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How Organized Crime Uses Technology to Make Money

Stock scams, identity theft, you name it, this character has seen it. A fictional "CIO to the mob" explains how organized crime profits from IT.

By Scott Berinato

June 11, 2007 — CIO —

People call me a lot of things. Nobody would ever call me a CIO, but after reading CIO magazine a little bit, I guess that’s basically what I am. Maybe I’m a little younger than you. A little more techy. I know my routers and code.

Most of the guys I work with, they don’t like computers. They get frustrated. Lots of times they want to shoot their computers, like that guy in Colorado did. I printed out that story and gave it to one of my guys. He loved it, especially the part where the guy hung the dead computer on the wall of his bar. “I love this Colorado guy,” he said. And he passed it around to all the guys. “You have to read this story MIT gave me.” Yeah, they call me MIT, like, “Let’s ask MIT if we can set up an online account” or “Maybe MIT can make a website for that.” A website for what? For making money, what else? Isn’t that why anyone sets up a website?

Bosses. I mean, bosses are the worst, right?

The Penny Stock Scam
We’re in a real boom right now. Credit cards. Gambling. You heard about that stock deal? The one that uses that new kind of spam? Image spam? This is an old-fashioned pump-and-dump scam but with a cool techno twist.

This wasn’t mine, but I know a guy who knows the guy who set it up. Here’s how he worked it.

First, he rented a botnet. That was for e-mail distribution. He pays, I don’t know, say $50Gs for a month, turns around and promises the bot-herder a taste in exchange for that month’s usage and some guaranteed uptime. You know, he says, deliver me 10 million e-mail messages and I’ll guarantee you some back-end cash.

So the bot-herder knows a kid who wrote this absolutely killer image spam application that creates the e-mail messages. Pays him a flat fee. I mean, the kid could’ve asked for a lot more, but a lot of these programmers are pretty young and dumb. You wave some cash and they think, “Flat-screen TV!” Anyway, he tells the kid to make the program create advertisements for pink-slip stocks, those unlisted ones that trade for pennies. It all gets done in like 15 minutes after they get some of the basic wording down.

 

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