Records containing the names, Social Security numbers and birth dates of more than 40,000 individuals were illegally reproduced at a copying business sometime before January while they were waiting to be put onto a compact disc for the state.
State Attorney General Mark Bennett said federal authorities notified his office of the theft in January but asked that the information be withheld while an unrelated drug investigation was ongoing.
In letters sent yesterday, state officials warned Hawaii Government Employees Association and United Public Workers members whose names were on the stolen list or who were enrolled in union-sponsored health and group life insurance plans between July and December 1999 that they could be at risk of identity theft.
Dependents and spouses who were covered by the plans are also being asked to watch their credit scores.
"We are taking this issue very seriously and strongly advise those affected ... to obtain and review their credit reports," state Attorney General Mark Bennett said yesterday in a news release.
"Social Security numbers and other personal information can be used by thieves to obtain credit cards, to open fraudulent bank accounts, to mortgage property and purchase automobiles."
The records from the Voluntary Employees Benefit Association of Hawaii were set to be copied at NewTech Imaging in Honolulu when they were apparently illegally reproduced by one or more people, said Bennett's special assistant, Dana Viola.
She could not say when the records were taken, but Bennett believes it was after February 2005.
Federal investigators learned in January that the records had been stolen, Bennett said. Police later found the data on a computer that had been confiscated as part of an investigation into drugs.
Russell Okata, HGEA's executive director, said the state is to blame for the theft because officials failed to "adequately protect the records" of the union's members.
"HGEA is upset that members have been exposed to identity theft by the state's failure to adequately safeguard their private information," he added. "Now our members face a period of uncertainty."
A UPW official could not be reached yesterday. A representative from NewTech declined comment.
According to Bennett's letter to those whose information was stolen, the Social Security numbers and other personal information were "included among records that had been disclosed" in a lawsuit brought by the state against HGEA and UPW in 2002.
The suit was filed after the state alleged the unions were trying to block audits of members' medical, dental and life insurance plans.
Under Hawaii law the state is entitled to any refunds or credits paid to the public employees unions for members' health-care benefits.
"During the course of the litigation, the Voluntary Employees' Benefit Association of Hawaii provided the state with various printed records that included the names and Social Security numbers of both government employees and others," Bennett said in his letter.
He added that electronic copies of the records were made at NewTech "for litigation purposes," and the printed records were returned to the association. At some point, he said, "unauthorized copies of some of the records were made."
Bennett advised potential victims to put a fraud alert on their credit files and request copies of their credit reports.