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Home / FindArticles / Business / Arizona Capitol Times / Jun 23, 2006
13,000 Social Security numbers in downtown Phoenix taken in burglary
by Phil Riske
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Burglars broke into the offices of a national retirement investment company
in downtown Phoenix and stole four laptop computers, one of which had the
Social Security numbers of 13,000 public employees, company officials said.
The burglary took place in early April, but customers affected were not
notified until weeks later.
A spokeswoman for Nationwide Retirement Solutions said one computer
contained personal information about employees enrolled in 65 separate
deferred compensation plans in "outlying counties and municipal plans,"
representing 12 percent of the company's customers in Arizona.
Nationwide spokeswoman Carah Brodie declined to name the local governments
affected, but said the information taken did not involve every employee in
those counties and cities.
Nationwide Retirement Solutions, based in Columbus, Ohio, has more than 1.5
million public sector clients across the country, including a contract with
Arizona state government.
"No state employees of Arizona were affected by the burglary," Ms. Brodie
said. She said the Phoenix Police Department is investigating the burglary,
which occurred at the company's office at 4747 N. Seventh St. sometime
between April 7 and April 9. No arrests have been reported.
State employee information was secure on the company's national computer
server, Ms. Brodie said.
Arizona Capitol Times was unable contact police investigators, but Ms.
Brodie said they told her they think the burglars were after the computers
to sell them and were unaware of the information stored on them. The other
three computers did not contain sensitive information, she said.
"They kicked in the door to enter the office," Ms. Brodie said, adding that
the information is secured by computer user ID and password protection.
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She said all the employees whose information was on the computer were
notified of the theft more than month later, and the company offered them
assistance with their credit information.
Customers notified May 19
"Customer letters were mailed May 19," Ms. Brodie said. "The investigation,
in cooperation with local police, took some time."
Ms. Brodie said more than 1,100 customers affected by the theft have
enrolled in the company's free credit monitoring and receive $25,000 in ID
theft insurance. Another 966 customers have requested a free fraud alert
service, and no one had reported misuse of their personal information
"Arizona law doesn't require us to do anything, but we take privacy and
security very seriously," she said. "We don't have any reason to believe
that this information is going to be used, just that the thieves were after
the equipment themselves for resale value, not knowing what if any
information would be on it."
Arizona soon will require holders of personal information to notify
customers of any breach of security, with the passage in April of S1338,
which was signed by Governor Napolitano. The law will become effective Jan.
1, 2007.
The bill also permits the state attorney general to bring charges for
violation of the law, which will carry a civil penalty of not more than
$10,000.
Another bill, S1347, would permit people to request that their credit
information be frozen and not released to anyone, but the measure did not
come up for final votes.
Ms. Brodie said the burglary was the first time company information has been
stolen, adding it was a "worrisome" situation. The employee information was
on the laptop of a sales representative, she said.
"There's no blame here on an individual associate," Ms. Brodie said. "That
office was a victim."
Computer serial numbers were given to police to track the computers if
someone attempts to pawn them.
Nationwide says it has taken steps to further secure information stored on
its laptops, including the removal of customer data from the Phoenix office
laptops and encryption of all information on the hard drives.
The Phoenix metropolitan area had the highest per capita rates of identity
theft in 2005, with 9,320 complaints filed with the Federal Trade
Commission. Security breaches can include loss of misplaced computer disks
or backup tapes, stolen computers, hacked data or compromised passwords.
What deferred compensation does
The state in 1975 established a deferred compensation program for employees
to set up a supplemental retirement program. Nationwide was chosen to
administer the program, which requires a minimum contribution of $20 per pay
period, and state employees 50 years old and older may each defer more than
$15,000 in 2006.
A seven-person governing committee established to oversee the program
includes three state employees appointed by the governor, the director of
the Department of Administration, the director of the Department of
Insurance, and the director of the state retirement system. Yota Aguilar is
the manager of the local office.
The program undergoes annual financial audits.
"The security of employee, contractor and customer personal information is
of paramount concern to this administration," said William Bell, director of
the Department of Administration. "We are constantly improving and enhancing
our physical and network security infrastructure as technologies evolve."
Nationwide Retirement Solutions, a subsidiary of Nationwide Financial
Solutions, would not release the amount of deferred compensation
contributions in Arizona.
The federal Department of Veterans Affairs last month learned that an
employee, a data analyst, took home electronic data from the VA that was
stored in his home on a laptop computer and external hard drive. He was not
authorized to take this data home.
The employee's home was burglarized, and the computer equipment and other
items were stolen. The electronic data stored on the computer included
identifying information for millions of veterans.
As in the Phoenix burglary, authorities said believe the computer equipment,
rather than any data on it, was the target of the theft. The VA said it is
taking all possible steps to protect and inform all veterans, service
members, and reservists potentially affected.
Records containing Social Security numbers and claims history, some credit
card numbers and other private information were taken in a break-in in 2002
at Phoenix-based TriWest Healthcare Alliance, a defense contractor that
provides managed health care for 1.1 million active duty personnel, their
dependents and retirees in 16 states.
The Defense Department that year received an "F" grade for its computer
security from a House Government Reform subcommittee.
Last year, the personal information of 57,000 Blue Cross Blue Shield of
Arizona customers was stolen from Arizona Biodyne, a Phoenix-based managed
care company. A safe containing backup tapes was stolen from its office at
8900 N. 22nd Ave.
In Tucson last year, personal information of 40 million credit card holders
was taken by a computer hacker, the FBI said.
FYI
The prime sponsors of S1338 were Sens. John Huppenthal, R-20 and Linda Gray,
R-10; and Reps. Doug Quelland, R-10; Trish Groe, R-3; Marian McClure, R-30,
and Tom O'Halleran, R- 1.
Copyright 2006 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.
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