Data theft may cost $500m

2006-05-25 21:46

Washington - The head of the US department of veterans affairs faced angry lawmakers on Thursday and described how the theft of a device the size of an iPod containing personal data on 26.5 million veterans may cost taxpayers as much as $500m.

"As a veteran myself ... I am mad as hell," veterans affairs secretary Jim Nicholson told the house committee on veterans affairs.

Nicholson said a department employee who had taken the data home without authorisation was placed on administrative leave and "other people are also in my sights as a result of this".

The data was stolen from the employee's home in Maryland.

Nicholson said he could not promise the government would cover all potential losses by veterans, but suggested congress pass a law to do so.

"There is no sign that any of this (stolen names, social security numbers and birth dates) is being used at this time," Nicholson said.

Criminals can use such data in credit-card fraud and other identity theft scams.

Asked how much it would cost to prevent and cover potential losses, Nicholson estimated "way north of $100m" and did not rule out a total cost as high as $500m.

The data related to everyone discharged from the military since 1975, and some discharged earlier if they had filed a benefits claim, officials said.

- Reuters