.
    And let’s face it — Helen Anderson made an irresistible mark. To an ID thief in 2013, this was a woman from another time and place: little to no Web access, paper bank statements sent to an unlocked mailbox, paid bills via a telephone keypad. Becoming Helen Anderson was a cinch. So Alice — tall, blond, pretty — scissored into Macy’s near closing and treated herself and a friend to a shopping spree.
    For a good hour they roved the Seattle store, charging clothes and other merchandise to three different registers. It was the last clerk who told Alice that Anderson’s account was maxed out. So Alice got indignant, called the credit card company and harangued the rep on the line for 20 minutes. Customer service always caves. The rep raised her credit limit by $3,000.

AND THEN ALICE MADE A MISTAKE.   In her purse were the tools of her trade: a tablet computer, a meth pipe and 10 Washington-state driver’s licenses in nine different names. Each one was adorned with Alice Lipski’s attractive, blue-eyed mug.
    Alice had acquired these over several months, with the help of a small team of accomplices. Together, they were a dangerous combination of brains, talent and — fueled by meth — insatiable appetites. There was Dino, the artist who crafted IDs so convincing that they fooled bank tellers; Brian, who could calculate the algorithm used to determine driver’s license numbers; and of course Alice herself, the mastermind of this lucrative little operation. In one three-month stretch, she and her crew bagged nearly $1 million.
   And just about all of it was gone. So Alice was back, hitting Helen’s credit cards for what seemed like the millionth time. This Macy’s job was easy. Pretty big haul, too. So big that, in the scramble to gather all the bags and make her getaway from the now-closed store, Alice left behind, on a chair where it sat like a time bomb, her purse and all its secrets.
   Those secrets are what this story is about. There is, after all, an Alice Lipski in just about every city and town in the country. Some 16.6 million people in the U.S. were victimized by identity theft in 2012, according to the U.S. Department of Justice, with losses totaling $24.7 billion. That’s $10 billion more than all other property-
crime losses combined. And a 2014 study by Javelin Strategy and Research found that the number of identity theft victims jumped significantly. Al Pascual, a senior research analyst for Javelin, says that hackers are also getting better at capitalizing on the information they get from security breaches. In 2010, one in nine consumers who'd received breach notifications became fraud victims. "By 2013," Pascual says, "it was 1 in 3."
    For a number of reasons, older people are attractive targets for identity thieves. Compared with younger people, they tend to have better credit and more accounts to their names. They’re also often more vulnerable to a tech-savvy fraudster: Not only has technology made it cheaper and easier to take advantage of the reams of once-private personal data and financial information that can be accessed remotely via the Internet; also, those who are older are less likely to have online bank- and credit-account access, so they may not monitor their financial activity as closely as do younger people, who tend to be digital natives.

THERE ARE MANY WAYS TO STEAL personal information, but most fall into one of two categories. “It’s basically low tech versus high tech,” says Melinda Young, a King County prosecuting attorney who supervised the case against Alice Lipski. “High-tech thieves are more tied to organized crime and do the sophisticated data breaches.” These are the headline-making cyber attacks such as the one that occurred at Target in November 2013, when hackers made off with some 40 million credit card numbers. There’s not much a consumer can do to defend against this, Young says, besides keeping a close eye on his or her bank and credit card accounts. The low-tech ID thieves, on the other hand, use analog techniques in the real world. “They steal mail, break into cars and burglarize houses to get information,” she explains. “There are things you can do to prevent that.”
   But what if the thief is a little of both — a hungry street criminal with the patience and digital smarts of a hacker? In the fall of 2012, a 64-year-old retired nurse was about to find out.

