Stolen Identity Credit Problem in Michigan

Someone living in Detroit used my wife's name and SS number to establish an account with a computer company in a western state, then had a computer system worth $1650 delivered to an address in Detroit in October of 2000. Since the bank that holds the account could not contact anyone (I presume) then tracked down my wife to the address that we really live at. Now we are getting the bill in February, for a computer we didn't order in Octoober, didn't apply credit for and don't want. The bank has been very rude, and reluctant to help us with information, however, I did manage to get an address where the phone ordered computer was delivered. They even had my wife's name wrong by the first letter. What do I do now? The bank wants me to fill out a police report and some sort of fraud report, but how do I get rid of the bill and the bad credit report? Should I have to do all their legwork? Thanks, Craig