Smitty: Don't confuse ID theft and identity theft. Like fraud on the internet (think Russia software companies selling bogus software from Russia), the US embassy, State Department and Law Enforcement can't prosecute unless there was a crime committed on American soil. We can file a complaint but there is very little U.S. law enforcement can do except refer it to the local law enforcement agencies of the country involved. In this case, that is China who must be willing to go after and prosecute the individuals involved.

In addition, the theft in question was not a physical passport which is U.S. Government property (and taken very seriously) but was rather just the use of someone's (American, etc.) information/identity to commit a crime in China. No crime was committed in the United States so what can the U.S. prosecute? Very difficult to prosecute, especially if the individual willing handed over their information that was used to commit a crime in China. At most, we are looking at a complaint being filed with the Chinese authorities to investigate and deal with the problem. We see how far that got Google ;-)