2013.05.16 cfaa powerpoint for ima.v1

FRAUD 2.0Helping Businesses Prepare for

Computer Fraud and Data Breaches

Shawn E. Tumawww.brittontuma.com

The Association of Accountants and Financial Professionals in Business

May 16, 2013

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#fraud20

www.brittontuma.com

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have you ever

heard of …

www.brittontuma.com #fraud20

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Aaron Swartz?


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Sandra Teague?


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Bradley Manning?


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Hacking?


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Data Breach?


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Identity Theft?


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Stuxnet?


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Active Defense?


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NON COMPUTER

RELATED FRAUD?


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As of September 2012, cybercrime

• costs $110 billion annually

• 18 adults every second are victims

• 556,000,000 adults every year are victims

• 46% of online adults are victims

• mobile devices are trending

2012 Norton Cybercrime Reportwww.brittontuma.com

The Statistics

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What is fraud?• Fraud is, in its simplest form, deception

• Black’s Law Dictionary

• all multifarious means which human ingenuity can devise, and which are resorted to by one individual to get advantage over another by false suggestions or suppression of the truthwww.brittontuma.com

Fraud?

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Traditional vehicles for fraud?• verbal communication

• written communication

• in person

• through mail

• via wirewww.brittontuma.com

Fraud?

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What do computers do?

EFFICIENCY!www.brittontuma.com #fraud20

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FRAUD 2.0


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Computer Fraud = Fraud 2.0• Deception, through the use of a computer

• “old crimes committed in new ways … using computers and the Internet to make the task[s] easier”

• computer hacking, data theft, theft of money, breaches of data security, corporate espionage, privacy breaches, computer worms, Trojan horses, viruses, malware, denial of service attacks

• mouse and keyboard = modern fraudster tools of choice

www.brittontuma.com

Fraud 2.0

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Who knows the percentage of businesses that suffered at least one act of computer fraud in last

year?

90%(Ponemon Institute Study)

www.brittontuma.com

Fraud 2.0

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BRIEF HISTORY OF THE COMPUTER FRAUD

AND ABUSE ACT (CFAA)

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Computer Fraud and Abuse Act

Federal Law – 18 U.S.C § 1030

www.brittontuma.com

The Law!

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History of CFAA


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History of CFAA


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Why?

Primary Law for Misuse of Computers

Computers …

Why is the Computer Fraud and Abuse Act important?


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“Everything has a computer in it nowadays.”

-Steve Jobs

Why Computers?

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WHAT IS A COMPUTER?

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has a processor or stores data

“the term ‘computer’ means an electronic, magnetic, optical, electrochemical, or other high speed data processing device performing logical, arithmetic, or storage functions, and includes any data storage facility or communications facility directly related to or operating in conjunction with such device, but …”

IMPORTANT! “such term does not include an automated typewriter or typesetter, a portable hand held calculator, or other similar device;”

The CFAA says

What is a computer?

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What about . . .

What is a computer?

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“’That category can include coffeemakers, microwave ovens, watches, telephones, children’s toys, MP3 players, refrigerators, heating and air-conditioning units, radios, alarm clocks, televisions, and DVD players, . . . .”

-United States v. Kramer

The Fourth Circuit says

Anything with a microchip

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This may limit the problem of applying it to alarm clocks, toasters, and coffee makers – for now?

The CFAA applies only to “protected” computers

Protected = connected to the Internet

Any situations where these devices are connected?

What is a “protected” computer?

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seriously . . .

What is a computer?

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•TI-99 •3.3 MHz Processor•16 KB of RAM

•Leap Frog Leapster•96 MHz Processor•128 MB of RAM

•iPhone 5•1.02 GHz Processer•1 GB of RAM

Perspective

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66 MHz = fastest desktop in 80s

96 MHz = child’s toy today

250 MHz = fastest super computer in 80s

1.02 GHz = telephone today

Perspective

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WHAT DOES THE CFAA PROHIBIT?

