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The new era of organized cybercrime

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During the murder trial of the contentious Jamaican dancehall artist known as Vybz Kartel—still ongoing—a critical piece of evidence vanished. Kartel and his associates had been charged with conspiring to kill Clive “Lizard” Williams, and prosecutors had obtained a compact disc of allegedly damning cellphone records, including text messages. Then it disappeared.  

Losing that data wasn't the only technological misstep for the legal team. Inspector Warren Williams, head of the Jamaica Constabulary Force’s cybercrime unit, gave a PowerPoint presentation intended to establish, via GPS location, where Kartel and any accomplices were in Kingston when exchanging these messages. Instead, he misidentified the relevant buildings on his own map

There was also corruption in the air: It came out that a co-defendant’s cellphone was used while in police custody. For all the of the simplicity of the crime and punishment, there was a lot of sophisticated gadgetry involved—the kind that both enhances and vastly complicates our lives. Criminals and cops alike have been forced, as ever, to adapt to a virtual landscape, develop cutting-edge techniques, and reassess their potential allies.

All this ought to make us wonder if the term “organized crime” needs an updated definition in the Internet age. More and more, the Web is the very vector of criminal cooperation, as well as the means by which illegal enterprise is brought down.   

As 2013 drew to a close, the British Bankers Association revealed a stunning statistic: “Traditional” bank robberies—those that tend to involve duffel bags and the threat of deadly force—had dropped 90 percent in the last 10 years. The trend was the same in the U.S., where the FBI recorded 3,870 robberies in 2012, the lowest figure going back several decades.

Increasingly sophisticated deterrents and alarm systems had certainly played a role in the diminishing of violent theft, but the trend also coincided with the rise of cybercrime targeting financial services. Indeed, hackers had begun to drain bigger bank accounts while taking far fewer risks.

“Instead of guns and masks, they [use] laptops and malware,” said Loretta E. Lynch, U.S. attorney for the Eastern District of New York, on the topic of a historic $45 million ATM scam

“We certainly have much more diverse organized crime in the U.S. than in the past, much more transnational, much more linked to computers,” noted Louise Shelley, director of the Terrorism, Transnational Crime and Corruption Center at George Mason University. 

But given that the two styles of robbery call for vastly different skill sets, one has to wonder: Are the same people getting rich? Or has the Internet completely altered the landscape for illegal enterprise? As with most tectonic shifts in the history of crime, it’s been a messy transition.  

Prohibition is widely considered the catalyst that allowed the American mafia to evolve from a petty, murderous gang into a semi-corporate entity with an established hierarchy of leadership and division of labor. The mafia's business model took root in the public consciousness and flowered throughout the 1960s and 1970s. Even as bloody internal warfare rocked such institutions in the early 1980s and led to a major federal crackdown, criminal conglomerates were becoming transnational, coordinating activities on a global scale. The Internet, then, would appear to offer opportunities for further unchecked expansion. 

In the virtual world of cyberspace, though, it appears that the DNA of organized crime will have to mutate once again.

Reading about the cases of old-style bosses like Boston’s James “Whitey” Bulger, the inspiration for Jack Nicholson’s fictional mobster in The Departed, you might guess that the “traditional” forms of organized crime (dealing in protection money and other forms of extortion that rely upon face-to-face interaction and geographic boundaries) have all but crumbled before a more fluid underground economy. In a certain sense, you’d be right: These dons tend to sound nostalgic for the days of massive analog scams. The biggest mob bust of the past few years ensnared 127 players on charges of homicide, arson, and loan-sharking. Meanwhile, your conventional pusher couldn’t hope to compete with the Deep Web black market Silk Road—but wasn’t that bazaar, with its anonymizing defenses and reported hit-job conspiracies, itself an example of “organized crime”? 

It hardly helps that the term is so difficult to define. Would we consider the gangs pulled together by John Dillinger or Bonnie and Clyde “organized”? Perhaps that kind of loose, joyride-inflected camaraderie in a criminal enterprise is a better analogy for the scene we encounter on the Internet today, with its shifting alliances and adrenaline-junkie black hats. We still see many of the hallmarks of organized crime in online syndicates: The elimination of rivals, traitors, and spies is a concern subordinate to the creation of wealth at the expense of various victims. Mercenaries and middlemen abound, selling their services to the highest bidder. Hackers are sometimes “flipped” and made to give testimony against their colleagues.      

