Risk Factor iconRisk Factor

This Week in Cybercrime: Jay-Z and Samsung Face the Music Over Data Privacy Violations

Can They Beat the Rap?

The musician Jay-Z, who famously rapped about having “99 Problems,” is dealing with the one-hundredth: a complaint (.PDF) filed with the U.S. Federal Trade Commission last week by the Electronic Privacy Information Center (EPIC) alleging that the “Magna Carta Holy Grail” smartphone app he and electronics giant Samsung released this month for use on Samsung Galaxy Nexus handsets demands access to considerably more information than should be necessary for users to enjoy the album of the same name. Think the NSA is keeping tabs on you? Among the “massive amounts of personal information” and “substantial user permissions” cited in the EPIC filing are the ability to: change or delete the contents a phone’s USB storage; autonomously pull down data from Internet; view the Wi-Fi or network connections the phone is using; see who users call and when; and get up-to-the-minute details of the handset’s GPS and network-based location.

“EPIC is asking the FTC to have Samsung suspend distribution of the app until its privacy concerns are addressed and the app falls in line with the Consumer Privacy Bill of Rights the Obama administration laid out in the spring of 2012,” says a story at Kaspersky Lab’s Threatpost.

As if those demands aren’t bad enough, the brain trust behind the app thought it would be fair to trade the ability to download Jay-Z’s latest hip-hop record in exchange for users’ Twitter or Facebook credentials as well as the right to post on their behalf to create social media buzz.

For its part, Samsung says the EPIC complaint is without merit. “We are aware of the complaint filed with the FTC and believe it is baseless. Samsung takes customer privacy and the protection of personal information very seriously,” a Samsung spokesperson said on Wednesday.

EPIC, for its part, is hoping that the data privacy precedents set by the FTC in in cases such as one it settled with Path, a social networking app that was accused of snatching users’ address book information without permission, will rule the day.

Read More

IT Hiccups of the Week: IRS Exposes Up to 100 000 Social Security Numbers Online

Last week saw a hodgepodge of IT-related snafus, errors and problems crop up. We start off our review with another accidental exposure of personal information online, this time involving the U.S. Internal Revenue Service.

Up to 100 000 Social Security Numbers Exposed Online at the IRS

The IRS admitted last Monday night that it had indeed posted a “substantial number” of Social Security numbers on a website hosting publicly available information regarding tax-exempt political organizations known as 527’s (a moniker that comes from the associated Internal Revenue Code (pdf)), a story at the New York Post reported.

The mistake was discovered by the California-based public interest group Public.Resource.org. The group had been investigating a different accidental IRS disclosure of thousands of Social Security numbers related to tax exempt organizations required to file Exempt Organization Business Income Tax Return Form 990-T(pdf), according to a story at the National Journal, which originally broke the story. The reason for the group's original investigation was that the IRS had asked the group to remove some information concerning non-profits on its website that the the IRS had sent it on a CD, and the group was curious to understand why.

According to IRS regulations, unless specifically prohibited, tax exempt political, charitable and similar types of organizations are routinely required to have their various tax forms made available for public review.  To be fair, the IRS warns those organizations not to put personal information on any tax form the agency is required to publicly disclose, but obviously some personal information (Social Security, Employer Identification, or Individual Taxpayer Identification Number) has to accompany those submitted tax forms for the IRS to track who is filing the tax forms. While typically there is an Employer Identification Number on the publicly available tax forms, detailed information linking the EIN to a real person or persons can be found in a related IRS form (Form SS-4 Application for Employer Identification Number) that is originally filed along with the other tax forms the IRS routinely discloses.

From what I can gather in the Public.Resource.org letter to the IRS (pdf), the information on the Form SS-4, which typically requires an individual’s Social Security Number, was able to be accessed online at the IRS 527 website if the SS-4 was sent to the IRS along with the other publicly disclosed tax forms. In other words, basically whatever information the 527 organization sent to the IRS, the IRS just went ahead and posted it regardless of whether it contained personal information or not.

Carl Malamud, the founder of Public.Resource.org, estimated that up to 100 000 Social Security Numbers were posted by the IRS at its 527 website. The IRS, after being notified by Public.Resource.org of the issue, said it had restricted all access to the tax information on 527 organizations “out of an abundance of caution." Online access to 527 organization information is still restricted as of today.

