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RELATED LEGAL BASIS

High-Tech Crime
High-tech crimes targeting computer networks are becoming an increasing law
enforcement and national security problem because of the growing reliance in the
United States of government entities, public utilities, industries, businesses, and
financial institutions on electronic data and information storage, retrieval, and
transmission. Increasingly, other countries around the world face the same vulnerability.
The creation of complex computer networks on which many government, public, private,
and financial services depend has created opportunities for illicit access, disruption, and
destruction of information by a wide range of hackers. Although most computer attacks
are conducted by disgruntled employees and independent hackers, according to US law
enforcement information, the threat from foreign intelligence services and foreign
corporate competitors is significant for US national security interests. Moreover,
international terrorist and criminal organizations have increasing capability to penetrate
and exploit computer-based information and data systems.

Illegal penetration of computer systems provides criminals the ability to access
and manipulate personal, financial, commercial, and government data. The
introduction of computer viruses can compromise data system integrity. Hostile
hackers-- whether individuals, industrial spies, foreign governments, terrorist or
criminal organizations--could potentially disrupt critical public-sector assets.

The greater dependence on computer systems for daily business and administrative
functions--and the increasing interconnections between computer networks--has
increased both the vulnerability and potential costs of systems penetration. US
communications and information industries have developed the most technologically
advanced systems and networks in the world. Many critical public infrastructure
industries--including power and energy, telecommunications, and transportation
systems--are operated or managed by computer networks. According to the US
Customs Service, all major international industries, businesses, and financial institutions
rely on interconnected computer systems for commercial and financial transactions to
remain competitive.

Attacks on computer and information systems of US corporations, financial
institutions, universities, and government agencies through unauthorized access
by employees and external system penetration ranged from denial of service and
sabotage to financial fraud and theft of proprietary information, according to
surveys jointly conducted by the FBI and Computer Security Institute.

causing millions of dollars in losses to US businesses and potentially threatening the reliability of public services. according to the joint survey. universities.  Criminal groups may also exploit businesses and government agencies using programmers. are increasingly computer-literate. Criminals Exploiting High Technology As worldwide dependence on technology increases. enabling them to use cutting-edge technologies for illicit gain. many of whom are lesser paid foreigners. In addition.  The number of US businesses reporting computer intrusions through Internet connections rose from 37 percent in 1996 to 70 percent in 1998. often beyond the reach of law enforcement where the crime was committed. financial institutions.5 million from computer crime--almost double the reported losses of $136. and government agencies. E-mail mailing lists routinely distribute vulnerability information and software that can be used to exploit computer systems. With little of the risks and penalties associated with more traditional criminal activity. high-tech crime is becoming an increasingly attractive source of revenue for organized crime groups. 273 of the respondents cited financial losses of $265.8 million in 1998.Illegal intrusion and exploitation of computer networks in the United States have sizably increased over the last several years. to make software fixes or write new programs to gain access to computer systems and the information . vulnerabilities are publicly exposed in books.  According to the joint 2000 FBI-Computer Security Institute survey of security practitioners in US corporations. high-tech crime allows criminals to operate in the relative security of computer networks. International criminals rely on publicly available sources to obtain information on system vulnerabilities. International criminals. and a growing list of Web sites that are targeted at informing a wideranging global network of potential hackers about the latest methodology for staging computer attacks. as well as an attractive option for them to make commercial and financial transactions that support their criminal activities.  A significant percentage of the information needed to carry out essential government functions is processed at some point by information systems in the nonfederal sector of the national information infrastructure. including members of traditional organized crime groups. magazine and newspaper articles. electronic bulletin board messages.

Transactions involving technology or components for weapons of mass destruction or embargoed items under US or international sanctions are being done through computers. Press reports indicate that a Russian-speaking crime group in the United States recruited unemployed programmers in Russia to hack into other syndicates' computer systems. Modern technology allows these child pornographers to store vast quantities of digital images on small portable computers easily smuggled into the United States and elsewhere. for example. is being offered for international sale on Internet sites. business. International criminals are using computers to support a wide range of criminal activity. there were about 100 ongoing US Customs investigations involving the sale of counterfeit goods over the Internet. criminal commercial and financial transactions through computers occur amidst countless legitimate public. Moreover. In December 1999. including weapons of mass destruction and their component parts and delivery systems.  According to a joint FBI-Computer Security Institute survey in 1998.they contain. and create programs to protect its funds in US banks. The use of computer networks allows criminals to more securely and efficiently orchestrate and implement crimes without regard to national borders.  US Customs investigations show that many Internet sellers of contraband materials openly advertise that they have been in operation for many years without being caught by law enforcement. The Internet has also become the primary means used by international child pornography rings to disseminate their material worldwide. International child pornography rings are operating in dozens of countries. making them especially difficult to identify. including as an innovative alternative means to commit many traditional crimes.2 million in losses caused by computer . 241 US business respondents reported $11. are using encrypted e-mail and the Internet to avoid detection and monitoring of their communications over normal telephone and communications channels. peddling their illicit wares through the Internet and other global distribution networks. Virtually any commodity. Drug traffickers.particularly targeting US commercial interests. embezzle funds. and personal uses of computer networks. High-tech financial fraud through illicit access to credit card numbers and commercial accounts has the potential to cause serious losses for US businesses conducting electronic commerce over the Internet. Computers are also exploited by international criminals to facilitate a wide range of economic crime-.

an unidentified crime syndicate stole hundreds of thousands of dollars from local banks by using the Internet and bank-by-telephone services to hack into financial institutions. Industry and law enforcement reporting indicates that high-tech criminals are using advances in technology to target banks and other financial institutions. International criminals may be using computer hacking and related methods for financial gain. and was able to divert $115 million of the EU aid to Mafiacontrolled bank accounts in Italy and abroad before they were discovered. according to press reports. US businesses responding in the 1998 survey reported losses of $33.5 million in theft of proprietary information from computer attacks. Telecommunications fraud from computer attacks cost these companies an additional $17.2 million in losses. some have outdated or lax security practices that high-tech criminals are able to exploit.000.  In China. according to press reports.  In October 2000. While US and many Western and Asian banks and financial institutions maintain adequate security safeguards to prevent outside penetration of computerbased data financial transaction systems.financial frauds. Russia-. Employing corrupt officials from the targeted bank and a telecommunications firm. where he changed transaction records that cost two Chinese companies more than $300. The anonymity and speed of electronic transactions may encourage criminal exploitation of these technologies.  In March 1999. created a virtual banking site linked to the interbank payments network.  In 1994. Intellectual property rights violations through the penetration of computer networks are also an increasing threat to US businesses.aided by insider access-attempted to steal more than $10 million from a US bank by making . hackers pleaded guilty to breaking into US phone companies for calling card numbers that eventually made their way to organized crime syndicates in Italy. according to Chinese press reports.  In South Africa in November 1999. Italian authorities dismantled a Sicilian Mafia-led crime group that was planning to steal as much as $900 million in European Union aid earmarked for Sicily. Petersburg. the crime syndicate broke into the bank's computer network. a computer hacker was convicted in November 1999 of breaking into the Shanghai Securities Exchange. US law enforcement information indicates that this high-tech theft cost the US phone companies an estimated $2 million. individuals in St.

Members of the gang have since been arrested in several countries.approximately 40 wire transfers to accounts around the world. . and most of the stolen funds have been recovered.