NIA #4 - More Crime, Fraud, Waste
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Subject: nia #4
%% N.I.A. %%
%% Network Information Access %%
%% 03MAR90 %%
%% Lord Kalkin %%
%% File #4 %%
:_Computers: Crime, Fraud, Waste Part 2
:_Written/Typed/Edited By: Lord Kalkin
2. INFORMATION SECURITY
What was called computer security in the 1960s and data
security in the 1970s is today more accurately called information
security. Information security underscores the value of
information in today's society -- the recongition that information
is a valuable resource, that it is more than discrete data elements.
Information security refers to the controls that protect
information from unauthorized access, destruction, modification,
disclosure, and delay. Information security addresses safeguards
in the processes of data origination, input, processing, and
output. The goal of information security is to safeguard the
system's assets, to protect and ensure the accuracy and integrity
of information, and to minimize the damage that does occur if the
information is modified or destroyed. Information security
requires accountability for all events that create, modify, provide
access to, or disseminate information.
Information security provides assurances that the following
- Confidentiality of sensitive information;
- Integrity of information and the related process
(origination, input, processing, and output);
- Availability of information when needed; and
- Accountability of the related information processes.
Some techniques to protect the system and provide
accountability can be built into the computer. Others can be built
into the software. Still others are dependent upon management
policies to define appropiate procedures to be followed. Deciding
upon the level of sophistication of accountability techniques for a
system requires identifying the sensitivity of the information and
then determining the appropiate level of security.
This document addresses sensitive data as defined in OMB
Circular A-130, Management of Federal Information Resources:
The Term "sensitive data" means data that require
protection due to the risk and magnitude of loss or harm that could
result from the inadvertant or deliberate disclosure, alteration,
or destruction of the data. The term includes data whose improper
use or disclosure could adversly affect the ability of an agency to
accomplish its mission, proprietary data, records, about
individuals requiring protection under the Privacy Act, and data
not releasable under the Freedom of Information Act.
CRIMES, ABUSES, AND WASTE
A survey of goverment agancies identified techniques used
in committing computer-related fraud and abuse. Few of these
frauds and abuses involved destruction of computer equipment or
data. Only 3 percent of the frauds and 8 percents of the abuses
involved willful damage or destruction of equipment, software or
data. Most of the fraud and abuses cases involved information --
manipulating it, creating it, and using it.
THE FIVE MOST COMMON TECHNIQUES USED TO COMMIT
COMPUTER-RELATED FRAUD AND ABUSE
1. Entering unauthorized information
2. Manipulating authorized input information
3. Manipulating or improperly using information
files and records
4. Creating unauthorized files and records
5. Overriding internal controls
1. Stealing computer time, software, information,
2. Entering unauthorized information
3. Creating unauthorized information fileas and
4. Developing computer programs for nonwork purposes
5. Manipulating or improperly using computer
These techniques are often used in combination and are
identified in Computer-Related Fraud and Abuse in Goverment
Agencies, Department of Health and Human Services, Office of
Inspector General, 1983.
Another way of looking at computer-related crime is to examine
the types of crimes and abuses, and the methods used to commit them.
"Data Diddling" - Probably the most common method used to commit
computer crime because it does not require
sophisticated technical knowledge and is relatively
safe. Information is changed at the time of
input to the computer or during output. For example,
at input, documents may be forged, valid disks
exchanged, and data falsified.
"Browsing" - Another common method of obtaining information which can
lead to crime. Employees looking in others' files have
discovered personal information about coworkers. Ways to
gain access to computer files or alter them have been found
in trash containers by persons looking for such information.
Disks left on desks have been read, copied, and stolen.
The very sophisticated browser may even be able to look for
residual information left on the computer or on a storage
media after the completion of a job.
"Trojan Horse" - This method assumes that no one will notice that a
computer program was altered to include another function
before it was ever used. A computer program with a
valid, useful function is written to contain additional
hidden functions that exploit the security features of
"Trap Door" - This method relies on a hidden software or hardware
mechanism that permits system protection methods to be
circumvented. The mechanism is activated in some
nonapperent manner. Sometimes the program is written so
that a specific event, e.g., number of transactions
processed or a certain calender date, will cause the
unauthorized mechanism to function.
