Kenneth H. Ryesky

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Kenneth H. Ryesky is an attorney who teaches Business Law courses and Taxation courses at Queens College of the City University of New York. He formerly served as an attorney for the Internal Revenue Service.

Mr. Ryesky is admitted to practice before the courts of New York, New Jersey and Pennsylvania, and the United States Supreme Court. He received his BBA and JD degrees from Temple University, a MBA degree from La Salle University, and a MLS degree from Queens College CUNY.

He is a member of the Jewish Genealogical Society, and serves as an International Association of Jewish Genealogical Societies member of the Records Preservation & Access Committee.

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Consent to share DNA Test Results

by Kenneth H. Ryesky January 20th, 2016 10:19 am

Michael Cole swabbed his cheek and had Family Tree DNA (FTDNA) run a DNA test.  He then became exercised that (A) FTDNA posted his full DNA results on one of the FTDNA Project pages; and (B) shared his results with RootsWeb.

 

Cole is now the lead plaintiff in a class action lawsuit against Gene by Gene, Ltd. the actual legal name of the entity that does business as Family Tree DNA.  He has enlisted (or, perhaps, been enlisted by) Edelson, PC, a Chicago law firm that specializes in, among other things, class action litigation.  This is not necessarily a bad thing.  There are bona fide abuses whose resolution is best accomplished in the context of class action litigation.  Quite often, however, the lawyers for the plaintiffs are the disproportionate beneficiaries of class action litigation.  This posting posits no accusation or value judgment in such regard with respect to the subject litigation; as will be discussed presently, the litigation is likely far from finished and its outcome is not certain at this time.

 

Gene by Gene had purchased several liability insurance coverage policies from the Evanston Insurance Co.  Evanston sought to decline coverage, but the U.S. District Court for the Southern District of Texas has ruled that Evanston indeed has the duty to defend Gene by Gene under the policies.

 

Under insurance law, the duty to defend is broader than the duty to indemnify.  Evanston must engage an independent attorney to defend Gene by Gene; they cannot just assign their own in-house lawyers (which would constitute an obvious conflict of interest).  The lawyer they engage for Gene by Gene will have the duty to zealously advocate for Gene by Gene.

 

This case is likely to be in litigation for some time to come.  It may well set precedent for various issues, including but not limited to (1) what are the voluntary consent standards posting an individual's DNA on the Internet; (2) what are the permissible bounds for DNA testing firms to share their information with one another; (3) what actions must and must not be taken to safeguard the privacy of DNA test results; and (4) what is the value of genetic privacy.


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Genealogists as Stakeholders in Digital Ecosystem Cybersecurity

by Kenneth H. Ryesky March 19th, 2015 7:01 am

[I am now very heavily preoccupied, as never before, with various and sundry personal and professional burdens and deadlines and agendas, so this posting will necessarily be superficial.].

Today's Federal Register [80 F.R. 14360] includes a Notice by the Department of Commerce, National Telecommunications and Information Administration requesting public comment " to identify substantive cybersecurity issues that affect the digital ecosystem and digital economic growth where broad consensus, coordinated action, and the development of best practices could substantially improve security for organizations and consumers."

 

It is definitely in the genealogy community's interest to take advantage of this invitation to weigh in with comments.  Imprimis, we will be affected by whatever rules and schemes come out on the topic.  Moreover, as alluded to in more than one prior Genealogical Privacy posting, we cannot allow ourselves to be seen as an obstacle to privacy; indeed, we need to engage in responsible privacy practices, even as we access and analyze some very personal facts and statistics.

 

We have been given the opportunity to submit input into a process that will, in some way, shape, or form, affect how we operate -- for better or for worse.

 

The comment deadline is 18 May 2015.

 

 

 


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Update to posting of 23 April 2014 ("What's Behind the Adoption"):

by Kenneth H. Ryesky March 15th, 2015 12:17 am

Update to posting of 23 April 2014 ("What's Behind the Adoption"):

Quite unsurprisingly, the case is still unresolved and further court actions have transpired.

