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Computer Fraud Essay

Computer Fraud Essay

Computer Fraud

As much as $40 billion are lost every year due to flourishing computer crimes. In 1993 alone, Internet, the world wide system of computer networks, was swindled out of approximately $2 billion, and about $50 million were stolen from various companies such as GTE Corp., AT&T, Bell Atlantic and MCI ( Meyer and Underwood 45). Ironically these same organizations have been collaborating with software manufacturers for an expanded software production ( Cook 53 ). Multinational corporations and international authorities are threatened by these innumerable white collar crimes since such crimes are most difficult to prevent, and/or detect and highly profitable to the offenders ( Stern and Stern 525 ). This ever growing menace to society is assisted by the sophisticated computer technology which has also provided invaluable benefits to mankind. For instance, the advanced computer networks have recently helped to save lives in a faraway Chinese province. From information received through the Internet, a Chinese doctor was able to treat a desperate 13 year old girl, Yang Xiaoxia, of a mysterious flesh eating disease which had also killed eleven people in Great Britain in 1994 ( Turner 54 ). On the other hand, Internet has caused serious and unpreventable legal problems, as passwords can be very easily broken, ideas stolen and wrong doings very difficult, if not impossible to trace ( Meyer and Underwood 44 ). For example hackers in Florida can pass comfortably through another computer in Finland, where they can strip any name and address, and move on to still another computer in Asia, where such piracy is not considered a serious crime ( Meyer and Underwood 45 ). For instance, 25% of computer software is considered pirated in the U.S., (Internet of course making things easy since you could send even large length programs to another user through E-mail) while in China, the rate goes up to 98%. In 1994 only, companies estimated to have lost $8 billion due to piracy ( Hall and Vancura 108 ). Figure 1 How to prosecute offenders? Furthermore, Internet Frauds are very difficult to prevent because a long time is required for most of them to be discovered. For instance, law enforcers need not only at least equal scientific and technical ability as the offenders, but also precious time and energy to examine company books and accounts to unravel such crimes ( Croal 14 ). It is also felt that prosecution is often incorrect and counter productive (Southerland 85). When the crimes are uncovered, the laws are too vague and too limited for proper prosecution ( Stern & Stern 528 ). The complexity of Internet fraud makes it very difficult for legislators to estimate the extent to such offenses, thus leaving many loopholes to be exploited by alert offenders. Moreover, Internet offenses and offenders do appear to enjoy structural advantages, and the outcome of the policies pursued by law enforcers is that many avoid public prosecution and punishment ( Croal...

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The processes of globalization, including the globalization of information technology, provide unlimited opportunities to influence at individual and society. One of the negative consequences of the development of information technology is the emergence and development of new forms of crime – the crime in the sphere of high technologies, when computers or computer networks serve as the object of criminal attacks, and as well as means or method of committing crimes.

The emergence of crime in the sphere of computer information and telecommunications associated with the advent of computer networks and the creation of information enviroment.  As computer technology in various fields of activity become more and more using and increased, sonumber of crimes and results from damage to their commission rise too.

Cybercrime cause damage to the world economy amounting to 445 billion dollars a year, according to a new report by the Center for Strategic and International Studies (CSIS). The authors point out that cybercrime – is a growing industry that harms trade, competitiveness and innovations.

According to counting, the conservative counting the damage is estimated at  375 million dollars, and the most daring – at 575 million. “Cybercrime – in fact, is a tax on innovation, which slows down global development, reducing the level of inventors and investors profit, – said Jim Lewis from the Center of Strategic and international Studies. – For developed countries, cybercrime has serious consequences for the labor market” (Edwards, 2014).

The largest losses bear the largest economics in the world, and the leaders among them are the United States, China, Japan and Germany, losing $ 200 million annually. Losses associated with the leakage of personal information, such as the theft of the credit card is 150 million. In the USA, about 40 million people, about 15% of the total population, faced with theft personal information by hackers. In Turkey, this kind of crime affected 54 million people, in Germany – 16 million, in China – more than 20 million people (Thompson, 2014).

