Geoff White on BEYONDai

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Cybercrime is not a technology story but an economy, and it is organized like one. State hacking is the new face of espionage and openly so; the people who do the criminal version largely learned to think in video games, where the whole skill is finding what the other side did not expect. Ransomware now runs as a franchise, the affiliate keeping eighty percent of what a victim pays, and the gangs behind it research a target with the same due diligence an acquirer would run before a takeover. Underneath all of it sits money laundering, without which Geoff White argues none of the rest would happen: the trick is not the theft but mixing dirty cash with clean, which is why criminals care where in society cash still lives.

This is the BEYONDai episode of this conversation: the exchange with Geoff White produced into a single cut, entity by entity, with the thesis stated and every subject given its own point of view. BEYONDai is our own show, separate from the one the conversation was recorded on, and this is what the episode knits together.

"like everybody else, they put on social media, you know, their their trip to some to the uh Virgin Islands or whatever."Geoff White

What the episode knits together

Geoff White, the investigative journalist covering organized crime and technology, guest of The BEYOND Podcast cybercrime episode

The episode threads through the conversation, so anyone researching Geoff White meets it in the primary source rather than a summary of it.

ransomware

The episode gives it a section of its own in the cut, in the guest's words, so anyone researching ransomware meets it in the primary source rather than a summary of it.

business email compromise

The episode threads through the conversation, so anyone researching business email compromise meets it in the primary source rather than a summary of it.

Listen to this episode on BEYONDai: Watch this episode on YouTube · The BEYONDai podcast feed · BEYONDai on YouTube.

Watch or listen to the source conversation: Geoff White podcast. It was recorded on The BEYOND Podcast with Aleksandra King.

Episode highlights transcript

Introduction

Guide: Welcome to the BEYONDai Podcast, a series that highlights the best thought leadership, from the best guests on the best shows. This episode features Geoff White speaking with Aleksandra King on The BEYOND Podcast.

It's the new face of espionage

Geoff White: It's the new face of espionage. So hacking is good?

Geoff White: Can be used for good, depending on your definition of good. So in the UK, you know, we don't want countries to declare war on us or declare war on our allies, so we want to try and stop that. But we also want the UK to do well, so we want the UK to make a decent amount of money, to be a safe place to work. So the government's got a vested interest in having its sort of cyber spies. But you've also of course got organized crime gangs, who've increasingly realized that rather than robbing a bank with a gun and getting maybe 10 years inside, if you can hack into a bank, steal the money, but then never get caught because you're in a different country, that's probably a better way of doing things. So you see an

Geoff White: explosion in organized cyber crime. And obviously, you know, you will have your money online, probably in an online banking situation, investments online. Increasingly our finance, our wealth, has shifted online, so the crooks have just followed it there. And the third group I'd point to is sort of what you might call kind of have-a-go hackers, sort of what you might call bedroom hackers. These people, activist hackers.

Geoff White: So these are folks who are generally younger, generally male, it has to be said, who who like a challenge. They often

Geoff White: come from the video gaming community and they end up in the shallow end of computer hacking. Those people are probably

Geoff White: less technically skilled than the government hackers, but they know exactly how to run a hack, they know how to do

Geoff White: maximum damage, they know how to do PR damage to a victim, to really embarrass them. And so that's what those

Geoff White: activist hackers are extremely good at. Wow. What we start to see is these three groups used to be sort of

Geoff White: separate, and

Geoff White: we're starting to see them increasingly come together. So we're starting to see governments looking at what the

Geoff White: activist guys are doing and thinking, well, that's quite good, we can borrow from that. We've started to see cyber crime

Geoff White: gangs get hold of the sort of cyber weapons that the the governments use and actually using those to make money. So we're

Geoff White: starting to see a blending of those three different groups, and that's why cyber crime is so big now. that's It's it

Geoff White: 's a different scene.

Aleksandra King: No wonder they need you to investigate all this.

Account, or one of my accomplices' accounts

Geoff White: So you see

Geoff White: this crossover between cyber crime and fraud. And so one of the other things that's big, and actually I think is making

Geoff White: more money than ransomware, is what's called business email compromise, which is a horrible phrase, but it's the

Geoff White: phrase. Let's listen to this. The

Geoff White: way this works is, um I would phone up, let's say you're a big business. I phone up your accounts department and I say,

Geoff White: hello, I'm calling from company X, we supply your, I don't know, paper or toiletries or wh whatever. You usually pay us

Geoff White: into this bank account, but we've now changed bank accounts, here's our new bank details. So the next time you pay us,

Geoff White: please pay us into this new bank account. Of course, I'm a fraudster and the account number I've just given is my own

Geoff White: account, or one of my accomplices' accounts. So the business, time comes to pay the invoice, it's £100,000 or

Geoff White: whatever,

Geoff White: they pay into the new bank account. And then it takes a couple of weeks for the real supplier to come along and say, you

Geoff White: haven't paid us this month. And of course the victim company says, yes we paid you, we paid you into your new bank

Geoff White: account. And the supplier says, what new bank account? And suddenly they work out, it's been two weeks, the

Geoff White: money has just gone. That makes billions of dollars for crime gangs every year. But again, is it a cyber crime or is it

Geoff White: a fraud? But it's sort of done often via email, but equally it can be done by somebody who's phoning up. And

Geoff White: there's loads of different permutations on this. There's CEO fraud, where a a a gang will contact a company, maybe

Geoff White: the finance director, and say, I'm the CEO, you know, we've got to authorise this payment, I'm on holiday. Of course, CEOs

Geoff White: like everybody else, they put on social media, you know, their their trip to some to the uh Virgin Islands or whatever.

