The recently released Annual Intellectual Property Report to U.S. Congress has identified the dark web as a conduit for the occurrence of major international criminal events.
This report echoes the U.S. government’s practical and comprehensive resolve to implementing intellectual property policy.
Ideally, the government’s goal is to promote a level playing field to innovators and entrepreneurs across the existing economic divide.
This aspect is specific to creators whose inventions continue to solve modern social and technological issues.
The importance of a fair national marketplace, as far as American businesses are concerned, cannot be overemphasized.
In the past year, the Trump administration has strived to enforce intellectual property rights that affect local and international ecosystems.
Importantly, center to this endeavor is the annual analysis of the currently existing intellectual property environment—in order to identify key areas that demand attention and elucidate on enforcement interventions.
In the latest report, the dark web has been blamed for supporting the advancement of intellectual property (IP) crimes.
By definition, intellectual property crimes are mainly manifested through counterfeiting and cybercrime—an aspect that forms the core of most darknet activities today.
Counterfeiting and the Dark Web
The production and distribution of counterfeit goods is a significant threat to fair trade. This practice is a significant force crippling supply chains that form both public and private sectors.
In the context of this report, according to the U.S. government, the acquisition of products and services from merchants poses potential risks that run up to the highest echelons of national security.
From the economic standpoint, counterfeiting costs taxpayers millions of dollars in losses, which can impair supply chains of critical state departments.
This aspect is true in the face of governmental projects that depend on the reliability of state machinery to safeguard American economic and security affairs.
Furthermore, the integrity of sensitive governmental and organizational data becomes a critical issue in the face of counterfeiting schemes.
By now, you might be wondering about how the dark web supports the world of counterfeiting.
To understand this phenomenon, we take a quick swipe at two case studies as derived from past court records.
In the first case, a Francisco woman was sentenced to 151 months in prison on February 9, 2018 for her role in the sale of counterfeit oxycodone pills.
The 42-year-old, Candelaria Vazquez, was linked to a conspiracy to distribute fentanyl and launder drug proceeds.
A plea agreement intimated on the Vazquez’s involvement in the manufacture of fake oxycodone pills, which were stamped to look like genuine oxycodone.
The pills were reportedly laced with fentanyl and sold on the dark web.
By the time she was arrested in June 2016, Vazquez was deeply involved in a laundering scheme that would convert Bitcoin payments into cash via unlicensed proxies.
The second case involves another drug dealer who was charged with trading heroin and fake oxycodone online.
Cristian Rodrigues, a 43-year-old man from the Dominican Republic, was apprehended and charged with possession and distribution of heroin and counterfeit oxycodone.
Court files indicated that the man worked hand in hand with his cohorts in the anonymous sale and distribution of banned drugs via darknet marketplaces.
Rodriguez shipped an assortment of prescription drugs that were actually bound with heroin and distributed to individuals in the U.S.
In both of the above cases, the dark web was pivotal in the creation and maintenance of drug distribution networks that were supplied by counterfeit prescription goods.
Cybercrime and the Dark Web
According to the 2017 IP Commission Report, pirated software and the theft of corporate data, including trade secrets, costs the U.S. economy billions of dollars—in estimates that ran up to 3 percent of the country’s Gross Domestic Product (GDP) in 2017.
Until today, cybercrime continues to be a critical driver of illicit darknet crime that extends right from the sale of drugs to the trading of stolen intellectual property.
In a case example involving Chinese hackers that stole trade secrets and identities, three corporate entities were targeted in a conspiracy to bring key financial, engineering and technology organizations to their knees.
The three Chinese nationals, Wu Yingzhuo, Dong Hao and Xia Lei, were indicted after being caught trying to hack into the computer systems of victims in order to harvest trade secrets.
Such information ranged from communication data to sensitive company files and access credentials.
While there was no indication on whether this packet of data would be sold via dark web, it has become common knowledge that darknet marketplaces continue to provide ample environments for the sale of stolen data.
Cracking the Whip: Interventional Activities
The recently released Annual Intellectual Property Report [PDF] has identified particular enforcement and prevention mechanisms that the U.S. government has installed to control the growth of IP crime.
Agreeably, the State Department has been keen to spearhead the deployment of a Global Network of regional Intellectual Property Law Enforcement Coordinators (IPLECs) to augment U.S. law enforcement efforts in combating international IP theft.
This aspect extends to the critical focus on IP theft-related forms of cybercrime that lead to the trade of stolen data on dark web markets, where cryptocurrencies are used to hide proceeds.
Online Availability of Counterfeit Opioids
The Center for Drug Evaluation and Research (CDER) has been on the forefront in monitoring drug systems in the country.
Pursuant to its public health mandate, CDER hosted a one-day Online Opioid Summit in mid-2018 to discuss the online availability of illicit opioids.
The aims to the discussion centered on the importance of a multiagency exploration of synergies that would strengthen the fight against the marketing of counterfeit opioids.
In addition, the Food and Drug Administration (FDA) served warning letters to online networks known to operate illicit online drug marketplaces—including a number of sites marketing fake and dangerous opioids sold to users in the U.S.
The warning letter came as a component of the FDA’s campaign to target the illicit trade in unapproved opioids.
The well-known Operation Pangea is also another intervention that was acknowledged by the report to Congress.
To explain, this operation is an internationally-coordinated framework that targets the sale of counterfeit and unapproved drugs.
The endeavor is led by Interpol, which identifies websites that are known to undermine public health in this manner.
Homeland Security’s E-Commerce Strategy
The 2018 E-Commerce Strategy by Homeland Security Investigations (HSI) is an initiative that aims to leverage on a multisector approach to combat the illicit use of e-commerce outlets, including those hosted on the the clearnet, the dark web and social media platforms.
The initiative combines both private sector-led and law enforcement efforts in controlling the flow of goods and services online.
Specifically, the HSI E-Commerce Program targets individual elements that trade in counterfeit products via the internet.
A component of this program is the Operation in Our Sites (IOS), which was launched in 2010 to regulate online activities.
Ultimately, the e-commerce initiative aims to create lasting probes that scan target assets and financial frameworks used in maintaining offending websites.
The FDA/OCI’s Cybercrime Investigation Unit (CcIU)
The FDA/OCI’s Cybercrime Investigation Unit (CcIU) safeguards public health by merging efforts with local and federal law enforcement agencies to disturb criminal networks that utilize online resources illegally.
This stems from the sale of counterfeit drugs, medical devices and software.
At this point, 11 full-time agents have been assigned to the program. An analytical staff has been put in place to gauge the existing threats to public health and national security.
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