Kusserow on Compliance: Arrest of the University of Pittsburgh Medical Center hacker

An individual was indicted by a federal grand jury in Pittsburgh and arrested on charges associated with the 2014 “hacking” theft of University of Pittsburgh Medical Center (UPMC) human resources database that included personally identifiable information (PII) of over 65,000 UPMC employees. He was charged with fraud, aggravated identity theft, and selling of the information on the dark web to buyers around the world. The buyers, in turn, engaged in massive campaign of further scams and theft, including the filing of thousands of false IRS tax returns, leading to $1.7 million in false tax return refunds.

Additionally, the indictment alleges that the hacker, from 2014 through 2017, using the acronyms “TDS” or “DS,” regularly sold other PII to buyers on dark web forums, which could be used to commit identity theft and bank fraud. According to the Indictment, the hacker sold the stolen information on dark web forums for use by conspirators, who promptly filed hundreds of false tax return Form-1040 using UPMC employee PII. These false 1040 filings claimed hundreds of thousands of dollars of false tax refunds, which they converted into Amazon.com gift cards, which were then used to purchase Amazon merchandise which was shipped to Venezuela. The case was investigated by the Secret Service, IRS, and Postal Inspection Service. As a side note, six years ago, the case resulted in a major legal battle after employees sued UPMC for negligence and breach of contract. The state high court also ruled that UPMC may be responsible monetary damages if the plaintiffs can prove the health system acted negligently.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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