Understanding Internet Fraud and the Law…

Criminal activity involving the perpetration of a fraud through the use of the computer or the internet can take many different forms. One common form includes “hacking,” in which a perpetrator uses sophisticated technological tools to remotely access a secure computer or internet location. A second common criminal activity involves illegally intercepting an electronic transmission not intended for the interceptor. This may result in the interception of private information such as passwords, credit card information, or other types of so-called identity theft.

Federal law defines computer fraud as the use of a computer to create a dishonest misrepresentation of fact as an attempt to induce another to do or refrain from doing something which causes loss. Criminals create fraudulent misrepresentation in a number of ways. First, they can alter computer input in an unauthorized way. Employees may embezzle company funds by altering input data. Second, criminals can alter or delete stored data. Third, sophisticated criminals can rewrite software codes and upload them into a bank’s mainframe so that the bank will provide its users’ identities to the thieves. The thieves can then use this information to make unauthorized credit card purchases.

Violators may be prosecuted under:

18 U.S.C. § 506  No Electronic Theft Act
18 U.S.C. § 1028 Identity Theft and Assumption Deterrence Act of 1998
18 U.S.C. § 1029 Fraud and Related Activity in Connection with Access Devices
18 U.S.C. § 1030 Fraud and Related Activity in Connection with Computers
18 U.S.C. § 1343 Wire Fraud
18 U.S.C. § 1362 Communication Lines, Stations, or Systems
18 U.S.C. § 2511 Interception and Disclosure of Wire, Oral, or Electronic Communications Prohibited
18 U.S.C. § 2701 Unlawful Access to Stored Communications
18 U.S.C. § 2702 Disclosure of Contents
18 U.S.C. § 2703 Requirements for Governmental Access

Source: Cornell University Law School’s Legal Information Institute

Hackers or individuals who are prosecuted for computer-based fraud, are subject to serving time in prison or paying restitution. Those who are found guilty under any one of the above violations are usually given two years or more as a prison sentence.

The longest prison sentence handed out to-date was to David Ray Camez. In May 2014, he was sentenced to 20 years after violating RICO. The 22-year-old was the key member of the carder.su website. The site was known for trafficking stolen credit and identity information.