"Salami Technique" - So named because this technique relies on taking
slices so small that the whole is not obviously affected.
This technique is usually accomplished by altering a
computer program. For example, benefit payments may be
rounded down a few cents and these funds, which can be
considerable in the aggregate, diverted to a fraudulent
"Supperzapping" - Named after the program used in many computer centers
which bypasses all system controls and is designed to be used
in time of an emergency. Possession of this "master key"
gives the holder opportunity to access, at any time, the
computer and all of its information.
Examples of Compuer-Related crimes, abuses, and waste include:
- A payroll clerk, notified of a beneficiary's death, opened a
bank account using the beneficiary's name and social security
number. The beneficary was not removed from the computer
eligibility lists, but a computer input form changed the
address and the requested direct deposit of benefits to the
payroll clerk's new bank acount.
- A major loss occurred with the diversion of the goverment
equipment. Fictitious requisitions were prepared for routine
ordering at a major purchasing centor. The rquisitions directed
shipment of communications equipment to legitimate private
corporations holding goverment contracts. Just prior to the
delivery date, one of the conspirators would call the corporation
to alert them of their "error" and arrange "proper" delivery of
the equipment to the conspirators.
- Three data clerks, using a remote terminal, entered phony
claims into the computer to recieve over $150,00 in benefits
and then deleted records of these transactions to avoid being
- Thefts of information commonly involve selling either
personnel information, contract negotiation information
( e.g., contract bids), and company proprietary information
(e.g., product engineering information ) for outside commercial
use, or copying or using software programs for personal or
personal business use.
The following clues can indicate information security
1. Security policies and practices are nonexistant or not
followed. No one is assigned responsibility for information
2. Passwords are posted nest to computer terminals, written in
obvoius places, shared with others, or appear on the computer
screen when they are entered.
3. Remote terminals, microcomputers, and word processors are
left on and unattended during work or nonwork hours. Data
is displayed on unattended computer screens.
4. There are no restrictions on users of the information, or on
the applications they can use. All users can access all
information and use all trhe system functions.
5. There are no audit trails, and no logs are kept of who uses
the computer for which operation.
6. Programming changes can be made without going through a
review and approval process.
7. Documentation is nonexistant or inadequate to do any of the
following: understand report definitions and calulations;
modify programs; prepare data input; correct errors;
evaluate system controls; and understand the data base
itself -- its sources, records, layout, and data relationships.
8. Numerous attempts to log on are made with invalid passwords.
In dialup systems -- those with telephone hookups -- hackers
have programmed computers to do this "trial and error" guessing
9. Input data is not subject to any verification or accuracy
checks, or, when input data is checked:
-- more data is rejected;
-- more data adjustments are made to force
-- there is no record of rejected transactions.
10. There are excessive system crashes.
11. No reviews are made of computer information to determine the
level of security needed.
12. Little attention is paid to information security. Even if
an information policy exists, there is a prevailing view
that it really is not needed.
INFORMATION SECURITY CONTROLS
1. Control access to both computer information and computer
applications. Ensure only authorized users have access.
Require users to log on to the computer as a means of initial
identification. To effectively control a microcomputer, it may be most
cost-effective to use it as a single user systems. Typically, a
microcomputer has no log-on procedures; authority to use the system is
granted by simply turning on the computer.
Use nontransferable passwords, avoiding traceable personal data,
to authenticate the identity of the users. Establish password
management protection controls, and educate users to common problems.
Passwords are one type of identification -- something users
knows. Two other types of identification which are effective are
somthing that a user has -- such as a magnetic coded card -- or
distinguished user characteristic -- such as a voice print
If the computer has a built in default password ( a password
that comes built into the computer software and overrides access
controls ) be sure it gets changed.
Consider having the computer programmed so that when the user
log on, they are told the last time of its use and the number of invalid
log-on attempts since then. This makes the user an important part of
the audit trail.
