Computer Crime

Computer crimes need to be prevented and halted thought increased comput

er network security measures as well as tougher laws and enforcement of those la
ws in cyberspace:

Computer crime is generally defined as any crime accomplished through sp

ecial knowledge of computer technology. All that is required is a personal comp
uter, a modem, and a phone line. Increasing instances of white-collar crime inv
olve computers as more businesses automate and information becomes an important
asset. Computers are objects of crime when they or their contents are damaged, a
s when terrorists attack computer centers with explosives or gasoline, or when a
"computer virus"--a program capable of altering or erasing computer memory--is
introduced into a computer system. As subjects of crime, computers represent th
e electronic environment in which frauds are programmed and executed; an exampl
e is the transfer of money balances in accounts to perpetrators' accounts for wi
thdrawal. Computers are instruments of crime when used to plan or control such c
riminal acts as complex embezzlements that might occur over long periods of time
, or when a computer operator uses a computer to steal valuable information from
an employer.
Computers have been used for most kinds of crime, including fraud, theft
, larceny, embezzlement, burglary, sabotage, espionage, murder, and forgery, sin
ce the first cases were reported in 1958. One study of 1,500 computer crimes es
tablished that most of them were committed by trusted computer users within busi
nesses; persons with the requisite skills, knowledge, access, and resources. Mu
ch of known computer crime has consisted of entering false data into computers,
which is simpler and safer than the complex process of writing a program to chan
ge data already in the computer. With the advent of personal computers to manipu
late information and access computers by telephone, increasing numbers of crimes
--mostly simple but costly electronic trespassing, copyrighted-information pirac
y, and vandalism--have been perpetrated by computer hobbyists, known as "hackers
," who display a high level of technical expertise. For many years, the term ha
cker defined someone who was a wizard with computers and programing. It was an
honor to be considered a hacker. But when a few hackers began to use their skil
ls to break into private computer systems and steal money, or interfere with the
system's operations, the word acquired its current negative meaning. Organized
professional criminals have been attacking and using computer systems as they fi
nd their old activities and environments being automated.
There are not a large number of valid statistics about the extent and re
sults of computer crime. Victims often resist reporting suspected cases, becaus
e they can lose more from embarrassment, lost reputation, litigation, and other
consequential losses than from the acts themselves. Limited evidence indicates
that the number of cases is rising each year, because of the increasing number o
f computers in business applications where crime has traditionally occurred. Th
e largest recorded crimes involving insurance, banking, product inventories, and
securities have resulted in losses of tens of millions to billions of dollars--
all facilitated by computers. Conservative estimates have quoted $3 billion to
$100 billion as yearly losses due to computer hackers. These losses are increas
ing on a basis equivalent to the number of computers logged on to networks, whic
h is almost an exponential growth rate. The seriousness of cybercrimes also inc
reases as the dependancy on computers becomes greater and greater.
Crimes in cyberspace are becoming more and more popular for several reas
on. The first being that computers are become more and more accessible; thus ar
e just become another tool in the arsenal of tool to criminals. The other reaso
n that computer crimes are becoming more and more common are that they are somet
imes very profitable. The average computer crime nets a total of $650,000 (Amer
ican, 1991 standards); more than seventy-two times that of the average bank robb
ery.
Today's Techno bandits generally fall one of three groups, listed in the
order of the threat they pose:
1. Current or former computer operations employees.
2. Career criminals who use computers to ply their trade.
3. The hacker.
Outsiders who break into computer systems are sometimes more of a threat
, but employees and ex-employees are usually in a better position to steal. Bec
ause we rely more and more on computers, we also depend on those who make them a
nd run them. The U.S. Bureau of Labor Statistics projects that the fastest grow
ing employment opportunities are in the field computers and data-processing. Si
nce money is a common motive for those who use their computing know-how to break
the law, losses from computer theft are expected to grow as the number of comp
uter employees rises.
The following are examples of how employees that work on computers can g
ain profit at the employers expense:
In 1980, two enterprising ticket agents for TransWorld Airlines (TWA) di
scovered how to make their employer's computer work for them. The scam went lik
e this: When a passenger used cash to pay for a one-way ticket, Vince Giovengo s
ent in the credit change form, which should have been discarded. He kept the re
ceipt the should have been given to the costumer for paying cash. Samuel Paladi
na, who helped board passengers, kept the part of the traveler's ticket that sho
uld have been returned to the costumer. The two agents used computers to reasse
mble the ticket from the pieces they had. They then marked the ticket void, and
kept the cash the traveler had paid. The swindle was finally discovered by ano
ther employee who questioned the large number of voided tickets, only after appr
oximately $93,000 was taken.
The two TWA employees were tried in the United States and were convicted
of federal wire fraud in the United States. They each received six months in p
rison as a result of their crime. The penalty they had to pay should have been
much, much higher, in order to prevent computers from being used in crimes in th
e future. This is true for not just the United States and Canada, but for every
