How COVID-19 will impact Organised Crime in the EU

COVID-19Europol has just published a new report which assesses the impact of the COVID-19 pandemic on serious and organised crime across three phases:

  1. The Current Situation
  2. The Mid-Term Outlook
  3. The Long Term Impact

For more on the current situation see Europol’s previous reports published in March and April 2020.

During the medium term easing of lockdown measures will see criminal activity return to previous levels featuring the same type of activities as before the pandemic. However, the COVID-19 pandemic is likely to have created new opportunities for criminal activities that will be exploited beyond the end of the current crisis. It is expected that the economic impact of the pandemic and the activities of those seeking to exploit it will only start to become apparent in the mid-term phase and will likely not fully manifest until the longer term. Some of the relevant crime areas are:

  • Anti-money laundering: the pandemic and its economic fallout will exert significant pressure on the financial system and the banking sector. Anti-money laundering regulators must be vigilant and should expect attempts by organised crime groups to exploit a volatile economic situation to launder money using the on-shore financial system.
  • Shell companies: criminals will likely intensify their use of shell companies and companies based in off-shore jurisdictions with weak anti-money laundering policies at the placement stage to receive cash deposits that are later transferred to other jurisdictions.
  • The real estate and construction sectors will become even more attractive for money laundering both in terms of investment and as a justification for the movement of funds.
  • Migrant smuggling: While the economic impact of the COVID-19 crisis in Europe is not yet clear, it is expected that the impact on economies in the developing world is likely to be even more profound. Prolonged economic instability and the sustained lack of opportunities in some African economies may trigger another wave of irregular migration towards the EU in the mid-term.

Looking longer term some predictions are:

  • Organised crime is highly adaptable and has demonstrated the ability to extract long-term gains from crises, such as the end of the cold war or the global economic of 2007 and 2008.
  • Communities, especially vulnerable groups, tend to become more accessible to organised crime during times of crisis. Economic hardship makes communities more receptive to certain offers, such as cheaper counterfeit goods or recruitment to engage in criminal activity.
  • Mafia-type organised crime groups are likely to take advantage of a crisis and persistent economic hardship by recruiting vulnerable young people, engaging in loan-sharking, extortion and racketeering.
  • Organised crime does not occur in isolation and the state of the wider economy plays a key role. A crisis often results in changes in consumer demand for types of goods and services. This will lead to shifts in criminal markets.

Key factors with an impact on crime during and after the COVID-19 pandemic

Several factors have a significant impact on serious and organised crime during the COVID-19 pandemic. These factors shape criminal behaviour and create vulnerabilities. Based on experience gained during prior crises, it is essential to monitor these factors to anticipate developments and pick up on warning signals.

  • Online activities: more people are spending more time online throughout the day for work and leisure during the pandemic, which has increased the attack vectors and surface to launch various types of cyber-attacks, fraud schemes and other activities targeting regular users.
  • Demand for and scarcity of certain goods, especially of healthcare products and equipment, is driving a significant portion of criminals’ activities in counterfeit and substandard goods and fraud.
  • Payment methods: the pandemic is likely to have an impact on payment preferences beyond the duration of the pandemic. With a shift of economic activity to online platforms, cashless transactions are increasing in number, volume and frequency.
  • Economic downturn: A potential economic downturn will fundamentally shape the serious and organised crime landscape. Economic disparity across Europe is making organised crime more socially acceptable as these groups will increasingly infiltrate economically weakened communities to portray themselves as providers of work and services.
  • Rising unemployment and reductions in legitimate investment may present greater opportunities for criminal groups, as individuals and organisations in the private and public sectors are rendered more vulnerable to compromise. Increased social tolerance for counterfeit goods and labour exploitation has the potential to result in unfair competition, higher levels of organised crime infiltration and, ultimately, illicit activity accounting for a larger share of GDP.

To download a full copy of the report visit Europol’s website.