Public.Resource.org noted in its letter to the IRS that similar personal information disclosure problems involving routinely disclosed IRS tax forms have been known to exist for the past five years, and isn’t it time for the IRS to solve them once and for all? It also asked, “Why is there no easy way for people who find these problems to notify you?”

Both are good questions.

In a similar accidental information disclosure story from last week, ComputerWorld reported that the Japanese government admitted that the default settings were left untouched when the Ministry of Environment set up a Google email group account for those officials involved in its international standard negotiations on limiting mercury use. As a result, thousands of sensitive e-mails and associated negotiating documents were publicly accessible since January. The Japanese Ministry of Environment has said the information has now been removed, no doubt out of an abundance of caution.

UK Payday Lender Sends Threatening Debt Collection E-mails to Customers Who Didn’t Owe Money

UK payday lender QuickQuid sent e-mails to an unknown number of its customers threatening to turn their accounts to third party debt collectors if their debts were not repaid. The only trouble was that the customers receiving the threatening e-mail did not owe QuickQuid any money, the London Telegraph reported. The error was apparently discovered after those non-debt-owing customers started to call QuickQuid to find out what the heck was going on.

The Telegraph stated that QuickQuid placed a notice on its website stating, “An erroneous e-mail message was sent to a number of QuickQuid customers. Please note this was sent in error and should be disregarded. As a result, our call centre is currently receiving a high volume of calls and therefore customers may experience longer wait times than normal. We apologise for any inconvenience.”

It is hard to tell if QuickQuid was apologizing for the erroneous email or for the long wait times experienced by people calling to complain.

New York City Goes Back to Mechanical Voting Machines

Back in May, I wrote about the New York City primary elections to be held on 10 September for mayor, public advocate, and comptroller, and that if no candidate receives 40 percent of the vote, then a runoff election is required to be held. In such a case, New York state law requires that the runoff has to occur within two weeks.  This year, at least one if not two runoff elections are looking like a distinct possibility.

Unfortunately, the electronic voting machines on which New York City spent US $52 million cannot be reprogrammed in that short time frame (although the machine’s manufacturer, Elections Systems & Software of Omaha, Nebraska says the machines can be made ready if New York City is willing to pay it enough money to make it happen).

Last week, New York Governor Andrew Cuomo signed legislation that allowed New York City to go back to using mechanical voting machines for the primary elections, the New York Times reported, even though he said doing so was a “poor solution.” The legislation also extended the time between the primary and any runoff election by a week.  After Cuomo signed the legislation, the New York City Board of Elections prompted voted unanimously to use the lever machines for the primary, although the electronic voting machines will be used for the general election in November.

Everyone is hoping that a better solution is found over the next four years, although I wouldn’t make book on it.

Also of Interest…

Mitsubishi Australia Recalls 5000 2013 Model Outlander SUVs for Multiple Safety System Issues

Kenyan Equity bank Suffers Massive IT Failure

Hardware Failure Destroys Colorado Gambling and Medical Marijuana Business Licenses

Communication Failure Delays Flights at King Khalid International Airport in Saudi Arabia

Communication Failure Delays Flights at Jorge Newbery Airport in Argentina

IT Issue Delays Flights in United Kingdom

New Software Inflates Water Bills in Ohio

Photo: iStockphoto

IT Hiccups of the Week: Programming Error Exposes Up To 187 000 Indiana Family Aid Recipients

After a quiet June, July began with an uptick in the number of IT snafus, snarls and hitches. We start off with a “programming error” that led to the personal information on nearly two hundred thousand Indiana citizens potentially being sent to the wrong people.

Indiana Family and Social Services Recipients’ Information Inadvertently Disclosed

Last week, the Indiana Family and Social Services Administration (FSSA) announced that the personal information of up to 187 533 clients may have been accidentally disclosed to unauthorized individuals by a “computer programming error” in a document management system that supports the FSSA.  According to the FSSA announcement, the error which was made by its contractor, RCR Technology Corporation, “caused an undetermined number of documents being sent to clients to be duplicated and also inserted with documents sent to other clients.”

