Enemies at the Gate

Last week's revelation that cyber-criminals were pretending to offer financial services out of DIFC to defraud investors out of huge sums of money was a real wake-up call for the region. IT Weekly looks at what happened and examines the wider threat.

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By  Administrator Published  February 22, 2007

For the investors, who came from as far away as Singapore and Australia, the deal must have seemed almost too good to be true: the opportunity to make good returns on currency trades, based on the current weakness of the US dollar, all regulated by official bodies located in Dubai International Financial Centre (DIFC).

Unfortunately for them, it wasn't. Last week saw the exposing of a wide-ranging internet fraud scam, encouraging would-be investors to part with their cash by the creation of various fictitious organisations; an exchange, the Dubai Options Exchange, a regulator, the UAE Commodity Futures Board, and a company, Cambridge Capital Trading, which contacted potential investors.

All the organisations were provided with equally fictitious web sites to make them look more convincing. Victims were given a Dubai telephone contact number and details of a Malaysian bank account to pay money into.

An investigation by the Dubai Financial Services Authority (DFSA) and the DIFC Court - working with Dubai Police and financial authorities in the UK and Malaysia - has now resulted in a number of arrests, both in Dubai and in Kuala Lumar, as well as the closing of the web sites in question.

However, authorities admit the fraudsters managed to steal at least US$600,000, with the full amount unlikely to be known for some time - if ever.

David Knott, chief executive of the DFSA, said last week that investigations were still very much ongoing, but admitted that the sophistication of the fraud would make it hard to catch all the perpetrators. The web sites had been established through a US internet service provider (ISP) - not believed to be aware of the fraud - with a billing address in Singapore that later proved to be false.

"The internet has added a wonderful new dimension to our daily lives," Knott said in a statement. "But it has also opened up opportunities for criminals to prey on the public."

While such schemes have been previously targeted at more developed markets "we will increasingly see them occur in the Middle East as Dubai and other financial sectors increase their capital markets," Knott warned.

Security experts around the region echoed Knott's warning this week, pointing out that, as the region has become more high profile business-wise in the past couple of years, it has become more vulnerable to cyber-attacks.

These can take various forms, such as cyber-blackmail activities, with criminals launching, or threatening to launch denial-of-service attacks on organisations' web sites to extort money from them.

"Looking back over the past 24 months the number of various cyber-extortion related activities within the Middle East region has increased significantly," Ivor Rankin, senior security consultant at Symantec MENA, told IT Weekly. "I believe that as the region becomes more prolific in terms of investment, people will naturally turn their attention to what they mistakenly see as softer targets," he warned.

Companies that are vulnerable to such attacks are hardly likely to come forward and admit to it, making it hard to establish how much of a problem it is here in the Middle East, but most experts believe it is a real threat - and a growing one.

That is partly down to increasing internet usage, coupled with a comparative lack of education.

Justin Doo, managing director of Trend Micro Middle East, said he has heard of at least two cases of cyber-blackmail happening in the region, and warned that users here are vulnerable generally.

"I think cyber-criminals are targeting anywhere they can get a quick return and we have got to accept that in this region, there is a lower public awareness of what the threats are," he said.

The worry must be that this year all too many people will find out about cybercrime - the hard way.

“Looking back over the past 24 months the number of various cyber-extortion related activities within the Middle East region has increased significantly.”

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