The young man was riding a bicycle with no lights at 3:45 a.m., and sped away when police pulled up. They grew suspicious after stopping him: He was soaking wet and wearing a coat on a warm spring night.

They ran his name and found he was Jerry K. Thao, 21, wanted on a warrant for identity theft. In his backpack were numerous items belonging to his neighbors, including a driver's license, new credit cards, uncashed checks and a motor vehicle title.

The contents of that backpack should concern everyone, said Ramsey County Attorney John Choi, who is bringing a new prosecutorial focus on not just big fraud cases but smaller ones such as identity theft, one of the nation's emerging and most pervasive crimes.

Mail theft is another of those smaller crimes that, left unchecked, can foster crime waves when stolen identities serve as the "yeast" needed to bake up bigger schemes, Choi said.

Letting the less-severe crimes go unpunished sends the wrong message to criminals, Choi said. Sociologists' "broken-window" theory, in which one broken window in a building leads to more, happens with fraud, too, he said.

"The little stuff matters because it will become larger," he said Tuesday at an insurance fraud seminar in Bloomington.

Authorities face limited resources for investigations, but Choi's office is using creative solutions to fight fraud crimes, which affect quality of life and boost insurance and retail prices for consumers.

So far this year, 18 people have been charged with identity theft in Ramsey County District Court, up from seven in 2011, prosecutors said.

Another 137 people have been charged this year with theft by swindle or theft by movable property, including mail, credit cards or other identifying documentation.

Assistant County Attorney John Ristad, the first prosecutor assigned to Choi's newly created financial fraud unit, has strengthened ties with agencies and the private sector. He's worked with St. Paul police, attorneys and college students to provide accounting services to nonprofits and other organizations that suspect swindles.

And he's working closely with investigators to build stronger cases and to take another look at unsolved cases that, with a little more work, could be charged.

"We're trying to develop more of an expertise in this area instead of having all of our prosecutors handle these cases to one degree or another," said Ristad, who began his new assignment in June 2011.

Lacking resources for the fight

In 2011, identity fraud rose by 13 percent nationwide with 11.6 million victims, rebounding from a drop in 2010, according to Javelin Strategy and Research, a California consulting firm. Much of the rise was in card account fraud.

There are more categories of fraud, but the numbers don't tell the whole story, Choi said. He believes the crimes are more widespread, but that many businesses have simply resigned themselves to enduring it as a cost of doing business.

Crooks don't stop at borders and boundaries, but strapped police and prosecutors often do. And there aren't enough of them to go around, authorities say.

"We don't have the resources to deal with the volume that we get in the criminal justice system," Choi said. Too many smaller-amount check forgeries and credit-card frauds never get investigated or charged, he said.

Criminals know that and, with little chance of going to prison, see fraud as lucrative, prosecutors say.

"Fraud is becoming more and more attractive to new criminals and criminal gangs, individuals who at one time might have been involved with drugs, armed robbery and burglary," Choi said.

"The criminals are very sophisticated, and they know the threshold [$1,000] between a felony and misdemeanor, and we can see some of that playing out in terms of the crimes that are coming into our office."

Connecting the dots

Lesser cases are handled by city prosecutors, but Choi strives to build felony cases by teaming with other jurisdictions for aggregate prosecutions of mobile crooks.

Police and the private sector together can "connect the dots" that lead to more stringent prosecutions of those who roam the region, committing smaller crimes that add up, he said.

He pointed to a mail-theft ring broken up in Washington, Ramsey and Dakota counties, which recently led to federal convictions against 10 people.

Choi said organized crime in Minnesota is perpetrating medical and insurance fraud, which costs all consumers, in addition to the victims' losses.

Such insurance fraud is costing Minnesota families an average of about $950 a year, said Commerce Commissioner Michael Rothman.

Rothman and Choi are seeking more resources from lawmakers to investigate and prosecute fraud cases, which many times result in court-diversion programs rather than jail time for first-time offenders.

Jerry Thao is just the kind of criminal they want to stop.

He had been sought on a warrant last spring because police caught him a few months earlier with other people's mail and credit cards that had been opened in victims' names. He carried a notebook containing 195 names, listed alphabetically, with Social Security numbers, birth dates, addresses, employee identification numbers and other information.

Last month, Thao was sentenced to nearly five years in prison and ordered to pay $200,000 in restitution.

Joy Powell • 651-925-5038