New AI Fraud Methods—Lecture by Professor Wang Xiaoming

Compiled by Tang Jianhua

The main purpose of fraud is money. The United States is one of the richest countries in the world, so Americans have become the target of fraudsters. According to statistics from the U.S. Federal Trade Commission (FTC) in 2023, Americans lose approximately 100 billion U.S. dollars due to fraud every year, reaching a new high. Among them, the loss to victims of impersonation scams (imposter scams) is 27 billion, and the amount of email fraud victims is 24 billion. 14 billion, investment and financial fraud victims amounted to 10 billion, and romance scams lost nearly 2024 billion. The rampant fraud in recent years is probably related to the development of artificial intelligence (AI). For example, the losses of victims of counterfeit fraud rank first among all types of fraud cases. This is because fraud groups use new AI technology to pretend to be someone the victim knows (actually No), successfully defrauded the victim's trust and made money. With the advancement of AI technology, fraud groups are taking advantage of the trend to innovate their tactics. How can we avoid falling into the trap of fraud groups? "Jiaosheng Community Center" invited Dr. Wang Xiaoming, professor of criminal justice at UHD University of Houston, to give a keynote speech on September 9, 28. Analyze what is fraud? On this basis, let’s talk about the impact of artificial intelligence on electronic fraud, and from an academic perspective and the experience of grassroots law enforcement, provide the public with the wisdom to protect themselves and avoid becoming victims of fraud. What should you do if you are unfortunately victimized? Minimize losses (damage control).

An introduction to fraud

(1) The beginning of the fraud

Since the beginning of mankind, there has been deception because sin has entered the human heart (Romans 5:12). The Bible records how Jacob successfully deceived his brother Esau and their father Isaac. One day Esau came back from hunting very thirsty and wanted to drink red bean soup. Jacob used the red bean soup prepared in advance to negotiate terms with Esau, asking his brother to exchange his eldest son's birthright. Esau agreed without much thought. , so Jacob easily received the birthright. According to Jewish custom, when inheriting a family property, the eldest son can receive double the amount, but he still needs his father's blessing. So Jacob and his mother teamed up to take advantage of Isaac's old eyesight, disguised themselves as Esau, and obtained his father's blessing for the eldest son. From the perspective of biblical history, this is probably the earliest scam of mankind.

(2) Core of fraud

From a criminological perspective, fraud is a breach of trust that infringes upon the victim's interests by gaining the victim's trust. Human society is built on trust. For example, if you use a credit card to make purchases, why can you buy goods or services with just a plastic card? Because the entire trading system is based on "trust". Merchants believe that after selling products or services, they can receive payment from the card-issuing bank; another example is using banknotes for shopping, which is just a piece of paper with the amount printed on it. Why are people willing to accept it? Because "trust" is like the motto "IN GOD WE TRUST" on the US dollar bill, it means that we believe in God who created the universe, heaven and earth, so we believe that this piece of paper with the amount of money printed on it has the value of God's seal. If "trust" is violated, the human social system will collapse. Therefore, the harm of fraud to society is very serious.

There are two core elements for successful fraud. The first is "gaining the victim's trust." Just like Satan pretends to be an angel of light (11 Corinthians 14:2002), a liar will also pretend to be a human being to deceive the trust of his victims. In 1960, there was a movie "Catch Me" If You Can) is based on the true story of Frank Abagnale, Jr., a famous fraudster in the 250s. Abagnale pretended to be a pilot, a doctor, and a lawyer, and used forged checks to defraud 21 million US dollars. Therefore, in English, liars are also called "Con Artists". The second core factor for successful fraud is "being in the same community", that is, the scammer is often in the same community as the victim. For example, the founder of the "Ponzi scheme", Charles Ponzi, was an Italian-American, so Most of the victims are Italians; Bernard Madoff, the XNUMXst century "investment scam" tycoon, is the former chairman of Nasdaq, and most of the victims are Wall Street investors or companies; and in recent years, the "Chinese Consulate Impersonation Scam" Most of the victims are Chinese.

(3) Fraudulent schemes

The tricks of fraud are basically "inducement" and "coercion". The most common "inducement" is the "get rich quick trick". Scammers use electronic devices (mainly mobile phones or emails) to inform potential victims of "winning a lottery" or "investing". "Make a lot of money", you should contact them immediately. As long as potential victims are greedy for profit and contact the scammers, they will fall into the trap of fraud and become victims. In contrast, a common "coercion" is the "fake official agency routine". Scammers falsely claim to be the IRS or Immigration Bureau, telling potential victims of "tax evasion" or "illegal residence" and to contact them immediately. As long as potential victims are afraid, If you contact a scammer, you will fall into the scam and become a victim. Scam groups do not give potential victims time to think and often require victims to respond immediately. Even if potential victims ask for more information, the scam groups will direct the victims to the scammer's associates or web pages.

