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Organized Crime and the Internet

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Title: Organized Crime and the Internet


1
Organized Crime and the Internet
  • Andrew Skaggs
  • Mike Strobel
  • Chinh Tran
  • Matt Weber

CS4235 Spring 06 Internet Security 2 Research
Project
2
Outline
  • Defining Organized Crime
  • Types of Crime
  • Effects
  • Laws and Enforcement

3
Defining Organized Crime
  • Hollywood The Sopranos
  • Phil Williams A continuation of business by
    criminal means.
  • FBI any group having some manner of a
    formalized structure and whose primary objective
    is to obtain money through illegal activities.1

4
Real Crime Syndicates
  • Russians
  • Run Botnets
  • Associated with many worms
  • Americans
  • Spammers or other users of botnets
  • Often lower on the hierarchy
  • Nigerians
  • 419 scams

5
Types of Crime
  • Extortion (DDoS or break-in based)
  • Fraud
  • Identity Theft (phishing/pharming)
  • Scams (Nigerian 419)
  • Spam
  • Money Laundering
  • Narcotics
  • Encryption

6
Extortion
  • Either intrusion or DDoS based
  • Frequent with gambling sites abroad
  • Has grown in size, major companies such as
    Bloomberg threatened

7
Theft
  • Identity Theft
  • Steal Credit Cards
  • Create new accounts
  • Electronic transactions
  • Operation Firewall
  • Secret Service conducted 2 year investigation of
    identity theft ring
  • 28 arrests, 8 states, 6 countries

8
Scams
  • Email frequently used as to find victims
  • Nigerian 419 scam one of most common
  • Started in early 1980s via regular mail fax
  • Government involvement
  • 419 is section of Nigerian law

9
Spam
  • Debate on exactly what should be considered legal
  • US CAN-SPAM Act 2003
  • Often sent through botnets to avoid detection
  • ISPs usually shut down accounts of known spammers

10
Money Laundering
  • Traditional criminal technique to hide money
    trail
  • Taking advantage of the Internet
  • Fake auctions
  • Over and under invoicing through web-based
    companies
  • Online gambling

11
Narcotics
  • Web Pharmicies dont require prescriptions or
    sell fake drugs
  • Operation Cyber chase
  • 20 members of an Internet drug ring
  • Joint effort between 23 local and national law
    enforcement agencies across the world
  • Over 6 million seized

12
Encrypted Communications
  • Criminals can encrypt communications to prevent
    lawful interception
  • Encrypted records can be kept without fear of
    being used as evidence
  • As early as 1998 FBI Director Louis Freeh told
    Congress Widespread use of robust
    non-recoverable encryption is beginning to
    devastate our ability to fight crime and
    terrorism.2

13
Effects
  • Direct Impact
  • Over 100 billion worldwide3
  • 90 organized
  • In Perspective
  • FY2005 Microsoft Revenues 40 billion
  • Wholesale worldwide drug trade4 94 billion
  • FY2005 DoD Budget 400 billion

14
Effects (cont.)
  • Decrease in online consumers confidence leads to
    the loss of the revenue of online retail
    companies
  • TRUSTe survey shows 50 increase in concern from
    2003-2004
  • The costs of security increase business expenses
    for everyone
  • Must buy hardware, software to defend threats

15
Laws and Enforcement
  • Tracking Down Organized Crime
  • Cybercrime Reporting Problems
  • Jurisdiction Conflicts
  • International Cooperation
  • US Efforts
  • Future Efforts

16
Tracking Down Organized Groups
  • Historically difficult to track and prosecute
  • Operate like a business
  • Base their operations out of weak states
  • Countries where law enforcement is unqualified or
    underfunded
  • Hire professional consultants
  • Financial experts to help with money laundering
  • Hackers and security experts to manage internet
    operations
  • Internet crime is inherently difficult to track
  • The combination of these two factors has created
    a nightmare for law enforcement agencies.

17
Reporting Problems
  • High-tech crime is often not identified.
  • Electronic theft may simply be reported as
    theft by its historic definition.
  • The high-tech component may be omitted entirely.
  • Lack of proper reporting is largely responsible
    for the sudden perceived growth in cybercrime.
  • As a result, statistics have been skewed for
    years.
  • The problem was growing steadily, but it never
    received enough attention because nobody knew how
    to report it properly.

18
Jurisdictional Conflicts
  • Unlike the real world, the virtual world is not
    constrained by transnational borders.
  • Organized crime groups can conduct all matters of
    business from the relative safety of weak states.
  • Jurisdiction becomes a huge problem.
  • Governments must coordinate their investigations.
  • This is often slow and tedious, if not
    impossible.
  • Laws are often incompatible.
  • Some nations lack the capacity or the desire to
    effectively combat cybercrime within their
    borders.

19
International Cooperation
  • To effectively combat organized cybercrime,
    governments must cooperate.
  • Council of Europe Convention on Cybercrime
    convened in 2001
  • Harmonized national laws.
  • Improved investigation capabilities.
  • Boosted international cooperation.
  • Endorsed by EU, US, Canada, Japan, South Africa.
  • A step in the right direction by creating a legal
    framework
  • However, many countries lacked the resources to
    enforce these laws or conduct effective
    investigations

20
US Efforts
  • FBI lead agency due to cross-border nature of
    most crimes
  • In 2000, the FBI established the Internet Fraud
    Complaint Center.
  • Tracks complaints and mediates questions of
    jurisdiction between law enforcement agencies.
  • Success limited by the relatively large
    proportion of unreported cybercrime.

21
Future Efforts
  • Law enforcement must restructure and increase
    knowledge of computing
  • Must work with Academic Sector to increase
    knowledge of crimes and education of crimes
  • Recently industry has pushed government to fight
    cybercrime
  • In 2005, 15 CTOs asked President Bush to create a
    national commission on cybercrime.
  • 2 weeks later, BSA met with top law enforcement
    officials to improve coordination between high
    tech industry and law enforcement.
  • This cooperation has helped law enforcers develop
    a greater technical proficiency and provided them
    with the resources necessary to more effectively
    target internet crime.

22
Conclusions
  • Organized Crime is not just the Sopranos
  • Organized groups commit extortion, theft, scams,
    spam, and sell drugs on the Internet
  • Cybercrime nearing size of drug trade
  • Law enforcement is struggling

23
References
  • 1 http//www.fbi.gov/hq/cid/orgcrime/glossary.ht
    m
  • 2 http//www.techlawjournal.com/encrypt/80423.ht
    m
  • 3 http//www.foxnews.com/story/0,2933,177016,00.
    html
  • 4 http//www.unodc.org/unodc/world_drug_report.h
    tml
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