Two men in China tricked the country's State Taxation Administration's facial recognition identity verification system into creating fake invoices, raising fears about the strength of its security. 

Two fraudsters, identified only by their surnames Wu and Zhou, manipulated high-definition photographs with an app available on the black market that turns photos into videos to create deepfake videos that simulated facial movements like nodding, blinking and mouth opening.

They then used a smartphone to bypass the government system camera during facial authentication, instead feeding their doctored videos into and successfully fooling the identity verification process.

The two then created fake tax invoices, defrauding the taxation department by 500 million yuan (approximately USD 76.2 million). 

The fraudsters started their operation in 2018 and have since been captured and prosecuted in Shanghai.  

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• http://www.xinhuanet.com/2021-03/30/c_1127270651.htm

• https://www.scmp.com/tech/tech-trends/article/3127645/chinese-government-run-facial-recognition-system-hacked-tax

• https://findbiometrics.com/fraudsters-use-deepfake-biometrics-hack-chinas-taxation-system-040103/

• https://www.theregister.com/2021/03/31/tax_scammers_fool_ai_facial_recognition/

• https://geekwire.eu/2021/03/31/tax-scammers-in-china-turn-photos-into-vids-to-crack-tax-dept-facial-recognition-system/

• https://www.biometricupdate.com/202103/hackers-spoofed-biometric-authentication-videos-to-steal-millions-in-china

• https://www.thestar.com.my/tech/tech-news/2021/03/31/report-chinese-government-run-facial-recognition-system-hacked-by-tax-fraudsters