Business Torts and Crimes (part D)
by
Charles Lamson
Computer Crimes. Computer crimes are crimes committed with the aid of a computer or because computers are involved. Under this definition, computers can be involved in crimes in various ways:
- They can be the objects of the crimes---such as when a computer is stolen or damaged.
- They can be the method of committing a crime---such as when a computer is used to make take money from an account.
- They can represent where the crime is committed--- such as when copyrights are infringed on the internet.
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Today, more and more businesses rely on computers, computer systems have become more interconnected, and an increasing number of businesses and private individuals use the Internet and the information on the Internet. As a result, more opportunities exist for criminal behavior. Frequently computer offenses can be successfully prosecuted by using existing criminal laws prohibiting theft, mail fraud, wire fraud, and the transportation of stolen property.
Some courts have refused to apply traditional criminal laws to computer offenses. Both the federal government and the states have responded to the need for laws that clearly apply to computer crimes by enacting specific computer crime legislation.
One federal law is called the Computer Fraud and Abuse Act. This act makes it an offence to, without authorization, access a computer or exceed authorized access of a computer used by or for the U.S. government or a financial institution and to (1) fraudulently obtain anything of value; (2) intentionally and without authorization obtain or destroy information; (3) affect the use of the computer; or (4) cause damage. It is also an offense to (1) deal in computer passwords and thereby affect interstate commerce; (2) knowingly access a computer, obtain national defense information, and disclose, attempt to disclose, or retain that information; and (3) transmit a threat to damage a U.S. government or financial institution computer in order to extort money from anyone. The punishment is a fine and/or up to 10 years imprisonment for the first offense and up to 20 years imprisonment for the second offense.
The federal government has also enacted a law called the Electronic Communications Privacy Act. This law prohibits the interception of computer communications, such as email, or obtaining and divulging without permission data stored electronically.
The laws enacted by the states vary considerably. However, they generally prohibit alteration of a computer program or intentional, unauthorized access to a computer regardless of the reason for the access and the disclosure of any information gained by such access.
Criminal activity relating to computers can be classified as three types: trespass, fraud, and criminal copyright infringement.
Trespass. As applied to business crime, computer trespass means unauthorized use of or access to a computer. A trespass can range from being harmless to being a threat to national security. Such activities as merely using a computer to play games or prepare personal documents constitute computer trespass. More serious trespasses include learning trade secrets, gaining customer lists, and obtaining classified defense information. Computer trespass has been the focus of state computer crime laws.
A computer trespass may be committed in a number of ways, depending on who gains unauthorized access and the use made of the computer. The access might be by:
Since all computer trespass involves the use of computer time without permission, all trespass technically can be classified as theft of computer time. However, computer trespass causes even more serious problems. It ties up computers and prevents employees from doing their jobs and may reveal trade secrets, customers' personal financial records, or confidential medical information. Because computers house so much information, it is helpful that the computer crime laws of the majority of jurisdictions protect the confidentiality of all information stored in computers.
One of the most highly publicized methods of trespass involves damaging computer systems by using rogue programs. A rogue program is a set of software instructions that produces abnormal or unexpected behavior in a computer. Various kinds of rogue programs have such colorful names as viruses, bacteria, worms, Trojan horses, and time bombs. They may cause computer users difficulty, inhibit normal use, or impose injury. The programs can be introduced to a computer by being attached to a useful program or even email they spread to other computers through modems, discs, or network connections. Once introduced, a rogue program can alter the operations of a program, destroy data or screen displays, create false information, display a message, or even damage the computer.
Rogue programs may not show up for some time, so they can spread without alerting operators to their presence and damage all files in a computer system. One large computer software company inadvertently sent out copies of a software program containing a virus. The product had been accidentally infected after being loaded onto a computer that had received the virus from another program. In this case the virus merely caused a message to flash on computer users screens. However, the software company had the expense of recalling thousands of copies of its software program.
Fraud. As applied to computer crime, fraud encompasses larceny and embezzlement. It includes causing bank deposits to be credited to just one individual's account. Such an action might be prosecuted under traditional crime statutes or new computer crime statutes.
The use of the internet has made it possible for a wide variety of frauds to be perpetrated on unsuspecting businesses and individuals. Sometimes the internet provides an easy and inexpensive way to advertise a scam since so many people surf the web. A fraud can be easily advertised on the internet, such as the one in which a fifteen-year-old advertised computer parts for sale. Customers were required to pay cash upon delivery or buy a check on which payment could not be stopped. The box supposedly containing the computer parts would be empty and the perpetrator had the customers money.
Other internet fraud has included a long distance telephone company employee selling more than 50,000 calling card numbers. The employee was convicted and sent to prison. The Federal Trade Commission stopped an illegal pyramid arrangement after it's scam to participants of $6 million.
Computer criminals frequently target businesses, particularly large banks. Citibank lost $10 million, but recovered all but $400,000 when some Russians broke into its computer system and engaged in fraudulent transactions. Businesses frequently suffer losses quietly in preference to advertising to customers, stockholders, and clients that they are vulnerable to hackers, so it is impossible to accurately measure the dollar amount of loss to business from computer fraud.
Criminal Copyright Infringement. In addition to civil copyright infringement, there exists the crime of criminal copyright infringement. In order to establish the criminal offense, the prosecutor needs to prove that (1) there has been copyright infringement, (2) the infringement was willful, and (3) the infringement was done for business advantage or financial gain.
As anyone who has used the Internet knows, it is relatively easy to copy material found on the net. The most serious problems for business occur when software is copied. Software that is copied illegally is called pirated software. Pirating software is a worldwide industry because the Internet links people all over the world. Software is sometimes copied without the owners knowledge and stored in someone else's computer located anywhere else in the world. Within a relatively short time people all over the world can make numerous illegal copies. If the owner of the computer used for storage finds out, the pirated software can be removed from the computer, but the copying has already taken place. Hundreds or thousands of copies of the pirated software could have already been made.
Finding software pirates can be extremely difficult, if not impossible. They could have used fake identification and nicknames or used an anonymous remailer. An anonymous remailer is a device that permits a person who has access to a computer and an email account to send messages and software to an email address or a group without the recipient knowing the source of the communication. The person who wants to send an anonymous communication sends it to the anonymous remailer. The remailer removes the identity and address of the sender and then sends, or emails, the communication to the address indicated by the sender. The recipient receives the communication with the remailers address on it. Some remailers keep a record showing the sender's identity, some communication can be traced. However, if the sender uses a remailer that does not keep such a record or uses several anonymous remailers, the communication could be impossible to trace. As a result, computer copyright infringement is, in dollar terms, the most serious crime on the internet. It has been estimated to cost copyright holders billions of dollars a year.
Internet Resources for Business Law  *SOURCE: LAW FOR BUSINESS, 15TH ED., 2005, JANET E. ASHCROFT, J.D.,PGS. 28-38*
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