The case highlights one of the biggest holes in the war against terrorism: the easy availability of fake ID. After September 11 -- and the discovery that 18 of the 19 terrorists had used fraudulent IDs to complete their task -- law enforcers attempted to crack down on the counterfeit underground. A raid on a dingy apartment in Dearborn, Mich., belonging to suspected members of an al Qaeda sleeper cell a few weeks after the attacks produced a huge cache of fake passports, Social Security cards, and drivers' licenses. On Mar. 12, the FBI busted a $3 million counterfeiting ring in New York City with an inventory of more than 30,000 bogus documents. Chemical plants and nuclear facilities have stepped up ID checks, while the Homeland Security Dept. now requires some visas to include fingerprints and photos.
But nobody believes these steps have come anywhere close to solving the problem. According to immigration experts and forensic document specialists, the U.S. fake-ID trade is at least a $1 billion annual business that produces as many as 10 million bogus passports, Social Security cards, birth certificates, and driver's licenses each year. Using $500 laser printers and Adobe PhotoShop software, counterfeiters keep cranking out credible paperwork for a pittance. "It's frightening that people are turning themselves into de facto U.S. citizens," says Marti Dinerstein, president of Immigration Matters, a New York-based reform group, who has studied the fake-document industry.
Based on information that has emerged from the recent crackdown, BusinessWeek has pieced together a comprehensive view of how the counterfeit underground works. For most illegal immigrants, the first stop on the path to a new identity is usually a document mill. These businesses are located everywhere -- boarded-up laundromats in Atlanta, storage warehouses in Los Angeles, strip malls in Tulsa. Typically, they are run by the dominant local ethnic group -- Hispanics in Florida and Los Angeles, Chinese in San Francisco, Middle Easterners in Detroit. Security is tight: Customers contact the mills through unlisted phone or beeper numbers passed out by insiders.
The document factories used to be run by lone entrepreneurs, but they are increasingly managed by criminal networks such as Mexican drug traffickers, Chinese people-smugglers, the Russian mafia, and Islamic terrorist groups, says James R. Dorcy, a former Immigration & Naturalization Service criminal investigator and chairman of the Federation for American Immigration Reform's law-enforcement advisory council. The ID trade not only is lucrative but also serves the criminal gangs' other enterprises by enabling them, for example, to set up front companies. "The counterfeit document industry is far bigger than the counterfeit money business," says Dorcy.
The vast majority of new immigrants, of course, aren't terrorists. Much of the fake-ID underground serves the millions circumventing U.S. laws preventing businesses from knowingly hiring illegal immigrants. Almost all of the estimated 8.7 million illegal immigrants in the U.S. need a birth certificate, Social Security card, or green card to land a job.
Those are known as "breeders," which can then be used to apply for other forms of ID, such as driver's licenses and passports. A combo package of fake breeders, such as a green card and Social Security number, typically goes for $200, according to Homeland Security officials, sometimes with $50 off for a family set. A phony birth certificate and Social Security card runs $300.
Once the breeder documents are in hand, it's easy for an immigrant to secure a job, rent an apartment, open a bank account, board a plane -- or get into a position to commit an act of terrorism. Consider the case of Cristian Alzugaray. The 24-year-old electrician left Argentina early last year. His first stop: a document mill in Miami. Then, in June, Alzugaray was arrested in Beulah, N.D., after he used the fake IDs to get a job as a pipefitter at a synfuels plant in Bismarck -- a factory that produces natural gas and uses hazardous chemicals. Alzugaray was deported on July 21, 2002. There's no evidence that he intended to commit terrorism. But his tale chills law enforcers worried about possible sabotage.
Despite pledges to standardize ID formats, the government's crackdown has been set back by bureaucratic balkanization. There are still more than 240 variations of state IDs and driver's licenses, and more than 7,000 different types of birth certificates. Federal agencies have never considered policing these documents to be one of their jobs. States do not devote many resources to the issue, and penalties for wrongdoers are light. In March, prosecutors were able to secure only probation and a $15,000 fine against Egyptian immigrant Mohammed el-Atriss, 46, who operated a Paterson (N.J.) print shop that produced fake IDs for September 11 terrorists Khalid Almidhar and Abdulaziz Alomari.
The one step that would help quash the fake-document trade would be establishing a national ID card with security features such as DNA biometrics or retinal scans. But this idea is politically dead, viewed by right and left as an intrusion on personal freedoms -- a position that resonates with many Americans. Until the politics of a national ID change, unlikely anytime soon, the forged-document biz will continue to thrive. By Brian Grow in Atlanta