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1 Fundamentals of Computer and Internet Fraud GLOBAL Headquarters the gregor building 716 West Ave Austin, TX USA
2 TABLE OF CONTENTS I. INTRODUCTION What Is Computer Crime?... 2 Computer Fraud Versus Computer Crime... 3 Computer Fraud... 3 Computer Crime... 4 The Extent Question: How Much Computer Fraud Is There?... 5 A Few Statistics... 6 Vulnerability Projections... 6 The Internet... 7 The Perpetrators of Computer Fraud... 7 The Necessary Skills... 8 Inside or Outside... 8 Securing Information Resources... 9 Categories of Computer Fraud Content Learning Objectives II. THE USE OF COMPUTERS IN OCCUPATIONAL FRAUD Asset Misappropriation Cash Schemes Noncash Schemes Control Weaknesses Internal Control Weaknesses Control Activities Review Questions III. EMERGING TECHNOLOGY CONSIDERATIONS Fragmented Data Storage Video Bring Your Own Device Video Video Cloud Computing Video Video Video Social Media Organizational Risks Video Video Individual Risks Video Mobile Devices Mobile Ad Fraud Device Cloning i
3 III. EMERGING TECHNOLOGY CONSIDERATIONS (CONT.) Fraudulent Mobile Webpages Malicious Mobile Applications Minimizing Risks with Mobile Devices The Deep Web Video Virtual Currencies The Internet of Things Video Review Questions IV. DATA MANIPULATION AND DESTRUCTION Data Manipulation Fraud by Input Manipulation Fraud by Program Manipulation Fraud by Output Manipulation Computer Forgery Data Destruction Malware Drive-by Downloads Types of Malware Malware Carriers Malware Symptoms Preventing Infection What to Do if Infected Antivirus and Other Security Software Investigating Malware Infections Malware Information Resources Laws Used to Combat the Manipulation and Destruction of Data The Computer Fraud and Abuse Act The Electronic Communications Privacy Act Wire Fraud Review Questions V. UNAUTHORIZED ACCESS TO COMPUTER SYSTEMS AND SERVICES Categories of Security Attacks Interception Interruption Modification Fabrication Passive and Active Attacks Passive Attacks Active Attacks Common Methods of Attack Social Engineering Reverse Social Engineering Hacking Anti-Intrusion Legislation ii
4 V. UNAUTHORIZED ACCESS TO COMPUTER SYSTEMS AND SERVICES (CONT.) Preventing Unauthorized Access Basic Prevention Measures Warning Screens Security Policies Firewalls Security Software Encryption Protecting Wireless and Remote Access Wi-Fi Security Video Usernames Passwords Multifactor Authentication Hacker Publications and Communications Review Questions VI. SOFTWARE PIRACY AND THE THEFT OF TRADE SECRETS Introduction Software Piracy The Effects of Software Piracy Anti-Piracy Measures Costs of Software Piracy Types of Software Piracy Copyright Laws Anti-Piracy Resources Theft of Trade Secrets Digital Data Economic Espionage Identifying and Protecting Proprietary Information Sample Designations of Confidentiality Sample Employee Manual Information Legislation Used to Protect Proprietary Information Economic Espionage Act of 1996 (18, U.S.C., ) Disclosing Government Trade Secrets (18, U.S.C., 1905) Interstate Transportation of Stolen Property (18, U.S.C., 2314) The Wire Fraud Statute (18, U.S.C., 1343) The Computer Fraud and Abuse Act (18, U.S.C., 1030) The Uniform Trade Secrets Act Review Questions VII. INTERNET AND E-COMMERCE FRAUD Introduction Internet Fraud Scams Identity Theft Video Abuse Phishing iii
5 VII. INTERNET AND E-COMMERCE FRAUD (CONT.) Video Video Video Video Foreign Trust Schemes Investment Schemes Combating Internet Fraud Encryption Customer Validation Internal Network Security Firewalls Auditing and Intrusion Detection Electronic Commerce Types of E-Commerce Types of E-Commerce Scams Electronic Commerce and Information Security Information Security Goals Consumer Confidence Guidelines for E-Commerce Transactions Smart Cards and E-Commerce Review Questions VIII. COMPUTER SECURITY CONSIDERATIONS Computer Security Computer Security Risk Analysis Computer Security Controls Frameworks and Standards ISO/IEC 27002: COBIT Payment Card Industry s Data Security Standard Standard of Good Practice Cloud Security Alliance Security and Privacy Controls for Federal Information Systems and Organizations Physical Security and Controls Physical Threats Physical Controls Video Detective Physical Controls Technical and Administrative Controls Security Policies and Awareness Training Logical Access Controls Video Network Security Operating System Security Encryption Application Security Data Classification iv
6 VIII. COMPUTER SECURITY CONSIDERATIONS (CONT.) Review Questions IX. SECURITY AUDITING AND TESTING Introduction Log Management and Analysis Recommendations for Log Management Types of Event Logs Event Attributes Dynamic Monitoring Log Analysis and Reporting Incident Response Plan Security Audits Video Phases of Security Audits Information Examined in Security Audits Event Logs External Security Audits Penetration Testing Review Questions X. LEGAL ISSUES REGARDING COMPUTER AND INTERNET FRAUD INVESTIGATIONS Avoiding Liability When Conducting Investigations Video Personal Privacy Employees Duties and Rights Employees Duty to Cooperate Employees Rights During an Investigation Monitoring and Surveillance Video Video Video Surreptitious Recording Review Questions XI. DIGITAL FORENSICS Introduction Hiring a Forensic Expert Video Conducting Investigations Involving Computers Preliminary Investigation Digital Evidence Computer Investigations and Computer Forensics Plan Seize the Data Acquire an Image Process the Data v
7 XI. DIGITAL FORENSICS (CONT.) Analyze the Data Report and Testify Mobile Forensic Investigations Plan Seize Extract Analyze Document Report and Testify Review Questions XII. CONCLUSION XIII. PRACTICAL PROBLEMS Practical Problem Practical Problem Practical Problem Practical Problem Practical Problem Practical Problem XIV. APPENDIX A: RESOURCES ON INTERNET AND COMPUTER FRAUD XV. APPENDIX B: VIDEO TRANSCRIPTS XVI. SOLUTIONS TO REVIEW QUESTIONS II. The Use of Computers in Occupational Fraud III. Emerging Technology Considerations IV. Data Manipulation and Destruction V. Unauthorized Access to Computer Systems and Services VI. Software Piracy and the Theft of Proprietary Information VII. Internet and E-Commerce Fraud VIII. Computer Security Considerations IX. Security Auditing and Testing X. Legal Issues Regarding Computer and Internet Fraud Investigations XI. Digital Forensics XVII. SOLUTIONS TO PRACTICAL PROBLEMS Practical Problem Practical Problem Practical Problem Practical Problem Practical Problem Practical Problem XVIII. PRACTICAL PROBLEM EPILOGUE vi
8 XIX. FUNDAMENTALS OF COMPUTER AND INTERNET FRAUD FINAL EXAMINATION... E-1 XX. INDEX... I-1 vii
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