Personal data on 26.5 million veterans fell into the hands of criminals when a laptop and computer disks were stolen from a government official who had taken the information home without permission. The data contains the name, date of birth and social security number of everyone discharged from the American Armed Forces since 1975.

The security breach is second in scale only to the hacking attack on CardSystems Solutions last June, which compromised the accounts of 40 million credit card holders. But it is potentially even more damaging because the stolen information contains social security numbers, which can be used to obtain credit cards and loans in a victim’s name.

Veterans reacted with fury at the prospect of having their identities stolen by criminals who might run up huge debts in their names. “We look to (the Department of Veterans Affairs) executive management to hold everybody accountable who was involved. And ‘accountability’ we define as immediate termination,” Bob Wallace, the Washington representative of the Veterans of Foreign Wars, said.

The data was apparently stolen on May 3 during a break-in at the home of a data analyst from the department. The burglars forced open a window and took the laptop, an external drive and a bag containing computer disks.

Jim Nicholson, the Secretary of Veterans Affairs, said that investigators regarded the burglary as one in a series of random break-ins in the area. He said: “It’s highly probable that they do not know what they have.”

Alberto Gonzales, the Attorney-General, was asked to comment on the theft after the first meeting of President Bush’s task force on identity theft, which was established to address a problem that claims an estimated 10 million victims a year in the US. He said: “I’ve directed prosecutors to exercise zero tolerance for those who engage in identity theft that may be related to this incident.”

The Government is notifying veterans to monitor their bank accounts and credit cards for suspicious activity and has set up a hotline. The data analyst has been placed on administrative leave until the investigation is complete.

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