The Rise of Fake Employees: A Real Threat to Businesses Everywhere

In an era where remote work has become the norm, companies face an unexpected and serious threat—fake employees. While the notion of a leading security training platform falling victim to such deception may evoke a chuckle or two, the reality is far from amusing. In fact, the consequences of hiring a fake employee could jeopardize a company’s data security, financial stability, and reputation.

A Sobering Example

In July 2024, leading IT security company KnowBe4, known as the world's first and largest security-awareness training and simulated, phising platform, revealed that they had unknowingly hired a fake employee — a North Korean operative posing as a highly qualified software engineer. While KnowBe4's security measures caught the issue within 25 minutes of detecting suspicious activity, the incident highlighted a concerning trend. Other organizations soon stepped forward with similar experiences, exposing a global, well-orchestrated scheme to infiltrate businesses.

This wasn’t just a one-off case. KnowBe4’s transparency opened the floodgates to conversations about fake employees, revealing that hundreds of organizations, both big and small, have fallen prey to similar schemes.

The Serious Risks

Hiring fake employees isn’t just a cybersecurity risk: it’s a legal minefield. U.S. laws and United Nations sanctions strictly prohibit employing North Koreans without UN approval. Penalties include steep fines, legal action, and even jail time.

Beyond legality, the risks include:

1. Data Breaches: Fake employees often attempt to steal sensitive corporate data, including intellectual property, customer information, and trade secrets
2. Financial Exploitation: Fraudulent salaries and fees paid to these operatives funnel money into illegal activities, including North Korea’s weapons programs
3. Reputation damage: Being associated with such schemes can tarnish an organization’s image, erode customer trust, and lead to public realtions nightamres
4. Legal Consequences: U.S. laws and United Nations sanctions explicitly prohibit hiring North Korean nationals without prior UN approval. Violations can result in severe penalties, including fines, legal action, and reputational fallout.

Mechanics of the Scheme

The sophistication of these fake employee operations cannot be overstated. These are not amateur scams; they are carefully planned and executed, leveraging advanced technology and social engineering tactics. These fake employees are often very highly skilled IT professionals that are trained in North Korea but operate out of other countries to avoid detection.

Their tactics include:

1. Identity Theft or Fabrication: Operatives steal or fabricate identities, often using AI-enhanced photos and fake documents such as passports or work visas. Some even impersonate real individuals with convincing backstories
2. Flawless Performance in Hiring Processes: Fake candidates excel in interviews, sometimes using accomplices or pre-recorded responses. They are adept at crafting resumes and portfolios that appear legitimate
3. Strategic Exploitation of Remote Work: Remote-first roles allow operatives to bypass in-person verification. Once hired, they often request company equipment to be shipped to unverified addresses or “laptop farms” managed by accomplices
4. Malicious Intentions Post-Hire: Once onboarded, fake employees may attempt to install malware, exfiltrate data, or compromise systems. Others focus solely on generating revenue through continued employment

Lessons Learned from KnowBe4’s Experience

KnowBe4’s vigilance turned what could have been a catastrophic incident into a valuable learning opportunity. Their response underscores the importance of preparedness:

1. Proactive Monitoring: The fake employee was caught within minutes of attempting unauthorized actions on a company-issued laptop. Endpoint detection and response (EDR) software played a crucial role
2. Swift Containment: The company immediately isolated the compromised device and involved external experts, including the FBI, to confirm suspicions and gather intelligence
3. Transparency: Instead of concealing the incident, KnowBe4 shared their experience publicly, sparking industry-wide awareness and collaboration

Spotting the Signs

Fake employees often leave subtle clues that can alert vigilant employers. Here are common red flags during and after the hiring process:

During Hiring:

• Discrepancies in resumes or inconsistent information across documents
• Hesitation to appear on camera during interviews
• Overly basic or recently created online profiles, such as LinkedIn or GitHub
• References using generic email domains like Gmail instead of company-specific addresses
• Unusual accents or language inconsistencies that don’t match the claimed background

Post-Hire:

• Requests to ship equipment to alternative locations
• Unusual login patterns or access attempts from unexpected IP addresses
• Work hours misaligned with the claimed time zone
• Malware or unauthorized software detected on company-issued devices
• Mitigation Measures to Protect Your Business

Mitigation Measures

Combatting this threat requires a multi-layered approach. Here’s how businesses can strengthen their defenses:

Revamp Hiring Processes:

• Conduct in-depth background checks, including validating references through verifiable business channels

• Implement mandatory in-person or third-party identity verification for remote hires

• Train hiring managers to recognize signs of fraudulent behavior

• Secure Company Equipment:

  • Limit access to sensitive systems during onboarding
  • Use monitoring tools to detect unusual activity, such as language changes or unauthorized logins

• Foster a Security-Conscious Culture:

  • Educate employees about the risks of fake employers and employees
  • Encourage open reporting of suspicious behavior during hiring or employment

• Leverage Advanced Technology:

  • Utilize tools like AI-driven candidate analysis to flag anomalies
  • Deploy robust EDR solutions to monitor company-issued devices in real time

• Plan for Contingencies:

  • Establish protocols for isolating and investigating suspicious employees
  • Collaborate with cybersecurity experts and law enforcement when needed

The Wake-Up Call Businesses Can’t Ignore

The rise of fake employees is a reminder that the modern workplace is as much a digital battleground as it is a professional environment. While the KnowBe4 case has spotlighted North Korean operatives, this issue isn’t limited to one country or group. It’s a global problem that requires vigilance from every organization, regardless of size or industry. Hiring processes designed for trust and efficiency must now adapt to counter these new-age threats. Companies must act decisively, not only to protect their assets but also to ensure they don’t inadvertently contribute to dangerous global activities.

Businesses must evolve their hiring and onboarding practices to stay ahead of this threat. After all, the cost of complacency is far greater than the investment in preparedness. Whether it’s data security, financial integrity, or the trust of your stakeholders, protecting your organization's data security, financial stability, and reputation starts with taking hiring seriously.

Remember, it’s not a question of if you’ll encounter a fake employee — it’s when. Are you ready to defend your organization?