110TH INTERNATIONAL TRAINING COURSE
VISITING EXPERTS’ PAPERSEFFECTIVE COUNTERMEASURES AGAINSTECONOMIC CRIME AND COMPUTER CRIME
Soh Thiam Sim*I. INTRODUCTION
In the last two decades, the Asia-Pacificregion has made significant economic
progress. Economic growth has led to anincrease in the region’s wealth andpurchasing power. Money, people andgoods can move with greater ease from one
s t a t e t o a n o t h e r. H o w e v e r, s u c hdevelopments have opened up
opportunities for cross-border economic
criminals to thrive. Due to its increased
wealth, the Asia Pacific region has
inevitably become a target of economic
crime. Singapore is also not spared andcommercial crime has resulted in a total
loss of about S$78 million in 1997.
Apart from increased wealth, the adventof information technology in the Asia
Pacific has made communications andbusiness transactions more sophisticated.
As the region enters the information age,
the use of computers in both commercial
and non-commercial environment has
increased significantly. While information
technology enables business enterprises tocompete globally and provides for a higher
quality of life, it also enables criminals tocommit a whole range of computer andcomputer-related crime. Indeed, the FBI
predicted that in the near future almost
every major crime would involve the use ofsome form of information technology. The
emergence of new and complex technocrime and the cross-border nature ofsyndicated economic crime have posed
problems to the law enforcement agencies.
* Head, Computer Crime Branch, Commercial Crime
Division, Criminal Investigation Department,
Singapore Police Force, Singapore

The challenge to the law enforcement
agencies lies in devising effective measures
to counter such crime.
Economic crime can range from fraud,embezzlement, forgery, insurance fraud,and computer-related offences to insider
trading, and organised crime schemes
involving money laundering. In Singapore,
the agencies investigating economic crime
are the police and the Commercial Affairs
Department (CAD) which comes under the
Ministry of Finance. Most of thecommercial crime cases are investigated by
the police in the Police Land Divisions
while the complex cases are investigatedby the Commercial Crime Division (CCD)of the Criminal Investigation Department.
The cases handled by the CAD are more
specialised, eg offences under theCompanies Act, the Banking Act, theSecurities Industry Act and fraud andembezzlement involving company officials
who abuse their position of trust. On theother hand, computer crime cases areinvestigated by the Computer Crime
Branch which is one of the four branches
under the CCD.
The following four specific types ofcommercial crime and computer crime
continue to be areas of concern as
Singapore strives to be a financial/transport center and IT hub in the region:(i) counterfeit credit card fraud;(ii) maritime fraud;(iii) documents of identity fraud; and(iv)advance fee and telegraphic transfer
fraud.
This paper was prepared to share with103

RESOURCE MATERIAL SERIES No. 55
you some of our experience in handlingthese types of crime and thecountermeasures adopted. The material
for this paper is based largely on theexperience of CCD.

shortest possible time, before thecardholder is alerted. The only
hurdle for the culprits is imitating
the cardholder’s signature and they
are able to overcome it by producing
a signature close to the
cardholder’s;

II. CREDIT CARD FRAUD
A. Background
Unlike cash, credit cards operate in aninternational payment system, crossing
jurisdictional confines. A credit cardtransaction can be made anywhere in theworld. Currently, there are more than 700
million credit cards in circulation globally.
Nearly 22,000 financial institutions areissuers of credit cards. About 13 million
merchants world-wide accept cards as
payment. The total annual cardholders’spending exceed US$1 Trillion. Credit
cards have thus become a lucrative
business and an integral part of thebanking world. Its use has gained
overwhelming popularity in the Asia
Pacific region in recent years, including in
Singapore.

(ii)(iii) Fraudulent Applications: The
culprits would apply for cards using
a fictitious identity or the identityof another person. Upon receipt of
the card, they would go on a
shopping spree with no intention of
making payment;(iv)

Colluded Merchant Fraud:
Merchant fraud is multi-faceted. It
can involve a dishonest merchantmaking multiple charges on anunsuspecting customer’s card andsubmitting the fraudulent charge
slips to the bank for payment. The
merchant may also collude withother perpetrators to accept
counterfeit cards for payment. A
merchant may also steal a
cardholder’s card information andsell it to syndicates to makecounterfeit cards;(v)

Mail Order/Telephone Order(MOTO): Dishonest cashiers or
counter staff at shops may
compromise a cardholder’s account.
Using computer software such as‘CreditMaster’, valid card accountnumbers are generated from the
shoppers’ data. The culprits thenorder goods and services via

