Starting this summer, the Internal Revenue Service (IRS) intends to dispatch four cybercrime investigators to Australia, Singapore, Colombia, and Germany. These four new jobs indicate a major boost in the IRS's global efforts to combat cybercrime, such as cryptocurrency, decentralized finance, and bitcoin laundering services.
In recent years, IRS-CI agents have played a key role in investigating crimes on the dark web as part of landmark international operations such as the shutdown of the drug and hacking services marketplace AlphaBay and the arrest of its administrator, the bust of the internet's largest child abuse website, and the takedown of a marketplace for stolen Social Security numbers, among others.
Until now, the IRS has only one cyber investigator abroad, in The Hague, Netherlands, who has been mostly working with Europol since 2021. Guy Ficco, the IRS's executive director for worldwide operations policy and IRS-CI support, initially mentioned the expansion during a panel discussion at the Chainalysis Links conference on April 4.
“Starting really now we’re going to be piloting for additional posts, putting dedicated cyber attaches in Bogota, Colombia, in Frankfurt, Germany, in Singapore, and in Sydney, Australia,” Ficco said. “I think the benefits have been — at least with the Hague and with Europol posts — have been very tangible.”
In an email, IRS spokesperson Carissa Cutrell explained that the four new positions are part of a pilot program that will run for 120 days, from June to September 2023, and are designed "to help combat the use of cryptocurrency, decentralized finance, and mixing services in international financial and tax crimes." Following the 120-day pilot program, the IRS will decide whether to keep the agents in the new countries.
“Success will hinge on the attachés’ ability to work cooperatively and train our foreign law enforcement counterparts, and build leads for criminal investigations,” Cutrell said.
According to Chris Janczewski, a special agent in the IRS-CI Cyber Crimes Unit, expanding the IRS's presence abroad is crucial to expediting foreign investigations.
“The U.S.-based case agent can’t always travel to coordinate with foreign partners on investigative needs and the cyber attaché has to act as the proxy for the case agent,” Janczewski told TechCrunch in an email. “Their expertise on knowing what questions to ask, what evidence can reasonably be obtained, and the impact of any cultural or legal implications.”
Janczewski handled the investigation of the largest dark web child abuse site, Welcome to Video. He is presently the worldwide investigations director of TRM Labs, a blockchain intelligence firm. He explained that depending on the countries with whom the IRS is dealing, there may be different legal methods to gather evidence, "but often informal information in real-time is needed in fast-moving investigations."
“In these situations, it comes down to professional relationships, knowing who to call and what to say,” he said.
Aside from the five cyber investigators, the IRS maintains 11 attaché locations around the world, including Mexico, Canada, Colombia, Panama, Barbados, China, Germany, the Netherlands, the United Kingdom, Australia, and the UAE.
“These partnerships give CI the ability to develop leads for domestic and international investigations with an international nexus. In addition, attachés provide support and direction for investigations with international issues, foreign witnesses, foreign evidence, or execution of sensitive investigative activities in collaboration with our international partners,” the IRS-CI wrote in its 2022 annual report. “Attachés also help uncover emerging schemes perpetrated by promoters, professional enablers, and financial institutions. These entities facilitate tax evasion of federal tax obligations by U.S. taxpayers, as well as other financial crimes.”
