Online-banking security primer for LI

Just like consumers, small businesses and governments put their bank accounts at risk through carelessness and gullibility while managing money online, security experts say.

That's why a few dozen corporate and public financial officials from Long Island spent a few hours wincing Tuesday -- at how exposed their money might be -- during a seminar on online banking fraud organized in Melville by TD Bank.

"A lot of people fall for these things," said Sean Carter, senior director for training at the New England Automated Clearing House, an association that processes electronic bank transactions. For example, there's the e-mail to the payroll officer, purporting to be from the Internal Revenue Service, warning that corporate taxes are past due and asking for bank account information.

"But the government -- you think they're that efficient, that they're using e-mail?" Carter asked, as laughter spread through the room. "Really?"

Whether it's through such trickery or through computer viruses that expose account information to hackers, Carter said online bank crime swiped $40 million and was up 600 percent in 2009 from the previous year, and much of it was corporate bank account hijacking.

Last month 37 people were charged in a fraud ring based in Eastern Europe that drained more than $3 million from small business and municipal bank accounts, said FBI Special Agent Ihwan Yum.

The ringleaders are accused of infecting victims' computers by e-mail with the ZeuS virus, enabling hackers to take over the bank accounts and initiate electronic transfers to people hired as "mules." The mules - often immigrants in this country on student visas - get to keep a small portion of the money and wire the rest overseas, Yum said.

Criminals like to go after small businesses and municipalities because they're often easy targets, said John McCluskey, TD's head of investigations in corporate security.

"They know you're probably lax in your security procedures," McCluskey said.

And a clever attacker will craft e-mails to financial officers designed to get them to click on links and unknowingly download a virus, Carter said. Yum added that such links never go to where they seem.

The presentation was unnerving, said Michael Wayne, president of Cougar Management & Realty Services of Levittown. He said he might dedicate a single computer to nothing but financial transactions, to prevent hackers from getting access to accounts. "Clearly, this is the future," Wayne said.

Paula Francis, Harborfields school district's treasurer, said she'd recommend the same thing to the school board, even though the seminar reassured her that the district's other security practices were good.

"The key is, make it hard for them," Carter said of the criminals. "They're not the most ambitious people in the world."