Cybercrime: A 21st Century Fact of Life
Thursday, February 1, 2018
by Leslie Lytle, Messenger Staff Writer
Theorists speculate cybercrime will replace armed conflict as a means of global change. Greg Esslinger’s lecture “Collision of Cultures: Cybercrime, Bribery, and International Business” provided a compelling argument for that assumption’s truth.
A Sewanee graduate (C’91) with a law degree from Georgia State University, Esslinger’s career with the FBI working in the field of counter terrorism paved the way for his current career as a senior partner in the firm Control Risks, specializing in combating global bribery and financial fraud.
Putting cybercrime in historical perspective, Esslinger pointed to the BRICS nations—Brazil, Russia, India, China and South Africa—whose rapidly growing economies operate in cultures with vastly different rules from the current 21st century economic powers.
In 2001, the same year the BRICS acronym was coined, the Enron scandal forced questions about whether corporations were using financial influence to impact the political scene. Investigation under the Foreign Corrupt Practices Act revealed influence peddling wasn’t a large scale problem in the United States, but it was a behemoth-size problem in foreign nations. Most of the fines were levied against corporations operating in BRICS countries. A $579 million fine levied against Halliburton illustrates that trend.
Western economies saw the BRICS as “nations hungry for products and culture,” Esslinger argued, but they initially failed to see the bribery and corruption. The BRICS “exported” centuries-old cultural practices that resulted in a vastly different business climate. In China, “gaining face” via incurring compliments and “losing face” via damage to ones reputation dominated the business culture making extravagant gift giving an expected practice. In Brazil in 2010, corruption resulted in the wholesale overhaul of the government. Esslinger described Russia as a nation “controlled by oligarchs…economically teetering on the brink of collapse.” In India, the largest population in poverty in the world, “bribery is a method of survival,” Esslinger said, while “South Africa is a minefield of regional and class warfare.”
Esslinger defined the internet as “taking a staggering number of individuals with infinite cultural norms and nuances and bringing them together in one anonymous place that contains unlimited amounts of information.” The resultant large-scale opportunity for crime poses a $2 trillion problem with an estimated 800,000 internet scammers operating today. The BRICS nations, especially Russia and China, have notably availed themselves of the opportunity.
“Bank robbery is the 21st centuries dumbest crime,” Esslinger said, with 95 percent of perpetrators caught, average earnings of $6,000, and sentences of death or life in prison in cases involving murder.
Conversely, in a single morning an internet scammer can earn $141,000 in profits with almost zero chance of being caught by mimicking a bank’s log-in page, sending a mass email, and realizing $2,500 from each of the 50 or so emails that reach actual customers who respond. The hacker can then earn an additional $16,000 by selling the list.
In a popular corporate scam, “internet kidnapping” scammers contact a corporation asking ransom for a corporate employee in a foreign country, giving the corporation 30 minutes to respond. The hope is that with insufficient time to check out the threat the ransom money will be forthcoming, Esslinger said.
Esslinger cited several problems with prosecuting cybercrime: difficulty in determining the geographic location of the scammer and lacking the authority to prosecute a perpetrator in a foreign country; altered data logs masking when the hack occurred; and the crime going unreported or being reported long after the fact.
Cybercriminals are “emboldened by anonymity,” Esslinger said. He also emphasized the difference in motivation, not money as with much crime in the past, but activism and the desire to “disrupt, confuse, and destroy.”
In Russia, where the lines between government and organized crime blur resulting in widespread organized crime, investigators tracked two hackers who had wives and children, played soccer on weekends, and every weekday went to an office building job where they joined a host of colleagues all engaged in the same profession: hacking.
China is regarded as an even greater cyber threat than Russia due to the higher volume of attacks originating there.
Hacking of U.S. government computers exposed the personal information of 22 million people in 2015. By comparison, Target suffered 110 million recent data breaches; EBay suffered 145 million; and 412 million users of the dating site Adult Friends Finder had their data hacked.
Of the top five risks in 2018, Esslinger’s company Control Risks named “cyber attacks targeting large infrastructure” as number two, second only to escalation in North Korea.
Esslinger attributes the rise in cybercrime to the increased professionalization, hacking in an office setting, and the increase in the available targets, particularly internet-connected devices used by individuals ranging from TVs, to home security, to dog collars.
“There are no internet police,” Esslinger stressed. “You can’t dial 911. Education and communication are the keys to combating cybercrime. Cybercrime culture is part of the world we live in. It’s always there in the background.”
The Babson Center for Global Commerce and Office of the Dean of the College sponsored Esslinger’s lecture.