Is the new guy in IT who he claims to be?
There’s a growing risk that he may be a North Korean operative. For more than a decade, state-sponsored fake workers have been infiltrating organizations around the world. The North Korean remote IT worker scheme has been one of the most successful. Organizations inadvertently hire North Korean operatives who gain a steady source of revenue and insider access to sensitive systems. Up to 90 percent of their salaries are funneled to the North Korean government, often to fund its weapons development programs.
It’s difficult to determine the true extent of the fake worker problem because many organizations handle incidents quietly. In a recent survey by Resume Genius, however, 17 percent of hiring managers said they have encountered applicants using deepfake technology to alter their video interviews.
It is estimated that 10 percent of Fortune 500 companies have already interacted with, and potentially hired, fraudulent workers. Gartner projects that one in four job candidates globally could be fake by 2028.
How the Scheme Works
Fake worker schemes have flourished in the era of remote work, enabling operatives in countries such as China and Russia to apply for jobs in Western companies using false identities. The North Korean scheme is unique in that it’s state-sponsored and uses technology to bypass global sanctions and funnel hundreds of millions of dollars into the regime.
Operatives use stolen identities, AI-generated photos and sometimes deepfake technology to apply for high-paying, remote IT positions. Once hired, the worker asks the employer to ship the company laptop to a U.S.-based address controlled by a facilitator. The facilitator sets up the laptop and enables remote access for the fake worker to bypass geolocation and IP address checks. These “laptop farms” may house dozens of company-owned computers.
Unlike individual fraudsters driven by personal greed, North Korean fake workers are part of a coordinated effort to generate revenue for the government. Salaries paid by the victim companies are funneled through various accounts back to the North Korean regime.
Fake Workers Cause Real Damages
Direct financial losses are the most immediate damage caused by fake worker schemes. The median loss in salaries and benefits is about $50,000, although some schemes can cost millions. Paying fake workers can lead to inaccurate tax filings, resulting in back taxes, fines and interest owed to the IRS and other agencies. Then there’s the time and money wasted on the recruitment and management of fake employees, as well as on subsequent investigations and recovery efforts.
Organizations may face lawsuits from clients, shareholders or other stakeholders who are harmed by the actions of fake employees. They also risk penalties for non-compliance with labor, tax and data protection laws.
However, the access gained by fake workers poses an even greater threat. Fake employees may use their access to internal systems to install malware, steal sensitive data and set up backdoors for future attacks. In some high-stakes cases, fake workers are part of sophisticated corporate espionage efforts aimed at embedding within technology or aerospace companies to steal intellectual property and trade secrets.
Reducing the Fake Worker Risk
Organizations should implement new processes to identify fake workers in the hiring process. Multilayered identity verification and secure video conferencing platforms are essential. However, hiring managers should also look for generic resumes, recycled contact information and other red flags. They should probe for details about past projects and experience, and use multiple rounds of role-specific interviews with different interviewers.
Unfortunately, fake workers have already infiltrated many organizations. Managers should monitor behavior for poor performance, excessive overtime and unusual activity. Fake workers may also avoid video meetings and answer questions inconsistently. Strong internal controls, such as regular audits and segregated duties, can also help root out imposters.
Technologent’s resource consulting services can help. We have technical resources for a variety of hard-to-find skill sets available immediately. These resources range from engineering support to C-level executive consulting. All are thoroughly vetted by our recruitment specialists and have direct access to Technologent’s engineers as needed for assistance with complex issues. Let us help you meet your short- and long-term hiring needs while reducing risk.
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