The type of information mistakenly sent included, “name, address, case number, date of birth, gender, race, telephone number, email address, types of benefits received, monthly benefit amount, employer information, some financial information such as monthly income and expenses, bank balances and other assets, and certain medical information such as provider name, whether the client receives disability benefits and medical status or condition, and certain information about the client’s household members like name, gender and date of birth.” Social security information on another 3 926 recipients may have also been mistakenly sent to the wrong people, the FSSA said.

The FSAA said that because the way its correspondence is printed and mailed, it can’t figure out exactly how many of its clients had their personal information accidentally disclosed. As of last week, it knows of at least 14 of its clients have reported receiving information that wasn’t theirs, the AP reported. The FSSA is telling anyone who receives someone else’s information should turn it into a local FSSA office or shred it.

While the programming error happened on 6 April, it wasn’t discovered until 10 May; the error was finally fixed on 21 May. When the FSSA was asked why the information wasn’t disclosed until 1 July, it tried to pass the buck to the Indiana’s Attorney General’s office which the FSAA said had to be involved with any disclosure and proposed solution.

The FSSA, along with the contractor RCR, has apologized and is promising to take step to ensure the problem doesn’t happen again. Apparently, this is all FSSA clients can expect in this case, for Indiana has decided to forego paying for a year of credit monitoring for its FSSA’s clients, which has become standard in these types of disclosure situations .  Instead, Indiana has “advised” FSSA clients regarding how they can protect themselves from identity theft that might result from the state’s error.

No doubt FSSA clients, among the poorest in the state, greatly appreciate the sage advice.

Victoria’s Emergency Dispatch System Goes Down for Third Time in Two Months

It looks like New York City isn’t the only one having trouble with an emergency dispatch system. According to the Age, a software-related problem with Ambulance Victoria’s computer aided dispatch system caused the Australian state’s ambulance services to be “plunged into chaos” last Friday night at around 7:40 pm local time. It was another three hours before operations returned to normal. While the Ambulance Victoria was able to switch to its manual back-up systems, some ambulances were delayed for as long as 45 minutes instead of the allowed 90 seconds before being dispatched, an AAP story reported.

The Age reported that Emergency Services Telecommunications Authority corporate affairs manager Rosie Mullaly explained the dispatch system had been experiencing “some slowness and lagging” Friday evening, and so a decision was made to go to the manual back-up system until “the issue could be resolved.” Mullaly said that problem was with “a secondary software system” that was seemingly interfering with the operations of the emergency dispatch system.

Victorian Health Minister David Davis in a bit of understatement called the latest emergency dispatch system problem, the third in the past two months, “not ideal,” but promised to look into the situation. Davis didn’t provide any deadline for when the investigation would be finished, however.

Detroit, Michigan’s new Police Chief James Craig was more forthright in expressing his displeasure with his city’s emergency service failure that coincidentally also happened on Friday. ABC News Station WXYZ in Detroit reported that around 5:30 am Friday morning, the “radio system used for communication between 911 dispatchers and Detroit's police, fire and EMS crews” failed and for some unknown reason the back-up communication system also failed to operate properly.  The city had to use the Michigan State Police communication system as a back-up.

Craig said he was “appalled” by the failure of the redundant radio system, especially since Detroit had a maintenance contract with Motorola, the radio system vendor, to ensure that such a failure wouldn’t occur. Apparently, periodic tests to ensure the back-up system would work in the event of a failure of the main radio system were not being performed. Craig stately flatly in a news conference that “this will not happen again;” at the time he was “flanked by a representative of Motorola,” WXYZ reported.

As of today, it is still unclear whether Detroit’s main radio system is back-up and operating normally or whether the city is still depending on the Michigan State Police radio system.

More Chrysler Automation Related Recalls

After recalling some 460 000 vehicles for software-related issues last month, Chrysler announced a recall of 840 000 vehicles, Reuters reported last Wednesday.

Reuters says that Chrysler issued five separate recalls covering 490 000 cars and SUVs for an active‐restraint head rest issue, and another 282 000 minivans for possible malfunction involving air bags.  The reason for the active-restraint head rest recall is because of “potentially faulty microcomputer components for head rests that are designed to move forward during rear‐end crashes.” Reuters quotes Chrysler as stating that, “The potentially faulty microcontrollers were installed in a supplied component. They entered the supply chain after the 2011 earthquake and tsunami in Japan caused a worldwide microcontroller shortage.”  TRW Automotive Holdings was the supplier of the microcontroller, Chrysler said.

