Chapter 11: Scams, Fraud, and Cybercrime in a Globalized Society

Global Village

Analogy that the vastness of the world is compressed into a village due to instant communication, as if everyone was our neighbour

• We live in it

• Internet is “borderless and ubiquitous”

Cyberspace

Information sharing, communications, and interaction environment created by interconnected network of computers

• Hosts everything we see on our screens

• Upkept by human participants

Enables new forms of crime not possible in conventional spaces.

With the rise of ICT’s, criminals can…

Proliferate more crime and innovate

• Cyberspace allows new forms of crime

• Enables computer-assisted crime

• Created new categories of crime surrounding cyberspace

Cybercrime

Criminal activity perpetrated by electronic communication devices

• e.x. online scams or common frauds

• Can target institutions, organizations, or governments

Perceived as “outside of the real world”, may give perpetrators a sense of anonymity

- Many think they are immune from punishment

Cyberspace is..

Borderless and Ubiquotous

Space Transition Theory - Jaishankar

Social behavior in conventional spaces changes when people are in cyberspace

Anonymity removes the social deterrents preventing deviant behavior

• Repressed criminal tendencies may emerge (TRANSGRESSION)

Why does Cybercrime Challenge traditional Criminology?

Traditional criminology tends to put things in inherent “good” or “evil categories

Binary of good and evil is blurred in cyberspace, as law-abiding computer users can be trolls, spammers, hackers, or cyberbullies

Cybercrime in Relation to Criminological Theories

Cybercrime tends to blend criminology theories (e.x. social learning, subcultural, neutralization)

Looks at how they are altered in cyberspace

Wall’s Typology on Theories of Cybercrime (Four categories)

1. Cyber-trespass - The hacking of barriers and private boundaries

   • e.x. accessing one’s computer without permission

   • malware, viruses

2. Cyber-deception - Theft of data, personal files from institutions

3. Cyber-porn / obscenity - Distribution of illegal sexual material through computers

   • e.x. child porn or revenge porn

4. Cyberviolence - Use of internet to harm others, such as stalking, harassment, etc

   • Bullying, harassment, threats to one’s character, etc

Traditional Scams, Frauds, and Cons….

Usually target vulnerable individuals such as the elderly, minors, or immigrants

Scams eventually get found out, and replaced by unique ones unbeknowst to the public

Marks

Victims targeted by a scam or a fraud

Con artists

People skilled at gaining the trust of individuals during a scam

Pyramid Scheme

a “get rich quick” type of scheme that involves the constant recruitment of investors into a network that resembles a pyramid hierarchy

• “Investors” are paid by the recruitment of others

Person at the top receives all the money paid by recruits at the lower end of the stage

• The constant recruitment at each level becomes unsustainable

• Investors quickly lose their funds

Usually perpetrated by laypersons and not professionals

Ponzi Scheme

“Get rich quick” scheme that involves paying back investors using the money of other investors

• “Borrowing from Peter to pay back Paul”

Investors are lured by high rates of return early, but eventually lose their investments

• Scammer gets rich off the investors pouring money

• Lavish lifestyle attracts new investors

Oftentimes garner investor money on the grounds of raising capital for a business startup

Charles Ponzi

Had scammed tens of thousands in Boston for about $190 million today through his “Securities Exchange” Company

• Tricked investors into believing he was an experienced investor who would earn them high rates of return

Advance Fee / 419 / Nigerian Scam

Scam via phishing where an email or message is sent stating that a large sum of money would be sent if a smaller fee is sent first

The version known as “Nigerian Fraud” is when a high-ranking government official or royal such as a prince, declares a fortune to someone’s name is discovered

• Scam originates in Nigeria

Grandparent Scam

Scammers target elderly parents into believing their grandchild is somewhere stranded in the world, and needs money

• Can impersonate their child’s voice

Considered a modern scam due to the usage of e-transfer systems

Identity Theft and Identity Fraud

The assumption of another’s identity/name to commit wrongdoing, monetary gain, or avoidance of the law

Can be accomplished using fabricated or stolen I.D. documents

Easily more achievable in cyberspace, where personal info is stored in computer databases

• Identities can be used to take funds out of legitimate accounts

Criminals may assume multiple identities at once

• e.x. Samantha Azzopardi from Australia had assumed multiple identities at once

  • Caught under the fake names in Ireland, Canada, etc

Fortune Teller / Psychic Scam

In Canada, it’s a crime to pretend to practice witchcraft, magic, or sorcery as a business front

• People who believe in the supernatural are often vulnerable to fake psychics

e.x. a woman in Toronto in 2018 was charged with fraud after she pretended to practice witchcraft to convince a man to sell his house and transfer her the money after she convinced him evil spirits were in his home

Trolling

Unwelcome or disruptive online behavior done through posting innappropriate texts or content

Internet of Things

The concept that household objects have ICT components within them that allow them access to cyberspace

• Created to be “smart” but often inconveniences

The Internet has created the:

Hacker, who engages in cybercrimes

Cyberattacks

A deliberate attempt to compromise or destroy a computer / system and the information contained in them

Hacktivists

Hackers that gain access to unauthorized systems as a form of social protest

e.x. Anonymous bombarding the Church of Scientology in 2008 with DDoS attacks

Cybercrimes may be Categorized into….

