A programmer/consultant, indicted on identity theft and fraud charges resulting from his alleged theft of 111,000 workers' compensation claimants' records from Sentry Insurance, is due for arraignment tomorrow in U.S. District Court in Nashville, Tenn.

Binyamin Schwartz, 28, of Oak Park, Mich., was indicted July 19 by a grand jury that accused him of identity theft, aggravated identity theft, access device fraud and wire fraud, according to an announcement from James K. Vines, U.S. Attorney for the Middle District of Tennessee, and Sarah Beth Pulliam, special agent in charge of the U.S. Secret Service Nashville Office.

The indictment alleges that between May 25 and June 22 of this year, Mr. Schwartz possessed 111,000 stolen Social Security numbers with the corresponding names, addresses and dates of birth for the individuals to whom those numbers belong.

Sentry, based in Stevens Point, Wis., said in a statement that personal data of 72 workers' comp claimants was among the information stolen from its systems, and that this information was later sold over the Internet.

Sentry--citing what it said were "contractual" obligations--declined to identify the company for which Mr. Schwartz worked, but did note that the theft had been perpetrated by a consultant "with a nationally recognized computer contractor engaged by Sentry."

"The consultant's job required that he have access to Sentry claimant data," the company said. The name of the contractor was not a part of the court records, said Assistant U.S. Attorney Byron M. Jones.

Mr. Schwartz, according to the grand jury, offered to sell the stolen names, addresses, dates of birth and Social Security numbers of approximately 36,000 people to an undercover agent of the Secret Service for $25,000 in cash.

The consultant also asked that the undercover agent purchase a $1,300 espresso machine via credit card fraud, then offered to pay the agent 60 percent of the price of the espresso machine from the $25,000 he expected to receive from the sale of the stolen data, the indictment said.

Sentry, meanwhile, said it has contacted the individuals who were impacted by the theft from its systems and is providing credit monitoring services to help prevent further fraudulent activity.

Data on an additional 112,198 claimants was also recovered by the Secret Service, a company spokesperson said, but there is no evidence that it was sold.

Sentry, however, has notified these additional individuals and has offered credit monitoring services to them as well. The spokesperson noted that the monitoring service is being provided "at our expense," adding that as of the end of July, there had been "no problems" resulting from the theft.

"This is a situation where the expert who was working on our system chose to breach the faith that had been placed in him," said Jim Stitzlein, Sentry's senior vice president-operational services.

If convicted, Mr. Schwartz faces up to 15 years in prison and a $250,000 fine on the identity theft charge, the U.S. Attorney's Office said.

The device fraud ("devices" being the stolen data) count is punishable by imprisonment for up to 10 years and a fine of up to $250,000. Wire fraud is punishable by imprisonment for up to 20 years and a fine of up to $250,000. Aggravated identify theft requires imprisonment for two years in addition to the sentence imposed for wire fraud.

Arraignment has been set for 11 a.m. tomorrow, said Mr. Jones.

Special Reports /

Sentry Consultant Indicted In Comp I.D. Theft Scam

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