The increase in card usage has led to arise in card fraud. In 1996, the industry
lost US$2.1 billion globally to card fraud,
double that of 1995. Credit card fraud iscommitted by both petty offenders
operating on their own and by wellorganised syndicates. From arrests
handled by the Singapore Police, it appears
that syndicates have built themselves a
network between Malaysia, Thailand,
Singapore, Indonesia, Hong Kong, Japan,
Europe, South Africa and the U.K.
B. Types of Credit Card Fraud
Credit card fraud is perpetrated in thefollowing ways:
(i)

104

Lost & Stolen Cards: When a cardis misplaced, lost or stolen from the
cardholder, the culprits use thesecards to make purchases in theIntercepted Cards: Cards may beintercepted through the mail or by
the internal staff before thecardholder receives it. As the newly
issued card is unsigned, the culprit
would append a signature before
using it;

110TH INTERNATIONAL TRAINING COURSE
VISITING EXPERTS’ PAPERS
telephone or mail, quoting the card
account numbers and expiry dates.
In such cases, the delivery
addresses given by the culprits areusually vacant premises, orpremises rented for the specificpurpose of collecting the delivered
goods;(vi)

Altered Cards: The culprits would
alter the details on a genuine card
which was stolen, lost or expired.
Alteration is done through a ‘heatprocess’ whereby the accountdetails on the face of the card areflattened and new account details
are re-embossed and re-encoded.
The genuine account holder would
be unaware of this until theyreceive the statement of accounts
showing the unauthorised
transactions;(vii) White Plastic: White Plastic is ablank plastic card, with an
integrated magnetic stripe, that isused to imitate the functions of acredit card. It is not necessarily
white in colour and does not bear
any resemblance to a normal credit
card. The culprits would emboss
details of legitimate accounts on theplastic, or encode account details
onto the magnetic strip, or both. As
white plastic does not have thephysical appearance of credit cards,
they are often used with theconnivance of dishonest merchants;
and(viii) Counterfeit Cards: Statistics showthat organised syndicates using
counterfeit cards perpetrate mostcredit card fraud. Advanced
technology enables syndicates to
produce counterfeit cards of closeto-genuine quality. The final stageof counterfeit card production is theencoding of genuine account details
onto the cards. Such details areusually supplied by dishonest
merchants who steal theinformation from cardholders.
C. Skimming Fraud- Latest Modus
Operandi in Counterfeit Cards
By 1995, credit card fraud syndicateswere able to penetrate the security systemsof credit card companies and produce
counterfeit cards complete withinformation and security codes using a“Skimmer Machine”. In January 1995,
credit card issuing banks in Singapore
received complaints that their customers’
cards had been used extensively in Europe.
None of the cardholders, however, had losttheir cards. Investigations conducted by
CCD revealed that all the cards had beenused at a local Karaoke lounge between
May and October 1994. The informationon the cards was stolen at the lounge andsupplied to the syndicate to produce
counterfeit cards. About 500 fraudulent
transactions were made in Europe on thesecounterfeit cards, amounting to S$160,000.
The counterfeit cards were believed tohave been produced with genuine cards’
information which was captured by aportable card reader called a “skimmer”.
The skimmer can electronically record
access codes encoded in the magnetic stripof the cards. Skimming fraud has hit thecard industry world-wide, causing millionsof dollars in losses. In recent years, theAsia Pacific region alone suffered losses
from skimming exceeding US$10 million.
More than 40 % of these losses wereincurred in Japan. The detection ofskimming activities is difficult as the Pointof Compromise (POC) is very mobile.
In March 1998, CCD arrested a
Malaysian for skimming fraud. The
culprit, a waiter in a KTV lounge, had used
the KTV lounge as a point of compromise

105

RESOURCE MATERIAL SERIES No. 55(POC) for skimming. He had obtained askimming machine from another
Malaysian and was promised M$50 for thedetails of each gold credit card he swiped.
The culprit stole customers’ card data byswiping the cards through his skimmer andfurnished the information to the accomplicein Malaysia. Subsequently, counterfeit
cards were made from the data captured
in the skimmer and fraudulent charges
amounting to S$16,260 incurred in
Malaysia. The culprit was charged in
Singapore in July 1998 for fraud offences.
The Prosecution pressed for a deterrent
sentence and he was sentenced to 5 years
imprisonment.
D. Countermeasures
Given the nature of the crime,
countermeasures against credit card fraudshould be organised on a regional orinternational basis. The Singapore Police
Force has thus undertaken the following:(a) Intensify the sharing of information
through regular meetings andexchanges with the card industry andinternational law enforcement
agencies to cripple cross-border
syndicates;(b) Increase regional co-operation in
ASEAN through:(i) Intelligence sharing. By setting
up a database on such fraud
reported in the ASEAN region,
early detection and apprehensionof criminals can be facilitated; and(ii) Appointing a liaison officer in eachmember country. This would help
co-ordinate cross-borderenquiries, investigations andexchange of information.
International co-operation should leadto development of effective strategies
aimed at breaking up and defeating the
spread of criminal organisations, including
dismantling their alliances and support

