CHARACTERISTIC OF CRIMES COMMITTED IN THE BANKING SYSTEM
BY USING UP-TO-DATE INFORMATION TECHNOLOGIES
Government vital activity banking system which deals with accumulating, dividing and using governmental and private funds is the most attractive for individual criminals and especially organized criminal groups. The most financial swindles of different kinds accomplished more often during various bank operations are committed now in this system.
To function normally economy needs to have a reliable, stable and developed banking system where banks will implement payments, extend credits to their clients in proper time, provide with services in securities operations and so on, and so forth. If the bank financial position is “swayed”, the financial standing of hundreds of bank clients can give a lurch as well.
The annual growth in the bank offense amount increases the size of loss caused by these crimes. Data for 1997-1998 prove that more than 75% of all losses inflicted by the financial criminality only fall on the commerce bank field of business. (1)
Offenses committed in the banking system or by using it can be attributed to the most dangerous economic crimes since their negative influence is not only reflected on the bank itself but also the many other subjects of the economical activity and the financial system of the government at large.
Sums that are drawn from the banking accounts of the depositors and the resources of the banks themselves by applying computer systems reach especially great extents. Crime, which covers corpus delicti provided by the Criminal Code of Ukraine in Clauses 190 “Fraud”, 200 “Illegal act with transfer bills, payment cards and other means of access to the banking accounts, equipment for their manufacture”, 361 “Illegal interference with the work of electronic computers, systems and computer nets”, 362 “Larceny, misappropriation, extortion or possession of the computer information by swindling or abusing official position”, 363 “Violation of operating rules for electronic systems”, can be attributed to this kind of criminal activity.
Early 90-s the global society computerization was initiated in Ukraine that did not become only a factor of the scientific-and-technological progress but also entered work, everyday life, science, education and culture. Computers became indispensable man help.
Today our country has sufficiently developed system of electronic communication, which cannot be absolutely reliable and protected. Such a situation gives criminals a possibility to get an access to the computer information systems to conduct illegal manipulations with mercenary motives. The society computerization results in increasing the amount of computer crimes and their weight depending on the sums used in the total part of the material costs in comparison with the ordinary offenses.
The object of the criminal trespass depending on the kind of a crime is not the same. The criminal trespasses in the bank sphere are determined by the criminal-and-legal indication depending on the circumstances by the clauses of different chapters from the Criminal Code of Ukraine: 1.Offenses against property – “Fraud” (190); 2.Offenses in the sphere of economic activity – “Illegal acts with transfer bills, payment cards, equipment for their manufacture and other means of access to the banking accounts” (200); 3.Offenses in the sphere of using electronic computers, systems and computer nets – “Illegal interference with the work of the electronic computers, systems and computer nets” (361); “Larceny, misappropriation, extortion and possession of the computer information by swindling or abusing official position” (362); “Violation of the operating rules for automated electronic systems”(363); (2). Funds of the government or private firms, enterprises and persons in the Ukrainian or foreign currency, goods and property as well are the object of these criminal trespasses.
The methods of committing banking offenses are very different. Let us examine the crimes committed by using modern information technologies: counterfeit and application of the plastic payments cards and computer banking information.
For the last years the Ukrainian market of the bank technologies traversed a path from the initial stage of computerization – realizing the most simple banking operations on the base of the personal computers, to the valuable automated banking systems, which meet the most exacting modern requirements. The international systems of payment are being introduced.
The modern state of the information systems and electronic technique allows introducing the most delicate and interesting technologies. One of them is so called "e-money".
The mutual interest of the government and the owners of the plastic cards stipulated the appearance and spread of plastic payments means. It is one of the ways for the government to reduce the needs in ready money mass.
The emitters recurrently inform the organizations, which accept cards, about the numbers of cards declared null and void, stolen, lost or forged. The list of the numbers of such cards is called “stop-list”. When using a card, it is checked for the validity of its details by the “stop-list” and with the reading unit. (3)
Hackers are a real danger for the bank industry of plastic payment means. When using special software they can determine and then sell the numbers of valid accounts of the credit cards and also extend passwords, identification numbers, credit and other personal information through computer nets, thereby helping criminals to obtain illegal access to the credit offices and computer systems of the financial establishments.
But counterfeit is the most dangerous threat for the payment systems with using bank plastic cards. This kind of offenses is developed the most dynamically and creates great difficulties when researching and calculating losses. Criminals use the numbers of the valid cards and their owners even do not guess it.
Theft in the bank activity with using electronic computers or computer nets is broadly extended now. This kind of theft is characterized with that the criminals abused their official position to get unlawful access to the computer information of the financial character, concentrated in the electronic centers of the banking establishments, revealed the flaws in the activity of the inspection services and carry out the criminal operations with the information obtained from the electronic computers and data carriers.
Today there are four groups of principal means of committing computer crimes:
1.Information piracy: direct and electromagnetic
2.Unauthorized access to information: “computer boarding”, “mystification”, “disguising”, “changeable choice”, “by tail”, “emergency”, “after fool”, “breakthrough”, “hatch”, “storehouse without walls”, “system gawks”.