The history of cybercrime

Appearing in the mid 60-ies of 20th century, computer networks, since the mid ’70s had been growing until the end of the century it was not entangled the half planet  by the web of World Wide Web.

Packet communication technology (splitting files into pieces and their delivery to the recipient in different ways) was developed in 1961 by a MITs’ student D. Klyaynrokom. Then George Licklider advanced the concept of “Galactic Network”, describing it as a network of interconnected computers with which anyone can access data and programs located on any computer (Bresiger, 2013).

The prototype of the Internet is the first high-speed continental computer network ARPANet, established in DARPA – Army Advanced Research Projects Agency commissioned by the Department of Defenseof USA. The idea of creating such a network was born in 1964 in Larry Roberts and was consistes in creation of decentralized system, consisting of separate independent segments, where there wouldn’t be the main computer, that can be destroyed in the event of nuclear war. Such a network was originally designed as a sustainable communication systems, capable to continue working even after a nuclear attack. In the event of failure of one computer, the transfer was carried out on the bypass channels.

Experiments about connecting computers and combining them into a network carried out since 1965. September 2, 1969 two computers were successfully connected to each other, result was a successful exchange of information. On October 20 of that year, a similar experiment was conducted between computers located in different cities. From that moment ARPANet began its work. This network was connected more and more computers military and scientific institutions (Robertson, 2010).

After the development of R. Tomlinson in 1971 e-mail system, began a rapid expansion of the network, connected the growing number of new users. In 1976, R. Metkalif created the first local computer network Intranet (Ethernet). Further growth of users exhausted the possibilities used in ARPANet Protocol NCP, and in January 1, 1983, all computers switched to the protocol TCP / IP. ARPANet network continued to expand, and in 1986 on the basis of its National Science Foundation of the United States created NSFNet, covering about 10,000 computers in the United States and abroad.

Minutes of WWW (World Wide Web) was established in early 1991, by the European physics laboratory. In May 17, was launched the first Web-server. Network development has gone exponentially. In the mid 90-ies of 20th century to the Internet was connected more than 13 million users.

The rapid development of computer networks and their penetration into various spheres of human activity, as has been said, changed the nature of criminal attacks and gave rise to new forms of them. So in which areas of activity penetrated the network was depended most pressing threat to the current time. Thus, in the 60s, when computer networks were used mostly in military and scientific institutions, the main danger was considered the loss of sensitive information, as well as unauthorized access to it. In the 70s to the fore came the problem of economic crime in the field of computer technology – breaking the bank computer networks, industrial espionage. In the 80’s crimes became widespread hacking and illegal distribution of computer programs. With the advent and development in the 90 years of the Internet, a whole range of issues related to criminal encroachments on privacy of personal information appeared, f.e. distribution of child pornography at networks, operation extremist virtual network communities. In addition, in the last few years the new problem bringings the spread of viruses and that more and more concerned about western researchers, the use of the Internet for terrorist purposes.

Computers as a weapon to commit a crime have been used before widespread computer networks. On the first “computer crime” opinions of researchers are different. Some believe the first officially registered cases of the use of computer technology to commit crimes, when it  marked the advent of high-tech crime, stealing from the bank Minnessoty (USA) committed using a computer in 1966. Others as the first offense of this kind is called perfect with a computer crime in the amount of tax 620 thousand dollars, for which in 1969 Alphonse Confessori was brought before a USA court.

