This paper presents a dynamic hypothesis explaining the system dynamics underlying the identity theft epidemic. The causal loop structure synthesizes current understanding of the problem and suggests that any strategy to address the identity theft epidemic by primarily focusing on prosecuting thieves without effectively mitigating the underlying forces is doomed to failure. The causal loop diagram elucidates the dominant feedback structure ...a collection of rapid-feedback, self-reinforcing dynamics that generate ample opportunities for would-be thieves.  Preliminary results from the analysis provide a foundation for exploring policy options through a full working model, yet to be developed.