Firstly, there was an appeal to the Appellate Division, but, but for whatever reason, that was withdrawn.

More significantly, the Surrogate's Court granted the injunction against the Trustees, enjoining them from seeking any resolution in the Texas courts regarding the July 2012 settlement. "This court continues to defer to the Texas court on the question of whether the Texas orders of adoption at issue can be vacated or voided based on any theory pled, cognizable, and proved in Texas."

[This latest Surrogate's Court decision, entered on 6 March 2015, has not yet been picked up by the New York State Reporter, but did appear in the New York Law Journal of 10 March 2015, at p. 22, col. 6 - p.23, col. 1. It also is in the Dow-Jones Factiva database, Factiva document #
NYLJ000020150310eb3a00016.].

It is, of course, too early to call the end result of the litigation, but my personal call is that the adoptions will stand. But even if they don't, I stand by my contentions in the last two paragraphs of the 23 April 2014 posting:

" Never mind that there obviously was a scheme involved here, the propriety of which shall not now be taken to the mats. The decision in the case brings forth some questions hitting at the intersection of genealogy and privacy. What are the uses and misuses of adoption? How, if at all, should adult adoptions be treated differently than infant adoptions or pre-teen adoptions or teenager adoptions? How open or private should side deals behind adoptions be?

Regardless of whether or not this particular court decision stands (the dollars at stake here may well be impetus for an appeal), these questions will likely be reprised somewhere, at some future time, in some form."


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How the DNA Helix Twists on Privacy, Property, and Paternity in the Probate Courts

by Kenneth H. Ryesky August 20th, 2014 5:27 am

Following an adventurous life that brought him from Vietnam to America, Truong Dinh Tran settled in New York, where he invested in various business and real estate ventures, and died a centimillionaire in 2012. Having left no last will and testament to dispose of his worldly assets, his property will be disposed of under New York's intestacy laws. Truong was known to have had intimate relationships with multiple women during his lifetime. Not surprisingly, five persons alleging that they are Truong's grandchildren now seek a piece of the pie.

At the behest of the five individuals, a hair sample was removed from Truong's body by the New York City Medical Examiner's office, and was given to the DNA Diagnostics Center laboratory for testing. The laboratory, obviously aware that sensitive legal issues may explode in its face in light of the conflicting requests from various parties, has been reluctant to cooperate with the five putative grandchildren or anyone else.  The five have brought an action in the New York County Surrogate's Court, praying for an order requiring the Temporary Administrator to authorize the DNA Diagnostics Center to do the testing on the hair sample, and, if such is impracticable or inconclusive, to authorize the lab to use information from prior DNA tests to determine kinship.

The Court specifically found that the hair sample is an asset of the Estate, and that the Estate fiduciary (in this case the Temporary Administrator) alone is empowered to direct testing on the sample. The Court specifically authorized the Temporary Administrator to direct the appropriate actions with respect to any DNA samples of the decedent. The Court declined to order any specific tests until a viability study indicates which particular procedures would likely be productive.

The Court directed that the costs of the testing be borne by those seeking such tests, but without prejudice to demand reimbursement from the Estate.

New York's Surrogate's Court Procedure Act § 2225(b) sets the standard. It mandates "that diligent and exhaustive efforts have been made from all available sources to ascertain the existence of distributees, or members of a class of devisees, legatees or beneficiaries" before the Court can determine that no such individuals exist.

Under circumstances such as those in Tran's Estate, DNA samples are among the "available sources" in which "diligent and exhaustive efforts" be made. The information relevant to DNA testing carries obvious privacy issues that reach well beyond the construction of family tree charts, most notably personal medical issues not only of the decedent, but of the surviving putative heirs. Mismanagement of the decedent's estate, which, in days of yore, risked little more than the wasting and squandering of Estate assets, now implicates personal information and privacy concerns of individuals other than the decedent. The "diligent and exhaustive" search process needs, in the first instance, to be managed by a responsible and accountable individual.