3.Manipulation with information: “Trojan hobbled hoarse”, “Trojan wooden doll”, data substitution, code replacement, computer virus, “salami”, “logical bomb”, “asynchronous attack”, modeling, “kite”, “trap with bite”.
4.Obtaining and using information with criminal purpose: larceny of software, equipment by means of computer operations, theft of money by means of gaining confidential codes, computer remittance, manipulation with computer or introducing alterations to the program. (4)
Commitment of these crimes is preceded by the certain preparation, the character of which depends on the level of connection of the wrongdoers with the activity of the bank electronic center. The unauthorized persons think over the ways of access to the computer systems, try to find out the program passwords and keys. The programmers, operators and other officials of the computer center and other bank departments who prepare such a swindle choose the most favorable circumstance to commit it and can set up a false firm with the settlement account to transfer drawn money, etc.
In the main, criminal action consists of conducting contact operations of the wrongdoers with the electronic computers or machine carriers, drawing necessary information or money from the e-accounts of the bank clients, possessing it or transferring it to the accounts of the “false” organizations.
Restoring the initial program that underwent some changes in the process of criminal access to the bank computer information conceals such an offense. Highly skilled experts who may breach the bank software depending on its level of access can do this.
Situation created by criminals to commit these crimes first of all is formed under the influence of different misunderstanding, contradictory, undeveloped regulations in our legislation, some insufficiently considered decisions and inadequately elaborated mechanism of realizing decisions in the field of bank activity.
The circumstance is favorable for swindlers who use plastic payments cards when “stop-lists” are not send in time to the organizations which accept these cards and the persons who take and check these cards at the commercial and other facilities are careless.
The situation of the lax control for maintaining the established order of professional work in the electronic bank nets and the insufficient protection of computer systems favor the mercenary crimes dealing with using information electronic systems. Here criminals apply favorable conditions already objectively formed for them more often than those specially created by them. Even the insufficiently considered organizational-and-administrative decisions can favor such plundering.
Criminal. Psychology of profit-seekers, dealers, liking for profit, striving for quick accumulation of wealth by any means without taking into consideration that their actions can cause at times serious losses to the economy of Ukraine is peculiar to most of them.
Persons who commit these crimes have comparatively high level of education.
Persons who commit theft by means of using computer bank systems should be referred to the specific category of these wrongdoers.
Defining persons who commit computer offenses it is necessary to mark the main distinction, and namely: very many people ranged from highly skilled specialists to amateurs are involved in the electronic criminality.
Home and foreign researches make it possible to paint a portrait of a typical computer, electronic criminal, that is a proper profile of this social type: he is average 30 years old, by education – an engineer in the field of electronics and mathematics, or programmer, but there are some cases when the criminals never had any technical experience. Besides they are not on the books at IAA and do not have criminal past at all.
According to Computer Criminality Research Center males are five times oftener the subjects of crimes committed by means of using high technologies. The most criminals have full or incomplete higher technical education (53,7%), another full or incomplete higher education (19,2%). Persons aged from 30 to 45 (46,5%) and from 16 to 30 (37,8%) as well prevail among them. (5)
From a position of human psychophysical characteristics it is a desired official, a bright, thinking, creative person, who knows his business and is ready to accept a technical challenge. They always occupy senior posts and are equipped with special knowledge and the newest technologies, have an access to the banking computer systems.
At the same time they are afraid of losing their authority or certain status within the limits of a social group, or being mocked at the work.
It should be taken into consideration that at this stage the computer crimes in the bank system are committed mostly in an organized way. It is explained by that the organized criminal groups, which have wide influence, can transfer money to the foreign bank accounts without any problems, or “launder” it through false firms in order to legalize and bring it into circulation later on.
These criminals are notable for concentration and diligence, their actions are refined, cunning and accompanied with excellent disguising. Outwardly the behavior of those people do not differ from the social rules established in the society. More frequently they do not only have special skills in making use of electronic computers, their devices but also can apply bank program passwords and keys, use their expert knowledge to falsify programs by means of altering correct output data. They are usually operation officials who occupy various posts, programmers and computer operators. Computer crimes with mercenary motives are also committed by so called “hackers” (possessed programmers) who are chiefly young people well technically and professionally trained to work with electronic computers and draw up computer programs. (3)
Researches show that mainly bank officials: programmers, engineers, and operators who are users or service personal of electronic computers (41,9%) can obtain a direct unauthorized access to the electronic computers, systems or computer nets. Almost twice less the other bank officials (20,2%) can gain such an access, and in 8,6% of cases the crime was committed by the officials that had been dismissed, 22,5% - an unauthorized access is obtained by a stranger. (5)
“Hackers” – computer rowdies who enjoy penetrating into smb. else’s computer. They are capital experts on information technology. By means of telephones and home computers they are connected to the nets, which transmit information linked nearly with all big computers that operate in the field of economy and banking activity.
