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To: Win Smith who wrote (149)	12/3/2002 1:44:39 PM
From: maceng2	Read Replies (1) \| Respond to of 603

Fraud detection software catches Pentagon's eye newscientist.com 09:40 30 November 02 When their prototype fraud-detection software sounded the alarm over the financial statements of a high-profile technology company, programmers at Crystaliz Corporation thought little of it. But later that day, a Wall Street watchdog launched an investigation into the very same company's affairs. "It was just a coincidence that it was the same day," says Sankar Virdhagriswaran, chief executive of Crystaliz, based in Massachusetts. But their probing software did not stop there, he says. "It then found a cluster of companies and three out of four were eventually investigated by the Securities and Exchange Commission." That was validation enough for the Crystaliz crew. Their software could successfully analyse "semi-structured information". This includes large amounts of free text surrounding just a handful of key numbers such as the real operating profit and bad debt figures buried in a long, complex report. The Crystaliz software was programmed with normal and abnormal patterns and trained to recognise anomalous data patterns in documents that are known to be fraudulent. In the case of the discredited Enron Corporation, for example, the figures for revenue per employee alone would have triggered alarms. "It was in the stratosphere range," Virdhagriswaran says. Tracking hackers But that is not all the software looks at. Microsoft, for example, has high revenue per employee, but its filings are neither misleading nor fraudulent. "That's where the software's multidimensional analysis comes in," he says. "You look at other ratios, and ratios of ratios." Related Stories US scientists propose counter-terrorism measures 26 June 2002 Intelligence analysis software could predict attacks 2 October 2001 Massive search reveals no secret code in web images 25 September 2001 For more related stories search the print edition Archive Weblinks Crystaliz Corporation DARPA US Securities and Exchange Commission Crystaliz says its software could have wider uses, such as detecting hacking attempts on online banks and stores. The central idea is that most users perform a typical sequence of actions - what Virdhagriswaran calls our "Web DNA". So, if someone is trying to break in or is using a stolen login and password, the software can monitor the user's Web DNA and snag impostors if their usage pattern is suspicious. The significant aspect of the software is that it can detect previously unknown patterns of hacker attacks because it looks for deviations from the norm. The software's ability to find the strange within the commonplace has attracted the interest of the military. DARPA, the Pentagon's research wing, is now partly funding the software's development and is especially interested in its potential to combat terrorism. The software can look for patterns in the semi-structured data that makes up emails, for example, or sift web-based reservation data for suspicious travel plans. DARPA wants to develop the software further to catch bomb makers trying to buy their raw materials over the net. The challenge here is to distinguish would-be bombers from farmers who use the same chemicals as fertilisers. Anil Ananthaswamy, San Francisco