Federal prosecutors in Los Angeles have charged five people with using other people’s Social Security numbers to run up more than $140,000 in debt at retailers, then filing for bankruptcy to wipe it out. Four of the five were arrested, and one remains at large.
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The U.S. Attorney’s Office for the Central District of California said in its October 1 announcement that the five were charged in separate criminal complaints. The complaints allege that the defendants used stolen Social Security numbers to open store credit accounts and charge purchases to them. The defendants then each filed for bankruptcy protection in the U.S. Bankruptcy Court for the Central District of California, seeking to erase over $140,000 through bankruptcy. The charges are allegations, and each defendant is presumed innocent unless proven guilty in court.
For readers, the unsettling part is how ordinary the first half looks. A Social Security number is a nine-digit string that appears on tax forms, employment files, medical paperwork and loan applications, and it also sits in the profiles that data brokers and people-search sites compile. Anyone whose number is in circulation faces the same basic question: how much of what a borrower needs is publicly available for a stranger to use? Incogni sends removal requests to data brokers on a customer’s behalf, and less personal data on broker lists can mean fewer scam calls, texts and emails.
Which stores and how much
Prosecutors named the retailers where the debt was run up: Daniel’s Jewelers, Old Navy, Macy’s, Lowe’s, The Home Depot, Sam’s Club, Bass Pro Shops, Best Buy and Guitar Center. The complaints say the largest single total, $63,974, was attributed to defendant Ortuño, and the release names Ortuño-Claras as the defendant still at large.
The bankruptcy filings came between February and May 2025. They were filed in the defendants’ own names, according to the Justice Department, and the aim, prosecutors allege, was to have the store debt discharged. Each defendant faces up to 15 years in federal prison if convicted.
The scheme, as described, has two halves. In the first, the numbers belonging to other people were used to get credit that those people never asked for. In the second, the resulting debt was routed into a bankruptcy case, which is a court process built for people who cannot pay what they owe.
Where bankruptcy fraud gets policed
Bankruptcy is supposed to be a clean way to resolve debts that cannot be paid, and the system depends on the filer being who they say they are. The Justice Department’s U.S. Trustee Program says its mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders. Cases in which prosecutors say a filing was built on stolen identities fall on the wrong side of that mission.
On the Social Security side, the agency’s inspector general takes reports of misuse. The inspector general’s reporting page lists misusing a Social Security number or Social Security benefits among the fraud it wants to hear about. Social Security’s own fraud page lists the Office of the Inspector General’s fraud hotline as 1-800-269-0271.
The people whose numbers were allegedly used are the ones left to untangle the damage. The release is about the defendants, so it does not describe what happened to the people whose numbers were taken. The practical risk for any victim of a case like this is that a collection notice or a credit report entry arrives long after the accounts were opened.
Freezing credit and shrinking the data trail
The federal government’s free recovery site, IdentityTheft.gov, offers step-by-step advice that can help limit the damage, report identity theft and fix credit. It is the place to start for anyone who finds an account they did not open.
Before any damage turns up, two steps do most of the work. The first is a credit freeze with each of the three national credit bureaus, which blocks new accounts from being opened under a number while the freeze is in place. The second is reducing how much personal information is easy to find, since addresses, birth dates and phone numbers listed on people-search sites are what a person needs to pass for someone else.
Checking the credit reports at each bureau for accounts that are not recognized, particularly store cards from retailers like those named in this case, is the check that catches a scheme early.
Anyone who suspects that a Social Security number is being used by someone else can report it to the Social Security inspector general through the fraud page and hotline listed above. The Justice Department’s account of this case, with its figure of more than $140,000 sought to be erased in bankruptcy, is a reminder of how far a single borrowed number can travel through the credit system before anyone notices.
Incogni asks data brokers and people-search sites to remove personal information, and it keeps re-sending those requests, so the opt-outs do not have to be repeated by hand.
Click here to get Incogni to start removal requests with people-search sites →
This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
