fraud Archives - Schneier on Security

Entries Tagged "fraud"

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Faking Receipts with AI

Over the past few decades, it’s become easier and easier to create fake receipts. Decades ago, it required special paper and printers—I remember a company in the UK advertising its services to people trying to cover up their affairs. Then, receipts became computerized, and faking them required some artistic skills to make the page look realistic.

Now, AI can do it all:

Several receipts shown to the FT by expense management platforms demonstrated the realistic nature of the images, which included wrinkles in paper, detailed itemization that matched real-life menus, and signatures.

[…]

The rise in these more realistic copies has led companies to turn to AI to help detect fake receipts, as most are too convincing to be found by human reviewers.

The software works by scanning receipts to check the metadata of the image to discover whether an AI platform created it. However, this can be easily removed by users taking a photo or a screenshot of the picture.

To combat this, it also considers other contextual information by examining details such as repetition in server names and times and broader information about the employee’s trip.

Yet another AI-powered security arms race.

Posted on November 7, 2025 at 7:01 AM • View Comments

Ghostwriting Scam

The variations seem to be endless. Here’s a fake ghostwriting scam that seems to be making boatloads of money.

This is a big story about scams being run from Texas and Pakistan estimated to run into tens if not hundreds of millions of dollars, viciously defrauding Americans with false hopes of publishing bestseller books (a scam you’d not think many people would fall for but is surprisingly huge). In January, three people were charged with defrauding elderly authors across the United States of almost $44 million by “convincing the victims that publishers and filmmakers wanted to turn their books into blockbusters.”

Posted on June 18, 2025 at 10:37 AM • View Comments

Fake Student Fraud in Community Colleges

Reporting on the rise of fake students enrolling in community college courses:

The bots’ goal is to bilk state and federal financial aid money by enrolling in classes, and remaining enrolled in them, long enough for aid disbursements to go out. They often accomplish this by submitting AI-generated work. And because community colleges accept all applicants, they’ve been almost exclusively impacted by the fraud.

The article talks about the rise of this type of fraud, the difficulty of detecting it, and how it upends quite a bit of the class structure and learning community.

Slashdot thread.

Posted on May 6, 2025 at 7:03 AM • View Comments

Gift Card Fraud

It’s becoming an organized crime tactic:

Card draining is when criminals remove gift cards from a store display, open them in a separate location, and either record the card numbers and PINs or replace them with a new barcode. The crooks then repair the packaging, return to a store and place the cards back on a rack. When a customer unwittingly selects and loads money onto a tampered card, the criminal is able to access the card online and steal the balance.

[…]

In card draining, the runners assist with removing, tampering and restocking of gift cards, according to court documents and investigators.

A single runner driving from store to store can swipe or return thousands of tampered cards to racks in a short time. “What they do is they just fly into the city and they get a rental car and they just hit every big-box location that they can find along a corridor off an interstate,” said Parks.

Posted on December 31, 2024 at 7:02 AM • View Comments

Justice Department Indicts Tech CEO for Falsifying Security Certifications

The Wall Street Journal is reporting that the CEO of a still unnamed company has been indicted for creating a fake auditing company to falsify security certifications in order to win government business.

EDITED TO ADD (11/14): More info.

Posted on October 18, 2024 at 9:58 AM • View Comments

IronNet Has Shut Down

After retiring in 2014 from an uncharacteristically long tenure running the NSA (and US CyberCommand), Keith Alexander founded a cybersecurity company called IronNet. At the time, he claimed that it was based on IP he developed on his own time while still in the military. That always troubled me. Whatever ideas he had, they were developed on public time using public resources: he shouldn’t have been able to leave military service with them in his back pocket.

In any case, it was never clear what those ideas were. IronNet never seemed to have any special technology going for it. Near as I could tell, its success was entirely based on Alexander’s name.

Turns out there was nothing there. After some crazy VC investments and an IPO with a $3 billion “unicorn” valuation, the company has shut its doors. It went bankrupt a year ago—ceasing operations and firing everybody—and reemerged as a private company. It now seems to be gone for good, not having found anyone willing to buy it.

And—wow—the recriminations are just starting.

Last September the never-profitable company announced it was shutting down and firing its employees after running out of money, providing yet another example of a tech firm that faltered after failing to deliver on overhyped promises.

The firm’s crash has left behind a trail of bitter investors and former employees who remain angry at the company and believe it misled them about its financial health.

IronNet’s rise and fall also raises questions about the judgment of its well-credentialed leaders, a who’s who of the national security establishment. National security experts, former employees and analysts told The Associated Press that the firm collapsed, in part, because it engaged in questionable business practices, produced subpar products and services, and entered into associations that could have left the firm vulnerable to meddling by the Kremlin.

“I’m honestly ashamed that I was ever an executive at that company,” said Mark Berly, a former IronNet vice president. He said the company’s top leaders cultivated a culture of deceit “just like Theranos,” the once highly touted blood-testing firm that became a symbol of corporate fraud.

There has been one lawsuit. Presumably there will be more. I’m sure Alexander got plenty rich off his NSA career.

Posted on October 11, 2024 at 7:08 AM • View Comments

Problems with Georgia’s Voter Registration Portal

It’s possible to cancel other people’s voter registrations:

On Friday, four days after Georgia Democrats began warning that bad actors could abuse the state’s new online portal for canceling voter registrations, the Secretary of State’s Office acknowledged to ProPublica that it had identified multiple such attempts…

…the portal suffered at least two security glitches that briefly exposed voters’ dates of birth, the last four digits of their Social Security numbers and their full driver’s license numbers—the exact information needed to cancel others’ voter registrations.

I get that this is a hard problem to solve. We want the portal to be easy for people to use—even non-tech-savvy people—and hard for fraudsters to abuse, and it turns out to be impossible to do both without an overarching digital identity infrastructure. But Georgia is making it easy to abuse.

EDITED TO ADD (8/14): There was another issue with the portal, making it easy to request cancellation of any Georgian’s registration. The elections director said that cancellations submitted this way wouldn’t have been processed because they didn’t have all the necessary information, which I guess is probably true, but it shows just how sloppy the coding is.

Posted on August 7, 2024 at 7:10 AM • View Comments

Hacking Scientific Citations

Some scholars are inflating their reference counts by sneaking them into metadata:

Citations of scientific work abide by a standardized referencing system: Each reference explicitly mentions at least the title, authors’ names, publication year, journal or conference name, and page numbers of the cited publication. These details are stored as metadata, not visible in the article’s text directly, but assigned to a digital object identifier, or DOI—a unique identifier for each scientific publication.

References in a scientific publication allow authors to justify methodological choices or present the results of past studies, highlighting the iterative and collaborative nature of science.

However, we found through a chance encounter that some unscrupulous actors have added extra references, invisible in the text but present in the articles’ metadata, when they submitted the articles to scientific databases. The result? Citation counts for certain researchers or journals have skyrocketed, even though these references were not cited by the authors in their articles.

[…]

In the journals published by Technoscience Academy, at least 9% of recorded references were “sneaked references.” These additional references were only in the metadata, distorting citation counts and giving certain authors an unfair advantage. Some legitimate references were also lost, meaning they were not present in the metadata.

In addition, when analyzing the sneaked references, we found that they highly benefited some researchers. For example, a single researcher who was associated with Technoscience Academy benefited from more than 3,000 additional illegitimate citations. Some journals from the same publisher benefited from a couple hundred additional sneaked citations.

Be careful what you’re measuring, because that’s what you’ll get. Make sure it’s what you actually want.

Posted on July 15, 2024 at 1:13 PM • View Comments

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