country in the world.
Another computer heist, one of the largest ever, involved several highly
placed employees of the Volkswagen car company of West Germany. In 1987 the co
mpany discovered that these "loyal" workers had managed to steal $260 million by
re- programming the computers to disguise the company's foreign currency transa
ctions. The workers that committed the crime received 10 years in Germany's pri
son system; not nearly as harsh as if they had stolen the money through non- com
puterized means. This sets an example that computer crimes are easy to execute,
and are punished very lightly. This will evoke a downward spiral; leading to m
ore and more computer crimes.
For career criminals, computers represent a new medium for their illegal
actions. Computers only enhance the speed and quality of the crimes. Now the
professional criminals can steal or commit almost any other crime they want, sim
ply by the means of typing directions into the computer. Computers are quickly
being added to the list of the tools of crime.
Hackers often act in groups. The actions of several groups of hackers,
most notable are the Masters of Deception (MOD) and the Legion of Doom, have bee
n exposed in the media recently. These groups and most malicious hackers are in
volved in computer crime for the profit available to them.
Individual hackers are often male teenagers. They comprise the majority
of the computer criminals, although they do pose a major threat to society's co
mputer uses.
Computer criminals have various reasons for doing what they do. The mai
n reason computer crimes are being committed on the large scale that they are is
mainly for the profit. As earlier stated, the average computer crime nets more
than seventy-two times that of the average bank robbery. This is seen for many
skilled computer operators as a opportunity to make some quick profit. Cyberc
rimes are usually only committed by people that would not commit any other type
of crime. This shows that the chances of getting caught and punished are percei
ved as very low, a view that must be changed.
Some hackers feel that it is their social responsibly to keep the cybers
pace a free domain, with out authorities. This is accomplished by sharing infor
mation, and removing the concept of property in cyberspace. Therefore, they fee
l that it is proper to take information and share it. In their minds, they have
committed no crime, but from the victim's eyes, they deserve to be punished.
Other hackers think that it is a challenge to read other's files and see
how far they can penetrate into a system. It is pure enjoyment for these hacke
rs to explore a new computer network. It becomes a challenge to gain access to
strange, new networks. They often argue that they are only curious and cause no
harm by merely exploring, but that is not always the case.
Where did my homework files go? Who is making charges to my credit card
? Sounds like someone is out for revenge. Computer have become a modern day to
ol for seeking revenge. Here is an example: A computer system operator was fire
d from CompuServe (a major Internet provider) and by the next day his former man
ager's credit card numbers had been distributed to thousands of people via elect
ronic bulletin boards. The manager's telephone account had been charged with th
ousands of long-distance phone calls, and his driver's license had been issued w
ith hundreds of unpaid tickets. This shows the awesome power of a knowledgeable
hacker.
Also, these hackers try to maintain free services. Some of these free s
ervices include Internet access, and long distance telephone access.
Banks and brokerage houses are major targets when stealing money is the
objective, because of their increased reliance on electronic funds transfer (EFT
). Using EFT, financial institutions and federal and provincial governments pas
s billions of dollars of funds and assets back and forth over the phone lines ev
ery day. The money transferred from bank to bank or account to account, is used
by sending telephone messages between computers. In the old days, B. [efore] C
. [omputers], transferring money usually involved armored cars and security guar
ds. Today, the computer operators simply type in the appropriate instructions a
nd funds are zipped across telephone lines from bank A to bank B. These codes c
an be intercepted by hackers and used to gain credit card numbers, ATM and perso
nal identification numbers, as well as the actual money being transferred. With
the ATM and credit card numbers, they have access to all the money in the corre
sponding accounts.
The act of changing data going into a computer or during the output from
the computer is called "data diddling". One New Jersey bank suffered a $128,00
0 loss when the manager of computer operations made some changes in the account
balances. He transferred the money to accounts of three of his friends.
 "Salami slicing" is a form of data diddling that occurs when an employee
steals small amounts of money from a large number of sources though the electro
nic changing of data (like slicing thin pieces from a roll of salami). For exam
ple, in a bank, the interest paid into accounts may routinely be rounded to the
nearest cent. A dishonest computer programer may change the program so that all
the fractions of the cents left over go into his account. This type of theft i
s hard to detect because the books balance. The sum of money can be extremely l
arge, when taken from thousands of accounts over a period of time.
"Phone Phreaks" were the first hackers. They are criminals that break i
nto the telephone system though many various mean to gain free access to the tel
ephone network. Since telephone companies use large and powerful computers to r
oute their calls, they are an oblivious target to hackers.
Stealing information in the form of software (computer programs) is also
illegal. Making copies of commercial software, for re-sale or to give to other
s is a crime. These types of crime represent the largest growing area of comput
er crime. In one case, a group of teenagers pretending to be a software firm, s
old $350,000 dollars worth of stolen software to a Swiss electronics company.

