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Financial Crimes Increasingly Become Cybercrimes

March 4, 2013

More financial crimes are turning into cybercrimes, according to a panel of experts who spoke last week at Pace University, requiring stepped up efforts from both law enforcement and financial professionals.

“You can hardly pick up the newspapers without reading something,” said Pace University president Stephen J. Friedman at Thursday’s symposium at Pace’s downtown New York campus, sponsored by ACCA USA, the U.S. arm of the Association of Chartered Certified Accountants. Friedman pointed to several recent cases, including the recent Chinese hacker attacks on power grids, oil and gas pipelines, and media outlets like The New York Times. “What do we do about this? How do we stop it? What kind of recovery plans do we need to have in place? I know that those are the kinds of questions that keep the people in this room up at night. I believe that answering those questions requires the kind of corporate partnership we see here today among law enforcement officials, government agencies, the private sector and universities like Pace.”

Friedman introduced Manhattan District Attorney Cyrus Vance Jr., who noted that nearly every crime in New York City today has some cyber or computer component.

“When we were all growing up, watching TV, watching Law and Order, when you’d think of a crime scene, you’d think of yellow tape wrapped around the side of a street corner, police cars parked, police lights, that’s what we think of when we think of a crime scene,” he said. “But I think we all know today that the crime scene of this century is a different crime scene. The crime scene of today is the Internet. And as the high tech and digital world becomes more sophisticated, so do criminals who are using computers and technology to take advantage of unsuspecting victims in this crime scene.”

He noted that while incidents of violent crime around New York City have decreased, prosecutions of cybercrime and identity theft have increased by 50 percent in the last five years.  “They range from the very simple identity theft cases to large-scale financial fraud against multibillion-dollar businesses that we now prosecute," said Vance. "Cybercrime is the fastest-growing crime trend in New York and around the country.”

Other panelists, including representatives from the Secret Service, Deloitte, and Verizon, discussed topics such as the vulnerabilities of mobile phone-based payment systems, some of which are unencrypted and unwittingly expose a user's personal financial information, as well as how criminals hack into the credit card skimming machines used at restaurants and other places frequented by consumers.

ACCA CEO Helen Brand pointed to the dangers of outsourcing. “If you talk about where is your information and where is it being held, of course there’s so much outsourcing of that information,” she said. She noted that a recent ACCA survey found that the second highest country that was worried about cybercrime was India, “where huge amounts of data are held by markets all around the world.”

Brand and other speakers also cautioned against the vulnerabilities in the supply chain, in which even well-secured companies could expose financial information to hackers by doing business with partners that don't take the proper steps to make their networks secure. Panelists pointed out that hackers prefer to target the weakest link in the supply chain. In many cases, companies aren't even aware they have been hacked until it's too late, and the problem is only solved when the criminal gets all he wants and moves on to the next target. Too many companies simply content themselves with sending out data breach notices to customers in an effort to protect themselves from lawsuits.

Later in an interview, Brand pointed out, “It’s not just hacking into the U.S. It’s out of the U.S. The point is it’s a multinational issue and problem that’s probably best solved on a multinational basis, whether that’s through the prevention measures that were being discussed, or through punitive or legislative measures, and the crime agencies dealing with that.”

Comments (1)
I think it happens because things like cybercrimes are not studied well enough and the reason is a poor funding. So many people become victims of cyber thieves every day and our government does nothing about it. Well not really nothing, but definitely just not enough. I think that todays' technologies allow finance facilities tracking all of the possible danger. You know, I think people would agree paying just a few dollars more for the proper protection. I am definitely fine with it, since I do not want to look for payday lenders ( )to borrow me some after I get robbed after. And again we are talking about money and their usage.
Posted by AliciaS | Tuesday, March 05 2013 at 5:06AM ET
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