The Tran case is useful precedent for doing so by explicitly defining the DNA sample held by the lab as an Estate asset, thereby placing the estate fiduciary in the driver's seat for conducting the search.

 

Matter of Tran, 2014 NY Slip Op 32056(U), N.Y.L.J., 8 August 2014, p. 22, col. 3, 2014 N.Y. Misc. LEXIS 3501, (Surr. Ct. N.Y. Co., 2014).


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Unsealing divorces in New York

by Kenneth H. Ryesky May 7th, 2014 8:15 pm

Col. Holland Sackett Duell was a noted New York lawyer, decorated military officer, politician, and yachtsman.  The Colonel's life was interesting; sufficiently interesting that author Christopher Madsen now aspires to write a biography of him.

 

Duell was twice married, first to Mabel Halliwell and then, after his divorce from Mabel in 1925, to Emilie Brown.  As with other divorces in New York, the court of Duell's divorce from Mabel is sealed.  Section 235 of New York Domestic Relations Law basically seals the court records of all matrimonial actions for one hundred years, absent a court order issued for good cause.

 

Madsen, having been rebuffed by the Westchester County Clerk in seeking access to the file, brought a proceeding for a court order, claiming that the book he seeks to write will be "an academic work of historical importance," and speculating that information sealed in the divorce case file might contain some facts of public interest for his tome in the making.

 

The last of Holland and Mabel's children died in 2003, and Madsen's petition to the court was unopposed.  Nevertheless, Justice Francesca E. Connolly denied Madsen's petition for an order to unseal the file.  Madsen v. Westchester County Clerk, 2014 N.Y. Misc. LEXIS 1899, 2014 NY Slip Op 50675(U) (Sup. Ct., Westchester Co. 2014).

 

The statute was last tweaked by the New York State Legislature in 1979, way back before modern text media technology altered the personal privacy scene.  Even then, the statute provides that the only information about a sealed matrimonial case file to be made available to a curious member of the public is a "certificate of disposition" which effectively says only that the divorce (or child custody decree) was granted; evidence and testimony are shielded for 100 years absent a compelling reason.

Justice Connolly* wrote in her opinion:  "[F]ishing expeditions into sealed records should not be permitted; rather, a petitioner seeking access to sealed records must be able to articulate and particularize the relevance of the information sought to an important pending matter.   ...  Public officials charged with safeguarding records containing the intimate details of litigants' lives bear a 'heavy responsibility'  ...  By sparingly exercising their discretion to permit access to these records, courts promote an atmosphere of privacy for litigants that encourages open and honest disclosure in the context of matrimonial litigation."

Justice Connolly did not consider Madsen's literary pursuits sufficient reason to unseal the record, even though the divorcing couple and all of their children are now deceased and would not suffer embarrassment from the disclosure.

The New York scheme, then, strikes a balance between the free flow of information and the need for privacy.

Madsen will just have to wait until 2025 to write about whatever lurid details attended to the Colonel's divorce.

 

[*  In New York, the lowest courts of general jurisdiction are the Supreme Courts, to be found in each county; the jurists who sit on the benches wearing the black robes are invested with the title "Justice" and not "Judge."].

 

 


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What's Behind the Adoption?

by Kenneth H. Ryesky April 23rd, 2014 10:18 am

 

 Arnold Levien was an accomplished engineer, and perhaps more accomplished still as a real estate investor.  At the time of his death in 1979 he was a multimillionaire, and his Will established a Trust of which his children and/or grandchildren were income beneficiaries, pending the Trust's termination.  The terminating event for the Trust was the attainment of age 35 of the last of his surviving great-grandchildren who was alive on the date of his death.  Upon termination, the Trust principle was distributable to Arnold's surviving great-grandchildren.

 

The trustees of the Trust were empowered, in their absolute discretion, to invade the principle for early distribution to an income beneficiary on account of "serious illness, misfortune or other emergency affecting any such beneficiary."

