Site hosted by Angelfire.com: Build your free website today!

HISTORY
 

 

 


In 3500 BC the Chinese used primitive mechanical computers to calculate how much crops weighed.   Most likely (due to greed) some of those users found a way to alter their computers in order to cheat their fellow citizens for financial gain.  The first documented computer crime occurred in 1801.  Joseph Jacquard, a French manufacturer, introduced the first punch card carpet producing machine that would lower the cost and time needed for carpet manufacturing.  His workers rebelled and damaged the machine for fear they would lose their jobs (2).

As early as the 1940’s, concerns about computer ethics were raised.  Study of computer ethics was founded by MIT professor Norbert Wiener during World War II.  Wiener called it “cybernetics”: - the science of information and feedback systems.  He was remarkably insightful recognizing then that the computer revolution would be a multifaceted, ongoing process that would take decades of effort and that would bring about radical change (3). 

Many of today’s computer-facilitated crimes were inspired, in part, by a technology-centered counterculture that emerged in the United States in the late 1950s.  Students from the Massachusetts Institute of Technology and other top universities believed that technology should be liberated from the control of governments and private industry.  These technology junkies were known as “hackers.”  Steven Levy, chief technology writer for Newsweek, explained that the early hackers felt access to computers should be unlimited and total; that all information should be free; and that they resent any person, physical barrier, or law that stands in the way of unlimited and total access.  Early hackers known as “phone phreaks” didn’t limit themselves to computers; they tried to exploit telephone systems.  They made devices known as “blue boxes” that allowed then to make free long-distance calls (4).

According to author Danko Vukovic, most of the computer crimes in the 1950s and 1960s were related to some kind of physical damage such as destroying tapes, or shooting a computer system with a shotgun (South Africa, early 1960s).   Vukovic tells of Henry King who, in 1957, used the computer at his company in order to increase his paycheck from $300.00 to $720.00 (2).  In 1967, a New York bank employee used the institution’s computer to shave fractions of pennies from interest on long-term accounts. He wrote a program to deposit these pennies to his own account.  After several years, he had amassed over $200,000.   

By 1974 the FBI began keeping statistics on computer crime.  Today the FBI has several computer-fraud training programs.  In 1978 Mark Rifkin robbed a California bank of $10.2 million.  By making a phone call using a special code number and an assumed name, he committed the perfect crime.  It was Rifkin’s loose tongue rather than the bank’s computer fraud detection devices that led the FBI to him (5). 

The personal computer (PC) revolution of the 1980s opened up a whole new era for e-fraud.  The Advanced Research Projects Agency (ARPANET), a pre-Internet computer network started in 1969, opened up cyberspace to hackers leading to varieties of future e-fraud (4).  In 1983, unhappy government computer personnel made unauthorized changes in computer programs allowing payroll checks to be sent to laid off employees (5).  Abuses like these led to the Computer Fraud and Abuse Act of 1984 (CFAA) which defines criminal and civil violations arising from computer access without authorization or exceeding authorized access (6). 

In 1986, Clifford Stoll an astronomer at the University of California at Berkeley was chosen to solve a problem at their computer lab.  Berkeley was using two accounting programs which kept track of who was using their computers, and then billed the users.   Due to both computers keeping track of identical information, the results should also have been identical.  This did not happen.  There was a $.75 discrepancy.  No government agency was interested in assisting due to the small amount.  In the end, Stall was able to determine that the culprit was Markus Hess, a German hacker, who was being paid by the KGB to glean US military secrets (7). 

Robert Morris in 1988 caused $98 million in damage and crippled approximately 6,200 computers.  Morris, a 22 year old student at Cornell University, developed a self-replicating computer program (worm) designed to attack computers throughout the Internet.  He was convicted and fined $10,050.00 and sentenced to three years probation and 400 hours of community service (4).

According to the Wilson Quarterly, by 1990 computer crime was already costing the USA an estimated $3-$5 billion annually (8).  The 1990 Computer Misuse Act made it easier for companies to bring cases against existing or former employees (9).  As a result of cases like Morris and Hess, in 1991 a distinct Computer Crime Unit was created within the General Litigation Section of the Justice Department. This unit was later elevated in status and renamed the Computer Crime and Intellectual Property Section.   The FBI also in 1991 created the National Computer Crime Squad (7).

http://www.crime-research.org/eng/library/Alex.htm

The Computer Crime Research Center reported that the monthly rate of incidents involving the theft of proprietary information rose 260% from 1985 to 1993.  Due to the escalating rise in computer crimes, in 1996 the CFAA of 1984 was amended by adding eleven provisions to protect the confidentiality, integrity, and availability of data and systems (7).  Organizations such as the Federation Against Software Theft (FAST), have invented programs and strategies to help others combat the wide range of computer fraud.  In 1996, it is reported that FAST started 204 legal actions versus 137 in 1994 (9). 

E-fraud is an international problem.  Hong Kong reports that in a 2000 survey of 1500 of its largest companies, 73% of those responding believe fraud is a problem.  Twenty-five percent have experienced at least one fraud in the last two years.  Over 50% of those reporting fraud discovered it through internal control mechanisms (10).  Romanian officials are alarmed at the growing rate of e-fraud committed by Romanian hackers on the Internet.  The Romanian Communication and Information Minister, Dan Nica, warned “that the growing amount of Internet theft…could leave the country ‘on the sidelines’ of modern civilization” (11).  Computer Fraud & Security reported that almost half of the European users of the Internet do not buy goods online for two reasons: they do not trust the Web vendors or they fear their credit card details will not be secure (12).  This is certainly a concern for users internationally and domestically.

 

Back to Top

 

Move to STATE OF THE ART