The vanishing of “territory,” however, means that the recognized families of the mafia no longer have a home base to defend or define themselves by. Muscle and physical threats are less essential, and schemes take fewer conspirators to arrange. As globalization called for cooperation between syndicates and thus the emergence of a broader, flatter management structure, so too does the digital frontier demand a fresh approach. At the outset, that means acquiring the talent necessary to make cybercrime lucrative—however possible. Infosec Institute relayed reports that Mexican drug cartels have even forcibly recruited and kidnapped computer programmers.  

“But,” Louise Shelley told the Daily Dot via email, “for over two decades, narcotics traffickers from Colombia have used the service of experienced computer specialists to encrypt their communications.” Similarly, she wrote, the cartel-affiliated, Los Angeles-based organization M-13, known to be involved in human trafficking, is using the Internet to get jobs done efficiently and quietly. You can kill and terrorize all you want, but money is becoming more virtual daily. 

“Individuals who are not tech-savvy are losing out on organized crime in the U.S.,” she declared.

Ethnic solidarity remains a theme as organized crime seeps into cyberspace. A bank fraud and identity theft ring in California, for example, was the work of several men associated with the Armenian Power crime syndicate, two of whom were incarcerated and operating via cellphones smuggled into their prison (once again, turf is beside the point). More and more common, however, are confederacies assembled in far-flung regions. Just skim some of the FBI’s big cybercrime cases: One press release touts the arrest of “10 individuals from Bosnia and Herzegovina, Croatia, Macedonia, New Zealand, Peru, the United Kingdom, and the United States.” The porous, frictionless Web results in bedfellows you may not have predicted half a century ago. 

Of all the existing mafias, Russia’s have surely gotten the early lead in cybercrime, operating in poorly policed .su domains. “There is a segmentation of the market,” Shelley explained. “Some of the most lucrative transnational crimes, such as selling counterfeit pharmaceuticals online, are done by Russian organized crime groups.” Last month, an Arizona man named David Camez was convicted for his role in the Carder.su identity theft syndicate, but he was just a small-time buyer of counterfeit IDs. The actual empire was run by Russian Roman Zolotarev—according to the testimony of former Secret Service agent Michael Adams, who went undercover to infiltrate the market—a mastermind who remains comfortably beyond extradition. 

Nevertheless, the case was a watershed moment, as it marked the first use of the Racketeer Influenced and Corrupt Organizations Act, or RICO, in a U.S. prosecution of cybercrime. The federal law was enacted in 1970 and designed to benefit law enforcement agencies going after mob families. In Camez’s case, rather than argue his guilt, lawyers stressed the question of whether Carder.su met the same legal/criminal criteria as the mafia—which, apparently, it does. 

Similar struggles to reconcile organized crime and cybercrime are common in the heavily wired nation of India. A unit devoted to online crime in the city of Jaipur, for example, has come under fire for electing to pursue only those reports that indicate organized gang activity.

Back in 2002, the North Carolina Journal of Law & Technology published an essay titled “Organized Cybercrime? How Cyberspace May Affect the Structure of Criminal Relationships.” This was before there was much in the way of cybercrime to study, as author Susan W. Brenner, now a distinguished professor of law and technology at the University of Dayton School of Law, readily admitted. Nevertheless, she was able to put her finger on a future problem in the fight against the type of computer fraud that features an ensemble cast:

"Specifically, instead of assuming stable configurations that persist for years, online criminal organization may incorporate the 'swarming' model, in which individuals coalesce for a limited period of time in order to conduct a specifically defined task or set of tasks and, having succeeded, go their separate ways. If cybercrime adopts this organizational model, law enforcement’s task will become much more difficult; in the real-world, the stability and consistency of organized criminal groups gives law enforcement a fixed target upon which to focus its efforts. Police concentrate on identifying a permanent group of participants who engage in a set of routine illicit activities." 

