In a new report, California Attorney General Kamala Harris details why high-tech crimes emanating from international groups present a major threat to the state's economy.
On Thursday, Harris released the 118-page report (PDF), called “Gangs Beyond Borders: California and the Fight Against Transnational Organized Crime.”
Three “emerging pillars” of transnational criminal activity were addressed in the report: trafficking of drugs, weapons and human beings; money laundering; and high-tech crimes, including hacking, fraud and digital piracy.
In addressing cyber-related threats, the report highlighted several infamous rings made up of criminals in and outside of California. A scheme code-named “Operation Phish Phry” was named as “particularly devastating” to its victims.
The international phishing ring looted more than $1 million, and resulted in charges being brought against 100 hackers in the U.S. (primarily in California) and Egypt in the fall of 2009.
In assessing its track record of orchestrated attacks, the report said that California topped all states “by a large margin,” in the number of hacked systems, computer systems infected by malware and victims of internet crimes. In addition, the losses suffered by cyber crime victims, as well as the number of victims of identity fraud, outpaced other states, the report said.
“In addition, because of the outsized role new technologies and mass-media entertainment play in its information-based economy, California is particularly vulnerable when its networks become infected and its intellectual property is stolen,” the report continued.
Harris' report cited 2012 stats from the Privacy Rights Clearinghouse, which recorded around 330 breaches in the U.S. caused by attackers who deliberately aimed to compromise databases or networks.
The report said that, out of at least 331 intentional breaches, 17 percent occurred in California – resulting in a “far higher percentage than in any other state – which, in turn, contributed to putting at risk the sensitive information of at least 2.5 million Californians that year.”
The findings also noted other emerging attack methods for cyber criminals, including the use of Bitcoin and other virtual currencies that can allow for the quick and efficient movement of illegal money transactions.
Recommendations for thwarting high-tech crimes were for state and local authorities to better utilize the private sector, as the industry often serves as their “best source of information” for staying abreast of, and stopping, emerging threats.
In addition, Attorney General Harris advised business to adopt cyber security best practices to help minimize their vulnerability to threats. Last month, the California Department of Justice released a document called “Cybersecurity in the Golden State,” to serve as a reference for organizations.
The state of California has often led the way on enforcing privacy and data security mandates, including its landmark 2003 breach notification bill, SB-1386, and even its insistence on holding mobile application developers accountable for failure to post clear privacy policies for consumers.