SWIFT and BAE Systems publish ‘Follow the Money’ report

SWIFT and BAE Systems Applied Intelligence today published ‘Follow the Money’, a new report that describes the complex web of money mules, front companies and cryptocurrencies that criminals use to siphon funds from the financial system after a cyber-attack.

The report highlights the ingenuity of money laundering tactics to obtain liquid financial assets and avoid any subsequent tracing of the funds. For instance, cybercriminals 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.

SWIFT commissioned BAE Systems to investigate this element of the money laundering process as part of its Customer Security Programme (CSP). The CSP continually helps the financial community to strengthen its cyber defences through a range of measures including mandatory controls, intelligence sharing and thought leadership. The aim of this report is to illuminate the techniques used by cybercriminals 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 – cybercriminals 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 cybercriminals 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.