Over a fancy lunch today in a Scottsdale, AZ restaurant filled with other people’s office Christmas parties, I heard a hair-raising presentation about an Underground Economy of organized criminals and cybercrime on the internet.
The speaker, the owner of Packet Forensics, a company started in 2002 to provide dedicated equipment for cyber-surveillance to telecom companies, ISPs, governments, and law enforcement, is an expert in cybercrime who probably realized a market need after 9/11.
But the long and short of it is that cybercrime started long before that. In fact, it probably started with the law firm of Cantor and Siegel in Phoenix, which in the early days of the internet spammed usenet groups to encourage people to apply for green cards through its law firm. That was the beginning of spam.
By 1997, spammers were using Internet Relay Chat channels to trade software hacks. The hacks were often created by kids who were paid in bicycles, computers, and other small items for their work.
The turn of the new century saw the first use of bots and DDOS attacks on sites like Amazon and EBay around Christmas, and by 2002 spammers had discovered that hackers could sell them bots to automate their efforts.
Organized crime, in the form of the Russian mafia, entered the spamming world in 2003, and quickly organized cyber criminals in nations like Estonia, Georgia, and Kyrzgyzstan, where cyberattacks were part of a plan to force a political agenda
Although spam, organized crime’s first venture, doesn’t seem too harmful right now, by comparison, cyber crimes can melt down entire systems (power generators), and phishing scams steal $2.2 trillion annually according to Interpol.
The underground economy of organized crime on the internet mirrors how business is done in the “real world.” Underground, criminals sell both products and services: they sell lessons in hacking, knowledge and information, passwords, and credit card information. A single criminal stole $170 million in credit card records from TJ Maxx; twelve million account transactions were sniffed from Dave & Buster’s restaurant chain. [Update: the TJ Maxx thief was apprehended.]
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