COMPUTER CRIME - New Jersey

1 COMPUTER CRIMEA JOINT REPORTS tate of New JerseyCommission of InvestigationAttorney Generalof New JerseyJUNE 2000 COMPUTER CRIMEA JOINT REPORT State of New JerseyAttorney GeneralCommission of Investigation of New JerseyLESLIE Z. CELENTANOJOHN J. FARMER, KAREN THOMPSONW. CARY EDWARDSAUDRIANN KERNANCOMMISSIONERSJUNE 2000 The Report, complete with hypertext links, is available on the Commission s Web site at CRIMETABLE OF CONTENTSINTRODUCTION1 CHILDREN IN JEOPARDY 4 THE PROBLEM 4 THE MAKING OF PREDATORS: CYBERSPACE HELPSPEDOPHILES ACT OUT THEIR PERVERSION 9NO EASY SOLUTIONS 11 PARENTAL SUPERVISION 11 BLOCKING, FILTERING AND MONITORING SOFTWAREAND CHILD-FRIENDLY BROWSERS 14 CHILD-FRIENDLY WEB SITES 16 SCHOOL AND LIBRARY POLICIES 17 CONTROL ORGANIZATIONS AND PROGRAMS 20 UNESCO 20 White House 21 Federal Bureau of Investigation andOffice of the Attorney for theDistrict of New Jersey 22 United States Customs Service 23 Federal Trade Commission 24 National Center for Missing andExploited Children 24 Office of Juvenile Justice andDelinquency Prevention 25 Cyber Angels and Other HelpOrganizations 26 End Child Prostitution and Trafficking(ECPAT) and the World TourismOrganization (WTO)

2 28 Internet Service Providers 28 New Jersey State Police 29 LAWS AND LEGAL ACTIONS 29 BIAS AND HATE32 THE PROBLEM 32 CROSSING THE LINE FROM HATE SPEECHTO HATE CRIME 36 CONTROL ORGANIZATIONS, PROGRAMS AND LAWS 42 OFFICE OF BIAS CRIME AND COMMUNITY RELATIONS 42 DIVISION ON CIVIL RIGHTS 43 ANTI-DEFAMATION LEAGUE 44 CENTER ON HATE AND EXTREMISM 45iiSOUTHERN POVERTY LAW CENTER 45 NEW Jersey COMMISSION ON HOLOCAUST EDUCATION 46 SIMON WIESENTHAL CENTER 46 HATEWATCH 47 OTHER ANTI-EXTREMIST ORGANIZATIONS 47 HACKING48 THE PROBLEM 48 PASSWORD TIPS 58 WHEN CREATING A PASSWORD: 58 ONCE YOU HAVE A PASSWORD.

3 58 ENCRYPTION 59 CONTROL PROGRAMS AND METHODS 61 INTERNET FRAUD69 COMMON SCAMS SPREAD FAR AND FAST ONLINE 69 COMMON FRAUDULENT SCHEMES 72 CONTROL ORGANIZATIONS AND PROGRAMS 76 FEDERAL TRADE COMMISSION (FTC) 77 INTERNET FRAUD COMPLAINT CENTER 78 INTERNET FRAUD COUNCIL 79 INTERNET FRAUD WATCH 80 BBBONLINE 80 SECURITIES AND EXCHANGE COMMISSION (SEC) 82 NORTH AMERICAN SECURITIESADMINISTRATORS ASSOCIATION 83 NATIONAL ASSOCIATION OF SECURITIESDEALERS (NASD) 83 FEDERAL DEPOSIT INSURANCECORPORATION (FDIC) 84 MAIL ABUSE PREVENTION SYSTEM 84 NEW Jersey DIVISION OF CONSUMER AFFAIRS 84 IDENTITY THEFT88AN ESPECIALLY EGREGIOUS FRAUD 88 DEMONSTRATION OF ONLINE PITFALLS 94 HOW TO AVOID BECOMING A VICTIM 96 ACTIONS VICTIMS MAY TAKE 98 RECENT LAWS AND CONTROL PROGRAMS 99 NEW Jersey LAW STRENGTHENED 100 FEDERAL LAW STRENGTHENED ENHANCED ROLE FOR FTC 100 OTHER CRIME -FIGHTING FEDERAL AGENCIES 100 KEEPING PERSONAL INFORMATION PRIVATEAND ACCURATE 101 PRIVATE HELP AND PREVENTION RESOURCES 105iiiINTERNET GAMBLING107 OFFSHORE FIRMS SERVE A GROWING DEMAND 107

4 JUSTIFICATION FOR PROHIBITION 109 EFFECTIVENESS OF PROHIBITION 110 JUSTIFICATION FOR REGULATION 115 EFFECTIVENESS OF REGULATION 118 COMPULSIVE CYBER-GAMBLING 119E-COMMERCE IN ALCOHOLIC BEVERAGES AND TOBACCO121 CHALLENGES FOR LAW ENFORCEMENT 122 SPECIAL PROBLEMS OF COMPUTER -RELATED CRIME 122 JURISDICTION 125 SPECIALIZED COMPUTER CRIME UNITS WORKING TOGETHER 127 COMPUTER ANALYSIS AND TECHNOLOGYUNIT (CATU) 130 HIGH TECHNOLOGY CRIME ANDINVESTIGATIONS SUPPORT UNIT (HTC&ISU) 130 TRAINING 132 RETENTION OF KEY PERSONNEL 134 RECOMMENDATIONS 136 STRENGTHEN NEW Jersey S COMPUTER ANDTECHNOLOGY CRIME LAWS 136 INCREASE, TRAIN AND COORDINATE LAWENFORCEMENT RESOURCES 140 INCREASE PREVENTION AND EDUCATION 142 ACCESS TO ELECTRONIC RECORDS OF INTERNET USE 143 ONLINE PRIVACY 144 RESTRAINING ONLINE SALES 145 ESTABLISH AND PUBLICIZE HOTLINES ANDCOMPLAINT PROCESSES 145 MAINTAIN PROHIBITION ON INTERNET GAMBLING 146 COMPUTER CRIMEINTRODUCTIONIn an unprecedented joint project.