The microcontroller recall includes 2011‐2013 Chrysler Sebring, Chrysler 200, Dodge Avenger and Jeep Liberty vehicles, as well as 2011‐2012 Dodge Nitro SUVs, Reuters states.

The air bag recall involves 2013 model year Chrysler minivans. In this case, “a side air bag software component was not programmed properly, which could affect proper deployment,” Reuters stated. Apparently, the wrong side air bag can deploy in a crash.

In addition, 69 000 2013 Ram 1500 pickup trucks with all-wheel drive were also recalled by Chrysler because of a potential electronic stability control software issue. Dealers were reporting that the electronic stability control lamp was illuminating, indicating the system was off when it wasn’t.

Chrysler wasn’t alone in announcing an automation-related recall last week. Toyota announced that it was recalling 185 000 vehicles world-wide “due to a faulty computer system in the power steering,” the Wall Street Journal reported. The WSJ stated that 109 000 Vitz compacts (aka the Yaris in overseas markets) made between November 2010 and March 2012, as well as 65 000 Ractis compacts (aka the Verso-S) made between August 2010 and August 2011 are being recalled. Another 11 000 Ractis compacts that are made for Fuji Heavy Industries and are sold by Fuji under the Subaru Trezia model name are being recalled, too.

Got all that?

Also of Interest…

Tesco Sells Cadbury’s Caramel Bunnies for 1p in Yet One More Pricing Glitch

Indiana Jail Blames Weather for Automatic Lock Failure

South Yorkshire England Police Have IT System Problems

Canadian Weather Service Abruptly Stops Online Reporting

Indonesian Government Prepares to Sanction Again Blackberry for Outage

Computer Problem Blamed for Premature Iowa Fireworks

Computer Issue Creates Confusion for American Airlines Passengers in La Crosse, Wisconsin

Photo: kr7ysztof/iStockphoto

IT Hiccups of the Week: Kansas DMV System Prevents Proper Voter Registration

It was a leisurely week in the land of IT-related snarls and snafus. We start off with the continuing saga of problems plaguing the Kansas Department of Motor Vehicles modernization effort.

Kansas DMV System Slows New Voter Registration

In May 2012, the Kansas finally introduced a new US $40 million computer system to handle car title and registration processes at the Department of Motor Vehicles. But more than a year later, the system continues to cause problems for the state and its citizens.

Most visible have been the intolerable DMV office wait times, as the system has proved to be less than dependable. In fact, Kansas is still holding back $2 million of the $25 million contract with the system developer 3M until system reliability improves. That can't happen soon enough for those drivers using the Wichita and Andover DMV offices who are still experiencing three to five hour waits and recurring computer failures.

But now there's another problem: Kansas voters aren’t being correctly registered to vote .

Back in 2011, Kansas legislators were considering passing a law that would require new voters to provide a birth certificate, passport or other documentation proving their citizenship when they registered to vote. According to a news story at the Lawrence Journal-World, Kansas Secretary of State Kris Kobach assured the legislature "that a new computer system being installed by the Division of Motor Vehicles could seamlessly provide citizenship information to county election officials across the state.” 

The law passed, but the legislature decided to delay its start date from 1 June 2012 to 1 January 2013 “to ensure the [DMV] computer system would be working properly,” the Journal-World wrote. (This was over Kobach’s strong objections—he wanted the documentation requirement in place before the elections last November).

Apparently, even that delay wasn’t long enough.

According to the newspaper, the DMV claims that it is sending the required proof of citizenship information to Kobach’s office, but most of the documentation doesn't seem to be finding its way back to county election officials. For example, the Journal-World says that county election officials in Douglas County report that some 80 percent of the voter registration forms it receives that were originally filed at the DMV are lacking the proper citizenship verification information. This compares to about 30 percent of all new voter registration forms filed (including those coming in from the DMV) since the law took effect in January.

Voter registration forms that don’t have the proper documentation are placed “in suspense” until the proper documentation is provided by the potential new voter. However, there is no requirement (or money budgeted) for Kansas county election officials to contact a potential voter about their missing information. So a new voter may well have provided the required information to the DMV, but still have a suspended registration.

Officials as of yet can't pinpoint whether these documents are lost due to human or technical error.

Kobach admits, according the Journal-World says, that “the DMV system isn’t working as intended but said citizenship documents were being forwarded by email,” which county election officials strongly dispute.

