With Internet Crime on the Rise, Businesses Must Remain Vigilant

NEWS ANALYSIS: The head of the FBI’s white-collar crime division tells eWEEK that there’s a lot businesses can do to insulate themselves from cyber-criminals.


Over the past four years, the cost of internet crime has topped $7 billion, according to the FBI’s latest Internet Crime Report. And that’s just the crimes that have been reported to the FBI. Steven D’Antuono, the FBI’s Financial Crimes Section chief, says there are a lot more that go unreported and that’s a problem.

What D’Antuono does know is that the number and amount of internet crimes keep climbing. “I can’t tell you if the crime problem is growing or if all the work with outreach has increased the reporting of the crime to IC3,” he told eWEEK.

The Internet Crime Complaint Center (IC3) is the FBI’s central collection point for reporting internet crimes. This is the spot where companies, or anyone else, can report anything from Business Email Compromise (BEC) to extortion attempts. It’s also the place where businesses needing the assistance of the Recovery Asset Team can go for help getting their money back if they’ve fallen victim to an internet crime.

While BEC is the largest of the internet crimes affecting business, if only because the amounts stolen are frequently very large, it’s by no means the only method criminals use to steal money from businesses. D’Antuono said that crime is increasing in a variety of different sectors. He lists real estate crime and payroll processing crime as two areas that are widely used.

Popular Scams

Payroll processing scams are growing across a number of companies, D’Antuono said. “There’ll be an email sent from an employee to accounting saying they need to change routing number and payment information on payroll.” He said that a payroll clerk will frequently make the change, and the victim will never realize that the money has been stolen until paychecks fail to be deposited.

Real estate scams usually involve a spoofed email from a real estate agent involved in the transfer of real estate. The spoofed email will go to the buyer, and asks that the down payment be wired to the agent. The email will also include a bank routing number and an account number that’s actually controlled by the criminal.

Other scams include varieties of extortion. One popular version arrives in the form of an email that claims to be from a hacker who has taken over the victim’s webcam, and who has recorded compromising videos, which will be deleted upon payment of a ransom. Other schemes include threating a denial of service attack that won’t happen if a ransom is paid.

And of course, there’s always the “hit man” scam, in which the email is ostensibly from a person who threatens to kill you or a loved one, but who will take money instead.

Threatening emails, including the hit man scam, need to be reported to the FBI on the IC3 form right away. While it’s not clear that these criminals have actually followed through on their threats, reporting them will get them out of circulation.

One of Your Best Defenses Is Personal Contact

But for some of the other scams, such as the payroll, real estate and BEC scams, D’Antuono says that personal contact is one of your best defenses. This includes actually talking to the CEO (or whoever is requesting money in a BEC scam) on a phone number you already have to confirm. The same is true with the payroll scam and the real estate scam.

“I’m a believer in the old ways of doing things, such as human contact,” D’Antuono says. “We’ve become a society where we text and email, and we don’t call people on the phone. If you get that email from Joe, and he wants to change his routing information, maybe you have a policy in which the payroll specialist contacts the person with the information you already have.”

Note the emphasis on using the information you already have, not the information that’s contained in the email requesting the change. This means looking up the contact information in the personnel file and contacting the employee that way. The scammer will certainly include a bogus phone number in the email.

D’Antuono said that you need to train your employees to be skeptical, especially about email. “Everyone thinks what comes over email is true,” he said. “Verify where the payment is going.”

Teaching people to spot the little inconsistencies in a bogus email is important. On April 24, a Passaic County, N.J., man, Lawrence Espaillat, admitted to a series of schemes that involved defrauding businesses. Those schemes used email accounts created by Espaillat that differed from legitimate email addresses by only a letter or two.

He used those emails to send what appeared to be legitimate invoices requesting payment for goods or services. The payments went into bogus bank accounts. One corporate victim in Texas deposited $3.8 million into one of those bogus accounts.

While there are any number of actions you and your employees can take to reduce the chances of being hit by internet scams, D’Antuono offers some particularly important ones:

  • Be skeptical. Just because it looks good in an email doesn’t mean it is, and just because it looks like it came from the CEO or other senior executive doesn’t mean it did. Insist on some sort of confirmation that does NOT involve using email.
  • Insist on personal contact. When you get a request to change payroll deposits, or a vendor changes payment information, or when something else involving finances changes, require confirmation using contact information you already have, not what came in the email.
  • Be aware of what your employees are saying about their jobs in social media. This is where scammers get much of the information they need to social engineer an attack against your business. That means making sure what employees are saying about their jobs and their work doesn’t provide needed information.
  • Look at your company website and remove any contact information for your employees. Publicly available email addresses give scammers a pathway into your business, as do publicly available direct phone numbers. If you must have a public email, then have a separate inbound email address that’s not the same as the one you use internally.
  • Teach your employees how to tell if an email has been spoofed by looking at actual addresses and by checking headers. Your IT department or your security officer can assist in this.
  • One other action that’s recommended by the FBI is to register all forms of your company name as internet addresses, including common misspellings. That makes it harder for scammers to set up bogus websites pretending to be your company.
  • And if you have reason to question whether that payment is going to a legitimate bank, you can check the routing number to see where the money is going. US Bank runs such a service at http://www.routingnumber.com/. But remember, the scammers could have their accounts in a real bank.

“The criminals are very good,” D’Antuono said, “and they will find a way to get to us. There has to be vigilance to keep them from getting through the gate.”

Wayne Rash

Wayne Rash

Wayne Rash is a freelance writer and editor with a 35 year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He covers Washington and...