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Davis, California

Friday, February 23, 2024

Watts Legal

Question: Here’s a “hypothetical” scenario: I’m keeping a secret and don’t know what to do. Without telling me about it, my cousin used my social security number to get a loan and buy a house in my name. My cousin is renting the house out under the table, keeping the money for herself  and not paying the mortgage. I only recently learned about the house, when a collection agency gave me a call. Apparently this happened a few years ago. Until now, I’ve always had perfect credit.

Even though my cousin is ruining my life, she’s still family, and I’m struggling to decide whether to report her. I want her to stop, but I don’t want her own life ruined. If I reported her, what kind of trouble would she get in? And what kind of trouble would I get in if I didn’t report her?

-Jamie Q., Woodland


The short answer: She’s looking at 15 years in federal prison. And if you knowingly tolerate the fraud, you risk getting drawn in as a co-conspirator if the prosecutor is particularly zealous.

Federal law prohibits fraud in connection with identification information in 18 U.S.C. § 1028. Anyone who knowingly uses, without lawful authority, another person’s identification information with the intent to commit a felony violates that statute. If they end up obtaining anything worth more than $1,000, they can be sentenced to 15 years in prison. You don’t mention where this house is located, but I’m guessing it’s worth more than $1,000. (Most houses are, unless they’re in Detroit).

It might seem strange that you could get in trouble for simply forgiving your cousin and refusing to report her. But imagine the alternative to turning her in. You’re obviously not planning on paying this mortgage yourself, so when the collection agency calls again, you’re going to have to dispute the debt. They’ll ask who did rack up the debt, and then you have a choice: Protect your cousin and lie, or tell the truth. If you lie, you’re covering up a crime.

“But I could just refuse to pick up the phone,” you might say. True, but eventually the collection agency or the bank is going to foreclose on the house, and sue you to collect the debt. They’ll drag you into court with a subpoena and force you to testify. Debt collecting is a civil proceeding, not a criminal one, so the Fifth Amendment’s popularized “right to remain silent” does not apply, especially since the crime about which you’d testify isn’t your crime — it’s your cousin’s. And you certainly don’t have a Fifth Amendment right to remain silent about other people’s crimes.

Eventually, your cousin is going to get caught, whether it’s by your tattling or the creditors’ investigations. As for you, your implied collusion could get you in trouble as well, depending on the prosecutor assigned to your cousin’s case. You might remember the case of Aaron Schwartz, a computer genius and internet activist who downloaded academic articles from a computer in MIT in order to “liberate” them by posting them online for free. For downloading and distributing articles without authorization, prosecutors charged him with a dozen felonies, which could have sent him to prison for 35 years and forced him to pay a $1 million fine. Civil rights activists heavily criticized the prosecutors’ conduct, but prosecutors still overcharge crimes. To get you to testify against your cousin, they might threaten to charge you with conspiracy to commit fraud unless you cooperate. It’s an outside risk, but it’s a real one.


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