   Retirement for Helen Anderson came not with a bang—a big bash where fellow nurses bellowed their favorite Helen story — but with an ache. For most of her adult life she had worked in the operating room at a Seattle hospital. Like a lot of nurses, she developed back problems, because of the long hours on her feet and the awkward mechanics involved in maneuvering patients. One day on the job in 2011, her legs started hurting; by evening she could barely walk. She underwent back surgery but was never able to return to work.
   Luckily, she’d planned well for her retirement. Helen had good credit, she paid her bills on time, and she owned her small home. She had her hands full, too. Her daughter, who lived in Portland, Oregon, was having health problems of her own and needed surgery. Before Helen left in August for the first of a series of week-long trips to Portland, her niece, Samantha, offered to house-sit and feed Helen’s white lapdog during her aunt’s time away. Helen agreed. The only condition she gave Samantha: Don’t let anyone else stay in the house.  
   So when Helen returned in October, she was surprised and angry to discover that there was a woman named Alice living there.
   “What’s she doing here?” Helen asked her niece.
Alice, Samantha explained, was a friend of hers. She’d had a fight with her boyfriend and needed a place to stay. Samantha had offered to let her live in Helen’s house for a few days. “I know you’re a really nice person, so I knew you’d say yes.”
  “Then why didn’t you call me and ask me?”
  It really bothered Helen: She told Samantha that Alice had to go by the end of the week. But deep inside, she knew her niece was right: If she’d only been asked first, she probably would have been OK with the houseguest. And Samantha treated it as no big deal — as if to say, “Really, Aunt Helen, how bad could Alice be?”

MAILBOXING IS LIKE HUNTING FOR PEARLS.  And Alice and her crew, Dino and Brian, had this scheme dialed in. Most people don’t lock their mailboxes. You just pull out the prize — bank statements, credit card offers, credit union applications — and leave the rest. January, when people got their W-2 tax forms, was prime hunting season. Sometimes Alice would just take a photo of the mail and put it back. The homeowner might not ever know anyone had been there.

Swiping mail from an unlocked box takes only seconds, but can yield a jackpot of private information from bank and credit card statements, tax forms, and medical bills.

    Or the crew would be more strategic. Start by breaking into a car. That one in the mall parking lot, or the one sitting in the long-term lot near the train station. Even better — the unlocked minivan idling near a day care, where Mom just dashed in with a baby in one arm, leaving a purse on the seat. Or the gym parking lot, where you can count on people leaving wallets in the glove box during workouts.
   But even a seemingly empty car is often full of useful trash. Those gas station and ATM receipts scattered on the floor? They’ll have scraps of critical info — partial account numbers and bank names, if you’ve made a deposit. When there’s a vehicle registration in the glove box, bam, the crew knows their mark’s full name, home address and bank. Three pieces of the puzzle. Then they hit the mailbox, until all the pieces fit.
   Next, back at their “shop,” usually an apartment, they would get to work counterfeiting IDs. Dino was their artist. Brian was security — the guy who rigged up an encrypted server to store all the data they had pulled from swiped laptops. Alice was the face of the operations, the pretty young California girl who could stride into Nordstrom without raising any eyebrows: no visible tattoos or bad teeth, smart, poised, well-spoken. She could walk up to the counter of a credit union, present a bogus Washington-state driver’s license and walk out with hundreds of dollars — or show up with a stolen check, forged so it appeared as if written out to Alice’s mark, and cash it. The crew was a fine-tuned fraud instrument. They worked well together, Alice says, because Dino and Brian were gay and never tried to sleep with her.
   But there was a fourth member of the crew — and in the end it had final say.
   Alice was first given methamphetamines in 1996, at age 17. Her parents broke up not long after she was born; her dad, a surfer and Air Force vet from Huntington Beach, California, had raised her with her stepmom and moved the family up to Seattle. But Alice often visited her birth mother, Cindy, back in California during the summer while she was in high school. During one of these visits, one of her mother’s friends passed her a meth pipe in the garage. She inhaled, felt the drug’s weirdly urgent energy tingle through her bloodstream. And just like Mom, she became an addict.
   For a long time after that, Alice was using and dealing, sleeping in cars and cheap hotels, trapped in the orbit of dangerous men. She was physically abused, raped and once, she says, kidnapped for several days. She’d get clean for a while — there was that five-year stretch from 2005 to 2010, right after she had a baby, when she settled down, got engaged and stayed sober. Then she relapsed. The father stepped in to take care of her boy, and Alice went back to the addict’s life. She calls this the riptide of meth: “Every time you make any progress, it just drags you back. Somehow the drug just sucks the hope right out of you.”

