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Fifth Column


Broken Egg: Internet Bank Robbery


"First time hackers moved money from a bank." Sure. Bwahahahahahahaha.

Organised criminals are believed to have carried out the first internet "bank
robbery", stealing hundreds of thousands of pounds.

The online bank Egg, which has 1.2 million customers, is understood to be the
target of the professional hackers. Understood to be part of a organised
crime syndicate, the hackers are believed to have removed several hundreds of
thousands of pounds from Egg, which is owned by Prudential.

If the fraud is confirmed it will send shock waves through the Internet
banking world, whose security has already been questioned after a string of
online security lapses that have hit several major companies, including
Barclays. If the online robbery is proven it will also be the first time
hackers have managed to remove money from a bank.

Details of the cyber break-in remained vague last night, but the criminal
hackers are not believed to have taken money from individual's accounts.

The suspected fraud came to light after officers from the National Crime
Squad carried out a series of early morning raids at seven homes mostly in
the Milton Keynes area in Buckinghamshire yesterday. Three men in their 30s
were arrested and were being questioned by police last night.

Computer equipment and documents were taken from addresses in Lidlington,
Bedfordshire, Milton Keynes, Pottersbury, Northamptonshire, and Newport
Pagnell, Buckinghamshire. A small quantity of drugs and cash was also seized.

The 7am raids, codenamed Operation Skoda, followed a six month inquiry by the
National Crime Squad into internet banking fraud. They were assisted by
computer experts from a civilian consultancy company.

Detective Sergeant Mick Randall, who led the operation, said: "This has been
a very complex investigation involving organised criminals who we believe
have been using the internet as a medium for committing serious crime and for
targeting the relatively new internet banks."

A NCS spokesman added: "They were professional in their approach. Our concern
is that this is not the only attempt to infiltrate Internet banking. We
believe it is an attempt by organised crime to exploit a new area that could
be worth millions potentially.

"They got away with some money. It was substantial but not huge amounts. It
is the first case of internet banking fraud that we have dealt with. This is
an area we are beginning to expand into as organise criminals move into
hi-tech crimes."

Egg was the first internet bank to operate exclusively via the electronic
highway and the telephone. It was an instant success and has quickly
attracted hundreds of thousands of customers and has spawned scores of
rivals. Egg floated earlier this year and has just launched an insurance arm.
A spokeswoman for the company declined to comment.

Concern about the rise in hi-tech crime has prompted the Home Office to set
up a new squad to tackle the problem, which will include officers from the
NCS, the National Criminal Intelligence Service, Customs and the Serious
Fraud Office.

The London Independent, August 23, 2000    �
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