 

Two of Arnold's grandchildren, Stephen and Harlan (apparently neither of whom is anything resembling a slouch in his own right), are afflicted with muscular dystrophy.  Neither has sired any biological natural children.  Their respective (and apparently coordinated) requests to the trustees for early Trust principle distribution on account of their medical situations were rebuffed; they sued the trustees.  The lawsuit was settled in July 2012 by agreement giving Stephen and Harlan each a six-figure cash payment, in return for which, they "relinquish all rights as beneficiaries of income and/or principal of the Trust" and would "make no further requests of the Trustees for income or principal."

 

As will be discussed shortly, the settlement agreement had a gag clause prohibiting its terms from being disclosed to others.

 

In October 2012, Stephen and Harlan each respectively adopted an adult son, said adoptions having been validly formalized in Texas courts.  Apparently, one of the adopted sons is older than his adoptive father.  The Trustees of the Trust were apprised of these adoptions shortly thereafter.

 

In February 2013, the last of Arnold's surviving great-grandchildren alive at Arnold's death attained the age of 35, thereby terminating the Trust.  Kenneth Ives and Parvin Johnson, Stephen and Harlan's adoptive sons (this Kenneth not to be confused with Kenneth Levien, one of the trustees, nor with the author of this posting) claimed their respective shares of Trust principle as Arnold's great-grandchildren (each share being worth in excess of a million dollars before taxes), and the trustees of the Trust sought declaratory judgment that Kenneth and Parvin were not entitled to shares of the Trust as Arnold's great-grandchildren.

 

In a verbose ruling [Levien v. Johnson, 2014 N.Y. Misc. LEXIS 1802, 2014 NY Slip Op 30995(U) (Surr. Ct. N.Y. Co. 2014)], the New York County Surrogate's Court dealt with the Trustee's relevant contentions as follows:

 

A.  Arnold did not intend to benefit non-biological descendants:  The laws of New York (and other states) recognize offspring by adoption on par with biological offspring, and Wills are so construed unless a contrary intention is specified.  No contrary intention on the part of Arnold was specified in his Will, and none was otherwise proven.

 

B.  The adoptions were unique and unforeseeable if not a sham:  Adoption is specifically recognized as a valid method of creating parent-child relationships under the laws of New York (and other states).  Adoption is foreseeable and, inasmuch as no misrepresentations were made to the Texas courts in the course of the adoption proceedings, the adoptions were valid and not sham.

 

C.  Stephen and Harlan had a duty to disclose their anticipated adoptions to the Trustees during the course of the settlement negotiations in the prior lawsuit:  No such duty was shown, and, even if it did exist, it would not affect the status of Kenneth and Parvin as adoptive children of Arnold's grandchildren.

 

D.  The distributions of principle to Kenneth and Parvin would circumvent the settlement agreement in the prior lawsuit:  Though the settlement agreement was intended to bind the "heirs, executors, successors, and assigns" of Stephen and Harlan, it did not in any way affect Stephen and Harlan's rights and capacities to adopt.

 

 

And so, if this court decision stands, Kenneth and Parvin will get their shares from their adoptive great-grandfather's life labors.

 

But the Court did not dismiss the trustees' claims against Stephen and Harlan for breach of contract.  The trustees contend that the only way Kenneth and Parvin could have learned of the terms of Arnold's Will was through Stephen and Harlan; Kenneth and Parvin contend that they knew that information before the settlement agreement was entered into.  On the disputed facts, a trial is necessary, and dismissal on motion is inappropriate.  Never mind that Arnold's Will, having been duly probated, is a matter of public record.

 

The foregoing is an abbreviated synopsis of a very wordy judicial opinion; the reader is free to read the original opinion if he or she so desires.

 

Never mind that there obviously was a scheme involved here, the propriety of which shall not now be taken to the mats.  The decision in the case brings forth some questions hitting at the intersection of genealogy and privacy.  What are the uses and misuses of adoption?  How, if at all, should adult adoptions be treated differently than infant adoptions or pre-teen adoptions or teenager adoptions?  How open or private should side deals behind adoptions be? 

 

Regardless of whether or not this particular court decision stands (the dollars at stake here may well be impetus for an appeal), these questions will likely be reprised somewhere, at some future time, in some form.