While most hackers claim curiosity and a desire for profit as motives fo
r cracking computer systems, a few "dark-side hackers" seem to intentionally har
m others. For these individuals, computers are convenient tools of wickedness.
One crazed hacker broke into the North American Air Defense computer system and
the U.S. Armies MASNET computer network. While browsing the files, officials s
ay, he had the ability to launch missiles at the USSR. This could have led the
a nuclear war, and possibly the destruction of the world.
There are more than 1200 bugs out there, and the infections spread put t
he victim out of action until the healing process begins (if there is a healing
process). This may sound like a description of the common cold or flu virus, ex
cept that the virus does not attack people. This bug is made by human hands and
it attacks computers. It is spread though shared software, almost as easily as
a sneeze, and it can be every bit as weakening as the flu. Around the world on
March 6, 1992, computer users reported for work only to find that their compute
rs didn't work. The machines had "crashed" due to Michelangelo. This was a com
puter virus that was set to destroy all infected computers because it was set to
go off on the renaissance artist's 517th birthday. Approximately 10,000 comput
ers were hit world wide. The virus disabled the computers causing millions of d
ollars worth of down-time and lost data.
Computer crimes are becoming more and more dangerous. New laws and meth
ods of enforcement need to be created; the evidence is above. An effort is bein
g made by governments, but it is not enough. The problem is a international aff
air, and should be treated as such.
Current Canadian laws are some of the most lenient in industrialized cou
nties. They were also in place much later than other countries put their laws a
bout computer crime into effect, when compared to the United States and Japan.
The Criminal Law Amendment Act, 1985 included a number of specific computer crim
e- related offences. Now, for the first time, Canadian law enforcement agencies
can lay charges relating to cybercrime. The following text is an excerpt from
the Martin's Annual Canadian Criminal Code, 1995 edition:
326. (1) Every one commits theft who fraudulently, maliciously, or without
colour of right,
(b) uses any telecommunication facility or obtains any telecommunication
service.
(2)In this section and section 327, "telecommunication" means any transm
ission, emission or reception of signs, signals, writing, images or sounds or in
telligence of any nature by wire, radio, visual, or any other electro-magnetic s
ystem.
342. 1 (1) Every one who, fraudulently and without colour of right,
(a) obtains, directly or indirectly, any computer service,
(b) by means if an electro-magnetic, acoustic, mechanical or other devic
e, intercepts or causes to be intercepted, directly or indirectly, any function
of a computer system, or
(c) Uses or causes to be used, directly of indirectly, a computer system
with intent to commit and offence under paragraph (a) or (b) or an offence unde
r section 430 in relation to data or a computer system
is guilty of an indictable offence and liable to imprisonment for a term not exc
eeding ten years, or is guilty to an offence punishable on summary conviction.
430. (1.1) Every one commits mischief who willfully
(a) destroys or alters data;
(b) renders data meaningless, useless or ineffective;
(c) obstructs, interrupts or interferes with any person in the lawful us
e of data; or
(d) obstructs, interrupts of interferes with the lawful use of data or d
enies access to data to any person who is entitled to access
thereto.