LAW-ENFORCEMENT OFFICIALS have long known that there is a link between the rising waves of methamphetamine addiction and ID theft. Some experts say that half or more of the identity thieves who get prosecuted are meth addicts. That’s another thing about tweakers — a slang term for addicts of the drug. They’re full of ideas. They’ll stay awake for days at a time, thinking up clever new ways to get more money for more drugs. “Tweakers’ years are like dog years,” Alice says. “We live seven years to your guys’ one because we’re up 24/7, going at high speed on fast-forward.”
   At first, Alice says, she wasn’t directly involved in fraud. But among her crowd of meth users and assorted hangers-on, it was no big deal; everyone was doing it. Alice would watch, see how it was done and soon offer her ideas. “Once I found out I was good at this, it was on,” she says. “Most criminals want instant gratification. I can wait. I can sit and wait to keep myself safe.”
   That’s when she met Dino, the fake-ID genius: “He could make any kind of ID you wanted. He and I would just sit around getting high and brainstorming ideas, and would come up with amazing stuff. Together we were a complete fraud nightmare.”
   Alice had established a network of drug runners from her dealing days. When she got into identity theft, she called them up and pressed them into service. She would send them out to steal mail and break into cars, hunting for laptops and phones and purses. Sometimes she would do this herself, but she preferred to work safely behind the scenes. Her real gift was using computers. After the runners had smashed and grabbed the victim’s personal information, Alice would hit the Web to dig for details such as birthdays, family names and past addresses — genealogy sites and online background-checking services were handy tools for this. Armed with a lengthy dossier of likely passwords and personal data, she’d get to work setting up new credit accounts and online profiles, burrowing tunnels into people’s financial lives.
   Part of the thrill was the intellectual challenge of beating the system. It didn’t matter what bank or credit card company it was: If Alice wanted to, she’d find a way in. “These are billion-dollar companies with huge security features,” Alice says, “and I was able to get through them. It’s a huge ego boost.”
   And, she reasoned to herself, she wasn’t really hurting anyone. The banks and credit card companies were the ones on the hook for fraud; the strangers whose names and accounts she was stealing were covered. And besides, at first Alice just cracked accounts and then sold the info to someone else — “so I wasn’t actually the one destroying somebody’s life.”
   Maybe that’s why, when a friend named Samantha offered to let Alice stay at her Aunt Helen’s house for a few days in October 2012, Alice found it so easy to take advantage of the situation. After all, that little house was chock-full of store receipts and — jackpot — unopened mail. It was an ID thief’s paradise.

MAYBE HELEN SHOULD HAVE KNOWN it could happen again. About 15 years ago, the sister of one of Helen’s hospital coworkers stayed with her for a week. Later, the woman managed to open a credit card in Helen’s name. When Helen discovered the ruse, the woman paid off the debt and closed the account, and that was that.
   So when the branch manager of her credit union called her on Thursday, October 25, not long after she’d returned from Portland, she had a bad feeling. Her account held her latest Social Security and pension check, and she’d just transferred about $2,500 from her savings account to pay her property taxes. Now the manager was telling her someone had charged $300 on a debit card that she’d never used before. Worse, he said, the account was now overdrawn.
   On Monday, Helen went into the credit union office to fill out a fraud affidavit. The lost money was quickly restored, and that seemed to settle the problem. But just a few days later, another phone call came, early in the morning. This one was from Wells Fargo. Had she just made $5,000 in charges on a credit card that she’d never used before? This one was more scary. The card had been activated from her home the week before, and the balance had been paid off with one of her own checks to boost the credit limit. Helen went back to her credit union. While looking over her account, the manager asked, “Did you just pay $500 from this checking account toward your American Express card bill online?”
   No, she hadn’t — she didn’t pay any bills online. “You need to file a police report,” the manager said.
   This was only the beginning. Just a few miles away, Alice Lipski was methodically assembling her digital facsimile of Helen Anderson. After a bit of social media sleuthing and an Internet background check, she found Helen’s mother’s birthday and was able to negotiate the security questions and reactivate a canceled store card from Costco, setting new security answers that only she knew, effectively locking Helen out of her own account. Once inside, she signed up Helen for a credit-monitoring service. Like many such services offered by banks and credit card companies, it was designed to protect customers from identity theft. Instead, it exposed Helen’s full credit history. “Basically, the service designed to protect her is what gave me access to everything in her life,” Alice says.

