People exit PayPal Holdings Inc. headquarters in San Jose, California, U.S. (Photographer: David Paul Morris/Bloomberg)  

Mueller Says Russians Used PayPal to Buy Facebook Ads

(Bloomberg) -- Russian operatives using social media to manipulate the U.S. election bought their Facebook ads in a sophisticated manner: stealing the identities of Americans and opening accounts at PayPal Holdings Inc.

“Defendants and their co-conspirators also obtained, and attempted to obtain, false identification documents to use as proof of identity in connection with maintaining accounts and purchasing advertisements on social media sites,” according to an indictment issued Friday by U.S. Special Counsel Robert Mueller. The indictment described a multiyear effort by Russia’s Internet Research Agency and others to shape American opinions, including by impersonating Americans on Facebook, Instagram, Google’s YouTube and Twitter Inc.

Mueller described a sophistication beyond what Congress had understood about the Russian meddling in the election. At hearings three months ago, Facebook Inc. was criticized for not quickly becoming suspicious of U.S. election ads purchased in Russian rubles. But with stolen American identities and PayPal accounts, the ads would be unlikely to trigger any alarm, and the extent of the campaign may still not be fully known.

PayPal said it is “intensely focused on combating and preventing the illicit use of our services.”

“We work closely with law enforcement, and did so in this matter, to identify, investigate and stop improper or potentially illegal activity,” the San Jose, California-based company said in a statement.

The indictment alleges the Russian-backed IRA opened U.S. bank accounts with Social Security numbers and identities they’d stolen from Americans. They bought stolen bank account numbers online as well, using them to bypass PayPal’s security system and open accounts, with which they bought Facebook ads.

PayPal accounts were used for general expenses, the purchase of advertisements and to buy buttons, flags and banners for the political rallies organized through the social media scheme, according to the indictment.

The ads purchased by Russian actors on Facebook went through an automated buying system, where they are only flagged if they break rules on the social network related to its community standards. The company has since bolstered the team that reviews ads and is planning to add tools to let users know who is behind them. Still, that is unlikely to solve a problem of stolen identity behind a purchase.

The revelation ratchets up the pressure on Facebook and Twitter to bolster their defenses, or risk government regulation. Meanwhile, it highlights the difficulty of fully protecting against such tactics.

©2018 Bloomberg L.P.