National Overview

The rapid evolution of technology, particularly the Internet, increasingly facilitates international trade and in turn provides potential opportunities for organized crime. The increasing number of on-line users, as well as the increasing speed in which financial transactions occur, challenges law enforcement to remain in step with current technological tools and equipment.

As technologies for conducting on-line commercial transactions evolve, so do opportunities for fraud. Identity theft and payment card fraud are among the most frequently occurring types of fraud in Canada according to Phonebusters, a fraud reporting agency administered by the Ontario Provincial Police in cooperation with the RCMP. Identity theft provides opportunities for criminals and/or members of organized crime groups to assume a false identity and obtain funds illegally. The use of sophisticated peripherals such as laser printers, digital cameras, scanners, and desktop publishing software can also offer the opportunity to facilitate the production of false identities and counterfeit documents.

Asian-based and Eastern European-based organized crime groups are reported to be extensively involved in large-scale elaborate payment card fraud schemes as well as other fraud-related criminal activity throughout the country.

There are instances in which the modification and/or enhancement of existing technology may also allow criminals to facilitate fraud-related crimes. In March 2003, Ontario-based individuals with suspected ties to organized crime persuaded unsuspecting merchants into using modified point-of-sale machines. These machines, fitted with a “skimming” device, would sit for a period of time capturing payment card information until the device was retrieved by the criminals. In December 2002, several individuals were charged with debit card fraud and fraud over $5,000 after participating in an elaborate automated teller machine fraud scheme orchestrated by members of an Eastern European-based organized crime group. This scheme, which stretched across the country, had an attributed loss of over $1.2 million. Electronic mail is also used to facilitate schemes such as stock market manipulation, frequently referred to as pump and dump or slump and dump schemes,² telemarketing schemes, as well as proliferating malicious code programs such as the SLAMMER³ worm in January 2003.

Criminal groups such as outlaw motorcycle gangs and Asian-based groups are reportedly using technologies to secure their documents and communications. Peer-to-Peer (P2P), a communications protocol which allows computers to communicate directly with one another without the intervention of a server, as well as Internet Relay Chat (IRC), an instant messaging protocol, offers the opportunity for criminals to communicate covertly and facilitate the electronic distribution of child pornography, illicit drug transactions, money laundering and fraud. Files may be encrypted or masked using methods such as steganography, which allows users to hide text, image or sound files within another file. The increasing sophistication of voice privacy techniques may be exploited by organized crime. Wireless technology is readily available and can be used in an effort to remain anonymous.

To minimize these challenges and obstacles, Canadian law enforcement is participating in national and international initiatives such as the Federal- Provincial-Territorial Working Group on Cybercrime to examine issues concerning the illegal use of technology. Issues such as theft prevention, lawful access and encryption are addressed by this group. In addition, in 2001, with growing concern over the potential risk of technological attacks on various infrastructures such as energy and utilities, communications, services, transportation, safety and government sectors, the Office for Critical Infrastructure Protection and Emergency Preparedness (OCIPEP) was established to develop protective measures for Canada’s critical infrastructures.

Another significant challenge to technological crime investigators in Canada is the issue of jurisdiction. There are a number of fundamental requirements needed to maintain an evidentiary trail that often crosses international borders. To facilitate this issue internationally, Canada was one of many signatory countries which helped draft the Council of Europe’s Convention on Cybercrime, the purpose of which is to establish a common international criminal policy on cybercrime. This convention is still in the ratification process in Canada.

In an effort to remain in step with current technologies and expertise, law enforcement in Canada is taking measures to increase resources, training and personnel within the various technological crime units across the country. In recognition that technology represents a new dimension in criminality, law enforcement continues to develop key partnerships with governmental and private sectors to establish best practices and strategies in order to reduce the risk posed by the criminal exploitation of technology.  

² Method to influence stock prices by spreading false information via the Internet, causing stock to increase/lower in price. This enables the criminal to buy or sell the stock at a more desirable price.

³ SLAMMER was discovered in January 2003. This worm brought down computers networks worldwide by launching distributed denial of service attacks via the Internet. Monetary losses attributed to SLAMMER amounted to approximately $1.2 billion worldwide.