Seagate Phish Exposes All Employee W-2’s

Email scam artists last week tricked an employee at data storage giant Seagate Technology into giving away W-2 tax documents on all current and past employees, KrebsOnSecurity has learned. W-2 forms contain employee Social Security numbers, salaries and other personal data, and are highly prized by thieves involved in filing phony tax refund requests with the Internal Revenue Service (IRS) and the states.

Seagate headquarters in Cupertino, Calif. Image: Wikipedia

According to Seagate, the scam struck on March 1, about a week after KrebsOnSecurity warned readers to be on the lookout for email phishing scams directed at finance and HR personnel that spoof a letter from the organization’s CEO requesting all employee W-2 forms.

KrebsOnSecurity first learned of this incident from a former Seagate employee who received a written notice from the company. Seagate spokesman Eric DeRitis confirmed that the notice was, unfortunately, all too real.

“On March 1, Seagate Technology learned that the 2015 W-2 tax form information for current and former U.S.-based employees was sent to an unauthorized third party in response to the phishing email scam,” DeRitis said. “The information was sent by an employee who believed the phishing email was a legitimate internal company request.”

DeRitis continued:

“When we learned about it, we immediately notified federal authorities who are now actively investigating it. We deeply regret this mistake and we offer our sincerest apologies to everyone affected. Seagate is aggressively analyzing where process changes are needed and we will implement those changes as quickly as we can.”

Asked via email how many former and current employees may have been impacted, DeRitis declined to be specific.

“We’re not giving that out publicly — only to federal law enforcement,” he said. “It’s accurate to say several thousand. But less 10,000 by a good amount.”

Naturally, Seagate is offering affected employees at least two-years’ membership to Experian’s ProtectMyID service, paid for by the company. Too bad having credit monitoring through Experian won’t protect employees from the real threat here — tax refund fraud.

As I noted in last month’s warning about W-2 phishing, fraudsters who perpetrate tax refund fraud prize W-2 information because it contains virtually all of the data one would need to fraudulently file someone’s taxes and request a large refund in their name. Indeed, scam artists involved in refund fraud stole W-2 information on more than 330,000 people last year directly from the Web site of the Internal Revenue Service (IRS). Scammers last year also massively phished online payroll management account credentials used by corporate HR professionals.

According to recent stats from the Federal Trade Commission, tax refund fraud was responsible for a nearly 50 percent increase in consumer identity theft complaints last year. The best way to avoid becoming a victim of tax refund fraud is to file your taxes before the fraudsters can. See Don’t Be A Victim of Tax Refund Fraud in ’16 for more tips on avoiding this ID theft headache.

Update, March 7, 12:36 p.m. ET: Several readers have forwarded news reports about other companies similarly victimized in W-2 phishing scams, including mobile communications firm Snapchat and GCI, an Alaskan ISP and telecom provider that handed thieves some 2,500 employee W-2’s.