Tuesday, April 18, 2023

IRS To Open Criminal Cyber Data Center To Crack Down On Highly Technical And Cryptocurrency-Related Crimes

According to Law360The IRS Criminal Investigation division is close to unveiling a centralized hub that will provide additional resources to bolster the agency's efforts to crack down on highly technical and cryptocurrency-related crimes, division chief Jim Lee said on April 17, 2023.

The Advanced Collaboration and Data Center, or ACDC, will bring together expertise from data scientists, cybercrime special agents, and computer scientists and analysts, as well as experts from other federal agencies, Lee said at a tax conference at University of California, Irvine School of Law.

"Think about a center where we're equipped with the most up-to-date tools, training and resources to tackle the most notable cyber challenges that investigators around the country see daily," Lee said, noting that he hopes to open the ACDC in the "next couple of months."

The ACDC Is A Critical and Ongoing Investment To Stay In Front f The Rapidly Growing Arena of Cyber-related Crimes,
 Including The Tax Evasion And Money-Laundering Activities Involved In Cryptocurrency Transactions, Lee Said.

The Criminal Investigation division and other law enforcement agencies have to "invest appropriately in this fast-changing environment," he said.

Lee gave the example of agents encountering digital evidence found in an operating system in a laptop or smartphone. If the agents do not have the tools, training or resources to understand the evidence, they will be able to go to the ACDC to receive assistance from a team of investigators, analysts and other experts, he said. The center will have tools that can access obsolete, broken or encrypted devices, Lee said, noting that it will provide a wide range of support.

In the past few years, the Criminal Investigation division has pursued more digital asset investigations, with half of cases involving attempts to circumvent U.S. tax laws. 

The Division Has Seized Cryptocurrency Assets Valued At Approximately $7.1 Billion And Has Forfeited Approximately $1.1 Billion In Ill-Gotten Proceeds, According To The Division's Annual Report Released In November.

The ACDC will add to the Criminal Investigation division's work to bolster its cryptocurrency expertise. In 2021, the division created the Office of Cyber and Forensic Services to bring its digital asset and cybercrime specialists under one roof. The office also supports agencywide investigations into the illicit use of digital assets to exploit the U.S. tax and financial system, according to the report.

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