EXCLUSIVE: Secret Service's Deputy Director on the Fight Against Transnational Crime

Posted: 03/31/2013

As the Number Two in the U.S. Secret Service, A.T. Smith has been at the forefront of efforts to counter transnational organized crime. Here, the agency’s Deputy Director gives a fascinating insight into the fight against global computer crimes, identity theft and money laundering.

Can you describe what you believe the latest developments are in countering Transnational Organized Crime?

The amalgamation of advanced technology and the Internet has created opportunities for the transnational cybercriminal just as the Secret Service has observed a marked increase in the quantity, quality and complexity of illicit transnational cyber activity targeting U.S. financial institutions and critical infrastructure. Criminal trends show an increased use of phishing emails, account takeovers, malicious software, hacking attacks and network intrusions resulting in significant data breaches.

Electronic Crimes Task Forces (ECTFs)

The Secret Service created a nationwide network of task forces to prevent, detect and investigate various forms of electronic crimes, including potential terrorist attacks against critical infrastructure and financial payment systems.

Related: From Information Assurance to Cyber Operations: The Way Ahead

The Secret Service currently operates 29 domestic and two international ECTFs in London and Rome. The ECTF methodology utilizes advanced technologies and capitalizes on the power of partnerships with academia, private sector, law enforcement and governmental authorities across international boundaries.

These trusted partnerships allow ECTFs to identify and locate international cybercriminals involved in network intrusions, bank frauds, data breaches and other computer-related crimes. Computer gurus, forensic specialists, investigative experts and intelligence analysts provide rapid responses and critical information in support of financial analysis, infrastructure protection and transnational cyber crime investigations.

This proactive approach has successfully prevented cyber attacks that otherwise would have resulted in large scale financial losses to U.S. based companies or disruptions of critical infrastructures.

Cyber Intelligence Section

The Cyber Intelligence Section (CIS) combats incidents of transnational cybercrime targeting the nation's financial payment systems and critical infrastructures. CIS provides a critical investigative function as the collection point for data generated through Secret Service cybercrime investigations, open source Internet content and a variety of information from financial and private industry partnerships relating to hacking, identity theft, credit card fraud, bank fraud and computer crimes.

The information and coordination provided by CIS is a crucial element necessary to successfully investigate, prosecute and dismantle international and domestic criminal organizations.

CIS currently deploys agents, on a rotating assignment basis, to work with the Estonian National Police, Latvian National Police and the Lithuanian National Police in the Baltic Working Group; the Security Service of Ukraine and the Ukraine Ministry of Internal Affairs in the Ukraine Working Group; and cyber investigators of the Netherlands High Tech Crime Unit in the DutchWorking Group. These trusted partnerships enable the Secret Service to effectively targettransnational suspects involved in the distribution and operation of botnets, criminal networksoffering bulletproof hosting and mal ware creators and vendors.

Electronic Crimes Special Agent Program (ECSAP)

To combat the evolving transnational cyber threat, the Secret Service provides special agents with basic and advanced computer and digital media forensic training. ECSAP investigators

collaborate to combine their skills with the resources of academia, the private sector and federal, state and local law enforcement agencies in the fight against global cyber exploits.

Additionally, the program provides state and local law enforcement partners with the necessary computerbased training, tools and equipment to enhance their investigative skills through the Secret Service's National Computer Forensics Institute in Alabama.

Europol

Money Laundering is the primary mechanism transnational criminals utilize to transfer illicit funds in support of their criminal activity. To combat the movement of illegal money, Europol established an informal network of global contacts from law enforcement anti-money laundering units.

The Secret Service is an active member of this network and maintains a permanent presence in The Hague, Netherlands, home to Europol, to foster existing legal frameworks for international cooperation and information exchange to address money laundering and related TOC activities.

Project South America

Project South America is the combined oversight of Secret Service vetted anti-counterfeit efforts in both Colombia and Peru. The project provides the necessary training, strategy development and infrastructure improvement to our foreign law enforcement partners to reduce the production, sale and distribution of counterfeit U.S. currency.

Since 1986, the Secret Service has recovered more than $630 million in South American-produced counterfeit U.S. currency passed and seized globally.

Since 2003, the Secret Service has tracked more than $131 million in Peruvian-produced counterfeit. In response, the Service formed the Peruvian Counterfeit Task Force, a collaborative effort between the Secret Service and Peruvian law enforcement, and in July 2012, established a permanent presence in Peru with the opening of the Lima Resident Office.

Where are the world's main TOC problem regions at the moment and what kinds of crimes are involved?

Eastern Europe

The Secret Service has seen an increase in cyber-related criminal activity involving Eurasian hacking groups targeting United States citizens and financial institutions. Subjects in Eastern Europe control many of the Internet web sites that buy and sell illicitly obtained credit card data.

These sites openly advertise stolen credit card information, compromised bank accounts, hacking and malware services, counterfeit identity documents and other items for sale. Laws and jurisprudence in foreign countries differ dramatically from those in the United States, making prosecution more challenging.

In 2012, the Secret Service prevented nearly $1.2 billion in fraud loss and identified more than $330 million in actual fraud loss in cybercrime investigations. Additionally, the Cyber Intelligence Section experienced continued success as its work benefited a number of high-profile Secret Service cyber investigations:

• Aleksandr Suvorov of Estonia was sentenced to seven years imprisonment for his role in two separate hacking schemes involving more than 240,000 stolen credit card accounts.

• Vladislav Horohorin of Moscow, Russia, and the founder of the illicit credit card vending site CarderPlanet, was arrested by Secret Service and French law enforcement authorities while on vacation in the French Riviera in 2010. Horohorin was extradited to the U.S. where he plead guilty to federal violations of aggravated identity theft and conspiracy; he is awaiting sentencing.

South America

The Secret Service's investigative focus in the Southern Hemisphere is transnational organized criminal networks involved in the manufacture, sale and distribution of high-quality counterfeit U.S. currency. Counterfeit money operations augment drug cartels and other subversive groups involved in illegal narcotics and weapons trafficking and human smuggling.

Since 2001, specifically in the country of Colombia, law enforcement has made more than 760 arrests, conducted 120 counterfeit plant suppressions and seized more than $290 million in counterfeit U.S. currency.

With the success of the Secret Service anti-counterfeiting enforcement in Colombia, counterfeiters and international organized crime began moving their operations to Peru. The Peruvian counterfeit currency family has expanded dramatically with a total worldwide recorded activity reaching nearly $53 million in the last two years.

Worldwide Activity

No one region of the world monopolizes the activity of converting illicit funds to the appearance of legitimate means. Money laundering is a part of most large-scale organized criminal networks around the globe. Transnational criminal groups widely use the border between the United States and Mexico to smuggle bulk cash associated with illegal narcotics and weapons trafficking.

Eastern European digital currency exchangers funnel millions of dollars obtained through organized criminal activity. Middle Eastern terrorist groups frequently launder funds through a hawala, an underground banking system based on trust whereby money is made available internationally without actually moving it or leaving a record of the transaction. In East Asia, precious metal dealers, travel agencies, money exchangers, finance companies and import/export businesses all serve as conduits to legitimize criminal proceeds.

In 2012, approximately 240 Secret Service investigations involved money laundering violations, resulting in over $120 million in actual fraud loss, more than 165 domestic arrests and 100 foreign arrests.

A.T. Smith is a keynote speaker at IDGA's Countering Transational Organized Crime event, which is being held from April 22-24. For full details, go to www.CTOevent.com

Posted: 03/31/2013