 

 

 

 


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Practical Practices in Pennsylvania

by Kenneth H. Ryesky February 1st, 2014 10:49 pm

There are two interrelated historical patterns that occur with great frequency:

A. Individuals of power and influence ignore and/or dismiss the significance of an event or development; and, the other side of the coin,

B. There are individuals who engross themselves into any given trend or paradigm shift long before the general acceptance or implementation of such trend or paradigm.

Shortly after the 1993 bomb incident in the World Trade Center parking garage, my brother-in-law, who is very active and high-profile in the broadcast industry, advised broadcasters who had antennae on the WTC Towers to implement back-up antennae at other locations, just in case the WTC antennae would suddenly be removed from service.  Eight years later, my then 12-year-old son, who made a daily 1-hour commute from Long Island to his school in Queens via the Long Island Railroad, had one of the relatively few operational cell phones in the September 11, 2001 chaos. Those cell phone providers who depended solely upon their WTC Tower antennae were caught short-handed, and my brother-in-law was quite unhappily vindicated (as were my wife and I, who had been criticized and castigated for giving a twelve-year-old kid a cell phone).

And, let us not forget what data digitization did to the photographic film manufacturers, and the manufacturers and purveyors of the cameras that used the film, and the processors of the film.

So it goes with privacy and the genealogical community. Those genealogists who failed to recognize the broader privacy issues are now being abruptly sucked into the great privacy debate. And the privacy conversation, genealogy and otherwise, is now spotlighting many areas and issues which heretofore had been seemingly unconnected to our main focuses of concern. One of these is privacy and the taxation process. [It is parenthetically noted that old taxation records are valuable genealogical resources; indeed, it was the sovereigns' concerns for collecting the taxes that was the impetus for the use of surnames in many societies.].

We are now at the point where all but the most naive in the contemporary genealogical community in America are at least generally aware of how the IRS's data security (mal)practices affect their genealogical research.

It has come to the attention of this tax lawyer that the Pennsylvania Department of Revenue has issued the following pronouncement:

"Beginning with the 2014 income tax filing season, the department instituted new security measures to identify and intercept fraudulent refund filings. As part of this initiative to ensure refunds are issued only to their rightful owners, taxpayers may be asked to confirm their identities before refunds are issued."

How this new initiative fares remains to be seen, but people in the taxation community will certainly be watching to see whether the Pennsylvania Revenue Department is ahead of the IRS on the power curve. Pennsylvania's practices and procedures will play into the discussion as to whether the recent restrictions on the Death Master File access (of which I posted on 7 January 2014) are sufficient or are overly broad.

It is a discussion in which the genealogical community must participate.


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Taking a Stand in Genealogyland

by Kenneth H. Ryesky January 20th, 2014 3:37 am

"Just how tone deaf is the genealogical community?" asks Brad in his post of 16 January 2014, imploring the leadership in Genealogyland to take a stand against the misuse of public information for nefarious if not lethal purposes. My own posting of 7 January 2014 mentions a loophole in the latest Federal budget agreement's restriction upon Death Master File (SSDI) access; various members of the genealogical community are now pondering the prospects of at least some genealogists obtaining Commerce Department certification for the early access loophole.

As this posting is being written, the Commerce Department is working on its proposed regulations for the DMF early access program; these, we are assured, will soon appear in the Federal Register for public comment.

Many existing professional qualifications are accepted as valid credentials for various purposes by various governmental agencies. The Internal Revenue Service's Office of Professional Responsibility, for example, accepts bar admission or CPA certification as a valid credential for representing taxpayers in matters before the agency. Many government agencies, Federal and state, accept the Certified Professional Contracts Manager or the now superseded but grandfathered Certified Purchasing Manager designation as a substitute for some qualifying experience in procurement and acquisition jobs (my own C.P.C.M. and C.P.M. certificates gave me a fair degree of career mobility within the Department of Defense when I needed it, but lapsed after I transitioned from DoD to the IRS).