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Statutory Language

CFAA prohibits the access of a protected computer that is

Without authorization, or Exceeds authorized access


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Statutory Language

Where the person accessing Obtains information

Commits a fraud

Obtains something of value

Transmits damaging information

Causes damage

Traffics in passwords

Commits extortion


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Very Complex Statute

Overly simplistic list

Very complex statute

Appears deceptively straightforward

Many pitfalls

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“I am the wisest man alive, for I know one thing, and that is that I know nothing.”

-Socrates

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Very Complex Statute

Two Most Problematic Issues

“Loss” Requirement

• Confuses lawyers and judges alike

Unauthorized / Exceeding Authorized Access

• Evolving jurisprudence

• Interpreted by many Circuits

• New conflict on April 10, 2012www.brittontuma.com #fraud20

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Civil Remedy

Limited civil remedy Procedurally complex with many

cross-references

“damage” ≠ “damages”

Must have $5,000 “loss” (i.e., cost)

Loss requirement is jurisdictional threshold


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Civil Remedy

What is a “loss”?“any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service.”

Loss = cost (unless interruption of service)


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Civil Remedy

Remedies Available

• Economic damages

• Loss damage

• Injunctive relief

Not Available• Exemplary damages

• Attorneys’ fees


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Basic Elements

Elements of broadest CFAA Claim1. Intentionally access computer;

2. Without authorization or exceeding authorized access;

3. Obtained information from any protected computer; and

4. Victim incurred a loss to one or more persons during any 1-year period of at least $5,000.


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Basic Elements

Elements of CFAA Fraud Claim1. Knowingly and with intent to defraud;

2. Accesses a protected computer;

3. Without authorization or exceeding authorized access;

4. By doing so, furthers the intended fraud and obtains anything of value; and

5. Victim incurred a loss to one or more persons during any 1-year period of at least $5,000.


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WRONGFUL ACCESS

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Wrongful Access

General Access Principles Access by informational / data use

≠ technician

Must be knowing or intentional access

≠ accidental access


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Wrongful Access

“without authorization” Outsiders No rights Not defined Only requires intent to

access, not harm Hacker!

“exceeds authorized” Insiders Some rights CFAA defines: access

in a way not entitled Necessarily requires

limits of authorization Employees, web

users, etc.

www.brittontuma.com

Two Types of Wrongful Access

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Wrongful Access

When does authorization terminate?

Trilogy of Access Theories

• Agency Theory

• Intended-Use Theory

• Strict Access Theory


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Wrongful Access

Ways to establish limits for Intended-Use

Contractual• Policies: computer use, employment & manuals

• Website Terms of Service

Technological• Login and access restrictions

• System warnings

Training and other evidence of notification

Notices of intent to use CFAA


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Wrongful AccessExamples

Employment SituationsMost common scenario is employment• Employee access and take customer account

information

• Employee accesses and takes or emails confidential information to competitor

• Employee improperly deletes data and email

• Employee deletes browser history

• Employee accessing their Facebook, Gmail, Chase accounts at work


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Family Law SituationsHave you ever logged into your significant other’s email or Facebook to see what they’re saying to others?

DON’T ANSWER THAT!

• Estranged spouse in Arkansas did after separation

• NTTA account?

• Bank account?

• Cancelling services via online accounts?


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Sharing Website LoginsHave you ever borrowed or shared website login credentials and passwords for limited access sites (i.e., online accounts)?


• Recent case held that permitting others to use login credentials for paid website was viable CFAA claim

• The key factor here was the conduct was prohibited by the website’s agreed to Terms of Service


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Misuse of WebsitesEver created a fake profile or used a website for something other than its intended purpose?


• Myspace Mom case – United States v. Drew

• Fake login to disrupt legitimate website sales

• Accessing website to gain competitive information when prohibited by TOS

• Creating fake Facebook to research opposing parties



Earlier Questions?

Have you ever heard of?