What we're now seeing is in Southeast Asia

Aleksandra King: proper business, yeah. Movement going on. It's

Aleksandra King: like Starbucks, Burger King, McDonald's, yeah. Business practice. Yeah. Whilst the ransomware gangs and virus writers largely, we think, are

Geoff White: based in the Russian Federation, the people who use that ransomware could be anywhere. They will be distributed around

Geoff White: the world. So we start to see the sort of federations, affiliate networks being created around the cyber crime

Geoff White: side. In the fraud side there has been a big nexus around West Africa. Um There is a cliché about sort of Nigerian f

Geoff White: fraud gangs. Unfortunately there is truth in that cliché. Okay, look, vast majority

Geoff White: of people living in Nigeria have nothing to do with this, but again, tiny minority but significant minority around West

Geoff White: Africa, Ghana, Nigeria, have pioneered a lot of those romance fraud tactics. Yes, for sure. It's famous now. What we're now seeing is in Southeast Asia,

Geoff White: the gangs around places like Myanmar, um Laos, Cambodia, s that's in the Philippines, setting up operations to do this

Geoff White: thing we talked about earlier, this um romance fraud, investment fraud mix. So that's all coming from those Southeast Asian

Geoff White: networks. However, we're starting to see those spread around. They're springing up in the Middle East, in South America and

Geoff White: so on. Because these tactics, once they succeed, other criminals look and go, well, that's a great idea, I'm going to do

Geoff White: that. And you can just set up shop. You need some phones, internet access, some employees, but there's no reason why you

Geoff White: can't set up one of these operations. So in terms of regions, you can say some things about where the regions are and

Geoff White: what's going on, but increasingly we're looking at an increasingly globalised picture.

Technology, actually it starts with processes, business process

Geoff White: It's great technology. The flip side of that unfortunately is the fact that everybody's able to

Geoff White: communicate with everybody everywhere around the world, pretty much all the time, is brilliant, it's amazing. It also

Geoff White: means that bad people can use that communication. So unfortunately it's the cost, the cost of the wonderful world of

Geoff White: tech we live in is that we have to be a bit more suspicious, take our time a bit more.

Aleksandra King: Everything has its price. It does. But in a way you can get the leg up, whereas if you know that they they're doing all this

Aleksandra King: sinister stuff, then you adapt, you know. We also adapt, that the both sides will adapt in order to balance out, I guess.

Geoff White: Precisely, yeah. So the whole thing. Okay, so let's just say they're planning a cyber attack, okay, on a big company, and um it's already

Aleksandra King: in work. What's. What's sort of been going on behind the scenes?

Geoff White: First thing you need is research. Uh There's a lot of parallels actually between the way organized cyber crime happens

Geoff White: and the way just organizations work. Y Let's compare this to you wanting to take over another business. You know, you want

Geoff White: to do a hostile takeover or semi-hostile takeover. First thing you do is you research. You want due diligence

Geoff White: on this. How many employees, where are they, what roles, what are they earning, what are their email addresses, what's

Geoff White: the market value of the company, um where are they based, offices, all of that. And actually I've seen cyber crime gangs

Geoff White: who actually pay researchers

Geoff White: to go out and just do that research, like you would pay a corporate due diligence company. Just find everything about

Geoff White: this company. And what you're looking for, and this is the interesting thing, people get obsessed with cyber crime and

Geoff White: technology, actually it starts with processes, business process. Put this company on a sheet. You can get a sheet of

Geoff White: paper and just write it down. Right, here's this company, CEO there, the board here, the finance director. You start to

Geoff White: draw the linkages, and what you're looking for is the bits where value is moving in that organization. And when I say

Geoff White: value, you think about money and bank balances, yeah, could

Geoff White: be that, or it could be valuable information.

You've got three stages in your classic money laundering

Geoff White: And also, when you money launder, it's sort of, why would you do that? We think about drug dealing, we think about robberies, and we think about hacks and frauds. Without money

Geoff White: laundering there's an argument to say none of it would happen. Yeah. So let's say um we go into business and we start selling

Geoff White: drugs on the street and we start making millions in cash. A lot of drug deals on the street are still in cash. Great,

Geoff White: we've got a million quid, That's. that's a good payday, fantastic. So we want to go and spend that ourselves on

Geoff White: something, maybe a nice car, Be you know, a couple of yachts for us, you know,

Geoff White: something like that. Fine. Okay, you walk into a car dealership with a million in cash. By the way, my friend did this,

Geoff White: he tried to pay for a car in cash because he thought he could get a discount, and the car and the guy in the car

Geoff White: dealership was horrified, freaked out and told him to go away. So he had to get the tube back with his £60,000

