Computer Crime Research Center


IT and organized crime

Date: March 06, 2004
Source: Computer Crime Research Center
By: Victor Sabadash

The forming of independent Ukraine as a strong European country is tied with overcoming of considerable political, economical and social difficulties. Criminality structure changed sharply, it is constantly growing, new ways and kinds of crimes are arising, old types are being constantly improved. The last decade is characterized by violent development in scientific progress. Global computerization of the whole society, affecting almost all spheres of activity of people, organizations and government, gave birth to new field of social relationship that, unfortunately, quite often is the object of illegal actions of organized criminal groups.

Computer crimes are becoming of more and more transnational and organized. Transnational character of computer criminality poses certain social danger, substantively threatening information security, which is a compound of national security of the country. Present day technologies gave a stimulus not only to free trade and economical activity, also to criminality. Modernization and integration of different communication means eased contacts between criminal groups in many countries; modern banking is based in great extent on different computer facilities and new information technologies, it assists international criminal transactions. E-revolution granted access to new technical facilities that allow appropriating illegally significant sums of money, evading taxes and laundering huge illegal shady incomes.

Article's topicality is conditioned by introduction of modern organized crime in Ukraine to principally new quality standards of its development. More often members of organized criminal groups apply current IT in their criminal activity. In this view, investigations of this field are necessary in order to perfect policy of counteraction to organized criminality in computer technologies field.

For last few years computer technologies took a huge step forward. According to experts' opinion, microelectronic and computer fields are unsurpassed by rates of growth, influence on social economical infrastructure, contribution in scientific technical progress, positive changes in society. World economy, governments, military departments cannot work without computer technologies. There is an introduction of local, branch, state and international communication systems happening at the moment. Computerization influences with all sides of social life: from control of air and land traffic to solving problems of national security [1].

Rash development of high technologies, computer age of world community along with positive trends let out new opportunities for evolution and improvement of criminal sphere, criminalizes social legal relations. More and more often computer-related crimes are committed. IT sphere allows to improve not only traditional kinds of crimes as theft, fraud, «money laundering», documents counterfeit, including securities and cash notes. Also it creates new types of crimes as unauthorized use of computer information, computer forgery, computer fraud, etc. Such concepts as computer information, computer crimes, cyber terrorism and information weapon are arising.

The goal of this article lies in investigating of IT use in organized crime, definition of principal directions of organized criminal groups' activity in IT field and basic directions of counteraction to organized crime.

It is necessary to note that problems of IT in organized crimes were reviewed in works of our Ukrainian scientists: N. Akhtyrskaya, P. Bilenchuck, V. Vekhov, V. Gavlovskiy, V. Golubev, M. Gutsaliuck, V. Krylov, G. Matusovskiy. However, impetuous growth in high tech field, new and new appearing methods of committing computer crimes do not allow to stop half-way and demand more and more deep research.

As it was mentioned before, the number of computer related crimes is increasing along with widening of IT related sphere.

It is explained by low rates of information systems' immunity, increasing number of anti social actions owing to great number of global networks users, application of new achievements by criminals. Interests of organized groups are directed to bank sphere, laundering money, distribution of false information, financial machination, where automated systems are widely applied [2].

IT facilitated crimes committed by organized criminal groups are divided into two groups: 1) crimes of economical non-violent character; 2) crimes of violent character.

First are:
- money laundering;
- credit cards fraud;
- monetary theft from bank accounts;
- cyber attack with purpose of money theft;
- coinage offence;
- computer fraud;
- child porn distribution;
- drugs distribution.

Organized economical crime is a global social problem of all economically developed countries and large international institutions. According to IMF estimations, monetary aggregates of «dirty» money makes up from $590 to $1 500 billion, that is 2-5% gross domestic product of all countries [3]. Appropriate goal of organized criminality lies in getting shady money and its legalization, i.e. investments in legal entrepreneur activity, shady manufacture and shady privatization. Organized criminal groups more and more often use the Internet for laundering dirty money.

Money laundering with help of Internet lies in hiding origin of dirty money. It is well-known crime, however anonymity of the Internet eases machinations with dirty money, placing it in legal assets and investments. There are some ways of money laundering in the Internet: gaming, Internet banks. Gaming: illegal money is used for betting in gambling games. Internet banks also render opportunity to open accounts without face-to-face contact with bank employees. Money can be deposited in the secret offshore account or transferred with help of electronic transfer from one bank to another, such operations are repeated until it will be difficult or impossible to pick up the trace. However it is still difficult to place large amount of cash to the account, and if it is deposited, it is much more easily and quickly to operate with it using electronic transfers.

Credit card frauds are getting more distribution. This fraud arose as a topical problem first in 90-s of the past century. This crime is distinguished by simplicity, absence of violence, and anonymity. It is widely employed by organized criminal groups. According to the Interpol general secretariat, almost 60% of all fraud related to credit cards applications are committed by organized groups of Asian origin. Other 40% fall on Nigerian, Bulgarian, Iranian and the former USSR countries [4].

Organized crime also uses hacker services very often in criminal activity. Hackers using special software tools get and sell data on credit cards accounts, also they divulge passwords ids and other personal info in computer systems. Thus they assist criminals in obtaining illegal access to loan offices and computer systems of financial institutions. According to NY Times, tens thousands of stolen credit card numbers are offered via the Internet each week at different websites. These sites are believably supported by people residing mainly in former USSR countries. These people are playing leading role in market of stolen data on credit cards. Such websites bring up to $1 billion losses to different financial institutions annually. System of credit card sales has been already well-set. Prices for cards are fluctuating between $ 0.4 and $ 5 per card, depending on information given. Usually cards are traded in large lots, at prices from $ 100 for 250 pieces up to $ 1000 for 5 thousand. At this, sellers guarantee that credit cards are valid. According to experts, geography of buyers covers whole world, but the largest share falls on countries of the former USSR, Eastern Europe, Asia and Malaysia. Buyers apply cards in different types of fraud, including purchasing goods through the Internet or money withdrawals.

There is one more way of stealing money with help of ATMs. Data from magnetic strips and PIN codes are stolen not only by cunning devices for reading data, panels laid on ATMs, hidden cameras, etc. There is much more efficient way: organized group purchases personal ATMs (since, one can easily buy them, the only problem is money), load it with cash and place in crowded locations. Besides these ATMs are modified so they read and record all the data. Card clones are manufactured on the basis of data obtained and then they are used for cash withdrawals from original ATMs. Members of one gang that had placed number of ATMs and withdrawn money from 21000 accounts in 1400 banks are wanted in the USA presently. According to modest calculations, criminals managed to withdrew more than $4 million. This criminal group is not the only and stolen sums number in tens of millions.

Organized criminal groups more actively use the Internet even in such type of criminal activity as selling drugs. Drugs dealers and their clients more often effect deals in «closed rooms» of chats, restricted for strangers, they also use Internet banks for dirty incomes. Drug and medicine sales bring more and more profits. Influence of the Internet on international drugs trading (e.g. opium) was examined by the UN and governments of some countries. In March 2003, the UN passed the resolution on «declining of global network role in narcotic drugs trading and misuse», recommending member countries to develop complex of measures, preventing or decreasing sales of drugs via the Internet.

Crimes of violent character that are committed by organized criminal groups, first of all should be referred to terrorism. Unlike...

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