• Aaron Swartz – information liberator!

• Sandra Teague – Obama’s academic records

• Bradley Manning –released classified info

• Stuxnet – variations for corporate espionage

• Active Defense – fun stuff – call me! #fraud20

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DATA BREACHWHAT DO YOU DO?

#fraud20

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Data Breach

Data Breach

• product of computer fraud• on the rise• major risk to virtually all businesses

• PII, PHI, financial data, cardholder data• disruption and data loss• claims from data subjects• fines and penalties from govts, agencies, indust.

groups

• impossible to prevent• plan ahead to reduce harm


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Data Breach

4 Phases of Data Breach

• Preparation

• Prevention

• Understanding • Laws, Rules & Regulations

• Responding


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Data Breach

Preparation

• Breach Response Plan• Goal Execute!• Who, What, When, How

• Attorney – privilege

• Adopted Notification Form

• Educate Team• IT Security Audit / Penetration

Testing• Compliance Audit

• HIPAA, ERISA, OSHA, PCI, FINRA

• Cyber Insurancewww.brittontuma.com #fraud20

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Data Breach

Prevention

• Software and Systems Updates

• Remediate Vulnerabilities

• Encrypt, Encrypt, Encrypt

• Data Surveillence & IT Alerts• Cyber CounterIntelligence / CounterEspionage

• IT Alerts


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Data Breach

Understanding Laws, Rules & Regulations• No Federal Breach Notification Law

(yet)• 46 States’ Have Laws

• ≠ Alabama, Kentucky, New Mexico, South Dakota

• Massachusetts is an oddball• 45 days (FL, OH, VT, WI) otherwise expeditious

without unreasonable delay• Consumers + State Attorney General

• Agencies (FTC, HHS, OCR, DOL, SEC)• Industries (FINRA, PCI)• International


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Data Breach

Responding to a Breach – Just Execute the Plan!• Contact Attorney• Assemble Response Team• Contact Forensics• Contact Vendor for Notification• Investigate Breach• Remediate Responsible Vulnerabilities• Reporting & Notification

• Law Enforcement First• AGs, Admin. Agencies, Industries, Cred. Rpt,

Consumerswww.brittontuma.com #fraud20

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OTHER LAWS FOR COMBATING FRAUD

2.0

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Federal Laws

Federal Laws for Combating Fraud 2.0• Electronic Communications Privacy Act - 18

U.S.C. § 2510

• Wiretap Act ≠ intercept communications

• Stored Communications Act ≠ comm. at rest

• Fraud with Access Devices - 18 U.S.C. § 1029

• devices to obtain passwords, phishing, counterfeit devices, scanning receivers, drive through swipe cards

• Identity Theft – 18 U.S.C. § 1028


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Texas Laws

Texas Laws for Combating Fraud 2.0• Breach of Computer Security Act (Tx. Penal Code §

33.02)

• knowingly access a computer without effective consent of owner

• Fraudulent Use or Possession of Identifying Info (TPC § 32.51

• Unlawful Interception, Use, or Disclosure of Wire, Oral or Electronic Communications (TPC § 16.02)

• Unlawful Access to Stored Communications (TPC § 16.04)

• Identity Theft Enforcement and Protection Act (BCC § 48.001)

• Consumer Protection Against Computer Spyware Act (BCC § 48.051)

• Anti-Phishing Act (BCC § 48.003)


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• Welcome to the world of Fraud 2.0!

• Why? Remember what Jobs said

• CFAA is very broad and covers all kinds of computer fraud (sometimes) – evolving!

• Data Breaches – be prepared – it will happen!

• Many other Federal and Texas laws also available for combating computer fraud

• Cyber Insurancewww.brittontuma.com

Conclusion

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2013.05.16 cfaa powerpoint for ima.v1

Documents

actof computer fraud

computer worms

computer old crimes

data theft

tasks easier computer

stores datathe term

cost loss requirement

abuse actfederal law