Pure Computing Crimes

• Occurs when the computer is the object of a crime

• e.x. malware, DDoS attacks, etc

Computer-Supported Crimes

• Occurs when the computer is an instrument used in perpetrating a crime

• e.x. Fraud, CP

Distributed-Denial-of-Service Attacks

Numerous computers being coordinated to flood servers to crash it

• e.x. High School student Michael “Mafiaboy” Calce shutting down major websites, with damages totalling to $1.7 billion in order to intimidate other hacker groups

• Aligns with hacker ethic (values technological optimism and distrust of authority)

  • Hackers value monetization nowadays compared to the older values of notoriety

Botnets

Network of PC’s that have been infected by malware for criminals to use for criminal activities, rather than using their own

• Remote controlled

• Infected computers can be used to attack other computers, spread malware, and “leech” the bandwidth off of internet services

e.x. the Mirai botnet being used to DDoS servers owned by Dyn in 2016

Phishing

the mass distribution of emails or texts that pose as trustworthy institutions requesting that “marks” release compromising information about them

• e.x. requiring to enter credit cards or passwords

• Spoof websites could occur (pharming)

Ransomware

form of malware sent by a hacker that holds a computer and it’s information hostage until a ransom is paid

• 91% originate from spear phishing, a form of phishing that targets an individual and makes it more promising with personal info

• often involves a fee paid through cryptocurrency, digital currency not controlled by any central bank

Fees may vary from hundreds of dollars against civilians, to thousands or millions against institutions

Lockscreen Ransomware

occurs when a message prevents a computer from being accessed, encryption ransomware encrypts files until the ransom is paid

“Spray and Pray” type of scam similar to phishing

Hacktivism History

Hacktivism emerged in the 90’s and involves hacking services in the name of political activism and protest

• e.x. Civil disobedience by website vandalism (30% are political)

Hackers may be considered intruders, but there are morally righteous hackers

Black Hat Hackers

often engage in crime such as theft, sabotage, etc with malicious intent

White hat hackers

ethical hackers who use their computer expertise to combat black hat hackers

• Hired to improve the cybersecurity of systems by trying to penetrate firewalls or security systems for vulnerabilities

• Can be former black hat hackers who’ve been charged

  • e.x. Michael “Mafiaboy” Calce, who had worked as a security consultant trying to find vulnerabilities (”zero-day” vulnerabilities”)

The Equifax Attack

Occurred in 2017 after the credit reporting company Equifax had been hacked, leaking the info of 143 million U.S. citizens

• China was accused of being the culprit

Fruitfly Malware

Form of spyware that had affected computers across America in 2017

• Dubbed fruitfly, had monitored keystrokes, mics, and cameras

• Phillip R. Durachinsky was indicted for creating fruitfly and produce child porn

Spyware

Form of malware used for spying and monitoring a user’s activity, and gather information

Bullying Before the Digital Age

Prevalent amongst the social interaction between youths

• Became digitalized and can involve the damaging of one’s reputation over social media to cause damage

Cyberbullying

Done with the intent to intimidate, threaten, or inflict emotional damage to someone through the use of ICT technology

Sextortion

practice of threatening to reveal sexual images of a victim over the internet if they fail to comply with demands

• Preys on the vulnerability of female users

Case of Amanda Todd and Rehtaeh Parsons

Sextortion case where the RCMP was alerted at least 5 times over the two year period before she committed suicide

Cyberstalking

ongoing harassment aimed towards a target victim, usually by following them online to make them fearful of harm

• Affects youths and adults who seek revenge against former exes

• accompanied by online trolling or doxxing

Revenge Porn

sexually explicit images of someone posted on the internet without their consent to enact revenge

• Can involve interconnected forms of online bullying

• Can be faked or real nudes done to cause distress

Intergovernmental Cyberwarfare and the Computerization of Political Antagonisms

The computerization of society has led to political antagonisms over cyberspace

• Computer infrastructure has become a target for governments who want to disable enemy forces without conventional weaponry

Cyberwarfare

refers to the use of computers to infiltrate, disrupt, or attack a government or military infrastructure by foreign agents

• Debate whether or not to classify it as terrorism/warfare

• Global feuds occur over cyberspace

“an extension of policy by actions taken in cyberspace by state actors or non-state actors that either constitute a serious threat to a nation’s security or are conducted in response to a perceived threat against a nation’s security”

Cybersecurity

the electronic security systems, protocols, and procedures implemented to prevent unauthorized access to computers and their servers

Stuxnet Case

Complex computer worm (malware) which was one of the first instances of cyberattacks affecting real-world systems

Stuxnet had spread through USB devices and would search hardware for a specific program

• If it didn’t find the targeted program, it would leave it alone and move on

It had targeted a specific program that had controlled spinning centrifuges that had enriched uranium for Iran’s nuclear program

• Located in a nuclear enrichment facility in Natanz, Iran

Espionage

Practice of spying by government agents to obtain classified information from a foreign government

• Can be seen through this perspective

e.x. China’s espionage of Western nations

Policing Cybercrime

Law enforcement always lack behind new innovative forms of crime

Cybercriminals often outsmart cybersecurity tech by finding loopholes in softwares

The computerization of society makes tracking crime difficult compared to the pre-internet era

• Had an enormous impact on crime commission and on crime control, that it marks a new perspective of crime investigation

  • Requires specialization on cybercrime

International Law and Cybercrime

Cybercrime is masked by anonymity and jurisdictional restrictions that law enforcement face

• Bill C-13, in response to the National Convention on Cybercrime, was adopted to increase power of the law to combat cybercrime

New Innovations that may be used in Cybercrime

• Artificial Intelligence (AI) - the replication of the cognitive capacities of humans via machines

• Quantum Computing - extremely fast type of computing system that surpasses binary computers

Make it harder for policing efforts, and complicate crime control in cyberspace