December, 2024 - CyberEye

Dan Gavin 16, Dec, 2024

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Corporate Transparency Act Takes a Knock-Out punch

The city might have appeared completely grey if not for the scattered, omnipresent flecks of color plastered over walls, over windows, on screens and billboards, and in the minds of the populace—Party-issued posters of a familiar man with a thick, bushy mustache, captioned, “BIG BROTHER IS WATCHING YOU.” George Orwell’s 1984 is, in essence, about control. The allegorical Party featured in the novel forces its followers into complete submission through surveillance and propaganda. Meanwhile, in the real world in 2024, the federal Corporate Transparency Act (CTA) has been described as Orwellian. It requires extensive disclosure of personal information about business owners, which some feel is an invasion of privacy and government overreach

The CTA was enacted in January of 2021. It required over 32 million businesses with less than $5M in annual revenue to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). The deadline to report is January 1, 2025—or was, rather. But on December 3, 2024, a Texas district court issued a preliminary injunction, halting enforcement of the CTA nationwide. The plaintiffs argued that the CTA compels speech and association, infringing on First Amendment protections. They also raised concerns about privacy violations under the Fourth Amendment (unreasonable search and seizure).

The presiding Judge Amos Mazzant wrote, “ . . . the government is unable to provide the court with any tenable theory that the CTA falls within Congress’s power. And even in the face of the deference that the court must give Congress, the CTA appears likely unconstitutional.” He added that corporate regulation has typically fallen under the states’ jurisdiction.

At the time of the injunction, just over 8 million of the 32 million businesses had reported to FinCEN. Had the CTA not been put on hold, the remaining businesses would soon be subject to fines amounting up to $500 per day. The injunction is therefore critical to the livelihood of small businesses. The federal government has already appealed the case to the Fifth District Court.

With the new administration beginning in January, it’s unclear what further steps may be taken to limit or halt enforcement of the CTA. Working jointly with Congress, the administration could revisit the actual contents of the law, amending transparency expectations or enforcement policies. They could deprioritize the funding of resources for enforcement. They might even manage to repeal the law altogether.

If a chief goal of the CTA is, as FinCEN claims, to uncover money laundering schemes, the fact that one criterion for exemption is a prior year federal income tax reporting of over $5M seems odd. Any money-laundering company would need way more than $5M in revenue to conceal its crimes. Banks with revenue in the billions have been fined for money laundering in the past. In 2012, for instance, HSBC was fined $1.9B for laundering money for drug cartels and countries under sanctions. Later, in 2018, Dankse Bank was involved in a $230B money laundering scandal. And in 2020, Deutsche Bank was fined $150M for involvement in laundering activities related to Jeffrey Epstein.

And it isn’t just banks. In my research, I still haven’t found one conviction for a business with less than $5M in revenue. The Unitech Group, a real estate firm, allegedly started and managed over 52 shell companies to launder money with a revenue of $36M. The Los Zetas Drug Cartel used an Oklahoma horse ranch and numerous shell companies to conceal and transfer millions of dollars of drug money to Mexico with revenues of over $13B. Other common businesses involved in money laundering include nightclubs and art dealers, again, with revenues well over $5M.

You would think, then, that such businesses would be the focus of any transparency acts designed to prevent money laundering. Why does there need to be another huge government database containing private information, which the government has proven they cannot guard safely? (Think back to April 2024, to the Social Security Administration hack. 2.9 billion records were breached.)

Was Judge Mazzant correct to describe the law as quasi-Orwellian? Is Big Brother trying to track the small business owner, infringing on his First and Fourth Amendment rights?

Original article published in the Sierra Vista Herald here.

Dan Gavin 16, Dec, 2024

Blog

A Whirlwind of Trouble as Salt Typhoon Hacks Cellular Wiretap Infrastructure

The morning of December 4, 2024 was a cold one, with a high temperature of 46 degrees—the sort of weather people generally prefer to observe from the comfort of their heated homes. But US senators had just received news about a cyberattack of unprecedented scope, so instead they gathered in Washington, D.C. for a classified briefing. The attackers were a highly skilled group known as Salt Typhoon. As I write this article, their attack is still going on. In fact, if you use a phone, it’s likely affecting you right now.

Way back in October 2024, the Wall Street Journal first reported the attack. They suggested a link between Salt Typhoon and the Chinese government. Of course, you might be thinking. It’s always that. This time, though, the motives behind the operation are more mysterious.

You really only need to worry about this if you have a phone—specifically, a phone with a Verizon, AT&T, or T-Mobile plan. Those seem to be the provider networks infiltrated by Salt Typhoon. I say “seem” because reports have been inconsistent. T-Mobile claims they’ve seen no evidence of malicious presence in their infrastructure. Verizon, on the other hand, admits a command-and-control (C2) presence. But all the providers mentioned above participated in the briefing on December 4. If nothing else, this demonstrates their mutual concern.

The question is, what specific data has Salt Typhoon accessed? And how could it affect you? The participating service providers claim the attack only affected the infrastructure used to wiretap specific targets. That said, we don’t know the extent to which these providers have been logging information. And whatever that extent is, Salt Typhoon has access to it as well. Under Section 702 of the Foreign Intelligence Surveillance Act (FISA), the FBI cannot target US citizens randomly. But if the infrastructure to tap is in place, and can be turned on for anyone the FBI decides to surveil, it’s quite possible that Salt Typhoon could do the same without FISA-based reservation. Meaning anyone could be a potential target.

Regardless of your paranoia level, there is something you can (and probably should) do: namely, following the counsel of Jeff Greene, the Executive Assistant Director for Cybersecurity at the Cybersecurity and Infrastructure Security Agency (CISA). “Our suggestion, what we have told folks internally, is not new here,” he says. “Encryption is your friend, whether it’s on text messaging or if you have the capacity to use encrypted voice communication. Even if the adversary is able to intercept the data, if it is encrypted, it will make it impossible.”

What your Cochise County Cyber Guys recommend is an app called Signal. You can get it on either iPhone or Android, and once you do get it, you can install the companion app on your PC or MacOS. With Signal, you can send and receive encrypted files, text chats, individual and group calls. You can even hold Zoom-style meetings with screen sharing. All this is end-to-end encrypted. That means even Salt Typhoon (and the FBI) won’t know what you’re up to.

Having said all this, we don’t condone illegal activity. We just think you have a constitutional right to privacy. Everyone does.

This article was originally published in the Sierra Vista Herald here.