Entries Tagged "fraud"

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Wire Fraud Scam Upgraded with Bitcoin

The FBI has issued a bulletin describing a bitcoin variant of a wire fraud scam:

As the agency describes it, the scammer will contact their victim and somehow convince them that they need to send money, either with promises of love, further riches, or by impersonating an actual institution like a bank or utility company. After the mark is convinced, the scammer will have them get cash (sometimes out of investment or retirement accounts), and head to an ATM that sells cryptocurrencies and supports reading QR codes. Once the victim’s there, they’ll scan a QR code that the scammer sent them, which will tell the machine to send any crypto purchased to the scammer’s address. Just like that, the victim loses their money, and the scammer has successfully exploited them.

[…]

The “upgrade” (as it were) for scammers with the crypto ATM method is two-fold: it can be less friction than sending a wire transfer, and at the end the scammer has cryptocurrency instead of fiat. With wire transfers, you have to fill out a form, and you may give that form to an actual person (who could potentially vibe check you). Using the ATM method, there’s less time to reflect on the fact that you’re about to send money to a stranger. And, if you’re a criminal trying to get your hands on Bitcoin, you won’t have to teach your targets how to buy coins on the internet and transfer them to another wallet — they probably already know how to use an ATM and scan a QR code.

Posted on November 16, 2021 at 6:18 AMView Comments

Friday Squid Blogging: Squid Game Cryptocurrency Was a Scam

The Squid Game cryptocurrency was a complete scam:

The SQUID cryptocurrency peaked at a price of $2,861 before plummeting to $0 around 5:40 a.m. ET., according to the website CoinMarketCap. This kind of theft, commonly called a “rug pull” by crypto investors, happens when the creators of the crypto quickly cash out their coins for real money, draining the liquidity pool from the exchange.

I don’t know why anyone would trust an investment — any investment — that you could buy but not sell.

Wired story.

As usual, you can also use this squid post to talk about the security stories in the news that I haven’t covered.

Read my blog posting guidelines here.

Posted on November 5, 2021 at 4:11 PMView Comments

Using Fake Student Accounts to Shill Brands

It turns out that it’s surprisingly easy to create a fake Harvard student and get a harvard.edu email account. Scammers are using that prestigious domain name to shill brands:

Basically, it appears that anyone with $300 to spare can ­– or could, depending on whether Harvard successfully shuts down the practice — advertise nearly anything they wanted on Harvard.edu, in posts that borrow the university’s domain and prestige while making no mention of the fact that it in reality they constitute paid advertising….

A Harvard spokesperson said that the university is working to crack down on the fake students and other scammers that have gained access to its site. They also said that the scammers were creating the fake accounts by signing up for online classes and then using the email address that process provided to infiltrate the university’s various blogging platforms.

Posted on November 3, 2021 at 6:10 AMView Comments

Textbook Rental Scam

Here’s a story of someone who, with three compatriots, rented textbooks from Amazon and then sold them instead of returning them. They used gift cards and prepaid credit cards to buy the books, so there was no available balance when Amazon tried to charge them the buyout price for non-returned books. They also used various aliases and other tricks to bypass Amazon’s fifteen-book limit. In all, they stole 14,000 textbooks worth over $1.5 million.

The article doesn’t link to the indictment, so I don’t know how they were discovered.

EDITED TO ADD (11/12): Press release.

Posted on October 20, 2021 at 6:16 AMView Comments

The Supreme Court Narrowed the CFAA

In a 6-3 ruling, the Supreme Court just narrowed the scope of the Computer Fraud and Abuse Act:

In a ruling delivered today, the court sided with Van Buren and overturned his 18-month conviction.

In a 37-page opinion written and delivered by Justice Amy Coney Barrett, the court explained that the “exceeds authorized access” language was, indeed, too broad.

Justice Barrett said the clause was effectively making criminals of most US citizens who ever used a work resource to perform unauthorized actions, such as updating a dating profile, checking sports scores, or paying bills at work.

What today’s ruling means is that the CFAA cannot be used to prosecute rogue employees who have legitimate access to work-related resources, which will need to be prosecuted under different charges.

The ruling does not apply to former employees accessing their old work systems because their access has been revoked and they’re not “authorized” to access those systems anymore.

More.

It’s a good ruling, and one that will benefit security researchers. But the confusing part is footnote 8:

For present purposes, we need not address whether this inquiry turns only on technological (or “code-based”) limitations on access, or instead also looks to limits contained in contracts or policies.

It seems to me that this is exactly what the ruling does address. The court overturned the conviction because the defendant was not limited by technology, but only by policies. So that footnote doesn’t make any sense.

I have written about this general issue before, in the context of adversarial machine learning research.

Posted on June 7, 2021 at 6:09 AMView Comments

Check Washing

I can’t believe that check washing is still a thing:

“Check washing” is a practice where thieves break into mailboxes (or otherwise steal mail), find envelopes with checks, then use special solvents to remove the information on that check (except for the signature) and then change the payee and the amount to a bank account under their control so that it could be deposited at out-state-banks and oftentimes by a mobile phone.

