Chinese government facial recognition system hacked by tax fraudsters

Occurred: 2018-2021

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Two men in China tricked the country's State Taxation Administration's facial recognition identity verification system into creating fake invoices valued at USD 76.2 million.

According to a Xinhua report, the pair manipulated high-definition photographs with an app available on the black market that turns photos into videos and then used a smartphone to bypass its camera during facial authentication, instead feeding their doctored videos into the system. 

The men set up a shell company that issued fake tax invoices that defrauded 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.  

Operator: State Taxation Administration
Developer: State Taxation Administration
Country: China
Sector: Govt - finance
Purpose: Verify identity
Technology: Facial recognition; Deepfake - image; Deepfake - video; Generative adversarial network (GAN); Neural network; Deep learning; Machine learning
Issue: Security

Page info
Type: Incident
Published: March 2021
Last updated: February 2024