As with many other affinity groups, genealogists have elevated themselves to professional status through the use of the certification process. Now that Congress has tasked the Department of Commerce with overseeing a process for early DMF access certification, genealogists are pondering how their own certification credentials might be used to bootstrap their way to the coveted Commerce Department approval.

If professional credentials such as the Certified Genealogist title are to be accepted by the people in Commerce, then the CGs will need to clearly and visibly build confidentiality and ethics into their own certification program. Even more basic is the need to make the criteria for CG certification, including matters of ethics and confidentiality, open and transparent.

Which all brings us back to taking a stand in Genealogyland.


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Congress is Plugging the Wrong Hole

by Kenneth H. Ryesky January 7th, 2014 1:41 am

[This piece originally appeared in The American Thinker on 20 December 2013]

Section 203 of the budget bill passed by Congress restricts access to a Social Security Administration database known as the Death Master File. The misguided passage of this restriction will carry negative side effects and fail to achieve its purpose.

Section 203 embargos the release of the DMF for three years. To be sure, early access to the DMF is provided to individuals having "a legitimate fraud prevention interest" or "a legitimate business purpose," but such individuals would need to run the gauntlet to achieve clearance under a not-yet-established Department of Commerce certification program. This would be unduly burdensome for, say, an estate executor who, on a one-time basis, needs to ascertain the heirs of a decedent.

The passage of this provision has been sold to the Congress as a miracle cure for a multi-billion dollar fraud scheme which collectively inflicts untold economic and psychological harm upon the victims: Tax fraud through identity theft.

For many years, fraudsters have filed with the Internal Revenue Service fabricated tax returns which use stolen identities as entries for the taxpayer and/or a claimed dependent, and which show a refund owed to the taxpayer, thereby defrauding the public fisc when the refund is issued (as it almost always has been). This has even been done by prison inmates, among other perpetuators. A Treasury Inspector General for Tax Administration (TIGTA) report confirms that stolen identity tax fraud entails millions of tax returns and billions of dollars. When the stolen identities are those of deceased individuals, particularly deceased young children, the collateral damage inflicted upon the surviving families is especially grievous.

And, due to some heedless inattention on the part of the IRS, one source of pilfered identities has been the DMF. The shutdown of DMF access accordingly has played quite well in the Congress, for it entails both a "feel good" sense that criminals will be stymied, and a seeming prospect to stanch a significant hemorrhaging of the public purse.

Social Security Numbers were originally intended to be just that, and not used for other purposes. But the uniqueness of the SSN made it convenient for use by the banking and financial industry, and by the taxation authorities. The Tax Reform Act of 1976 amended the Internal Revenue Code to require that the taxpayer's SSN be used as the identifier on a taxpayer's tax return.

During the 1970's, Ronald Perholtz, then the U.S. Postal Service's General Manager of Accounting, realized that the USPS was cutting many pension checks to deceased retirees, and that the Social Security Administration had data which could be used to prevent this and thereby save the Postal Service millions. Perholtz resigned his position, founded his own consulting firm, and proceeded to market his services to the government. Perholtz also developed another service for hire, verification that pensioners were in fact still among the living; his efforts culminated in a consent settlement with the Social Security Administration under which the SSA would publicly avail the DMF under the Freedom of Information Act. Other entrepreneurs have since taken to purchasing the DMF and purveying it as the Social Security Death Index. [Alas, Perholtz would later go to prison for contract fraud in his dealings with the government.].

The DMF/SSDI has since been used in many industries to prevent fraud. But fraud prevention is not the database's only useful purpose. Medical researchers, for example, need it for long-term projects to ascertain the living/deceased status of their subjects.

Genealogical researchers also use the DMF/SSDI extensively; such research is instrumental for purposes such as identifying and finding relatives of military or civilian casualties or crime victims, repatriating artwork stolen during the Nazi era, and building family health and medical history records (which the Surgeon General encourages Americans to do). Various groups having specialized family history research interests include Native Hawaiians who must prove their descent for certain housing guarantees, Ashkenazi Jewish women whose susceptibility to breast cancer requires knowledge of family breast cancer incidence in order to make appropriate healthcare decisions, and African-Americans who seek to reconnect descendants of siblings who were separated from one another during the slavery era.  These vital pursuits are now threatened because family research is not an activity for which early access to the DMF is specified.