Protect your Password
- Don't share your password -- with anyone
- Choose a password that is hard to guess
- Hint: Mix letters and numbers, or select a famous saying and
select every fourth letter. Better yet, let the computer
generate your password.
- Don't use a password that is your address, pet's name,
nickname, spouse's name, telephone number or one that is
obvious -- such as sequential numbers or letters.
- Use longer passwords because they are more secure; six to
eight characters are realistic
- Be sure that your password is not visible on the computer
screen when it is entered.
- Be sure that your password does not appear on printouts
- Do not tape passwords to desks, walls, or terminals. Commit
yours to memory. <<---- Remember this!!!
Manage Passwords Carefully
- Change passwords periodically and on an irregular schedule
- Encrypt or otherwise protect from unauthorized access the
computer stored password file.
- Assign password administration to the only most trusted
- Do not use a common password for everyone in an area.
- Invalidate passwords when individuals leave the organization.
- Have individuals sign for their passwords.
- Establish and enforce password rules -- and be sure everyone
Develope authorization procedures that identify which users have
access to which information and which applications -- and use
Establish procedures to require management approval to use
computer resources, gain authorization to specific information and
applications, and recieve a password.
In addition to user identification and authorization procedures,
develope procedures to restrict access to data files:
-- Use external file and internal file labels to identify the
type of information contained and the required security levle;
-- Restrict access to related areas that contain data files such
as off-site backup facilities, on-site libraries, and
off-line files; and
-- Use software, hardware, and procedural controls to restrict
access to on-line files to authorized users.
-- Turn off idle terminals;
-- Lock rooms where terminals are located;
-- Position computer screens away from doorways, windows, and
heavily tracked areas;
-- Install security equipment, such as devices that limit the
number of unsuccessful log-on attempts or dial-back would be
users who use telephones to access the computer;
-- Program the terminal to shut down after a specific time of
-- If feasible, shut down the system during nonbusiness hours.
2. Protect the integrity of information. Input information should be
authorized, complete, accurate, and subject to error checks.
Verify information accuracy by using procedures that compare
what was processed against what was supposed to have been processed.
For example, controls can compare totals or check sequence numbers.
Check input accuracy by installing checks on data validation and
verification, such as:
- Character checks that compare input characters against the
expected type of character (e.g., numeric or alpha );
- Range checks that compare input data against predetermined
upper and lower limits;
- Relationship checks that compare input data to datat on a
master record file;
- Reasonableness checks that compare input data to an expected
- Transaction Limits that check input data against
administratively set ceilings on specific transactions.
Trace transactions through the system using transaction lines.
Cross-check the contents of files by doing a record count, or by
controlling the total.
3. Protect System software. If software is shared, protect it from
undetected modification by ensuring that policies, developemental
controls and life cycle controls are in place, and that users are
educated to security policies.
Software developemental controls and policies should include
procedures for changing, accepting and testing software prior to
implementation. Policies should require management approval for
software changes, limit who can make software changes, and address
An inventory of software applications should be developed and
Controls should be installed that prevent unauthorized persons
from obtaining, altering, or adding, programs via remote terminals.
4. Enhance the adequacy of security controls by involving ADP auditors
in evaluating applications program controls and consulting them to
determine needed tests and checks in handling sensitive data. Audit
trails built into computer programs can both deter and detect computer
fraud and abuse.
Security audit trails should be available to track the identity
of users who update sensitive information files.
If the sensitivity of information stored on microcomputers
requires audit trails, then both physical and access controls are
In a computer network, the host computer, not the terminal, is
where the audit trails should be located.
Audit trails should not be switched off to improve processing
Audit trail printouts should be reviewed regularly and frequently.
5. Consder the need for communication security. Data transimitted over
unprotected lines can be intercepted or passive eavesdropping can occur.
N.I.A. - Ignorance, There's No Excuse.
Founded By: Guardian Of Time/Judge Dredd.
[OTHER WORLD BBS]