The Department of Justice said the scam caused "widespread" losses among banks, retailers and ordinary consumers - although it did not put a precise figure on the financial damage.
Retailers targeted included fashion store TJ Maxx and Barnes & Noble.
The justice department urged people worried about the safety of their personal information to contact their banks.
It said this was "the single largest and most complex identity theft case" ever to result in charges being brought.
"This case highlights our increasing vulnerability to the theft of personal information," said US Attorney General Michael Mukasey.
"Cases like these send a clear message to those who might be tempted to abuse our computer networks to steal information and harm law-abiding people and businesses.
"If you do, we will track you down wherever you are in the world, we will arrest you and we will send you to jail."
The accused targeted at least nine retail chains, prosecutors allege.
Those affected were TJX Corporation - which operates the TJ Maxx chain of shops - BJ's Wholesale Club, Barnes and Noble, Sports Authority, Boston Market, Office Max, Dave and Busters, DSW shoe stores and Forever 21.
TJX Corporation, which has shops around the world, revealed that it had been the victim of a massive identity fraud last year.
US Attorney General Michael B Mukasey described the scale of the fraud
More than 45 million credit cards were at risk of being compromised as a result of a breach of its computer systems which began in 2005.
The firm has since reached an agreement to compensate banks which are part of the Visa and Mastercard networks for the cost incurred in replacing cards and dealing with fraud inquiries.
Law enforcement agencies around the world, including in Turkey and Germany, co-operated with the investigation.
There are concerns that identity theft is costing the US billions every year.
In 2006, the Bush administration set up an identity theft task force comprising 17 federal departments and agencies.
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