If something isn’t done soon to correct the problem, the paper says that “the ongoing issues leave the secretary of state vulnerable to allegations that the new requirement will suppress rather than encourage voter participation,” something that U.S. Supreme Court took a very dim view to recently.

The Kansas DMV may have more headaches in its future: the modernization of the driver's license process is supposed to go live later this year.

Read More

This Week in Cybercrime: Cybercrime’s Industrial Revolution

Cybercrooks: Captains of Industry?

The idea that cybercrimes are the work of miscreants or gangs of hackers picking targets at random is outmoded. Analysts now see a mature industry with an underground economy based on the development and distribution of ever more sophisticated tools for theft or wreaking havoc. That is the takeaway from a report released on Wednesday by researchers at 41st Parameter, a maker of device recognition and intelligence solutions.

According to the report,

Cybercrime is on the rise: large-scale fraud attacks, consumer data breaches, and politically-motivated Distrbuted Denial of Service (DDoS) attacks on financial institutions and others are costing businesses billions of dollars every year…Much of this growth stems from the maturation of the criminal digital underground and its 'industrial' approach to cybercrime.

Of the trends in cybercrime identified by 41st Parameter, a Network World article about the research summarizes the top five as: data breaches, which the report calls “the fuel that drives the industrial fraud complex,” becoming an inevitability even for large businesses; smartphone hacking, driven by the new business opportunity presented by the 700 million smartphones sold in 2012 alone; better cloaking techniques that allow malware to keep itself hidden from human users and antivirus scans; and automation of cybercrime, which allows crooks to multiply their efforts. “Automation allows fraudsters to trade a large number of smaller transactions for fewer, larger transactions,” says the Network World article. “This makes anomaly detection systems less effective while introducing greater requirements to identify, document and reset compromised accounts.”

Read More

How Often are EHRs Placing Patients at Risk?

This week, Bloomberg News published a special report examining the shift of US healthcare to electronic health records, and in particular, the questions hospitals, doctors and patients are asking about the “problems and potential harm arising from these new computerized systems.”  One story in particular provides an overview of a number of the safety issues being encountered, which include everything from medical data seemingly disappearing from EHRs to user interface issues. Not surprisingly, the Bloomberg article reports that the “most dangerous time for patients appears to be immediately after a facility installs” a new EHR system because of staff learning curve issues as well as the myriad of operational system fixes that always need to be made to get the EHR system to work reliably and correctly.

Jodi Daniel, director of policy and planning for the Office of the National Coordinator for Health Information Technology, which coordinates the U.S. effort to implement and use EHR systems, seemed to downplay the patient safety concerns the article raised. Daniel told Bloomberg News that, “So far, the evidence we have doesn’t suggest that health information technology is a significant factor in safety events.”

That’s a very interesting statement for Daniel to make considering that a 2011 Institute of Medicine report, and another report published this week by the American College of Emergency Physicians, state there isn't sufficient evidence for anyone to reach such a conclusion!

Read More

IT Hiccups of the Week: Southwest Airlines Computer Failure Grounded All Flights

It was a slow week in the land of IT-related “ooftas.” We start off with one that could have been much worse if the timing had been different.

Southwest Airlines Computer Failure Cancels 57 Flights, Grounds Another 250

Last Friday night at about 8 p.m. PDT, Southwest Airlines, the largest U.S. domestic carrier, with 3400 flights daily, experienced a system-wide computer failure that grounded the airline’s entire fleet not already in the air, the AP reported. Full service was restored by 11 p.m. PDT, but not before the airline had to cancel 43 flights (originally reported as 50) and delay about 250 others mostly west of the Mississippi River. Flights in Minneapolis, Chicago, Phoenix, Denver and San Diego were said to be affected. The airline also had to cancel another 17 flights early Saturday morning because crews and equipment were in the wrong place.

The computer failure, a Southwest spokesperson told the AP, “impaired the airline's ability to do such things as conduct check-ins, print boarding passes and monitor the weight of each aircraft.” Planes on the taxiways were recalled to the terminals although planes in flight were unaffected. The airline was able to get its back-up system operational, although the system's performance was said to be “sluggish.” Southwest got its primary system back up and operating normally by early Saturday, but the airline indicated it still wasn’t exactly sure of the source of the problem.

