Large ID Theft at BCBS of Michigan

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Blue Cross Blue Shield of Michigan in 2012 learned of a large scale identity theft scheme, but with the recent filing of indictments only now has been authorized by law enforcement agencies to announce the breach of protected health information and notify 5,514 members.

The members, covered under BCBSM or Blue Care Network, are being offered a two-year comprehensive suite of protective services from AllClear ID that includes identity repair assistance, credit monitoring and a $1 million identity theft insurance policy.

The U.S. Attorney Office for the Eastern District of Michigan has indicted 11 metro Detroit individuals on multiple counts of identity theft. Angela Patton was a BCBSM employee who printed screen shots of subscribers’ profiles, according to U.S. Attorney Barbara L. McQuade. These were distributed to her co-conspirators to apply for credit in other peoples’ names and purchase merchandise across the nation.

In addition to those indicted in Michigan, co-conspirators also were arrested in Ohio and Texas in position of screen shots from Patton’s BCBSM work computer, according to a statement from McQuade. In searches of homes in Michigan, personally identifiable information on thousands of subscribers were found, along with counterfeit and re-encoded credit cards and gift cards.

The level of identity theft was staggering. “The indictment alleges that three of the co-conspirators who used counterfeit credit cards at different major stores and warehouses fraudulently obtained more than $742,000 worth of merchandise from Sam’s Club alone,” according to the statement.

The Southeast Michigan Financial and Cyber Crimes Task Force, U.S. Secret Service, Department of Homeland Security, U.S. Postal Inspection Service, and IRS Criminal Investigations unit, along with five metro Detroit police departments, participated in the investigation.

“We have taken a number of deliberate steps to further secure our members’ personal information,” said BCBSM CEO Kevin Klobucar in a statement, “including limiting access to members’ Social Security numbers, requiring all employees to change their passwords and installing new printing devices that require employees to scan their coded badges to print.”

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