2. AI technology

Due to the popularity of electronic tools, today's scams are basically "electronic fraud." Professor Wang used a progress chart of electronic tools to show the world's first handheld mobile phone (also known as the "brick phone") produced by Motorola in 1984, the Apple mobile phone that came out in 2007, and now the new era of smartphones. To illustrate how fraud groups use smartphones, emails or applications (APPs) to transcend space restrictions, defraud victims of their trust, or steal personal information to further defraud money. This type of electronic fraud is also called "cybercrime" ( Cyber Crime). In recent years, with the advancement of AI technology, it has become a new tool for fraud groups. At present, the most commonly used method by fraud groups is "deepfake", which is to apply AI's human image synthesis technology to fraud to generate images of the victim's relatives and friends. Even the voices can be exactly the same, easily defrauding the victim's identity. trust.

(1) AI fraud cases

In January 2024, a video of Dr. Kgomotso Mathabe appeared on Facebook, promoting a drug to treat male erectile dysfunction. Since Dr. Mathabe is an expert in this field, many people believed it. It is known that the video was generated by AI deepfake technology and directed the victims to a website that required them to enter their bank details to purchase the drug online. As a result, these victims had their money transferred from their bank accounts but did not receive the drug.

(Source: Nature, doi: https://doi.org/10.1038/d41586-024-02521-3)

Diabetes expert Dr. Viswanathan Mohan has appeared in multiple AI deepfake videos endorsing diabetes drugs. In India, Dr. Mohan’s name is almost synonymous with diabetes, so many people are deceived.

(Source: Nature, doi: https://doi.org/10.1038/d41586-024-02521-3)

In February 2024, the United Daily News reported that "Successfully changed the face of the head office through AI and defrauded the Hong Kong branch of 2 million yuan." The news revealed that the fraud group first notified the Hong Kong branch manager Yueyang via email in the name of the head office. Hold an online meeting, and then use deepfake technology to "change" the scammer's face into a senior executive of the British company. There were 8 participants in the cross-ocean online meeting that day. Except for the head of the Hong Kong branch, who was a real person, the other five were all scammers who had "changed their faces". The head of the Hong Kong branch did not doubt these "familiar" senior executives of the head office. , and then followed the "highest instructions" to remit HK$6 million. Later, when I checked with the head office, I found out that I had been deceived.

(2) Shortcomings of deep fakes

However, the current "deep fake technology" still has shortcomings. The expressions of the changed faces are often stiff and unnatural, and the colors of the face and neck are different. As long as you pay more attention, you can still identify that this is an AI "changed face" and not a real person. For example, in the period martial arts drama "Love of Thousand Years", the female character was replaced for some reason. In order to avoid reshoots, the film producers used deepfake technology to "change" the new female character's face. After the broadcast in 2020, sharp-eyed viewers discovered that the female character's expression was stiff and the color of her neck and face were separated, and they revealed the replacement of the female character. Therefore, fraud groups are using new methods of AI technology. As long as we are more careful and do not blindly believe in the images and sounds presented on electronic tools, we can still reduce the chance of being deceived.

3. Prevention and Damage Control

Be alert: First of all, you must realize that everyone is a potential target of a fraud group, and the victims are regardless of race, gender, age, or education level. A high degree of education does not mean that you will not be deceived. You should be extremely cautious when offered investment opportunities by strangers. If there are elders in the family, we should also pay more attention to them. Some scams seem to target the elders. "Every day, scammers prey on unsuspecting seniors and rob them of their savings," said U.S. Attorney Tara McGrath. "We are calling on everyone to seek help from someone they have met only through a phone call, text message or computer. Before sending money to strangers, be cautious and consult family and friends.”

The following are cybersecurity tips from the FBI:

Systems and software should be kept up-to-date and have a powerful, reputable anti-virus program installed.
Be careful when connecting to public Wi-Fi networks and do not use public networks for any financial transactions to avoid having your personal information recorded.
A different password should be used for each online account.
All accounts should be set up with multi-factor authentication.
Check the source of all emails and double-check the web URL before replying to an email or clicking on a web page.
Do not click on anything in an unsolicited email or text message.
Be careful about the information you share in your personal online profiles and social media accounts, including information such as pet names, schools, and family members. This information may provide scammers with tips for guessing account passwords or answers to security questions.
Never send money to any unknown person or organization that demands money and urges immediate payment.

(2) Take action: What should you do when you realize you have become a victim of fraud? First, stay calm, take a deep breath, and take the right actions:

If your image has been fraudulently used or forged on a social media platform, contact the social media platform immediately and request its removal.
Call the police and seek legal action, especially if the video poses a serious threat to the victim's reputation or has been used in a crime.
Report to consumer protection regulators, the competent authority in the United States is the Federal Trade Commission (https://reportfraud.ftc.gov/)
Submit a complaint to the Internet Crime Compliant Center (IC3) (www.ic3.gov).
When reporting online criminal activity, try to provide as detailed information as possible, including the URL of the website or Internet address, the name of the application, personal information, personal Internet username, the relevant date and time of the report, etc.