Criminal Intent

7 ways criminals are making money from cyber crime

• By Andrew Deen
• Nov 01, 2017

As more of our lives move online, crime has unfortunately migrated to the internet at matching pace taking form in what’s now considered cybercrime. Cybercrime can take a vast number of forms, ranging from the illegal sale of goods and services to masquerading as another person to steal money from financial institutions.

Data breach. One of the most common online threats is a data breach. Data breaches can take many forms, but at its core, a data breach occurs when a criminal illegally accesses important— and often confidential—information from a company’s database. These attacks are distressingly common as in 2014 there were 783 data breaches in the United States alone. Some data breaches involve the collection of customer’s credit card data, while others involve proprietary information specific to the company itself. Often these attacks lead to the criminals threatening to release the affected companies’ data unless they are paid off.

Selling illegal goods. Beyond the threat of data breaches, cybercriminals also participate in the thriving online ecosystem of buying and selling a products and services, most of which have been deemed illegal in countries around the world. One of the most well-known hubs of this form of cyber activity was Silk Road whose users purchased more than 213 million dollars in goods before the site was shut down by the police. The vast majority of the site’s offerings were illegal drugs and at the time the website was shut down, there were more than 10,000 items listed, around 7,000 of which were illegal drugs like cannabis, MDMA and heroin.

Bitcoin and the dark Web. Silk Road operated primarily by use of an online currency called Bitcoin, which allows both the purchaser and the seller to remain completely anonymous. Through Bitcoin, the users of Silk Road were able to carry on their business over the course of several years. Eventually, however, federal agents were able to track down the founder of Silk Road, who has since been sentenced to life in prison without parole for his role in operating the website. While Silk Road itself has been shut down, a variety of sites have developed to take its place.

The lengths to which these agents had to go were compounded by one key element in the cybercrime economy: the dark web. Criminals rarely list their ill-gotten goods and services where they will be easy for the police to find. Rather, they hide them away in unlisted websites infamously called the dark web. Sites located on the dark web are protected by superlative degrees of encryption, as well as various browsing technologies that we will not dwell on here. The crucial element is that if one does not know what to look for and how to look for it, these websites are a totally hidden part of the Internet.

Tax fraud. Taxes are a pain for everyone, but cybercriminals have found a way to make profit from them. Using stolen social security numbers, cybercriminals file fraudulent tax returns in order to claim refunds in the names of their victims. The harm in this is not limited to the criminals’ fraudulent gains, as money can spill over to the victim whose identity they used. Through some websites, criminals may be able to purchase social security numbers and other personal information for as little as $250.

Commonly, the first indication a victim whose tax returns have been filed by a cybercriminal will come when the IRS rejects their initial tax return. Unfortunately, this may only be the beginning of the victim’s trouble, as once an individual’s identity has been stolen, that information will frequently be sold and traded around the internet as widely as the cybercriminal can.

Identity theft. Due to wide variety of cybercrimes associated with personal information, identity theft is a particularly common element of cybercrime. In 2015, 13.1 million Americans were victims of identity theft, ranging from illegitimate transactions made under the victims’ name to criminals opening new credit cards using their victim’s information to even combining personal information from several victims to create a new identity. Many attacks happen as a result of the victim not properly securing their personal data, particularly their passwords. This common error in security can lead to criminal activity that avoids any need to steal another person’s identity.

Instead, a criminal will acquire their victim’s login information to one service, such as a streaming service like Netflix. Once this information is acquired, it is a simple matter of selling it in the dark web, often for less than $10. The criminal will then see what other services they can access with that information, selling the data as a collection. Password re-use makes this much easier for criminals to gain access to a variety of services, all of which can be sold to the prospective buyer in a bundle. For example, if a victim used the same password for their email address and their login to a streaming service, it would be possible for a criminal to gain access to the email account tied to the account.

Counterfeit. Counterfeit money is another rising problem online, with counterfeiters taking advantage of the anonymity of the internet to distribute their forged currency. Recent reports show that this problem is particularly prevalent in Germany and other European Union countries, with fake bills, particularly fifty-euro bills making up roughly half of the counterfeited bills recovered by authorities. Criminals are not limiting their sales to the finished product; however, materials for new counterfeiters to produce their own fake bills and coins are also rapidly becoming widely available.

There were 86,500 cases involving counterfeit money were reported in 2015, more than double the frequency in 2011. Counterfeit bills are so common and profitable for criminals that for 600 dollars, a criminal can acquire $2,500 in U.S. dollars that are guaranteed to pass common pen and ultraviolet light tests. As counterfeiters continue to push the limits of their printing technology, the deep web will surely advance in step, and the market will only grow.

Medical information. Cyber criminals are not limiting their fraud to counterfeiting; doctor’s offices, pharmacies and the entire medical system are at risk for cybercrime. For example, in June, a hacker was attempting to sell more than 600,000 patient healthcare records harvested from three healthcare providers around the United States. These records present a wide sweep of dangers to the victims and to society at large.

Not only would the purchaser of these records be able to use this information for any number of fraudulent purposes, but there is a real possibility of using the information in these records to purchase prescription drugs. Beyond trafficking illegally acquired drugs, criminals would be able to submit false claims to Medicare, placing an additional burden on a system designed to help people when they need it most. Health care companies are fighting these threats as best as they are able, but the one constant in cyber-crime is a constantly changing variety of threats.

These varieties of crime are by no means the total extent of criminal activity online. Rather, they offer an introduction to understanding some of the ways that a criminal can take advantage of our online economy. Unfortunately, there is no way to protect oneself entirely from these threats, but a careful use of the internet will go a long way to keeping you safe from the threat of cybercrime.

This article originally appeared in the November 2017 issue of Security Today.