The subsequent history of crimes committed using a computer, is noted the following most notable cases:

  • In 1973, the cashier of the New York Citibank transferred into his account 2 million dollars, using the office computer.
  • the end of the ’70s – “robbery” of “Security Pacific Bank” (10,2 Mill. USD);
  • 1984 – the message of the first in the world computer viruses;
  • 1985 – disabling using the “virus” of electronic voting systems in the USA Congress;
  • 1987-1988 gg. – The appearance of the first computer virus in the USSR;
  • 1987 – the invasion of 17-year-old hacker in the US computer systems. This invasion is still considered the most dangerous because the offender was able to walk to the file management system and missiles the US Air Force Base “Robbins”. His presence was detected only after he took copies of the software, estimated at 1.2 million. Dollars, including top-secret program of artificial intelligence;
  • 1989 – American student lock computer 6000 Pentagon; International Congress of the computer “pirates” in the Netherlands with a demonstration of the possibility of unlimited introduction of computer systems;
  • 1990 – disabling NASA, work for 24 hours, a group of Australian hackers.
  • 1991 – theft in Outeconombank a 125.5 thousand dollars;
  • 1992 – the deliberate disruption of the Ignalina nuclear power plant reactors ACS;
  • 1993 – Some electronic fraud in the Central Bank of Russia (in the amount of 68 billion rub.);
  • 1995 – an attempt to steal a Russian engineer of the City – Bank 2.8 million dollars (Bain, 2010).

Currently, no one is surprised intrusion into computer systems, computer viruses, fraud committed using Internet technologies. The history of computer crime turns into a story of growth statistics on criminal assault on global information networks.

The history of cybercrime is inextricably linked with the history of legislation to combat abuse in the sphere of high technologies. In the future, we will analyze this relationship. As cyber crime is not in place, continuing to evolve, creating new forms of criminal attacks, and, in addition, the problem of cybercrime is relatively recent, the international community is still in search of not only effective criminal law and other methods to combat this problem, but in the process of developing a common policy on this issue.

The development of cyberspace and used its technology of global communication occurs quite rapidly, so the problem for lawmakers is that it is necessary to take into account these trends and opportunities “to keep up” in the new legislative regulation of relations arising in the information space. In addition, it is necessary to take into account factors transborder cyberspace allows you to make illegal under national law actions from the territory of another state, in which there are other legal norms. An important feature of cyberspace is the fact that it is difficult to determine the exact location of the criminals and the commission of one or other unlawful acts.

This restriction of the rights is most evident in the failure to adequately respond to the threats posed by virtual teams – organizations, individual online communities, political institutions, states as subjects of law in cyberspace.

A comprehensive description of this phenomenon is difficult by two reasons. Firstly, there is no currently  generally accepted definition of cybercrime. Secondly, because of differences in the legal systems of different countries and novelty problem of delinquent behavior, cybercrime as a legal term is not used in all countries of the world (Woodburn, 2011).

Types of cybercrimes

The rapid growth of IT-sector has not only positive but also negative side, manifesting itself in an unprecedented expansion of cybercrime market. Computer crime is becoming more sophisticated, global, capturing new market segments and ahead the reaction of lawmakers.

Today is quite acute problem of tax-free financial transactions laundering “dirty” money through bank electronic systems. The list of crimes committed using information theft can be continued. Mention may be made a cyber attacks on military and space computer networks, systems, industrial espionage and the use of compromising in politics. Especially active criminals began to apply a world network possibilities. The feature of the global network is no borders. For organizations such as the arms trade or drug is enough to create the appropriate site and wait for the receipt of proposals. Physical server that is hosting the information will be in any of the countries of the world (Collins, 2013).

For criminal purposes worldwide network used of professionals and applying knowledge for the purposes of industrial espionage, terrorism or political goals. They are able to spread their actions financial panic and provoke a military catastrophe, damage important information on the most dangerous objects – because the activity and energy complex, transport, banks largely depends on reliable storage, analysis and transmission of information.

Cybercrime investigations

The annual assessment of the state of cybercrime makes worrying laymen and professionals. The laymen is most concerned about a marked reduction in the level of protection of the citizen of the modern information society, and at the same range of sensitive issues is quite wide – from a technical vulnerability vulnerability to PD support systems with electronic cash. The professionals is waved about all aspects of the problem: technical, legal and institutional.

