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FSU CCJ 3644 - Chapter 7 Crimes in the Economic

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NEW MATERIAL FOR FINAL EXAM Exam 3 WCC Chapter 7 Crimes in the Economic and Technological systems Economic and technological systems o Similarities Cross international boundaries More interdependent than independent Workers possess specialized knowledge White collar crimes occur in both and together o Facebook Zuckerberg White Collar Crime Charges Copyright infringement Securities fraud Misuse of computer information Economic system o Includes banks investment companies stock markets etc o Investment fraud when investments are handled influenced fraudulently by stockbrokers or other officials o Commodities fraud fraudulent sale of raw materials such as gas gold and agricultural materials Prevalent in Florida Warm weather Proximity to other countries Established telemarketing firms Types of securities and commodities fraud o Market Manipulation pump and dump o Where executives officials do things to artificially inflate trading volume and affect the price o prevalent in gas and electricity markets o Example o Enron Transferred energy out of California to evade price caps allowed the company to charge more for energy than what it was worth o Federal Trade Commission Our mission to prevent business practices that are anticompetitive deceptive or unfair to consumers Created by Woodrow Wilson in response to trusts and monopolies Investigates issues raided by reports from consumers businesses pre merger filings Congressional inquiries or media reports False advertising Fraud Identity theft Broker Fraud Embezzlement o When brokers fail to tell clients important information or o When brokers take client s money intended for an account but used for personal use Hedge Fund Fraud o Hedge Fund o Private investment partnership of high net worth clients o Lie on account status in order to make commission o A million plus o Insider Trading within Hedge Funds o When individuals share steal information that could impact future investments Stock values mergers etc Usually more than one person ABC News o 7 Notorious Insider Trading Scandals o Rajat Gupta Goldman Sachs and Procter Gamble disclosed nonpublic information to Raj Rajartaman o Rajartaman Galleon Group is serving an 11 year prison sentence for stealing nearly 64 million through illegal stock tips Ponzi Schemes o Ponzi Investment fraud that involves the payment of hypothetical returns to existing investors from funds given by new investors Have increased greatly in the past decade a Ponzi nation o Bernie Madoff 65 billion from investors over 17 years despite complaints and an investigation by the SEC unsubstantiated Secrecy red flag U S Securities and Exchange Commission SEC o Mission to protect investors maintain fair orderly and efficient markets and o In charge of regulating the U S securities market using civil enforcement actions and facilitate capital formation administrative proceedings o 5 Divisions o Securities o A form of ownership that can be easily traded on a secondary market Allow you to own the underlying asset without taking actual possession liquid asset o Example stocks sold on the stock market o Traders must be licenses to buy sell securities o 3 types of securities o 1 Equity stocks o 2 Debt o 3 Derivative Chapter 7 Crimes in the Technological Systems Crime in technology system o Approximately 44 of viruses are from inside the organization virus introduction is a white collar crime o Cyber terrorism Only white collar crime if viewed at place of employment o Theft can include funds fraud or embezzlement inside information or o Child pornography intellectual property o Unauthorized access 1 Hackers access computer databases for skill 2 Crackers access computer databases for chaos sabotage Cybercrime Hacking o Other Names White Hates ethical hacker one who exploits the weaknesses of a computer system to point out vulnerabilities but nit for personal gain Black Hats seek out vulnerabilities and exploit them for malicious purposes such as personal gain or to steal or destroy data o An increasing proportion of theft includes stealing information pirating software and electronic products and copying intellectual property An estimated 1 3 of business software is pirated o Kevin Mitnick Once the most wanted computer criminal in the US convicted of various Gained unauthorized access to dozens of computer networks FBI IBM computer related crimes Motorola and Nokia Copied valuable propriety software from each of these companies Intercepted and stole computer passwords altered computer networks and broke into and read private e mail After serving 5 years in jail now runs Mitnick Security Consulting LLC Cybercrime Viruses and Malicious Code o Viruses operate in 4 primary environments File viruses Boot viruses at the start up of computer Macro viruses embedded in Microsoft word programs Network Viruses o Worms o Trojan Horses A more malicious standalone piece of code which does not change computer files and can reproduce itself and transfer from computer to computer Can be delivered in the form of a joke program or software Unauthorized programs contained within a legitimate program that performs functions unknown by the user Trojans do not replicate or copy itself but causes damage or compromises the security of the computer Often included in file sharing files internet chat programs attachments or FTP sites The user unknowingly installs the program onto their computer granting access for the perpetrator Cybercrime Identity Theft o Advances in technology have lead to new opportunities to commit identity theft which has grown exponentially in the recent decade Access to personal information and social security numbers online makes theft easier for some o Identity theft has been the primary charge in over 90 of all arrests made by the secret services financial crimes divisions since the 1990s o Costs of identity theft and fraud to American Institutions surpasses 50 billion annually o Identity theft methods Low tech methods dumpster diving rummaging through private or commercial trash receptacles in search of personal information Direct theft of mail Change of address forms in order to receive personal information High tech methods Hacking information from corporate databases for online transactions TJX corporation o A group of hackers broke into a database and stole at least 94 Million customer credit card accounts causing 1 billion in damages Cybercrime Internet fraud o Internet represents a fresh new ground for perpetrating fraud


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