THE REPORT REVEALED A MOTHER LODE of old credit accounts: Over her lifetime, Helen had acquired dozens of cards from stores and banks. Most were currently inactive; some Helen didn’t even remember opening. And Alice found them all — Chase, Wells Fargo, Nordstrom, Macy’s, Sears, Visa, American Express, Capital One. Then she reported credit cards as lost or stolen, so the companies assigned her new numbers, with her own login username and password information. She had IDs made up with her photo and Helen’s information. Finally, she ordered Helen’s mail held and forwarded, first to Alice’s boyfriend’s house, then to a post office box, so that Helen wouldn’t get her new statements. (Naturally, to pay the post office’s monthly $15 fee for the box, Alice used one of Helen’s credit cards.) Her junk mail was still arriving, so it took Helen weeks to notice that checks, bills and other financial documents had stopped coming to the house. Her financial existence had been effectively commandeered.
   “I knew everything about her,” Alice says. “And what I didn’t know, I changed to what I wanted it to be.”
   Helen started fielding more calls from credit card companies about suspicious transactions. Whoever was out there with Helen’s cards seemed to be having a great time. Lots of casino bills from up and down the I-5 corridor, huge charges for new tires and fancy wheel covers, gas, food, clothes. She estimates that more than $30,000 was spent in her name.
   In a world that had long sped past the analog way of doing business, Helen was like a foreigner moored in a country whose language and customs she could not begin to decipher: “I would call a card company, and they would ask for the account number and password, and I couldn’t give them either one.” All she could do was go down to the banks and stores in person and show them her driver’s license in an effort to prove who she was. She’d cancel the cards, reset the information, and life would go back to normal for a few weeks. Then, a fresh wave of attacks.
   Here’s the thing no one tells you about identity theft, the thing you learn only after it happens to you: the vanishing act. You begin to disappear. So thorough was Alice’s appropriation of Helen’s life story that Helen would find herself arguing with bank officers or postal workers over the details of her own life — her mother’s maiden name, her old jobs and addresses. “I couldn’t prove who I was because she could prove it easier than I could,” she says. “I felt like I was a nonhuman being.”

INDEED, ALICE SOON GREW BOLD ENOUGH to impersonate Helen in the real as well as the digital world. Armed with her victim’s Social Security number (obtained from a new Medicare card mailed to Helen) and what looked exactly like a valid Washington-state driver’s license — with her picture on it — Alice could walk into stores and convince cashiers to let her charge merchandise on Helen’s credit card accounts without having the card itself, sometimes even without the account number.
  To keep all these accounts from getting maxed out, Alice wrote bad checks stolen from other ID theft victims. She would pay down the balances and use the cards until the bank discovered the checks were no good — which might take 30 days.
   In February, Alice’s attacks escalated. Her boyfriend Matt got picked up with a loaded handgun while waiting in line at a convenience store. The cops searched his car and found a stash of meth, ecstasy and other drugs. Alice needed $10,000 to bail him out. She found it via a loophole in the security procedures at the credit union that allowed Alice to drain Helen’s account, plus the accounts of three other victims. As collateral to secure the bail bond, she pledged Helen’s credit — including the equity in her home. Voilà! Matt was free.
   And Helen had no idea, until the day she got an angry call from a bail bond company.
   There were times during these months when Helen despaired of ever freeing herself from the shadow of this other self. “I just wanted to die,” she says. “I wanted to go to sleep and not wake up, because I was so tired of it never ending, and I didn’t know what to do.”
   But the truth was — that Friday night in April when she left her purse behind at Macy’s — things were coming apart for Alice. She wanted out of this life. Her meth addiction was getting worse, despite the efforts she made to quit. That boyfriend she’d bailed out? The two of them were supposed to get clean together. Instead, he immediately went right out and got high with her old accomplices, Dino and Brian.
   Alice was crushed. And, even though she had racked up hundreds of thousands of dollars in bogus charges over the last several months, she was also, somehow, completely broke. She’d fallen out with Dino and Brian over their meth use since she’d bailed Matt out, so she was on her own. With no way to make more fake IDs, all she had was her laptop and the 10 IDs in her purse to keep her afloat.
   But she could still burn one victim, the same one she’d been working over so relentlessly in the past months — Helen Anderson. With all those credit lines to tap, Helen was the gift that kept on giving. That’s what brought Alice to Macy’s, where Helen had a charge account. Alice racked up a $1,823 bill, talked her way past four clerks and a store manager, and spent 20 minutes on the phone with the credit card company trying—successfully — to increase Helen’s credit limit. After all that, she just wanted to grab her bags and get out of there. It wasn’t until she returned home that she realized she’d left her purse behind.