Southwest said it “sincerely apologized” for the “airport technology issue.” Luckily, the failure hit late on a Friday night, instead of first thing Monday morning. Southwest also seemed to do a good job in being able to get its customers who were scheduled to be aboard the canceled flights rebooked: there was little grousing in the press from disgruntled Southwest passengers.

As you may remember, American Airlines had to cancel 970 flights and delay another 1068 when a computer problem hit mid-morning on a Tuesday and lasted for only 90 minutes more than Southwest’s snafu. However, American's problem—whose cause has, to my knowledge, never been disclosed—affected its back-up system as well.

American Airlines, along with United, had another computer-related system problem last Wednesday, but it was localized to Philadelphia International Airport. The AP reported that an airport spokesperson said there was a “connectivity issue” that “started early Wednesday morning in a computer system at a ticketing counter. It caused problems for several hours before the issue was resolved by 9 a.m.” CBS News, on the other hand, reported that United Airlines said the problem, which took out their computer systems and phones, was a power outage that began at about 4:45 a.m.

Regardless of the true cause, the problem caused United to cancel six flights and delay several others. American delayed flights, but reportedly did not cancel any.

No other airline at the airport reported having any problems.

Utah and Colorado Motor Vehicle Systems Have Problems

Last week saw the motor vehicle systems in both Utah and Colorado suffer outages. Last Tuesday, the Salt Lake Tribune reported that a “database error” crashed the state’s drivers license records system. The Tribune stated that the incident was the result of “a code-reading error involving a daily transfer of motor vehicle records from the state Tax Commission to a DPS [Department of Public Safety] database.”

The Utah DPS was able to get its back-up system working, which allowed the state’s law enforcement officers limited access to records, but all processing of license applications and renewals came to a halt. The system was fixed by late Tuesday night, and normal operations resumed by Wednesday morning.

On Saturday, Colorado's lone state motor vehicle office open on weekends was “unable to provide new vehicle registrations, renewals or title work” because of a crash of the Colorado State Motor Vehicle system, the Colorado Springs Gazette reported. The office, located in Colorado Springs, was still “able to address drivers licenses, recording and elections,” the paper said.  A news release at the state’s website seemingly blamed the problem on a network issue. A network problem affected motor vehicle offices across the state last month as well. The state said it appreciated everyone’s patience and apologized for the inconvenience.

1900 New York City High School Graduates Receive Post-it Note Diplomas

Some 57 000 New York City high school seniors graduated last week. For an unlucky 1900 or so, instead of receiving high school diplomas as they accepted congratulations from their principals, they each received a Post-it Note with their “name scrawled in Sharpie,” the New York Times reported. The reason for the less than thrilling recognition of achievement was because of an error at McGraw-Hill, the company that was in charge of scanning in the results of state’s Regents exams.

There is a bit of a backstory here that needs explanation. As the Times story described, for this school year, New York City school officials placed into effect a new Regents exam grading approach. In the past, officials felt teachers were grading their own students’ exams too easily, so they decided that the completed exams should be scanned and sent randomly to other teachers in the city to grade.

However, the company responsible for the exam scanning, McGraw-Hill Education in Connecticut, had what it called “intermittent slowdowns” which delayed the return of the exams to teachers be graded. The Times said the scanning system “broke down.”

New York City was forced to hire extra teachers over this past weekend to try to complete all the exam grading before school ends on Wednesday of this week. The New York Daily News says that McGraw-Hill will have to pick up the $42 an hour tab the extra teachers are going to be paid.

New York City Comptroller John Liu, who is running for mayor, wants McGraw-Hill to pay back the US $3 million the city spent on the scanning contract with the company. Liu is said by the Times to be considering an audit of the contract. In a related story, the state of Indiana announced on Friday that it plans to sue McGraw-Hill for its problems with administering standardized tests in that state. The announcement came on the same day company President Ellen Haley was apologizing to the state legislature for them.

An apology to New York City’s graduating seniors didn’t seem to be forthcoming from the city’s Education Department. A spokesperson there tried to minimize the issue by telling the Times that the department had expected some “bumps” and that “the problem affected fewer than 3 percent of the roughly 57,000 seniors”, and anyway, “each year there was a relatively small number of students who received their scores, and their diplomas, after graduation ceremonies.”

