Two for the most popular apps for millennials and travelers are now being used to launder money for criminal elements. Airbnb and Uber are playing host to a new scheme that turns ill-gotten gains into clean and hard to track cash or cryptocurrency.
Money Laundering Scheme
Add Airbnb and Uber to the growing list of ways criminals are hiding money these days. Experts told CNBC that fake Uber drivers, questionable Airbnb hosts, and cryptocurrency specialists are being recruited via the dark web.
“Cybercrime headlines tend to focus on new variants of malware or gross negligence resulting in large data breaches. It’s a proverbial game of cat and mouse, with white hats fortifying defenses and black hats adjusting to bypass,” stated Ziv Mador, a cybersecurity expert. “However, missing from these stories and just as important for grasping how cybercriminals operate is what takes place post-breach or when funds are acquired illegally.”
As leader of the cybersecurity firm Trustwave’s SpiderLabs research team, Ziv Mador also told CNBC that money laundering is essential to cybercrimes. It’s so prolific that if you’ve ever been the victim of a hack or cybercrime, your money probably ended up in a laundering scheme one way or another.
How it Works
The gig economy is easy pickings for cybercriminals. Over the past couple of years, cybercriminals used apps like Uber and Airbnb to divert, and essentially “cleanse” fraudulently earned money through a variety of automated systems. By using this method, the money eventually makes it back to the cybercriminal seemingly clean.
“In one common scam, criminals recruit Uber drivers to pretend to take them on a ride. The criminal never shows up but uses money from a stolen credit card to pay for the trip. The driver then wires a portion of the payment for the trip back to the criminal.”, says CNBC in a recent report.
There are actually ads out there on the dark web seeking help laundering assets. The entire criminal transaction can remain anonymous to both parties.
In another, called “acupuncture,” a criminal, typically in China or India, works by having a United States based driver placing falsified location “pins” in the app throughout their route. The driver is then able to collect the earnings of their route, which have been paid for using stolen credit card information, and wire a portion of their earning to the cybercriminals oversea.
“One reason it’s enticing to the real driver is they think ‘at least I’m getting paid for driving a route that I’m normally driving anyway.’ What they don’t realize is it’s not just defrauding Uber or our platform, it’s wire fraud, it’s serious legal liability for the driver,” an Uber spokesperson stated.
Another scheme is being employed using the Airbnb app. An Airbnb host finds ads posted online and instead of hosting an actual guest, they take payment from a fake guest who never shows up. Airbnb then processes the payment and it is made available to the host who then wires a portion of the money to the cybercriminal. This is yet another occurrence of wire fraud.
Airbnb and Uber Reactions
According to the CNBC report, Uber first learned about the money laundering because it was so common in the Chinese market. A spokesperson for the company says it has taken several steps to fight this type of fraud. Uber ramped up its fraud-detection techniques in 2016, around the time the company pulled out of China. They say the money laundering scheme has fallen to “historical lows” since then it still remains a problem. Uber frequently works with U.S. law enforcement to catch these crimes in action. One example given was from a case in 2017 involving a fake-passenger scheme that led to 13 arrests in New York.
Airbnb stated, “Airbnb takes its responsibility as a participant in the financial ecosystem seriously and has developed sophisticated models, systems and processes to detect and prevent all forms of misuse and illegal activity. In addition to our own controls, Airbnb also works with other participants in the financial system including financial institutions, regulatory agencies and law enforcement to spot new trends in potential misuse and illegal activity and share information to combat illicit activity.”
Other Money Laundering Schemes Still Prevalent
There are other, and more common, types of money laundering that are still being used by criminals. These include the traditional bank drop schemes and gift card purchases, as do buying iPhones and other devices with stolen credit card information and then selling them for next to nothing.
Tax refund scams are also on the rise. The FBI says criminals can direct federal or state tax authorities to issue fraudulent tax refunds on prepaid debit cards. Cryptocurrency payment processors are also becoming increasingly popular, usually funded through ransomware and are notoriously hard to track.
To learn more about wire fraud, financial fraud, tax evasion, and more, visit Jeffrey Newman Law today!