"THAT'S METH RIGHT THERE," Alice says. “It gives you the self-confidence to walk into a public place, charge $2,000 worth of merchandise posing as someone else and leave a purse behind with everything the police need to convict you.”
   Alice came for the purse the next morning, but by then, store security had looked inside and discovered the 10 fake IDs. She fled before cops arrived.
   It took six weeks, but Seattle police detectives caught up to Alice on May 24. She knew it was coming — was so certain that she made efforts to stop using meth in the weeks before, so she wouldn’t have to endure detox while in custody. On some level, she knew that she needed to be caught. Getting locked up, she thought, was the only way she’d get clean. When a team of Department of Corrections officers showed up at the house where she was staying so they could take her to Seattle’s East Precinct on the Friday afternoon before Memorial Day, she went quietly.
   The charges were 10 counts of identity theft. According to investigators, Alice Lipski and her accomplices had stolen $900,000 using Helen Anderson’s and dozens of other victims’ credit profiles.
   The second time Helen laid eyes on her impostor was at a sentencing hearing in December 2013. This wasn’t the pleasant-looking young woman she’d found living in her home back in October 2012; Alice now looked disheveled, with dirty hair and no makeup. She wore an orange prison jumpsuit and looked straight ahead at the judge, never making eye contact with her victim.
   Helen was determined to attend the sentencing. Prosecutors asked her if she was aware of the plea deal they had struck: Alice pled guilty to seven felony counts of identity theft and agreed to enter a residential drug-treatment program. If she stayed clean and didn’t re-offend, she would not have to serve more than the nine months of jail time she had already done while she was awaiting sentencing.
   Helen was furious. “Frankly, I’d like to see her spend the rest of her life in jail so she knows how much this has affected me,” she told the judge. “Because it’s ruined my life.”
   The dollar costs of identity theft are borne largely by banks, credit card companies and businesses. In Helen’s case, all her stolen funds were restored after she filed police reports, though her credit score took a 100-point beating during the months Alice was active. But the real damage, as many victims report, is psychological: the sense of violation, the knowledge that your home, family and personal information have been compromised. In the wake of the attacks, Helen sold her house of more than 40 years and moved in with her 95-year-old mother. Her financial future remains uncertain, even as she struggles to clean up her damaged credit: She’s stymied by the paperwork involved in getting the credit bureaus to correct her record and is fatalistic about the possibility of future fraud. “My information is out there,” she says.

BUT AT LEAST IN ONE WAY SHE WAS LUCKY.  Only a minuscule percentage of identity theft cases are ever successfully prosecuted. Helen, at least, was able to see her tormentor in court. And when she did, her anger softened somewhat. Alice, she learned, was the mother of a young boy. She was also a drug addict whose own mother struggled with — and, in 2013, would succumb to — her addiction. So when the judge asked Helen what she thought of the deal Alice had struck with the prosecutor’s office, she relented. “If she can go to drug rehab, get off drugs … and make a life for herself, in an honest way, then that’s what I hope for her."
   And that’s exactly what Alice Lipski says she’s trying to do. Today she is out of jail, working a basic minimum-wage restaurant job and renting a small studio apartment. The terms of her plea deal require her to stay clean; every week, she’s tested for drugs. “I don’t know exactly what’s in store for me,” she says. “I need to give myself the opportunity to find out what I can do when I’m not doing something bad.” Helping spread the word on how to avoid ID theft, she thinks, is part of that process.
   “Even though it was a really difficult path,” she says, “I think I’ve figured out who I am.”

Doug Shadel, a former fraud investigator for Washington state’s attorney general’s office, is the author of Outsmarting the Scam Artists: How to Protect Yourself From the Most Clever Cons(AARP/Wiley); he is also state director for AARP Washington.