In other words, those graduating seniors who didn’t get their diplomas on time should quit griping and just be happy admiring the framed graduation Post-it Notes adorning their living room walls.

Also of interest…

“Technical Flaw” Exposed 6 million Facebook Users’ Phone Numbers and Email Addresses

Industrial and Commercial Bank of China System Upgrade Goes Awry

“Obama/Black” Color Listing a Computer Error Urban Outfitters Say

Photo: Karen Bleier/AFP/Getty Images

Three Guilty Pleas in NYC's CityTime Payroll System Fraud Case

On Wednesday, Manhattan U.S. Attorney Preet Bharara announced that three defendants in its New York City's CityTime payroll system fraud case had decided to change their pleas to guilty. The three women—all related to Mark Mazer, a former city consultant who is charged with being one of the four central figures in the fraud—are: Svetlana Mazer, his wife; Larisa Medzon, his mother; and Anna Makovetskaya, a cousin.

As a quick recap, the CityTime project involved the development of a secure, Web-based time and attendance system for 80 mayoral and other city agencies. The original estimated project cost was some US $63 million, but CityTime ended up "costing" the Big Apple $720 million by the time it became fully operational in 2011. SAIC was the CityTime prime contractor, but it had shopped out much of the work (some $400 million worth) to Technodyne, LLC, a company owned by Padma and Reddy Allen.

An audit in early 2010 by New York City Comptroller Jon Liuthe first formal review of the project in 12 years, despite warnings as far back as 2003 that something wasn’t right with the management of the project —uncovered numerous contracting irregularities. In late 2010, federal charges were brought against SAIC employees and subcontractors involved in CityTime. At the time, the government believed the amount of fraud involved totaled about $80 million.

However, in 2011, Bharara announced that “...virtually all of the $600 million that the City paid SAIC for CityTime was tainted, directly or indirectly, by fraud.” More defendants and criminal charges were added (pdf) to the list of criminal complaints.  Bharara also announced in the complaint that SAIC’s Chief Systems Engineer on the project, Carl Bell, pleaded guilty to taking $5 million in kickbacks on the project.

In 2012, SAIC agreed as part of a deferred prosecution agreement to “forfeit a total of $500 392 977 to the Department of Justice, and forgive more than $40 million still owed by the City to SAIC in connection with the CityTime project.” SAIC also agreed to retain an independent monitor to ensure the company and its personnel followed its stated compliance and ethics policies. However, as I noted at the time, SAIC tried to put a pretty positive spin on its having to shell out $500 million to avoid prosecution for its part in the fraud. The company made out that it had been “victimized” and that it had, in fact, delivered a “world class workforce management system for New York City.”

Getting back to the three new CityTime criminals, not only did they agree to plead guilty, but they agreed to forfeit $31 million in cash and property. Reuters reported that each of the three were originally charged with “a count of money laundering conspiracy in connection with helping Mark Mazer conceal $25 million in kickbacks he received.” However, they agreed to plead guilty to lesser charges of obstructing justice by making false statements to a bank, and to serve sentences ranging from 10 to 30 months in jail. They could have faced 5 to 20 years in prison if they had proceeded to trial and been found guilty on the original charge.

Reuters also states that, “Despite so many members of his family pleading guilty, Mark Mazer is not in plea talks and continues to plan to fight the charges, said Gerald Shargel, his lawyer.”

“‘The guilty pleas have no impact whatsoever on our case,’ Shargel said. ‘Our position has been and remains the City of New York was not defrauded. The City of New York got exactly what it paid for.’“

Hmmm... Sounds just like what SAIC—and Mayor Michael Bloomberg—have claimed. In fact, observers are betting that the defense strategy will be something to the effect of, "Since there is a working, “world class” CityTime payroll system, no fraud was committed. Costly, maybe; but fraudulent, definitely not.

Interestingly, a story in yesterday’s New York Times indicates that the three women still believe Mark Mazer is innocent as well.  

His guilt or innocence will be determined beginning 30 September, when he and Gerald Denault (pdf), SAIC’s Program Manager for the CityTime project, go to trial. Technodyne owners Padma and Reddy Allen, the other main defendants accused in the fraud scheme, fled back to their native India in early 2011 with at least $39 million. Their whereabouts are unknown, except maybe to the NSA.


