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Study Opportunities' Blog

Big Hacks and the importance of Software Updates

Matters Arising:

Apple vs The FBI. The FBI backed down, cancelled the case and stated that a 3rd party (that they did not name) had come forward to help them crack the phone. They did not say if there was any worthwhile information on the device. They have also said that the method used would not work on a newer version of iOS.

The weeks biggest story: Tax Havens, Dirty Money - and how the world found out

“Your information has never been safer than with Mossack Fonseca’s secure Client Portal.”

Mossack Fonseca - sounds like an interesting character name in a novel. Actually it's the name of a law firm in Panama that has been very much in the news this week. Whilst the firm may be very good at the legal services it offered (it has offices in many countries and clients from around the world), it obviously needed to pay much more attention to its internal IT. The facts are:

  • Their e-mail was powered by an outdated version of Microsoft's Outlook Web Access (and not encrypted)
  • Their web site ran off an outdated (by nearly 3 years!) version of WordPress (a free, open source engine used to create web sites).
  • They used old versions of Drupal and various WordPress Themes, Scripts and Plugins.

WordPress is incredibly popular. According to Wikipedia "WordPress was used by more than 23.3% of the top 10 million websites as of January 2015". This popularity makes WordPress a great target for hackers. So any web site administrator with any common sense knows that, if you don't want to be hacked, you install any update to WordPress as soon as it is released. The concept of the importance of installing updates is even stressed in South African High School computer subject courses!

Who actually did the hack - and how they did it is unknown.

So Mossack Fonseca didn't stay up to date. And, surprise, surprise - they were hacked. The hackers stole 2.6 TERABYTES of data. 11.5 Million documents. Mossack Fonseca was oblivious to the hack which took place over the course of a whole year. The hacker(s) gave all the stolen data to the German paper Suddeutsche Zeitung who shared it with the ICIJ (International Consortium of Investigative Journalists), other news organisations and journalists around the world.

What was stolen?

This is where it gets interesting - the hacker stole documents that prove that the firm basically helped rich people effectively rob poor people by evading tax. Their clients include politicians, professional athletes, movie stars, FIFA officials, fraudsters, drug smugglers, Mafia bosses, and so on. The full list of names and companies will be released in May.

Why the fuss - what's really going on?

Basically Mossack Fonseca helped people create 'shell companies'. A shell company is a company that does nothing - except manage money. Enquiries about the company and the money it manages stop with the company - and its management; that is, the people whose names are on the documents and letterheads of the company (usually lawyers, accountants or even office cleaners - NEVER the owner of the company). In this way the shell company hides the true identity of the person receiving / 'owning' the money. This make it possible for the person involved to hide their wealth from their government and avoid paying tax on their millions. It also enables criminals to hide and 'launder' (pretend that their money comes from legal activities rather than crime) their money. If you really want to hide money you buy a shell company, use that company to buy another shell company, which in turn buys another shell company - and so on until it becomes virtually impossible to trace who really owns the money (except, of course, if you are hacked).

It is also important to realise that Mossack Fonseca is only one of many, many companies offering this kind of service to people wishing to hide their wealth.

Read More about this:

For the classroom:

This is a golden opportunity to stress the importance of updates and the consequences of failing to do so. It is also a good opportunity to deal with ethics. The hacker(s) who stole this data did something criminal - they stole data from a company. That data revealed illegal and corrupt activity - crimes - committed by others. Is what the hacker did right or wrong? The whole concept of 'Whistleblowing' is relevant here. Do the rich have a right to hide their wealth and not be taxed? If you are a soccer player being paid $5 million for the right to use your name and image, do you have the right to be upset that $2 million should go to tax? Is it OK for you to arrange that the payment goes to an offshore shell corporation instead of to you - and so no tax is paid? That shell corporation then buys you a house and pays your kids school fees, etc... Is what you are doing something that deserves to be kept 'private'?

Other noteworthy news:

  • If you have an iOS device and are blind then Facebook has a way to help you 'see' your friends photos. Using technology similar to the AI that beat the world 'Go' champion, your device can describe the contents of the photo to you! Check it out and see the video at Endgadget.
  • 3D Print a working ovary. Scientists have implanted 3D printed ovaries into infertile mice - which have given birth! Read it at Popular Science.
  • Newest e-mail Scam : Speeding tickets: You have to read this one - and then be careful which apps you install on your device and allow to access data such as GPS! The Verge

'Till next week, happy teaching.

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