Computer and internet fraud takes many forms, but generally refers to fraud accomplished through the unauthorized use of a computer, or the unauthorized accessing of data on or through the internet or a computer network. One common form of computer and internet fraud is hacking—the remote, unauthorized entry of a computer or computer system by using technological tools such as stolen passwords and surreptitiously-installed computer programs (bots) that allow the hackers to access valuable data.
Computer and internet fraud may be prosecuted criminally based on various state and federal statutes, including the federal Computer Fraud and Abuse Act located in the U.S. Code (statutes) at 18 U.S.C. §1030.
Common types of internet fraud include business fraud, credit card fraud, internet auction fraud, identity theft, investment schemes, Nigerian letter fraud, and non-delivery of merchandise. Some common methods for accomplishing these and other types of computer fraud include:
• Business E-Mail Compromise (BEC): A sophisticated scam targeting businesses working with foreign suppliers and companies that regularly perform wire transfer payments. The scam is carried out by compromising legitimate business e-mail accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.
• Data Breach: A leak or spill of data which is released from a secure location to an untrusted environment. Data breaches can occur at the personal and corporate levels and involve sensitive, protected, or confidential information that is copied, transmitted, viewed, stolen, or used by an individual unauthorized to do so.
• Denial of Service (DoS): An interruption of an authorized user's access to any system or network, typically one caused with malicious intent.
• E-Mail Account Compromise (EAC): Similar to BEC, this scam targets the general public and professionals associated with, but not limited to, financial and lending institutions, real estate companies, and law firms. Perpetrators of EAC use compromised e-mails to request payments to fraudulent locations.
• Malware/Scareware: Malicious software that is intended to damage or disable computers and computer systems. Sometimes scare tactics are used by the perpetrators to solicit funds from victims.
• Phishing/Spoofing: Both terms deal with forged or faked electronic documents. Spoofing generally refers to the dissemination of e-mail which is forged to appear as though it was sent by someone other than the actual source. Phishing, also referred to as vishing, smishing, or pharming, is often used in conjunction with a spoofed e-mail. It is the act of sending an e-mail falsely claiming to be an established legitimate business in an attempt to deceive the unsuspecting recipient into divulging personal, sensitive information such as passwords, credit card numbers, and bank account information after directing the user to visit a specified website. The website, however, is not genuine and was set up only as an attempt to steal the user's information.
• Ransomware: A form of malware targeting both human and technical weaknesses in organizations and individual networks in an effort to deny the availability of critical data and/or systems. Ransomware is frequently delivered through spear phishing emails to end users, resulting in the rapid encryption of sensitive files on a corporate network. When the victim organization determines they are no longer able to access their data, the cyber perpetrator demands the payment of a ransom, typically in virtual currency such as Bitcoin, at which time the actor will purportedly provide an avenue to the victim to regain access to their data.
In Texas, computer and internet fraud is addressed under various state and federal laws. The Texas Penal Code includes offenses such as Online Impersonation (Sec. 33.07), Breach of Computer Security (Sec. 33.02), and Electronic Data Tampering (Sec. 33.022), which cover unauthorized access to computers, networks, and data. At the federal level, the Computer Fraud and Abuse Act (18 U.S.C. §1030) provides a broad legal framework for prosecuting offenses related to hacking, unauthorized access, and damage to computer systems. Texas law enforcement agencies and federal authorities such as the FBI may investigate these crimes, which can range from misdemeanors to felonies depending on the severity of the offense and the amount of damage or loss incurred. Penalties can include fines, imprisonment, and restitution. The state also recognizes specific forms of fraud such as Business Email Compromise (BEC), Data Breach, Denial of Service (DoS) attacks, Email Account Compromise (EAC), and the spread of malware, including ransomware and scareware, as well as phishing and spoofing activities. These activities are illegal when they involve deception, unauthorized access to or theft of information, and can lead to both state and federal charges.
