The issue of falsely claimed identity in all its myriad forms has shadowed the Internet since the beginning of the medium. Anyone who has used an on-line dating or auction site is all too familiar with the problem; anyone can claim to be anyone. Likewise, confidence games, on or off-line, involve a range of fraudulent conduct committed by professional con artists against unsuspecting victims. The victims can be organizations, but more commonly are individuals. Con artists have classically acted alone, but now, especially on the Internet, they usually group together in criminal organizations for increasingly complex criminal endeavors. Con artists are skilled marketers who can develop effective marketing strategies, which include a target audience and an appropriate marketing plan: crafting promotions, product, price, and place to lure their victims. Victimization is achieved when this marketing strategy is successful. And falsely claimed identities are always an integral component of such schemes, especially those carried out on-line.
Such marketing strategies generally involve a specific target market, which is usually made up of affinity groups consisting of individuals grouped around an objective, bond, or association like Facebook or LinkedIn Group users. Affinity groups may, therefore, include those associated through age, gender, religion, social status, geographic location, business or industry, hobbies or activities, or professional status. Perpetrators gain their victims’ trust by affiliating themselves with these groups. Historically, various mediums of communication have been initially used to lure the victim. In most cases, today’s fraudulent schemes begin with an offer or invitation to connect through the Internet or social network, but the invitation can come by mail, telephone, newspapers and magazines, television, radio, or door-to-door channels.
Once the mark receives and accepts the offer to connect, some sort of response or acceptance is requested. The response will typically include (in the case of Facebook or LinkedIn) clicking on a link included in a fraudulent follow-up post to visit a specified web site or to call a toll-free number.
According to one of Facebook’s own annual reports, up to 11.2 percent of its accounts are fake. Considering the world’s largest social media company has 1.3 billion users, that means up to 140 million Facebook accounts are fraudulent; these users simply don’t exist. With 140 million inhabitants, the fake population of Facebook would be the tenth-largest country in the world. Just as Nielsen ratings on television sets determine different advertising rates for one television program versus another, on-line ad sales are determined by how many eyeballs a Web site or social media service can command.
Let’s say a shyster want 3,000 followers on Twitter to boost the credibility of her scheme? They can be hers for $5. Let’s say she wants 10,000 satisfied customers on Facebook for the same reason? No problem, she can buy them on several websites for around $1,500. A million new friends on Instagram can be had for only $3,700. Whether the con man wants favorites, likes, retweets, up votes, or page views, all are for sale on Web sites like Swenzy, Fiverr, and Craigslist. These fraudulent social media accounts can then be freely used to falsely endorse a product, service, or company, all for just a small fee. Most of the work of fake account set up is carried out in the developing world, in places such as India and Bangladesh, where actual humans may control the accounts. In other locales, such as Russia, Ukraine, and Romania, the entire process has been scripted by computer bots, programs that will carry out pre-encoded automated instructions, such as “click the Like button,” repeatedly, each time using a different fake persona.
Just as horror movie shape-shifters can physically transform themselves from one being into another, these modern screen shifters have their own magical powers, and organizations of men are eager to employ them, studying their techniques and deploying them against easy marks for massive profit. In fact, many of these clicks are done for the purposes of “click fraud.” Businesses pay companies such as Facebook and Google every time a potential customer clicks on one of the ubiquitous banner ads or links online, but organized crime groups have figured out how to game the system to drive profits their way via so-called ad networks, which capitalize on all those extra clicks.
Painfully aware of this, social media companies have attempted to cut back on the number of fake profiles. As a result, thousands and thousands of identities have disappeared over night among the followers of many well know celebrities and popular websites. If Facebook has 140 million fake profiles, there is no way they could have been created manually one by one. The process of creation is called sock puppetry and is a reference to the children’s toy puppet created when a hand is inserted into a sock to bring the sock to life. In the online world, organized crime groups create sock puppets by combining computer scripting, web automation, and social networks to create legions of online personas. This can be done easily and cheaply enough to allow those with deceptive intentions to create hundreds of thousands of fake online citizens. One only needs to consult a readily available on-line directory of the most common names in any country or region. Have a scripted bot merely pick a first name and a last name, then choose a date of birth and let the bot sign up for a free e-mail account. Next, scrape on-line photo sites such as Picasa, Instagram, Facebook, Google, and Flickr to choose an age-appropriate image to represent your new sock puppet.
Armed with an e-mail address, name, date of birth, and photograph, you sign up your fake persona for an account on Facebook, LinkedIn, Twitter, or Instagram. As a last step, you teach your puppets how to talk by scripting them to reach out and send friend requests, repost other people’s tweets, and randomly like things they see Online. Your bots can even communicate and cross-post with one another. Before the fraudster knows it, s/he has thousands of sock puppets at his disposal for use as he sees fit. It is these armies of sock puppets that criminals use as key constituents in their phishing attacks, to fake on-line reviews, to trick users into downloading spyware, and to commit a wide variety of financial frauds, all based on misplaced and falsely claimed identity.
The fraudster’s environment has changed and is changing over time, from a face-to-face physical encounter to an anonymous on-line encounter in the comfort of the victim’s own home. While some consumers are unaware that a weapon is virtually right in front of them, others are victims who struggle with the balance of the many wonderful benefits offered by advanced technology and the painful effects of its consequences. The goal of law enforcement has not changed over the years; to block the roads and close the loopholes of perpetrators even as perpetrators continue to strive to find yet another avenue to commit fraud in an environment in which they can thrive. Today, the challenge for CFEs, law enforcement and government officials is to stay on the cutting edge of technology, which requires access to constantly updated resources and communication between organizations; the ability to gather information; and the capacity to identify and analyze trends, institute effective policies, and detect and deter fraud through restitution and prevention measures.
Now is the time for CFEs and other assurance professionals to continuously reevaluate all we for take for granted in the modern technical world and to increasingly question our ever growing dependence on the whole range of ubiquitous machines whose potential to facilitate fraud so few of our clients and the general public understand.