‘Identity theft buffet’ lands ex-broker in court

By Abigail Goldman (contact)

Friday, June 12, 2009 | 2 a.m.

Forty boxes of paperwork were found in a trash bin on Decatur Boulevard in December 2006 — boxes that Metro Police seized for safekeeping because they appeared to contain sensitive financial information.

Now, more than two years later, the boxes and their alleged owner are being dragged into court by the Federal Trade Commission. The agency is charging former mortgage broker Gregory Navone with violating the Fair Credit Reporting Act and rules governing the disposal of consumer information and records.

A neighbor discovered the boxes in a bin assigned to 811 S. Decatur, an office complex between Alta Drive and Charleston Boulevard. At the time, the building housed two companies registered to Navone: First Interstate Reality Inc. and BNG LLC. Those companies are now respectively listed as in default and having revoked licenses on the Nevada secretary of state Web site, and Navone is no longer licensed as a broker with the state’s Division of Mortgage Lending.

What had been treated as trash outside Navone’s offices turned out to be “tax returns, mortgage applications, bank statements, photocopies of credit cards and drivers’ licenses, at least 230 consumer reports, and other documents containing sensitive consumer information” collected by Navone’s companies, according to the FTC complaint.

The trash bin may have been just the beginning, however. The complaint alleges he broke other rules regarding safeguarding sensitive consumer information, including keeping some of the information collected by his companies “in an insecure manner” in the garages of two of his homes.

The federal consumer protection agency is seeking penalties of not more than $2,500 for each violation of the disposal rules, though what that would add up to, if Navone is found guilty, is unclear. The FTC did not return the Sun’s calls for comment on Thursday.

Shortly after the trash bin discovery, Navone told the Sun he didn’t know what was in the boxes, didn’t know who put the boxes there and suggested that the boxes were probably stolen from his office.

He also contended the boxes contained no private information.

Navone could not be reached for comment Thursday. His attorney, Richard McKnight, is on vacation, according to office staff, and did not respond to the Sun’s e-mail inquiries.

In court filings, Navone denies the trash bin in question was publicly accessible and claims he does not know what kind of documents was found in the boxes, as they were taken before he could examine the contents. Moreover, the former mortgage broker says he was not in a position to “direct, participate or control” circumstances leading to the alleged security breach.

The nonprofit Identity Theft Resource Center tracks data breaches across the country. Even though the boxes were discovered in 2006, the Navone case is listed in the center’s log of 2009 data breaches because the court complaint was filed this year. The center’s log breaks down each case of compromised information according to industry. Of the 31 reported security breaches in banking, credit and financial industries, Navone’s case is one of two that occurred at companies based in Nevada. The second reportedly occurred in Reno, where almost 30 people filed reports of fraud at Clear Star Financial Credit Union after discovering unauthorized charges on their debit cards, according to the center.

Incorrectly disposing of credit reports is a federal offense, which explains why the FTC is pursuing charges against Navone, according to Linda Foley, Identity Theft Resource Center founder. Although this isn’t unheard of, it’s not common, if only because the federal agency has a limited number of personnel and “can’t go around behind every business in every state in the country looking in Dumpsters.”

If they could, Foley said, there would be more cases like Navone’s.

The neighbor who found the boxes had made complaints about loose rubbish and litter around the office building — when he saw the trash bin full of papers, he called Las Vegas Code Enforcement and his councilwoman, Lois Tarkanian, who came to the office building to see for herself.

“I looked at the boxes, and I will tell you, I was shocked,” she told the Sun that January. “To let them float around like that. Imagine who had their whole lives in there.”

One box that was immediately visible contained documents with bank account details, photocopies of driver’s licenses, Social Security numbers and other private information, Tarkanian said.

The neighbor who found the boxes asked to remain anonymous, fearful that there would be retaliation for his reporting of the “identity theft buffet.” He figured whoever had left the boxes exposed had committed a crime.

A couple of years later, the FTC is making a federal case out of it.