Photo: Charles O’Rear/Corbis

Does the NSA Really Need “Direct Access”?

Protesting the Program: Activists gathered in Washington D.C. on June 14th to rally against U.S government surveillance programs.

We’re now well into the second stage of the controversy surrounding the allegations that the NSA is conducting large-scale surveillance of U.S. citizens. Whistleblower/leaker/traitor (the exact term varying according to individual opinion.) Edward Snowden is being scrutinized, as are the articles written by Glenn Greenwald for The Guardian newspaper.

That Snowden’s perceived reliability, or lack thereof, has become a major part of the story is an entirely predictable consequence of his decision to reveal his identity. Back in 2004, Dina Rasor, then working under the auspices of the National Whistleblower Center in Washington D.C., told IEEE Spectrum that going public in this way was like “setting your hair on fire for one glorious minute.” Whistleblowers were well advised to remain anonymous so that the revelation “becomes the issue, and not you.” (As has been pointed out in several places, if we’d known that Deep Throat was an FBI director angry at being passed over for promotion, his accusations about Watergate might not have been taken so seriously.)

That the focus of the discussion has also shifted to Greenwald’s reporting is also not surprising in the light of that 2004 article. IEEE Fellow Stephen H. Unger, a former chairman of the IEEE Ethics Committee cautioned against the dangers of hastiness, or making the slightest factual error, when bringing any revelations to light: “Don't exaggerate at all… You could be 99 percent right, but if you make one little mistake, they'll focus on that to discredit you.”

The biggest substantive criticisms of Greenwald’s reporting so far have centered on his contention that companies like Google and Apple provided “direct access,” so that the NSA could come in and snoop around however they liked, grabbing information in real time if need be.

Read More

IT Hiccups of the Week: 911 Systems Need Emergency Help

This week, the U.S. National Emergency Number Association (NENA) holds its annual conference to discuss 911 policy, technology, operations, and related education issues. I would guess that high on the list of informal conversations among conference attendees will be the increasing controversy engulfing New York City’s new 911 dispatch system, as well as the problems that several other cities and towns recently have reported with their own emergency management systems.

Heated Arguments Over Whether New York City 911 System Contributed to Young Girl’s Death

It is a situation reminiscent of the disastrous London Ambulance Service dispatch system meltdown in 1992 that was blamed for contributing to the deaths of up to 20 or more persons waiting for ambulances that arrived horribly late.

About two weeks ago, four-year-old Ariel Russo was walking to school with her grandmother in New York City’s Upper West Side when they were struck by a car driven by an unlicensed 17-year-old trying to elude the police. According to the New York Daily News, it took “an unusually long 4 minutes and 18 seconds from the time of the first request for an ambulance from police at the scene to a 911 operator, until the time an ambulance was finally dispatched. Once FDNY and EMS dispatchers received and acknowledged the transmission, it took 3 minutes and 52 seconds to dispatch an ambulance and for it to arrive at the scene.”

Ms. Russo was said to still be alive after the crash, but in cardiac arrest; she died on the way to the hospital. It is unclear whether the time delay made a difference in whether she would have survived or not. The grandmother survived, but suffered a broken back and leg.

The FDNY admitted that it shouldn’t have taken four minutes to dispatch an ambulance, but it placed the blame squarely on “human error,” claiming that, “An EMS dispatcher apparently got up from his desk at some point for several minutes and missed the transmission for an ambulance that had been sent by the NYPD operator on a relay. We’ve interviewed the dispatcher and he’s admitted he missed it.”

However, that explanation was immediately challenged on a couple of counts. For one, it was a female dispatcher who supposedly took the call.  We say supposedly because the dispatcher, a 23-year veteran, claimed that the call never crossed her screen before she got up to take her scheduled break and was replaced by another dispatcher. In addition, the call was supposed to be displayed not only that dispatcher’s display, but all of the other 39 dispatchers’ screens as well as on a “giant, wall-mounted screen,” the Daily News reported in a follow-on story. Why didn't any of the other dispatchers say they saw the call, the Daily News asked.

Read More

Risk Factor

IEEE Spectrum's risk analysis blog, featuring daily news, updates and analysis on computing and IT projects, software and systems failures, successes and innovations, security threats, and more.

Robert Charette
Spotsylvania, Va.
Willie D. Jones
New York City
Load More