The article suggests a solution: stop using paper checks.

Posted on November 30, 2020 at 9:22 AMView Comments

Interesting Attack on the EMV Smartcard Payment Standard

It’s complicated, but it’s basically a man-in-the-middle attack that involves two smartphones. The first phone reads the actual smartcard, and then forwards the required information to a second phone. That second phone actually conducts the transaction on the POS terminal. That second phone is able to convince the POS terminal to conduct the transaction without requiring the normally required PIN.

From a news article:

The researchers were able to demonstrate that it is possible to exploit the vulnerability in practice, although it is a fairly complex process. They first developed an Android app and installed it on two NFC-enabled mobile phones. This allowed the two devices to read data from the credit card chip and exchange information with payment terminals. Incidentally, the researchers did not have to bypass any special security features in the Android operating system to install the app.

To obtain unauthorized funds from a third-party credit card, the first mobile phone is used to scan the necessary data from the credit card and transfer it to the second phone. The second phone is then used to simultaneously debit the amount at the checkout, as many cardholders do nowadays. As the app declares that the customer is the authorized user of the credit card, the vendor does not realize that the transaction is fraudulent. The crucial factor is that the app outsmarts the card’s security system. Although the amount is over the limit and requires PIN verification, no code is requested.

The paper: “The EMV Standard: Break, Fix, Verify.”

Abstract: EMV is the international protocol standard for smartcard payment and is used in over 9 billion cards worldwide. Despite the standard’s advertised security, various issues have been previously uncovered, deriving from logical flaws that are hard to spot in EMV’s lengthy and complex specification, running over 2,000 pages.

We formalize a comprehensive symbolic model of EMV in Tamarin, a state-of-the-art protocol verifier. Our model is the first that supports a fine-grained analysis of all relevant security guarantees that EMV is intended to offer. We use our model to automatically identify flaws that lead to two critical attacks: one that defrauds the cardholder and another that defrauds the merchant. First, criminals can use a victim’s Visa contact-less card for high-value purchases, without knowledge of the card’s PIN. We built a proof-of-concept Android application and successfully demonstrated this attack on real-world payment terminals. Second, criminals can trick the terminal into accepting an unauthentic offline transaction, which the issuing bank should later decline, after the criminal has walked away with the goods. This attack is possible for implementations following the standard, although we did not test it on actual terminals for ethical reasons. Finally, we propose and verify improvements to the standard that prevent these attacks, as well as any other attacks that violate the considered security properties.The proposed improvements can be easily implemented in the terminals and do not affect the cards in circulation.

Posted on September 14, 2020 at 6:21 AMView Comments

Amazon Supplier Fraud

Interesting story of an Amazon supplier fraud:

According to the indictment, the brothers swapped ASINs for items Amazon ordered to send large quantities of different goods instead. In one instance, Amazon ordered 12 canisters of disinfectant spray costing $94.03. The defendants allegedly shipped 7,000 toothbrushes costing $94.03 each, using the code for the disinfectant spray, and later billed Amazon for over $650,000.

In another instance, Amazon ordered a single bottle of designer perfume for $289.78. In response, according to the indictment, the defendants sent 927 plastic beard trimmers costing $289.79 each, using the ASIN for the perfume. Prosecutors say the brothers frequently shipped and charged Amazon for more than 10,000 units of an item when it had requested fewer than 100. Once Amazon detected the fraud and shut down their accounts, the brothers allegedly tried to open new ones using fake names, different email addresses, and VPNs to obscure their identity.

It all worked because Amazon is so huge that everything is automated.

Posted on August 26, 2020 at 6:31 AMView Comments

Adversarial Machine Learning and the CFAA

I just co-authored a paper on the legal risks of doing machine learning research, given the current state of the Computer Fraud and Abuse Act:

Abstract: Adversarial Machine Learning is booming with ML researchers increasingly targeting commercial ML systems such as those used in Facebook, Tesla, Microsoft, IBM, Google to demonstrate vulnerabilities. In this paper, we ask, “What are the potential legal risks to adversarial ML researchers when they attack ML systems?” Studying or testing the security of any operational system potentially runs afoul the Computer Fraud and Abuse Act (CFAA), the primary United States federal statute that creates liability for hacking. We claim that Adversarial ML research is likely no different. Our analysis show that because there is a split in how CFAA is interpreted, aspects of adversarial ML attacks, such as model inversion, membership inference, model stealing, reprogramming the ML system and poisoning attacks, may be sanctioned in some jurisdictions and not penalized in others. We conclude with an analysis predicting how the US Supreme Court may resolve some present inconsistencies in the CFAA’s application in Van Buren v. United States, an appeal expected to be decided in 2021. We argue that the court is likely to adopt a narrow construction of the CFAA, and that this will actually lead to better adversarial ML security outcomes in the long term.

Medium post on the paper. News article, which uses our graphic without attribution.

Posted on July 23, 2020 at 6:03 AMView Comments

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Sidebar photo of Bruce Schneier by Joe MacInnis.