An earlier post on this website covers advice on Cybersecurity awareness during the COVID-19 pandemic

EPTF holds Seventh Meeting

EPTFThe Seventh Meeting of the EAST Payments Task Force (EPTF) took place on Wednesday 15th April 2020.  Due to the Covid-19 situation it was conducted as a virtual meeting and 16 EPTF members participated.

The EPTF is a specialist task force that discusses security issues affecting the payments industry and that gathers, collates and disseminates related information, trends and general statistics.

The meeting was chaired by Mr Rui Carvalho, EAST Development Director, and key representatives from Card Issuers, International Banks, Law Enforcement, Payment Processors and Solution Providers took part.

There was a detailed discussion on the impact of Covid-19 on fraud and updates were provided from Austria, France, Germany, the Netherlands, Norway, Portugal, Spain and the United Kingdom  Updates were also given by Europol, Group-IB and Trend Micro.

The Group, which meets twice a year, adds value to the payments industry by using the unique and extensive EAST National Member platform and Associate Member network to provide information and outputs that are not currently available elsewhere.  EAST National Members represent 35 countries and outputs from the group are presented to National Member Meetings.  There are 213 EAST Associate Member Organisations from 53 countries and territories.

Investment fraud gang taken down in Bulgaria and Serbia

Investment fraudA large criminal network involved in investment fraud, money laundering and social engineering was taken down in an international investigation, launched one year ago. The action day, which took place in Belgrade and Sofia, went ahead on 2 April despite the current lockdown.

Estimated total losses were €80 million and the fraud affected over 1,000 victims in Germany and Austria, as well as people in other countries.  In Austria  it is estimated that 850 victims lost around €2.2 million, while in Germany hundreds of victims suffered estimated losses of about €10 million.

The suspects, believed to be members of a large criminal network, offered bogus investments in trading products such as binary options and contract for differences (CFDs) on online trading platforms.  The investments started at around €250 and Agents from call centres in Bulgaria and Serbia then manipulated the victims to make much higher investments in non-existent trading products including CFDs and forex (foreign exchange currency market).

During the action day Law enforcement authorities from Bulgaria and Serbia carried out 11 house searches and arrested 9 individuals (5 in Serbia and 4 in Bulgaria). Two of the leaders of the criminal network were arrested in Sofia. The seizures include five properties in Serbia, €2.5 million from a bank account in Germany, electronic equipment and other evidential material. 30 other bank accounts were put under surveillance.  

Advisory Group on Financial ServicesEuropol and Eurojust supported the investment fraud investigation, which involved law enforcement and judicial authorities from Austria, Bulgaria, Germany and Serbia.  

Europol facilitated information exchange and provided analytical support, cross-checking operational information in real-time against its databases to provide leads to investigators in the field, and a Joint Investigation Team between Austria and Germany was set up by Eurojust to coordinate judicial matters.

EAST and Europol have worked together since 2004 and EAST provides secure platforms for public/private sector cooperation in the fight against organised criminal groups engaged in financial crime.  Click here for more information on EAST’s law enforcement relationships.

The EAST Payments Task Force (EPTF) has a specific focus on tackling social enginnering  This Group, which meets twice a year, adds value to the payments industry by using the unique and extensive EAST National Member platform and Associate Member network to provide information and outputs that are not currently available elsewhere.

COVID-19 – Cybersecurity Awareness

CybersecurityThe coronavirus outbreak is still a rising issue for many countries and related lock-downs have forced many people into teleworking – working at home, while communicating with their office by phone or email, or using the Internet.  This raises cybersecurity concerns.

Malign actors are actively exploiting these new challenging circumstances to target remote workers, businesses and individuals alike.  It is vitally important for everyone to be fully aware of the threats and to ensure that anything transacted over the Internet is done safely and securely.

To help with this awareness Europol has provided ‘Safe Teleworking Tips and Advice’ for both employees and employers, as well as tips on  ‘How To Make Your Home a Cyber Safe Stronghold’ (available for download in 13 languages).

EAST and Europol have worked together since 2004 and EAST provides secure platforms for public/private sector cooperation in the fight against organised criminal groups engaged in financial crime.  Click here for more information on EAST’s law enforcement relationships.