The fraudster community eventually learned that one entity that did not verify its data with the DMF was the IRS. By 1998, when Alan Scott was convicted of filing 20 false income tax returns with the IRS using stolen identities, the IRS could no longer claim ignorance of the problem. Yet, more than a decade later, the IRS still fails to adequately assist the good faith tax return filers whose identity has been stolen by fraudsters.

The IRS's dismissive passivity in failing to verify the legitimacy of the filed returns has been quite ignominious. Imprimis, the tactic of falsely claiming someone else's child (often deceased) as a dependent can be readily detected up front because the information from the Form SS-5 Application for a Social Security Card requires that the parents' Social Security Numbers be provided for a child under the age of 18. This information is obviously in the government's database, and a red light should flash whenever the SSN of the taxpayer or the taxpayer's spouse does not jibe with that of the parent of the child when the child's SSN was first assigned.

Moreover, the IRS has assumed that the first tax return to be filed is the legitimate one, and the subsequently-filed return is that of the impostor. Such an assumption is questionable at best, inasmuch as the legitimate good faith tax return filer needs to assemble and compile complete and accurate information for the tax return, while, as amply demonstrated, the fraudster's return will suffice with randomly-concocted numbers which are not dependent upon any statements from banks, brokers, mortgage companies, or other third-party payers or payees.

A recent TIGTA report has found that the overwhelming majority of stolen identities used on tax returns are now those of living individuals. So cutting off access to the DMF may well protect deceased children, but will not stop identity theft tax fraud.

The vast databases of personal information required under ObamaCare can only provide greater opportunity to steal the identities of living persons; the ObamaCare incentives for employers to convert full-time employees to part-time (and strictly limit the hours for existing part-timers) in order to avoid having to provide healthcare insurance can only attenuate the employees' group identity and loyalty (and may even conjure up thoughts of vengeance against the employer); and the increased general costs of healthcare under ObamaCare can only provide increased pressure to steal an identity not to defraud the IRS, but to obtain healthcare itself.

Section 203 abridges access to a valuable resource which should be in the public domain; the provision was enacted to cover for the IRS's abject failure to protect the American people with proper data stewardship practices.

The Talmud recounts a colloquy where Rabbi Joseph says to Rabbi Abaye, "It is not the mouse that is the thief but the hole." Congress would have us (and perhaps themselves) believe that it has plugged a large hole in the Federal coffers. But the mice still forage and there are even larger holes for them to access the granary. Future GAO and TIGTA studies are likely to find substantial gaps between the savings projected by the proponents of Section 203 and the savings, if any, actually achieved by it.


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The Start of New York's I-STOP Program

by Kenneth H. Ryesky September 2nd, 2013 11:01 pm

Last year, New York's Governor Andrew Cuomo signed into law the Internet System for Tracking Over-Prescribing (I-STOP) Act, which establishes a database of prescriptions for certain addictive medications and requires physicians and pharmacists to use that database to screen for duplicate prescriptions from multiple doctors.  The objective is obviously to control the abuse of prescriptions to obtain the addictive pharmaceuticals.

The impetus for this legislation was a 2011 quadruple execution-style murder, by an addict, at the Haven Pharmacy on Long Island.  The killer was sentenced to what will surely amount to life without parole, and his wife received 25 years for her complicity.

One of the victims was 17-year-old Jennifer Mejia, whose only crime was working at her gainful employment at the pharmacy when the killer came in and opened fire.  I did not know Jennifer or her family, but the news of her murder hit me especially hard because when I was 17 years old, I, too, was employed part-time after school at a local small town pharmacy.

