KINGSPORT – “The truth is that everyone in this room, including myself, has had their identity stolen … every breach occurs because somebody did something they weren’t supposed to do. Hackers do not cause breaches. People do.”
Frank Abagnale Jr. had some direct, ominous language in his presentation the other day at a CyberSecurity and Fraud Prevention Seminar held at the MeadowView Marriott.
Abagnale, a former con artist whose crimes inspired the memoir and movie “Catch Me If You Can,” is an authority on forgery, embezzlement and secure documents. After a five-year international crime spree, he was arrested at age 21 for cashing millions in fraudulent checks worldwide and posing as a doctor, lawyer and airline pilot. Following his five-year prison term, he was released after agreeing to help the FBI as an expert on fraud.
He cited one negative number after another relating to “The Art of the Steal.”
For instance, Abagnale said there was $994 billion in fraud during 2017, including $60 billion in Medicare fraud alone
“Just to put that number in perspective … the Pentagon’s budget for the entire same year, all the armed services … was $740 billion,” Abagnale noted. “Unfortunately in 2018 we will probably reach the trillion dollar mark in fraud.”
The primary issue here, Abagnale pointed out, is people don’t stick to the things in actual accounting practices, due diligence or ordinary care even at medium and large companies.
“We have a moral obligation to keep our employees honest,” he stressed. “That’s the whole purpose behind control. We do not put everything in one person’s area. We have controls in place because we understand everybody has problems … sometimes people do things they normally would not do … we never want to put someone in that position.”
Abagnale said the most common email he gets is from a small business owner who’s had an employee steal, say, $50,000 from him. Then the person gets arrested, enters a guilty plea and gets probation. There’s no restitution.
So what should that particular business owner do?
Abagnale said the business owner should file a 1099 form against the employee with the Internal Revenue Service.
“The IRS collection unit will go after that individual,” he promised. “They have the power to take the car, take the home, garnish their wages. The threat of a 1099 is far greater than sending someone to jail. If you make it easy for someone to steal from you chances are they will.”
The U.S. Chamber of Commerce reported that at the end of 2017, every man woman and child paid $500 for crimes, Abagnale noted. As a result, businesses have to increase prices.
“We should be very concerned about that,” he told seminar attendees.
“Hackers are only looking for doors to open. When you open a door, you are going to end up being a victim. And they have a lot to choose from,” he said. “Education is the most powerful tool to fighting crime. I tell college students: Forget about writing code. Forget about going to computer class. Start to learn how to detect malware, ransomware.”