These Canadian are already outdated, and they are only eleven years old.
They need to be amended to include stiffer penalties. At the time of the crea
tion of the laws in 1985, they were deemed adequate, because computers crimes we
re not looked upon as a serious issue with far-reaching effects. In 1996, compu
ter crime has become a damaging and dangerous part of life. It is now necessary
to revamp these laws to include young offenders.
The young people committing some of these crimes have very detailed know
ledge of computer systems and computer programing. If they can handle this type
of knowledge, and commit these crimes, they should be able to foresee the conse
quences of their actions. Most young hackers feel that they are bright, and th
erefore should be able understand the results of their actions on other's comput
ers and computer systems. The laws should treat these young offenders like adul
ts, because they realize what they are doing is wrong, and should suffer the con
sequences.
Some of the computer crimes listed in the criminal code are only summar
y offences; thus are not considered very serious. This spreads the message to h
ackers that the crimes are not serious, but they are. Since the hackers don't v
iew the crimes as serious, they are likely to commit more of them. If the conse
quences of breaking any laws referring to computer crime were made tougher, hack
ers would realize what they are doing is wrong. They will also see other hacker
s being charged with offences under the criminal code ans figure out that they m
ay be next on the list to be punished for their actions.
Not only do these laws need to be made tougher, they need to be enforced
consistently. The Authorities must from all countries must have a conference t
o discuss the need for consistent enforcement of the law referring to computer c
rime. This is because computer crimes are truly international. A hacker in Can
ada may break into a bank in Switzerland. Does the criminal get punished by the
laws of the U.S. or by the laws of Switzerland? This needs to be decided upon.

The authorities must have special operations to stop computer crimes, ju

st as they do for drug trafficking. Much time must be devoted to stopping these
crimes, before it leads to disaster. The problem is getting out of hand and th
e public must actively participate in cooperation with the authorities in order
to bring the problem under control.
Security is one matter that we can take into our own hands. Until new l
aws are created and enforced, it is up to the general computer-using public to p
rotect themselves. The use of passwords, secure access multiports and common se
nse can prevent computer crimes making victims of us all.
Passwords can add a remarkable amount of security to a computer system.
The cases where pass words have been cracked are rare. Included with the passw
ord program must be a access restriction accessory. This limits the number of g
uesses at a password to only a few tries, thus effectively eliminating 98% of in
truders.
Secure access multiports (SAM's) are the best protection against compute
r crime making a victim out of a computer user. When joining a network, the use
r calls in and enters password and access code. The user is then disconnected f
rom the network. If the network recognizes the user as a valid one, it will cal
l the user back and allow he/she to log on. If the user was invalid, the networ
k will not attempt to re-connect with the user (see figure 1). This prevents un
wanted persons from logging on to a network.
Common sense is often the best defense against computer crime. Simple t
hings like checking and disinfecting for viruses on a regular basis, not sharing
your password or giving out your credit card number on online services (ie: Int
ernet). Also, employers can restrict access employees have to computers at the
place of employment. This would dissipate most computer crimes executed by empl
oyees.
If new laws and enforcement of those law are not soon established, along
with heightened security measures, the world will have a major catastrophe as a
result of computer activity. The world is becoming increasingly dependant on c
omputers, and the crimes committed will have greater and greater impact as the d
ependancy rises. The possible end of the world was narrowly averted, but was ca
used by a computer crime. The United States defense computer system was broken
into, and the opportunity existed for the hacker to declare intercontinental nuc
lear war; thus leading to death of the human race. Another event like this is l
ikely to occur if laws, enforcement of the laws and security of computers are no
t beefed up. The greatest creation of all time, the computer, should not lead t
he destruction of the race that created it.