That swarming behavior will sound familiar to anyone who has read about a distributed denial of service (DDoS) attack orchestrated by the hacktivist collective Anonymous, in which multiple people attempt suspend a service by overwhelming it with external communications requests. If it’s not necessarily an effective means of making money, it’s still a useful method of collaboration toward a number of ends that range from mischievous to catastrophic. (Indeed, it often appears as if the greatest difference between real-world criminals and online outlaws is that the profit motive cannot be taken for granted. There is just as often an ideological point to be made, or a reputation to be earned, or a thrill to be extracted.) 

In any case, the bonds forged between cybercriminals are those of convenience, not blood and mutual obligation. In 2011, Brenner identified the exact sort of legal pothole that she had predicted nine years prior, quoting from a case in which the five defendants, employees of Western Express International, had used the company as a front for the trading of stolen data and the laundering of cybercriminals’ money. The excerpt comes from the majority opinion of the Supreme Court—Appellate Division, which was considering whether New York’s Organized Crime Control Act, a state-specific RICO-like law, should be brought to bear:  

[T]he nature of this organization, as indicated by the evidence presented to the grand jury, constitutes a 'criminal enterprise' having an 'ascertainable structure' as contemplated by the OCCA. ... [T]he structure of Vassilenko’s enterprise ... differs greatly from the way in which the word 'structure’ is ordinarily used in the context of organized crime. The 'structure' at issue here is, essentially, a web site; there is no social club or office, no hierarchy of appointed positions. 

“In other words,” Brenner explained, “it didn’t look like the kind of Mafia family the OCCA and RICO were designed to pursue.” And yet three judges opted to allow an indictment on that basis, helping to set the stage for David Camez’s RICO conviction two years later. The dissenting pair of judges argued that the “defendants' combined activities, undertaken for their individual benefit, without any chain of command, profit sharing, or continuity of criminal purpose beyond the scope of the criminal incidents alleged in the indictment” were “insufficient to show they engaged in the type of criminal enterprise covered by the statute.” Vadim Vassilenko, ringleader of the ad hoc Western Express gang, in early 2013 pleaded guilty to a handful of money laundering charges, as well as a scheme to defraud and conspiracy in the fifth degree, a misdemeanor.

Just because the FBI and the U.S. Attorneys can now paint cybercrime, however imperfectly, as organized crime, we needn’t anticipate the disappearance of traditional mafias or the rise of purely digital cartels. In fact, the most notable push to monopolize the illegal drug market on Silk Road severely backfired. Nod, a notorious dealer, attempted to collude with other cocaine distributors on Silk Road to set prices even higher, but competitors chose instead to leak the documents in an effort to tarnish his reputation. 

It’s far more likely that the crimes of the future will assume a shape that’s difficult for us to imagine at the moment. The Internet has developed a new set of specialized tools that make running an illegal operation easier than ever before: The digital cryptocurrency Bitcoin can be used to launder dirty profits, malware can remotely seize control of devices, and anonymizing browsers like Tor have been a boon to the dissemination of child pornography, now largely accomplished online. 

But none of that matters when you don’t have access or expertise. Organized crime has always meant having your fingers in lots of different pies, so it’s natural that the Web would appear a new and fruitful frontier to be divided up, using as many parallel scams as possible. To accomplish that, old-school syndicates will need highly educated recruits. You can spot the generational chasm on the other side of the law, too: South Africa’s police can’t keep up with cutting-edge scams, and in the U.S., we’re grooming college kids to be masters of IT security.     

Mobsters who resist the Web now occupy the place of gangs that refused to start bootlegging when Prohibition created a black market in 1920. Whether you get into the industry or not, it will soon change everything about the way business is done, so you may as well stick a foot out for a toehold. When Brenners published her 2002 article, she acknowledged “the perception that cybercrime is perpetrated by hackers, who are loners, and are therefore not inclined to engage in group criminality; and the fact that, to date, most documented cybercrime reveals that a majority of incidents involve individuals, not groups.” 

Twelve years on, plenty of lone wolves still stalk the digital plains, and some are married to their isolation. Others are bound to form packs.  

Illustration by Jason Reed