Millions of people filing for unemployment, a fast-moving economic stimulus, requests for accelerated payments, and obligations and contract awards—all of these factors create the perfect storm for fraudsters.
The $2 trillion Coronavirus Aid, Relief, and Economic Security Act will provide economic relief to millions of businesses and taxpayers during the coronavirus pandemic. This stimulus bill may recall the last time government injected a huge sum of money into the U.S. economy— via the 2009 American Recovery and Reinvestment Act, following the 2008 mortgage crisis. But this time, the fraud risks are far more extensive due to the emergence of cyber crime.
The cyber fraud landscape has evolved significantly since 2009. Today there is a booming dark web underground market online, where criminals buy and sell identities, handbooks for how to commit fraud, forged documents and more. New, highly sophisticated cyber fraud schemes use techniques like phishing, deepfake voice spoofing, and notoriously effective malware that can “brute force” into vulnerable IT systems.
These techniques make it far easier to achieve synthetic identity theft and more. Further, the underground cyber market has developed tools to enable unsophisticated actors to carry out attacks. Therefore, as federal agencies prepare to disburse over $2 trillion in aid, they must be ready to go to battle with the cyber fraudster in ways they have not had to before.
Millions of people filing for unemployment, a fast-moving economic stimulus, requests for accelerated payments, and obligations and contract awards—all of these factors create the perfect storm for fraudsters. The number of data breaches in the last five years means that synthetic and stolen-identity use will be rampant, making it vitally important for government agencies to be cautious and perform the necessary due diligence to identify impersonations of legitimate beneficiaries or the creation of shell companies applying for benefits.
Phishing Attacks Impersonating Government Agencies
Among the most insidious fraud schemes, scammers use phishing to con innocent victims into providing confidential information, including bank account numbers, or installing malware on their computer to steal information. Paranoia around coronavirus is fueling and aiding cyber criminals in their effort to dupe individuals, businesses and government agencies.
Today, we are seeing a huge rise in malware that is being introduced into private organizations and public-sector institutions disguised as agency-distributed guidelines or recent headliners surrounding the coronavirus. Purporting to be from governing bodies, such as the Centers for Disease Control and Prevention, the World Health Organization and others, these emails can look and feel very real, making them more successful. Just last recently, the FBI’s Internet Crime Complaint Center reported a sharp increase in cyber fraud schemes related to the pandemic.
Easily Accessible Dark Web Markets and Recent Data Breaches Make Cyber Crime Common
The reality of today’s sophisticated and nefarious underground marketplace increases the need for government agencies to be hyper-vigilant about who they are interacting with. These marketplaces are already becoming a lucrative forum for fraudsters to buy and sell access to consumer, business and government information that can be used to fraudulently apply for CARES Act benefits. Fraudsters are selling “how-to guides” focused on fraudulent methods to obtain stimulus funds, including small business loans.
While once perceived to be an inaccessible, mysterious place, the dark web of today is easily accessible to anyone that wishes to reach it. As more and more people become desperate due to lost income, these marketplaces will become attractive to those who otherwise wouldn’t engage in fraudulent behavior.
Know Your Enemy
Criminals prey on fear. In the current environment, ripe with fear and filled with people experiencing desperate hardships, federal agencies need to be prepared for widespread fraud by opportunistic cyber criminals. Understanding the digital risk and exposure of an organization is a fundamental part of an effective anti-fraud program.
For example, does your government agency use two-factor authentication to protect against stolen credential use? How updated are your firewalls? Have your IT system administrators stayed current with installing patches and other upgrades? Do your staff and external stakeholders understand the nature of phishing schemes? Are you monitoring the deep and dark web to understand the changing dynamics of fraud being perpetrated against your agency?
The good news is that in the past few years, cyber threat intelligence has evolved with the tools to watch cyber criminals and take action before they can do real damage. Today, most large private-sector businesses have widely adopted cyber intelligence and digital risk protection programs to inform themselves of how bad actors are targeting them.
Many government agencies are also beginning to use these tools, but they are still in the very early stages of adopting them. Cyber threat intelligence to monitor the deep and dark web forums is a vital tool that agencies must employ in the fight against cyber crime, especially as the government prepares to dole out trillions of dollars in aid.
Linda Miller is a principal at Grant Thornton, where she leads the Fraud Risk and Financial Crimes practice. Ms. Miller is a former official at the Government Accountability Office, where she led the development of GAO’s Framework for managing Fraud Risks in Federal Programs.
Kurtis Minder is founder and chief executive officer of GroupSense.
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