The EAST Payments Task Force (EPTF) has a specific focus on cybersecurity.  This Group, which meets twice a year, adds value to the payments industry by using the unique and extensive EAST National Member platform and Associate Member network to provide information and outputs that are not currently available elsewhere.

EAST EGAP holds 13th Meeting in The Hague

The 13th meeting of the EAST Expert Group on ATM and ATS Physical Attacks (EGAP) took place on Tuesday 3rd March 2020 in The Hague.

EAST EGAP is a European specialist expert forum for discussion of ATM and ATS related physical attack trends, attack methodologies and counter-measures, threat protection, and for the provision of regularly updated lists of manufacturers of ATM protective devices. The latest lists can be downloaded from the ‘Stained Banknotes’ page on this website (bottom of page).

The meeting was chaired by Mr Graham Mott of the LINK Scheme and was attended by key representatives from Law Enforcement, Terminal Deployers, ATM Networks and Security Equipment Vendors.  Europol gave a central assessment of the ATM physical attack situation in Europe and National Threat Assessments were shared by representatives from fifteen countries.

A presentation was given by ESTA, the Cash Management Companies Association and an update from the European Central Bank (ECB) was shared.

EAST EGAP, which meets twice each year, enables in-depth and technical discussion to take place. The areas covered include:

  • The latest incidents and criminal MOs
  • The collection and distribution of best practice guidelines
  • The evolution of threats and counter-measures
  • Lessons from and on law enforcement

50th EAST Meeting hosted by PSA in Vienna

The 50th EAST Meeting (National Members) was hosted by Payment Services Austria (PSA) in Vienna on 12th February 2020. The meeting was chaired by Martine Hemmerijckx of Worldline NV/SA, who co-founded EAST with Lachlan Gunn, EAST Executive Director, in 2004.

This was a milestone meeting and the last in the current format as, in June 2020, EAST will hold its 1st Global Congress.  In recognition of her work in founding and supporting EAST, and on behalf of the EAST Board and members, Lachlan presented Martine with an award.

National country crime updates were provided by 20 countries, and a global update by HSBC.  Topics covered included payment fraud and the continuing evolution of payment technology and related threats, terminal related fraud attacks, malware and logical attacks, and ATM related physical attacks.

The Criminal Intelligence Service Austria presented on the prevention of e-commerce fraud.  The European Cybercrime Centre (EC3) at Europol gave a presentation on forthcoming Europol activities for 2020, with a specific focus on Carding Action Week (CAW) .  This was followed by a presentation from the Gulf Cooperation Council Police (GCCPOL) that gave an update on payment and fraud issues seen by their 6 member countries.

Presentations were also given by the EAST Payments Task Force (EPTF) and the EAST Expert Group on All Terminal Fraud (EGAF).  An update was given by the EAST Expert Group on ATM and ATS Physical Attacks (EGAP).

EAST Fraud Update 1-2020 will be produced later this month, based on the national country crime updates provided at the 50th EAST Meeting.  EAST Fraud Updates are available on the EAST Website to EAST Members.

Europol publishes Turkish language version of ATM Logical Attack Guidelines

EuropolATM has just published a Turkish language version of guidelines to help industry and law enforcement counter the ATM Logical Attack threat.  The English version of the document was officially launched in January 2019 at the 17th Meeting of the EAST Expert Group on All Terminal Fraud (EAST EGAF).  The document is now available in EnglishFrench, GermanSpanish, Russian and Turkish.