5 The State Commission ofInvestigation (hereinafter Commission or SCI ) and then-AttorneyGeneral Peter G. Verniero held three days of public hearings oncomputer CRIME on February 23, 24 and 25, 1999. The hearings, withmore than 30 expert witnesses, capped extensive inquiries by theCommission and the Attorney General s Office, headed since June 1999by Attorney General John J. Farmer, Jr. They underscored the need forlaw enforcement at all levels to coordinate efforts to control the dark side of the COMPUTER revolution. This includes prosecutinghigh-tech conduct offending criminal laws, pursuing civil remedies foronline wrongdoing, and helping adults and children to protectthemselves in technology and communication confer obvious advantageson businesses, governments, schools and individuals. With nominalresources, people and institutions can, via computers, leap state andnational boundaries to explore vast stores of information and benefitfrom innumerable commercial opportunities.

6 However, Commission ChairLeslie Z. Celentano cautioned in her public hearing opening remarksthat [as] on any frontier, .. predatory elements seek to takeadvantage of those reaching for new opportunities. With propersafeguards, adults and children should be able to enjoy and profitfrom cyberspace sometimes called the digital highway or the information superhighway without falling prey to schemers,predators and to the Department of Commerce, 40 percent ofAmerican households owned personal computers at the end of 1998. Aquarter of those had access to the Internet, a global group ofinterconnected COMPUTER networks, communications equipment andsoftware. The Internet furnishes nearly 200 million worldwide usersaccess to measureless riches of information and services. According toForrester Research, Inc., which tracks Internet commerce, total trade on the Internet reached $43 billion in 1998 and isprojected to rise to $ trillion in 2004.

7 Spending on Internetauction sites alone totaled $ billion in 1998 and is predicted togrow to $19 billion by each of the networks that make up the Internet is owned bya public or private organization, no single organization or governmentowns or controls the Internet. Originally created to further defense,scientific and academic endeavors, the Internet, which also affords2users the ability to communicate via electronic mail ( e-mail ), grewslowly but steadily until 1994. At that time, the World Wide Web ( theWeb ), the graphical user interface to the Internet, was Web prompted extraordinary growth in both the size and theuse of the Internet. Once limited to military and educationalundertakings, the Web has expanded to become an integral and evenessential part of vast numbers of businesses and households. Itconsists of millions of electronic storefronts, or repositories,called Web sites.

8 Businesses, organizations, government agencies andindividuals set up Web sites, which may be a combination of text,graphics, still pictures, videos and sounds. Each Web site has anInternet address called a uniform resource locator (URL).When it became clear that they could facilitate business-to-business and consumer-to-business electronic commerce ( e-commerce ),the Internet and the Web rocketed to importance in the economy. Onlinebusinesses now abound, and credit card purchases over the Internetoccur the vastness of cyberspace, which includes theInternet, COMPUTER -related crimes impacting New Jersey are varied andextensive. Child pornographers and pedophiles entice and exploitchildren via the Internet. Extremists and hate groups take advantageof high technology to rend society and foster bias-related individuals intrude upon supposedly secure computers anddatabases releasing catastrophic COMPUTER viruses and engaging inindustrial espionage.

9 Swindlers in cyberspace undermine confidence ine-commerce. With the aid of fly-by-night Web sites, identity thievesglean personal information in order to enrich themselves at theexpense of their victims creditworthiness and Internet gambling operations dupe the unwary. Lastly, hightechnology helps criminals foil law enforcement s efforts to detectand prosecute a host of traditional from the breadth of potential misconduct, the unique natureof the Internet presents challenges not evident in the traditional lawenforcement milieu. Enforcers must overcome problems involvingjurisdiction, evidence access and preservation, applicability ofcurrent laws, vulnerability of a virtually unlimited victim pool, andpractical obstacles to the identification of Attorney General s Internet Working Group was established in1997 and charged with coordinating the extensive high-technologyresources of the Department of Law and Public Safety in order toenhance the ability of the State s law enforcement community toaddress Internet and advanced technology issues.

10 The Internet WorkingGroup meets monthly to design strategies for handling COMPUTER -relatedpublic safety issues, including: child endangerment, threats andstalking, bias crimes, identity theft, online gaming, sale of drugs3and other illegal products, Consumer Fraud Act violations anddiscriminatory practices. The Internet Working Group also advises theAttorney General on matters concerning Internet legislation andpolicy. Training is another important focus of the Internet WorkingGroup. Through the Department s divisions, the Internet Working Groupensures that law enforcement agencies throughout the State are advisedof emerging high technology crimes and trained in methods toinvestigate and prosecute these Internet Working Group is in the process of constructing aWeb site that will provide information to the public about safecomputing practices and the proper methods for reporting hightechnology crimes.