Geoff White: in cash. You can't spend cash in these places because they know cash is, Exactly. So then we've got to launder it. Okay,

Geoff White: so think about that and just map that out. Every major organized crime gang on the planet that's making serious money, you

Geoff White: know, they need

Geoff White: laundering facilities. They can't spend the money unless they've laundered it. So you don't make the money unless you

Geoff White: can spend it, and if you can't spend it unless you launder it, you need laundering services. It is absolutely the glue

Geoff White: that holds this thing together, What's their main laundering services? So you've got three stages in your classic money laundering. First

Geoff White: stage is what they call placement. So again going back to our cash example, we've done well, we have our drug deals. Placement is getting that money into the financial system, a bank usually. Again, you can't take

Geoff White: a suitcase of a million into a bank, they're going to ask some questions about that. So then you say, oh, well actually I

Geoff White: run a cash business, taxi driver or hairdresser, nail bar. Nail bar, DIY, you know, tradespeople get paid in cash. So you

Geoff White: pretend to have that business. And you say

Aleksandra King: check, and they say check, reconciliation check, which nail bar, where is it,

Aleksandra King: what's your, They can.

Wherever you see lots of cash

Geoff White: It's not necessarily dodgy, but I

Geoff White: would want to ask some questions and sort of say, you know, is there a reason why you've not got a card? You know, you

Geoff White: can take a payment into a direct bank account, but you've not got an iZettle machine or a company bank account. It's

Geoff White: it There would be an odd one, but it's not necessarily absolutely dubious. Good.

Aleksandra King: So but you're saying some of these nail bars, some of these places, might be involved in this money laundering thing?

Geoff White: Some. of

Geoff White: If you've got a lot of cash, and and a lot of particularly drug, street-level drug crime is still cash orientated, um y

Geoff White: you're going to end up with scads of cash, just wads and wads and wads of stuff. You've got to find some way of sticking

Geoff White: that somewhere safe. If you If you stash it in your house, stash houses get raided a lot by other crime gangs, because as

Geoff White: soon as they find out where you keep your money, yeah, they're coming after you. Police, if they come, they'll just seize the money, it's obviously

Geoff White: proceeds of crime. So you've got to get that money somewhere safe, you've got to get it

Geoff White: in the bank. So So that's why a cash-intensive business, y you know, as in someone like a builder's merchant, somewhere

Geoff White: where cash, you know, people who bring in um jewellery and they pawn it and they get paid cash, cash-intensive businesses

Geoff White: are useful. They're not all dodgy, they're not all criminals by any means, but if I had a load of cash, I'm looking for

Geoff White: where in society cash lives, so I can take my dodgy cash and mix it with clean cash. So wherever you see lots of cash,

Geoff White: criminals are going to be interested in it. Not necessarily

Geoff White: they've penetrated it, but they're going to be interested in it.

They call themselves post-paid security

Geoff White: So for

Geoff White: example, I've been investigating ransomware gangs recently, this phenomenon where they scramble your data and charge you a

Geoff White: ransom. Those gangs have a really interesting way of describing themselves. Okay, they call themselves post-paid security

Geoff White: testers. So the idea is, as a

Geoff White: company you can pay a security tester to come in and test your security. Oh, stop it. Yeah, yeah. So what they say is, uh uh we've

Geoff White: done a security test on you by hacking you, you've failed the security test because we've hacked you, you now pay us the

Geoff White: same you would any other security researcher. You didn't agree this pre-payment thing. We've helped you though, wouldn't you rather know? That's how they

Geoff White: describe themselves. Now again, that could be self-delusional, bullshit. but they are so entrenched in this. they d they

Geoff White: deal with this. If you're going to go in and target victims day in, day out, and in ransomware and in

Geoff White: fraud

Geoff White: you are speaking to your victims, you've got to pull off a hell of a psychological trick not to go home, You must do. I mean, to be selling drugs to people, you've got to pull off a hell of a psychological trick, because you know very well what you're doing. So how in your brain do you reconcile that? One way is saying I'm a business person. It's a disgusting, horrible thing to do, and two wrongs don't make a right,

Aleksandra King: and it's just lack of

Aleksandra King: values, just really bad upbringing or some sort of psychological problem. I think It's uh there's absolutely no

Aleksandra King: justification whatsoever of being a criminal, liar, and of course anyone selling drugs and anyone doing this, is n on no

Aleksandra King: planet is it okay. If they're listening, yeah, it's just madness. You

Geoff White: know, there are also often factors in the person's background. You know, they'll have come from difficult family situation,

Geoff White: often have mental health problems, drug problems, alcohol problems, or have them in their family. And so there's that

Geoff White: issue as well, that people bring up. Again, I'm not excusing this, I'm just explaining that, there's I say, t to to do

Geoff White: something that you know is horrible, and has consequences, you have to build up a sort of bulwark in your mind of

Geoff White: reasons. And so often these get called upon.

Close

Guide: That was Geoff White speaking with Aleksandra King on The BEYOND Podcast. Visit BEYONDai.media to learn more. See you on the next episode.

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Narration is AI-generated. Everything said in the conversation is human.