This was back in the early 1970's, before Section 1203(d) of the Tax Reform Act of 1976 amended I.R.C. § 6109 to require the use of Social Security Numbers in the taxation process, a giant step towards their ubiquity in today's society.  It is safe to say that, with few exceptions if any, the only SSNs in the pharmacy's records were those of the employees.  None of the records were computerized; each customer had an index card with his or her prescription history.  Other high school students (one of whom happened to be a classmate of mine) came in a few evenings per week to maintain the record cards by typing them on the typewriter.  [The most advanced information technology used by the drugstore was not for the purpose of maintaining customer records, but rather, was the teletype terminal used in store's ever-contracting sideline business as the town's Western Union telegram franchisee; I thus had occasion to deliver more than a few Western Union telegrams during the course of my employment there.].   The information security measures in place at the pharmacy in those days were the norm for businesses at the time, but would be considered insignificant by today's commercial standards.  Even so, the Old Man did make abundantly clear that information regarding customers' personal medical situations, including and especially the drugs they were prescribed, was nobody else's business, and that he would view breaches of such confidentiality with greater disdain and alarm than things such as coming in late or goofing off on the job.  My successor in the position received a mild reprimand for the fender bender he had with the store's delivery station wagon; I am sure that the Old Man would not have given him a second chance had he blabbed about a customer's specific prescriptions to a third party.   The technology and society have changed tremendously since the early 1970's.  We are now able to keep pharmacy customer records in real time, and coordinate the pharmacy's records with the physician's records, not to mention the healthcare insurance records.   New York's I-STOP database has just gone live, and, Newsday reports, "In its first three days of use, New York State's new online system for tracking prescription pill abuse discovered at least 200 instances of apparent doctor shopping, when patients visit a number of doctors in search of prescriptions for pain pills."   As with any other database containing personal information, there are advantages and disadvantages, plusses and minuses, and potential for good and for harm.  In no particular order, the following ponderables and imponderables come to mind; do feel free to add to the list when you comment:

The patient's name; the patient's residential address; the patient's date of birth; the patient's gender; the date on which the prescription was issued; the date on which the controlled substance was dispensed; the metric quantity of the controlled substance dispensed; the number of days supply of the controlled substance dispensed; the name of the prescriber; the prescriber's identification number, as assigned by the DEA; the name or identifier of the drug that was dispensed; and the payment method, together with "such other information as is required by the [New York State Department of Health] in regulation."

The date of birth is of obvious interest to genealogists.  As matters currently stand, the I-STOP data is not to be disclosed to the public.  But with the sheer numbers of physicians and pharmacists who must access it, there are obvious security issues.

  • B.  Those security issues noted above are all the more salient in light of the Affordable Care Act's effective incentives for businesses to cut costs by hiring less full-timers and more part-timers, thereby avoiding the responsibility to offer healthcare coverage.  Governmental employers are also getting in on the act as well, as are colleges and universities.  This mean not only more individuals involved, but a workforce whose job tenure, and identity with and loyalty to their employers will, in many cases, be quite attenuated.
  • C.  The statute itself is devoid of SSNs.  But the database might also include "such other information as is required by the [New York State Department of Health]."  It is not difficult at all to imagine the DOH adding SSNs as a parameter.
  • D.  Nor is it difficult to imagine identity thieves obtaining prescriptions in the name of identity theft victims.
  • E.  The big chain pharmacies are already maintaining databases which include the purchases of non-prescription items, and are already using such information to personally target their marketing to their customers.  I regularly receive promotional coupons from Rite Aid for the types of items I frequently purchase there.  I started receiving a spate of coupons for candy, which I personally do not consume or purchase.  Sure enough, my wife, who sometimes uses my Rite Aid customer rewards card, had been purchasing candy at Rite Aid.  Query:  What is there to prevent the I-STOP database from being used or misused to market products or services to consumers?
  • F.  The real time verification which was actually achieved by the I-STOP program, and proven successful by the detection of questionable cases, surely offers lessons to the IRS in how it might approach detecting identity theft in the filing of tax returns.

Bottom Line:  Those concerned with promoting information security should be watching New York's I-STOP program.   Identity thieves certainly will be watching it and testing it.


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