The report highlights the ingenuity of money laundering tactics to obtain liquid financial assets and avoid any subsequent tracing of the funds. For instance, cyber criminals often recruit unsuspecting job seekers to serve as money mules that extract funds by placing legitimate sounding job advertisements, complete with references to the organisation’s diversity and inclusion commitments. They use insiders at financial institutions to evade or undermine the scrutiny of compliance teams carrying out know-your-customer (KYC) and due diligence checks on new account openings. And they convert stolen funds into assets such as property and jewellery which are likely to hold their value and less likely to attract the attention of law enforcement.
Although there has been much research into the methods that cybercriminals use to conduct attacks, there has been less investigation into what happens to funds once they have been stolen. The aim of this report is to illuminate the techniques used by cyber criminals to ‘cash out’ so that SWIFT’s global community of over 11,000 financial institutions, market infrastructures and corporates can better protect themselves.
Among the other findings in the report:
Front companies – cyber criminals tend to focus on textile, garment, fishery and seafood businesses to obfuscate funds. They find it easier to operate in parts of East Asia where less stringent regulations make it easier to conduct their activities.
Cryptocurrencies – while the number of identified cases of money laundering through cryptocurrencies is low so far, there have been a couple of major incidents involving millions of dollars. Digital transactions are appealing because they are conducted in a peer-to-peer manner that circumvents the compliance and KYC checks conducted by banks, and often require only an e-mail address
Experience - The method chosen by cyber criminals to cash out and spend the stolen funds is indicative of their levels of professionalism and experience. Some inexperienced criminals have immediately made extravagant purchases drawing the attention of law enforcement agencies and leading to arrests.
Brett Lancaster, Head of the Customer Security Programme at SWIFT said: “The threat posed by cyber-attacks to the financial sector has never been greater. Attackers are well-resourced, constantly evolving their modus operandi and using untraceable money laundering techniques. The report highlights how the growth in cyber-attacks is increasing the need for the convergence of anti-money laundering, fraud and cybersecurity processes in financial institutions. It calls for them to increase information sharing, tighten due diligence requirements and smartly invest in maintaining systems to strengthen their defences.”
Simon Viney, Cyber Security Financial Services Sector Lead at BAE Systems Applied Intelligence said: “The activity from cyber criminals and gangs across the world is estimated to result in over $1.5 trillion dollars in annual losses. This report focuses on money laundering related activities necessary for cyber attackers to conduct and ‘cash out’ a successful attack and avoid the money subsequently being traced. As technology and criminals’ techniques evolve at a rapid pace, so will the need for institutions, both private sector and law enforcement, to collaborate and maintain awareness of evolving money laundering techniques, in order to reduce the opportunities for threat groups to benefit from committing high-value cyber heists.”