[HEALTH.MIL] Victims of TRICARE Data Theft Report Financial Fraud

  • From: HEALTH.MIL@xxxxxxxxxxxxx
  • To: <HEALTH.MIL@xxxxxxxxxxxxx>, <TFL@xxxxxxxxxxxxx>
  • Date: Thu, 15 Mar 2012 09:20:28 -0500

BLUF:  Check your credit card and bank statements closely.

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Victims of TRICARE Data Theft Report Financial Fraud
By Bob Brewin 03/14/2012
Last fall, not long after someone stole computer tapes containing the health
records of 4.9 million TRICARE beneficiaries, some of the victims discovered
bogus charges on their credit card statements and unauthorized bank

The tapes were stolen in September 2011 from the car of an employee with TRICARE
contractor Science Applications International Corp. who was transporting them
from one federal facility to another in San Antonio, Texas. The employee left
the unencrypted tapes in a parking garage for most of a workday.

In October 2011, the law firm Shulman, Rogers, Gandal, Pordy & Ecker of Potomac,
Md., filed a $4.9 billion class action lawsuit against the Defense Department.
Since then, Defense or SAIC have been hit with seven additional lawsuits
charging the company and the government with negligence in the care of sensitive
personal and health information.

In an amended complaint to the original suit against Defense, which now includes
SAIC, plaintiffs said they started to notice fraudulent activity in their
financial accounts soon after the theft:

-- Virginia Gaffney of Hampton, Va., a TRICARE beneficiary and military spouse,
said her USAA credit card was rejected at a restaurant; she later discovered the
company had canceled her card due to suspicious activity.

-- Antoinette Morelli, a disabled Air Force veteran of the Gulf War, said she
and her husband, a retired Air Force colonel, discovered unauthorized charges on
two credit cards and unauthorized withdrawals from two bank accounts.

-- James Biggerman, a retired Army command sergeant major who lives in
Shelbyville, Ind., was notified about fraudulent charges on his credit card
account shortly after the tape theft and started receiving unsolicited calls
from telemarketers and scam artists.

-- Juan Diego Hernandez, a Frisco, Texas, Army veteran noticed unauthorized
charges on the credit card account he holds with his wife and spent hours on the
phone with the bank resolving the errors.

-- Carol Keller, the Revere, Mass., spouse of a disabled Air Force veteran, said
she discovered three separate fraudulent charges against her credit or debit
cards since last October.

The amended complaint said TRICARE beneficiaries had to take extensive steps to
protect their financial information.

The plaintiffs "had to cancel credit cards and close bank accounts; open new
credit cards and bank accounts; stop direct deposits to those compromised
accounts and re-enroll in direct deposits for new accounts; stop recurring
electronic payments from compromised accounts and re-enroll in electronic
payments through new accounts; and otherwise spend time and money in mitigation
responding to notifications following the wrongful disclosure that certain
financial accounts have been compromised," the complaint said.

Dr. Deborah Peel, founder of the Patient Privacy Rights Advocacy Group in
Austin, Texas, said unwanted marketing, credit card cancellation, and identity
theft are typical and expected when sensitive, richly detailed personal health
data is breached. It could take years to discover the repercussions of stolen
medical information, she said.

The new complaint alleges that the theft was targeted. The SAIC employee's car,
a 2003 Honda Civic, was parked in a garage that housed many luxury cars, "yet
the thief or thieves, who went to great effort to avoid security, did not break
into any of the luxury cars in the garage, targeting instead the relatively
inexpensive car containing the confidential data."

The complaint added, "The thief or thieves stealthily broke into the employee's
Honda Civic and took the unencrypted backup tapes and records, thereby gaining
information worth billions of dollars. The nature of this theft supports the
logical inference that the thief or thieves were specifically targeting the
confidential information contained on the backup tapes and records."

There are currently five separate lawsuits over the TRICARE data theft pending
in Washington, one in Texas, another in San Diego, and most recently, one in
northern California.

As part of their amended complaint, filing attorneys for the plaintiffs asked to
consolidate all eight cases. Arnold & Porter LLP of Washington and Reed Smith
LLP, SAIC's attorneys, agreed and filed a motion for consolidation on March 9.

SOURCE:  NextGov Web Site at

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