Fraud by Computer
C omputer re la ted financial f raud continues to be a problem. Here are a few cases from the Risks archives. ISSIDE RISKS Frauds • Volkswagen lost almost $260 million as the result of an insider scam that created phony currencyexchange transactions and then covered them with real transactions a few days later, pocketing the float as the exchange rate was changing. This is an example of a salami att ack-a lbe i t with a lot of big slices (SEN 12, 2, Apr. 1987, 4). Four insiders and one outs ider were subsequently convicted, with the maximum jail sentence being six years, so their efforts were not entirely successful! • Losses from automatic teller machines (ATMs) are numerous. The archives include a $350,000 theft that bypassed both user authentication and withdrawal limits, $140,000 lost over a weekend due to a software bug, $86,000 stolen via fabricated cards and espied authenticat ion numbers (PINs), $63,900 obtained via the combination of a stolen card and an ATM program error , and o ther scams. • Other f rauds include a collaborative scam that acquired 50 million frequent-f l ier miles, an individual effort that gained 1.7 million miles, a collaborative effort involving millions of dollars worth of bogus airline tickets, and a bank computer system employee who snuck in an o rde r to Brinks to deliver 44 kilograms of gold to a remote site, collected it, and then disappeared.