The production of this document was coordinated by EAST EGAF.  It has three sections:

  1. Description of Modi Operandi (Hareket Tarzi Açiklamas i)
  2. Mitigating the risk of ATM Logical and Malware Attacks, Setting up Lines of Defence (ATM’lere Yönelik Mantiksal ve Kötü Niyetli Yazilim Saldirilarinin Risklerini Hafifletmek Savunma Hatlari Kurmak)
  3. Identifying and responding  to Logical and Malware Attacks (Mantiksal ve KÖTÜ Niyetli Yazilim Saldirilarini Saptamak ve Yanitlamak)

The Guidelines were first published in 2015 and this latest version provides clearer definitions and greater clarity of the criminal methods and techniques encountered in these attacks, along with more detailed recommendations on how to mount a robust and effective response to them.  The recent fall in ATM malware and logical attacks, as reported by EAST in the latest European Payment Terminal Crime Report published in October 2019, reflects the work that has been put into preventing such attacks by the industry and law enforcement.

Circulation of the document is restricted to Law Enforcement and to the banking and payments industry, which includes EAST Members (National and Associate).

European Money Mule Action (EMMA 5) leads to 228 Arrests

The 5th European Money Mule Action (EMMA 5) resulted in 228 arrests.  3833 money mules were identified alongside 386 money mule recruiters. 1025 criminal investigations were opened, many of them still ongoing.  Money mule schemes rope in victims who are often unaware that the money they are sending is part of an elaborate money laundering scheme.

EMMA 5, which ran from September to November 2019, was driven by Law enforcement authorities from 31 countries, supported by Europol and Eurojust.  Supported by the European Banking Federation (EBF), over 650 banks, 17 bank associations and other financial institutions helped to report 7520 fraudulent money mule transactions, preventing a total loss of €12.9 million.

Europol and Eurojust organised various operational and coordination meetings in The Hague to discuss the unique approach of each Member State to tackle money muling in their respective country. During the three-month action, Europol supported the operations by assisting the national authorities with cross-checks against Europol’s databases and intelligence gathering for further analysis, while Eurojust contributed to the swift forwarding and facilitation of the execution of European Investigation Orders.

WHAT ARE MONEY MULES?

Money mules, unlike their drug-trade counterparts, are not shuffling illicit goods over a physical border. Instead, they take part – often unknowingly – in money laundering activities by receiving and transferring illegally obtained money between bank accounts and/or countries. Recruiters of money mules are coming up with ingenious ways to lure in their candidates. This year, cases involving romance scams were reported on the rise, with criminals increasingly recruiting money mules on online dating sites, grooming their victims over time to convince them to open bank accounts under the guise of sending or receiving funds. Criminals are also more and more turning to social media to recruit new accomplices through get-rich-quick online advertisements. This technique is particularly popular when it comes to targeting students and young adults.

DON’T BE A MULE!

Even if money mules act unwittingly, they are committing a crime. Law enforcement will turn first to whoever’s name features on the bank account, and the legal consequences can be severe. Depending on the country’s legal framework, mules may face lengthy imprisonments and acquire a criminal record that could seriously affect the rest of their lives, such as never being able to secure a mortgage or open a bank account.

Raising awareness of the issue is vital and the Europol website provides key information on Money Muling and how to prevent it.  The Europe-wide money muling awareness campaign #DontbeaMule started yesterday. With awareness-raising material, available for download in 25 languages, the campaign informs the public about how these criminals operate, how they can protect themselves and what to do if they become a victim.

Following on from EMMA 5, and for the next week, international partners from law enforcement and judicial authorities, together with financial institutions, will be supporting the campaign at national level.

Do you think you might be used as a mule? Act now before it is too late: stop transferring money and notify your bank and your national police immediately.


The EAST Payments Task Force (EPTF) provides a public/private sector platform which focusses on raising awareness of payment crime issues and related factors such as money muling.

 

Europol publishes German language version of ATM Logical Attack Guidelines

EuropolATM has just published a German language version of guidelines to help industry and law enforcement counter the ATM Logical Attack threat.  The English version of the document was officially launched in January 2019 at the 17th Meeting of the EAST Expert Group on All Terminal Fraud (EAST EGAF).  The document is now available in EnglishFrench, German, Spanish and Russian.