Investigate cybercrime is extremely difficult. Every crime is unique, but there are a number of universal steps investigation of a crime in the information field:

– The first step – it is always assessment the situation by law enforcement officers and trying to understand what is technically happened to any legally protected information unauthorized access occurred, what elements of a crime, legally speaking, are contained in known and objective facts. If technically correct and legally correct to gather sufficient information, the next step may be decided to institute criminal proceedings, which will be investigated by other qualified – investigators with the support staff operational units and experts in the field of computer and technical research. The court delivered its verdict in accordance with the criminal and criminal procedural law, the following basic steps of the competent authorities:

  • prove that the event itself was a crime, why it happened, define and document the time, place, method and other circumstances of the offense;
  • to prove the guilt of certain persons in the commission of a crime;
  • investigate the circumstances that characterize the identity of the accused;
  • document the harm caused by the crime;
  • identify the circumstances that contributed to the commission of the crime.

The purposes of computer and technical expertise are to find digital traces that are related to a person or group of people, to assess compliance of these tracks of a particular situation and identify those that are forensically significant, that can and should form the basis of the investigation. An important issue – presentation of research results in such a way that they are understandable to those of a purely legal knowledge are not familiar with the intricacies of IT, – judges, prosecutors, lawyers and other participants in the proceedings (Anderlini & McGregor, 2014).

The most famous cybercrimes

One of the first high-profile hacking attacks committed in 1983, by an American student and one of the most famous in the future hacker Kevin Mitnick. Using one of the university computers, he entered into a global network ARPANet, an Internet precursor, and get into the Pentagon computers. He had access to all the files of the Ministry of Defense. Mitnick was arrested right on campus. He was convicted and served his first real sentence after spending six months in a correctional center for young people.

Losing banks of almost $ 25 million dollars made two hackers from Russia. In November 2000, in the US, the FBI caught hackers from Chelyabinsk: 20-year-old Alexey Ivanov and 25-year-old Vasily Gorshkov. Russians managed to hack the computer systems of several companies and steal credit card numbers, in particular, they stole 15.7 thousand card numbers from Western Union. In 2002, Gorshkov was sentenced to three years in prison, and Ivanov was sentenced to four years (Walker-Osborne & Price, 2011).

$ 12 million tried to kidnap Vladimir Levin. In March 1995, he was arrested in London. The Security Service of the American “Citybank” accused Levin that in June and October 1994, he hacked into a central server and tried to rob a bank customer accounts. New York court sentenced Levin to 36 months in prison and deported to Russia.

Another hacker attack on NASA undertook in 2001-2002 from the UK hacker Gary McKinnon. He managed to get into computers belonging to the Army, NASA, Navy, Department of Defense, Air Force and Pentagon. In total, McKinnon gained unauthorized access to 97 computers, each time he found information about flying saucers. He was arrested in 2002, but for lack of evidence was released.

Loud attack carried out in 2002, a hacker Adrian Lamo. He was able to gain access to the internal network of the newspaper New York Times, where he began to modify important files. Lamo changed confidential databases, one of which contains a list of cooperating with the newspaper experts, he added his own name. In August 2003, Adrian Lamo was arrested, sentenced to two years probation and was appointed to pay Times 65 thousand dollars as compensation (Stevenson, 2013).

Conclusion

Currently, computer and telecommunication technologies cover virtually every sector of society. Not foreseeing the opportunities for abuse, it has put these technologies into their service, which gave rise to a new kind of crime – computer-related crime.

The problem of cybercrime has developed into a global community. In order to develop a scientific approach to solving this problem it is necessary formalization: isolation and identification of the main objects of the fundamental properties of the phenomenon.

The results of the analysis of the characteristics of computer crime can be predictive of complication struggle with it because the ways of committing computer crimes each year are becoming more sophisticated and difficult to define the character. To solve this problem scientist need to integrated approach.

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