First hacker’s aim can be only a sporting interest, connected with solving a difficult problem of “breaking” protection of program product or creating computer virus only to please their self-admiration or just make a fun. Hackers are notable for a high professionalism in combination with specific computer fanaticism. It is necessary to underline that the lack of evident unlawful intents features the criminals of this group. Practically all their actions are taken to show their intellectual faculties.
Professional criminals who act with obvious mercenary motive and have steady criminal experience are the most dangerous threat for the sphere of banking activity. Crimes that bear serial, continuous character are always concealed. More often the members of the organized criminal groups are highly skilled experts with higher mathematical, engineering and technical or economical education who are equipped with special technique. Most of the especially unsafe crimes in public offices such as misappropriation of money means to the particularly large extents committed by applying computing machinery fall on the share of this group of criminals.
They work either at the offices against which they act or outside them, alone or with accomplices. Some of them are weakly equipped and other have expensive, prestige and powerful computer systems.
Revealing traces. The biggest difficulty is to establish a fact of committing a computer crime in the banking system. It is explained by that outwardly the fact of committing a computer crime and its display in the environment is more modest than when burglarizing a grocery store or quite insignificant. Outwardly you cannot see an obvious loss of property inflicted by the electronic criminal. For example, unlawful copying out information more often remains entirely unrevealed, introducing a virus into computer is more often put down to the unintentional error of the user who could not “reveal” it when contacting with inner computer world.
Mechanism of committing offenses connected with automated systems of processing information is often hidden from the victims. Besides the fact of the information leakage can be disguised by means of electronic devices at the normal course of events before it is revealed.
Very often executive officers obliged to ensure computer security are not interesting in revealing fact of crime commitment. Acknowledgement of the fact of unauthorized access to the system, which is under their jurisdiction, puts under doubt their professional proficiency; weakness of computer security measures undertaken by the administration can result in serious internal complications.
As for the suffered banks their officials are not interesting at all in registration of those crimes but on the contrary try to conceal them studiously. Since making public the fact of committing criminal actions against bank computer will be negatively reflected on the authority of the establishment and can result in losing clients (only in 8,2% of cases the victims appeal to the law-enforcement agencies, and in other cases there are only internal investigations). (5)
The result of it is that the reluctance to inform about a crime, deliberately concealing it, favors putting obstacles in the way of revealing criminal traces which are insufficient enough as they are. But if the damaged party informs the law-enforcement bodies about committed crime the team of inquiry arrives on site of an accident and inspects it to reveal traces of the offense.
In particular all the computers of the banking establishments are equipped with the unauthorized access warning systems which fix all the attempts of this kind. Suffice it to enter a proper command and computer will display all the information. But a criminal can penetrate into another computer by finding weak points in the system protection; in this case the unauthorized access will not be fixed. In spite of prudence when working with information sometimes there remain traces: accidentally erased information or program confusion, which could occur when improper command is used. If money were drawn from the bank, making more detailed inspection will reveal the inflicted loss of property.
The officials, persons who know operating conditions very well and can use the possibilities of this system with mercenary purposes, mainly commit the lion’s share of computer crimes in the bank system. There are very few those people in every establishment so crime traces can remain on their working places. They are CD-ROMs, floppies where the criminal save necessary information, copies, notes on sheets of paper (passwords, codes).
Unfortunately electronic criminals commit nearly all the crimes in the daytime at the work when they are engaged in their official activity and you can do nothing with it. The only way out is to improve the protection system and restrict an access to the information on the system operating conditions. The less informed, the less suspected.
Circumstances that are subject to specifying in a process of investigating banking crimes, independently of their type are mainly determined on the base of their criminal characteristic and by taking into consideration an evidential matter.
The first group of these circumstances is connected with establishing all the main circumstances of the crime case to be investigated: an object of criminal trespass; means of commitment and mechanism (all stages) of criminal action, situation of committing it (place, time, specification of financial operations, conditions for performing and checking them, other local and surrounding conditions that accompany actions to be investigated), other circumstances that influence on the motives of actions; character and extent of the caused losses (harmful consequences); individual peculiarities of the suspected; availability or lack of indications of the organized criminal group activity (if it is determined and the suspected are its members). It is important to ascertain (if a crime had some episodes) the whole period during which the crimes were committed, and all the circumstances of committing it. Revealing the enumerated circumstances usually creates the necessary factual base for bringing an accusation.
The second group of circumstances combines facts that confirm guilt of the accused, and motives of committing a crime, including determining extent and nature of circumstances that aggravate or mitigate the punishment.
The third group of circumstances – conditions that favor committing a crime (imperfection of legal regulation of applicable operations, shortcomings of applicable rules of conducting operations, poor automation of payment transactions, etc.)
The fourth group of circumstances bears largely a criminal character and is aimed to reveal data that help to determine sources of main and additional information on the case. The process of determining circumstances of the group includes: verification of investigation versions, which have arisen; verification and assessment of actual data that formed the basis for criminal assessment of the action to be investigated (information about means, mechanism and circumstance of committing a crime), and also revealing and assessing the extent of the inflicted loss, means of disposal of stolen property and valuables purchased with drawn money.