financial crimes & fraud schemes affecting financial

Financial Crimes &

Fraud Schemes

Affecting Financial

Institutions

Detective Mark D. Solomon

Greenwich Police Department

CT Financial Crimes Task Force

IAFCI CT Chapter President

America Under Attack

Network Intrusions

POS Compromises

Skimming

Phishing/Vishing/Smishing

Account / Email Takeovers

False Applications/Openings

Card Crackin’ / Crackin’ Cards

Kiting

Understanding the Problem Identity Theft Statistics

• 16.6 Million people experienced ID Theft in 2012

• $24.7 Billion in losses from Identity Theft in 2012

• 85% of ID Theft cases involved the fraudulent use of existing account information, such as credit card or bank account information.

• 45% of the victims were notified of the incident by their Financial Institution

ID Theft Statistics & Law Enforcement

• Fewer than 1 in 10 victims reported identity theft to a law enforcement agency

• Only 5% of ID Theft cases reported to law enforcement end in the arrest of the suspect

• Once every three seconds—how often an identity is stolen

Network Intrusions 2014 Trustwave Global Security Report

71% of intrusions were not detected by the victim.

On average, it took 87 days for an intrusion to be detected.

Self Detection can shorten timeline from detection to containment from 14 to 1 days.

CONNECTICUT FINANCIAL CRIMES TASK

FORCE

(203) 782-7333

U.S. Secret Service (24 Hrs.)

(203) 865-2449

Where is the Data Going? The “Underground” of the Internet

The Criminal’s Version of E-bay

www. carder.su. “The E-bay of ID Theft and financial fraud”

Common Characteristics ATM Skimming Operations

Mostly Eastern European groups.

Normally will work in groups (2-3). Counter-surveillance and lookouts

Inspectors

Traditional Devices are being removed between 1-24 hours. recording storage space limitations (PIN Capturing Device)

Suspects may target the same ATM machine on multiple days.

Suspects prefer targeting ATMs after banking hours but at high traffic times (5-10pm Weekdays, After 1pm on Weekends)

Common Characteristics ATM Skimming Operations

Suspects prefer weekends (especially holiday weekends).

Suspects may remain in proximity to the ATM throughout skimming incident.

May use counter surveillance tactics to identify law enforcement.

Groups are Transnational (U.S. was probably not their first stop)

ATM SKIMMING HARDWARE The Evolution of Hardware

Traditionally (2) pieces of hardware are required to commit ATM Skimming:

ATM Skimming Device (AKA Skimmer)

Pin Capturing Device

Modern Day ATM Skimming

Operations

Sample ATM Skimmers

Key Identifier of Skimming Device

Micro Video Recorders: Concealed within object that appears to be part of

the ATM machine and/or its surroundings

Pin-Hole Micro Video Recorders

- Powered by batteries (cell phones)

- Limited video recording space

(1-6 hrs) (8-24 hrs)

Traditional PIN Capturing Devices: “The Micro Video Recorder”

Pinhole for camera

Receipt PIN Capturing Device and Skimmer

Components of Norwalk, CT Device

Nokia Cell Phone Battery

Camera devices

Alternate Location of Skimming Devices: ATM Lobby Door Skimmers

September 2009 – Connecticut

Instead of placing the Skimming Device directly on the ATM machine, skimmers can be placed at the ATM Lobby Door Access Device.

(A PIN Capturing Device is still required to be placed on or in close proximity to the ATM machine’s PIN Pad)

Increase in door skimming is a direct result of Anti-skimming measures being in-acted by ATM manufacturers.

Lobby Door Skimming ATM Lobby

Door Skimmer location

All-In-One Skimming Devices

Chip Reader Pin-hole camera

- An All-In-One Skimming Device contains both the skimmer

and PIN Capturing Device within a single unit.

- The key identifiers of the device is the Pin Hole Camera

located somewhere on the frame and the exposed card

reader chip at the mouth of the device.

2014 Trends Devices Designed to defeat ATM Skim technology

Ultra Thin Skimmers

Skimming of softer targets

US Post Office Automated Vending Machines (AVMs)

Automated Ticket Vending Machines

Privately Operated ATM locations

Hotel lobby/Supermarkets/Highway Rest Stop ATMs

Point of Sale Terminal (POS) skimming at merchant locations

Ultra-Thin Insert Skimmers

Photos provided by NCR

Ultra-Thin Insert Skimmers

Photos provided by NCR

Softer Target Deployment

Internal / External Gas Pump Skimming

Prevention & Detection Multiple Inspections (Log Sheet)

First arrive

Middle of Day

Last Person to Leave

Report All Active Devices to Local LE Without bringing attention (Counter-surveillance)

Safely monitor location until police surveillance is initiated

Immediately contact person controlling video surveillance and attempt to identify installation suspects.

Card Crackin’ / Crackin’ Cards Got it’s name from Chicago area.

Ringleader recruits multiple subjects to open new accounts or turn over existing debit card and PIN number to organization.

Other individuals deposit counterfeit checks into the account.

Suspects withdraw funds from the account using the forfeited Debit Card and PIN number before the FI is aware the check is counterfeit.

Accountholder reports debit card and PIN stolen after the fraud.

Accountholder receives portion of the stolen proceeds.

Combating Cyber Criminal Activity & Fraud “EPIC”

Education

Prevention, & Security

Intelligence Sharing

Capture and Prosecution

Education The Banking Industry

Education of the frontline employee: Understanding The various threats our financial

institutions may face. ATM Skimming

Cracking Cards

Check Fraud/Counterfeit Checks/Kiting

Understanding the various threats our customers may

fall victim to (“Having a Conversation with you

customer”): Foreign Lottery

Work From Home

Date. CON

Family Member in Distress

Prevention & Security

Identify your weakness and vulnerabilities at your financial institutions and make improvements.

Physical Security (ATMS/POS/Door

Readers/Cameras) Vulnerabilities to:

Network Intrusions Ransom-ware Phishing Attacks

Global Communication

To Combat

Global Organizations

The Value of Intelligence Sharing

Intelligence Sharing is the most critical tool in combating fraud & cyber criminal activity.

Law Enforcement Financial Institutions

Timely notification of fraud & the filing of SARS

Timely notification of a POC

Law Enforcement

Other FI’s

Visa/MasterCard

Resources to Bring LE & FI’s Together

CFT Training

IAFCI (www.iafci.org) International Association of Financial Crimes Investigators

CRIMEDEX (www.crimedex.com)

ATM Skimming Intelligence Network (mark.solomon@greenwichct.org)

External Fraud Meetings

Get to Know Your local LE Investigators!

Knowledge Is Key….Ask Questions