The production of this document was coordinated by EAST EGAF.  It has three sections:

  1. Description of Modi Operandi (Beschreibung Der Vorgehensweise)
  2. Mitigating the risk of ATM Logical and Malware Attacks, Setting up Lines of Defence (Risiken Für Logische System-Angriffe Und Malware-Attacken Auf Geldautomaten Verringern, Abwehrmechanismen Etablieren)
  3. Identifying and responding  to Logical and Malware Attacks (Logische Systemangriffe Und Malware-Attacken Erkennen Und Darauf Reagieren)

The Guidelines were first published in 2015 and this latest version provides clearer definitions and greater clarity of the criminal methods and techniques encountered in these attacks, along with more detailed recommendations on how to mount a robust and effective response to them.  The recent fall in ATM malware and logical attacks, as reported by EAST in the latest European Payment Terminal Crime Report published in October 2019, reflects the work that has been put into preventing such attacks by the industry and law enforcement.

Circulation of the document is restricted to Law Enforcement and to the banking and payments industry, which includes EAST Members (National and Associate).

GAAD cracks down on airline CNP fraud with 79 arrests

GAADThe 12th Global Airline Action Days (GAAD), which ran from 18 – 22 November 2019, resulted in the arrest or detention of 79 individuals suspected of travelling with airline tickets bought using stolen, compromised or fake credit card details. GAAD was coordinated from Command Posts at Europol in The Hague, INTERPOL Global Complex for Innovation in Singapore, Ameripol and Colombia in Bogota, Canada and NCFTA (with the US Secret Service) in the US.

Some of the reported cases were linked to illegal immigration, where the arrested passengers were in possession of counterfeited IDs or valid documents from other persons from different nationalities.  Card-not-present (CNP) fraud, the purchase of physical goods with compromised cards, has significantly increased throughout the EU and across many sectors such as, airline tickets, car rentals and accommodation. Tens of thousands of crimes are reported in many EU countries and volume is increasing every year.

Airline companies are among the most affected by CNP fraud.  It is estimated that losses for the airline industry globally have reached close to 1 billion USD per year, as a result of the fraudulent online purchases of flight tickets. These online transactions are highly lucrative for organised crime and are often linked to more serious criminal activities including irregular immigration, trafficking in human beings, drug smuggling and terrorism.

Eurojust assisted during the action days, together with the European Border and Coast Guard Agency (Frontex), which deployed officers to 28 airports. The Airport Communication Project (AIRCOP), implemented by the United Nations Office on Drugs and Crime (UNODC) in partnership with INTERPOL and the World Customs Organization (WCO) and counting the European Union as its main donor, also took part in law enforcement activities at airports in Africa, by deploying one officer at the main Command Post in Europol HQ.

Representatives from airlines, online travel agencies, payment card companies, the International Air Transport Association (IATA), European Airline Fraud Prevention Group and Perseuss, collaborated with Europol’s experts to identify suspicious transactions and provide confirmation to law enforcement officers deployed in the airports.  Europol’s European Migrant Smuggling Centre (EMSC) joined this year’s operation to provide better support to EU Member States and partners for fighting migrant smuggling networks. The GAAD operation was further supported by the Taskforce Travel Intelligence (TFTI).

Wil van Gemert, Europol’s Deputy Executive Director Operations, said “Airline ticket fraud is borderless by nature. This operation was the culmination of many months of meticulous planning between Europol, law enforcement, judiciary and border agencies, airlines and credit card companies, and is a perfect example of how our combined forces can make distinctive contribution in the fight against these criminal syndicates operating across borders”.

Paul Stanfield, INTERPOL’s Director, Organized & Emerging Crime, commented “The Global Airline Action Day operation is an excellent example of how collaboration between the agencies as well as the public and private sectors serves to tackle and prevent crime such as credit card fraud. The operation was underpinned by professional commitment and mutual support across borders between national, regional and international police organizations”.

Cooperation and information exchange between the public and the private sector is the most efficient way of fighting tickets fraud and all other forms of organised crime, such as irregular immigration, trafficking in human beings, drug trafficking.  The EAST Payments Task Force (EPTF) provides a public/private sector platform which focusses on driving down CNP fraud.