FBI Data Mining Targets Include Insurance Fraud Suspects

The FBI is gathering and sorting information about Americans to help search for potential terrorists, insurance cheats and crooked pharmacists, according to a government report.

Records about identity thefts, real estate transactions, motor vehicle accidents and complaints about Internet drug companies are being searched for common threads to aid law enforcement officials, the Justice Department said in a report to Congress on the agency’s data-mining practices.

In addition, the report disclosed government plans to build a new database to assess the risk posed by people identified as potential or suspected terrorists.

The chairman of the Senate committee that oversees the Justice Department said the database was “ripe for abuse.” The American Civil Liberties Union immediately derided the quality of the information that could be used to score someone as a terror threat.

The report, sent to Congress this week, marked the department’s first public detailing of six of its data-mining tools, which look for patterns to catch criminals. The disclosure was required by lawmakers when they renewed the USA Patriot Act in 2005. It comes as the Justice Department faces sharp criticism from Congress and civil liberties advocates for violating peoples’ privacy rights in terror and spy investigations.

Justice spokesman Dean Boyd said the databases are strictly regulated to protect privacy rights and civil liberties.

“Each of these initiatives is extremely valuable for investigators, allowing them to analyze and process lawfully acquired information more effectively in order to detect potential criminal activity and focus resources appropriately,” Boyd said in a statement.

All but one of the databases — the one to track terrorists — have been up and running for several years, the report showed. The lone exception is the System to Assess Risk, or STAR, program to rate the threat posed by people already identified as suspected terrorists or named on terror watch lists.

The system, still under construction, is designed to help counterterror investigators save time by narrowing the field of people who pose the greatest potential threat and will not label anyone a terrorist, Boyd said.

But it could be based, in part at least, on commercial or public information that might not be accurate — potentially ranking an innocent person as a terror threat. Watch lists, for example, have mistakenly identified people as suspects based on their similar names or birthdates to those of terrorists.

The Justice report also leaves open the possibility that the STAR program might draw up lists of terror suspects based on information from other sources, including from Data Mart. The report described Data Mart as a collector of government information, but also travel data from the Airlines Reporting Corp. and other information from private data-aggregators like Choicepoint. Private data aggregators often sell commercial credit records as well as other databases, like voter and vehicle registration.

“When you put bad information into a system and you don’t have any mechanism of ensuring the information is of high quality, you’re certain to get bad information spit out on the back end,” said ACLU senior legislative counsel Tim Sparapani. “And that has profoundly negative consequences for the individuals who are wrongly identified as potential terrorists.”

The five other databases detailed in the report include:

An identity theft intelligence program, used since 2003, to examine and analyze consumer complaints to identify major identity theft rings in a given geographic area.

A health care fraud system that looks at billing records in government and private insurance claims databases to identify fraud or over-billing by health care providers. It also has been running since 2003.

A database created in 2005 that looks at consumer complaints to the Food and Drug Administration to identify larger trends about fraud by Internet pharmacies.

A housing fraud program that analyzes public data on real estate transactions to identify fraudulent housing purchases, including so-called property flipping. The database was built in 1999.

A system that compares National Insurance Crime Bureau information against other data to crack down on fake car accident insurance claims and identify major offenders.

The 38-page report was four months late in being sent to Congress for required oversight. Senate Judiciary Chairman Patrick Leahy said it “raises more questions than it answers.”

“Unfortunately, the Congress and the American public know very little about these and other data mining programs, making them ripe for abuse,” said Leahy, a Vermont Democrat.