BLACK HAT USA 2018 - Las Vegas - Organized crime organizations play less of a role in cybercrime than you'd think. Instead, a new generation of criminal entrepreneurs runs much of the cyberattack operations worldwide, according to new research presented here today.
Over a seven-year period, Jonathan Lusthaus, director of the human cybercriminal project at Oxford University's sociology department, studied the role of mafia/organizations in cybercrime in 20 different countries, including Russia, Ukraine, Romania, Nigeria, Brazil, China, and the US. He found that while organized crime provides help or guidance to cybercrime gangs or campaigns in some cases, the bulk of these hacking enterprises are conducted by a new breed of criminal.
"I was a little surprised by the limited role that organized crime appears to play in cybercrime," Lusthaus said. "I was particularly surprised that I didn't find more cases where these groups were protecting cybercriminals."
But that actually makes sense, he said. "Cybercriminals often aren't competing with each other in a traditional territorial way, so they don't always need gangsters and strongmen to keep them safe or resolve disputes between them," he explained. "There are some examples of this but many others where mafias just aren't present."
The premise that organized crime and cybercrime are one and the same has been based mainly on "innuendo" and assumptions, according to Lusthaus, who presented his findings here in his talk "Is the Mafia Taking Over Cybercrime?"
Organized crime organizations' cybercrime activity is "more nuanced," according to Lusthaus, happening in a more "organic" fashion. "They tended to get involved in ways that matched their traditional skill sets and where there was a genuine need for what they could provide, such as in running money-mule or money-laundering operations," he said. "It's also clear that they are using technology to enhance their other criminal operations, though this isn't cybercrime per se."
Where organized crime organizations intersect with cybercrime falls into four activities, according to Lusthaus' research: providing protection for cybercriminals, investing in cybercrime ops, acting as "service providers" for a cybercrime scheme, and helping guide cybercriminals in their activities.
Lusthaus interviewed hundreds of law enforcement officials, former cybercriminals, and other experts and individuals in the private sector for his research, which is based on his newly published book, "Industry of Anonymity: Inside the Business of Cybercrime."
Lusthaus found an interesting paradox: While many of the people he interviewed believed organized crime plays a major role in cybercrime, few were able to provide examples. "Many participants in this study believed that organized crime involvement in cybercrime was substantial. But when pressed, this appeared to be a theoretical rather than an empirical view," he wrote in a white paper he released in conjunction with his Black Hat presentation.
That said, Lusthaus found several examples where organized crime and cybercrime work together.
In some cases, organized crime groups are investing financially in cybercrime, mainly as a way to leverage outside hacking expertise to make money. In one case shared by a UK law enforcement official, a cybercriminal got funding from a "well-established" organized crime syndicate to fund the work of a programmer to write software that would allow the group to obtain payment card information from banks. That deal backfired after a dispute between the cybercriminal and the group, and the cybercriminal had to go on the run after his life was threatened.
Lusthaus also said there are cases of organized crime groups offering their own services to cybercrime operations, including the "offline" money-laundering of stolen money. One high-profile case was the 1994 breach of Citibank by Vladimir Levin, who had millions of dollars from the hack laundered in illegal money transfers. A US law enforcement official said a Russian mafia group in St. Petersburg called the Tambov Gang financed and handled the flow of those stolen funds to Russia.
Lusthaus found other examples, as well – most recently mafia groups that smuggle between Eastern and Western Europe card skimmers and blank cards used for counterfeit credit and debit cards using stolen account information.
Organized crime also can serve as a coordinator for specific cybercrime operations. "This usually involves recruiting those with technical skills, among others, to carry out the jobs," Lusthaus wrote in his paper.
Interestingly, mafia groups rarely provide protection for cybercriminals, his research showed. That role typically gets filled by law enforcement or political figures for a monetary price.
Meanwhile, Lusthaus pointed out a way to deter cybercrime: by recruiting and hiring cybersecurity professionals in regions where cybercrime ops are rampant and often the only option for these individuals, such as in some Eastern European countries.