106

networks. To this end, legislative
mechanisms could further international cooperation; legislation on asset seizure is
one such means.
In the area of prevention, the card
industry and law enforcement agencies
feel that both merchants and cardholders
play important roles in curtailing such
fraud. Merchants must be accountable forthe fraud that takes place at their outlets
and cardholders should assist by providing
information on suspicious transactions.
However, these are short and medium termsolutions. A long term solution would be
to make cards more difficult to be
duplicated.
In particular, for skimming fraud, there
is presently no one standard preventive
solution. Various Task Forces have been
set up to devise strategies to combat
skimming fraud. The card industry andlaw enforcement agencies agree that timely
identification at the point of compromise(POC) sites and sharing of suchinformation can contribute to thesuccessful crackdown on such syndicates
and thus a reduction of fraud losses. The
Singapore Police also believes in training
to strengthen officers’ capabilities andupgrade their investigative skills throughtraining on handling transnational
economic crime. We would also press fordeterrent sentences against criminals so as
to prevent like-minded persons fromcommitting crimes of a similar nature.
III. MARITIME FRAUD
A. Types of Maritime Fraud
Maritime fraud can range from the crude
to the very sophisticated, from ship
scuttling to stealing cargoes using‘phantom ships’. In most cases, it involves
the issue of false or altered documents
which misrepresent the existence of certain
goods, their quality, value, ownership or

110TH INTERNATIONAL TRAINING COURSE
VISITING EXPERTS’ PAPERS
location. The extent and complexity of suchcrimes may be beyond the capacity andjurisdiction of any single law enforcement
agency to deal with. A law enforcement
agency investigating such activities within
its own country may not detect any
particular criminal offence. However, when
examined in totality, such activities may
constitute a criminal conspiracy to commit
fraud. However, the complications ofjurisdictional boundaries make it difficult
to apprehend and prosecute the offenders
with success. Three common types ofmaritime fraud are:Having done this, the perpetrator
would claim insurance not only forthe lost vessel, but also for the fullvalue of its cargo, purportedly lost
together with the vessel; and(i) Charter Party Fraud: In charterparty fraud, the perpetrator would
first charter a vessel from anunsuspecting ship owner. Afterpaying the ship owner the initialinstalment of the freight, the culprit
would offer all the available cargospace to unwary shippers. When thesecond or subsequent payment is dueto the ship owner, the culprit would
abscond with all the freight charges
that he has collected, rendering theship owner incapable of delivering thecargo to its final destination. If theshippers or consignees refuse to pay
any freight surcharge to complete theshipment, the ship owner is left withno alternative but to discharge thecargo at any port and sell it so as torecover the freight charges due;(iii)Phantom Ships: In recent years,
phantom ship fraud has seen asignificant increase in number. It isa developing phenomenon that
requires close scrutiny. A ‘phantom
ship’ is a vessel with a phantom
identity. The registration of such a
vessel is based on false informationand documents provided by theperpetrators to the registering
authority, and may include thevessel’s name, owner’s particulars
and technical specifications. Suchfraud is facilitated by ship registry
officials who are not stringent and areprepared to grant provisional
registration based on the unverified
information and documents provided.
Owners of phantom ships are usuallyshell companies using the premisesof secretarial service providers,sometimes set up a few days prior to
the illegal operation. The crew hired
for the job are often of mixed
nationalities and sometimes given
false identities, thus making it
extremely difficult to trace themwhen the phantom ship and its cargo‘disappear’ in the high seas.

(ii) Ship Scuttling: In ship scuttling, theperpetrator would charter or own an
old vessel, and offer cargo space tounwary shippers at extremely low
freight rates. Once the vessel isloaded with cargo, worth much morethan the value of the vessel, it would
set sail for an unscheduled port where
the cargo is discharged and sold forthe highest proceeds. The vessel
would thereafter leave port for thehigh seas and be deliberately sunk.

Between April 1997 and March 1998,
CCD investigated three cases involving
phantom ships. In two of the cases,
Singapore companies had chartered thevessels for the carriage of cargo which
subsequently disappeared en-route to theport of discharge. In the third case, theprovisional voyage documents had beencollected in Singapore. However, theMaritime and Port Authority records
showed that none of the vessels had calledat Singapore. Investigation conducted by

107

RESOURCE MATERIAL SERIES No. 55
CCD however does not reveal any evidence
to substantiate a criminal charge against
any of the parties.
B. Countermeasures
As the investigation and prosecution ofmaritime fraud is fraught with problemsof jurisdiction, the best approach is to work
towards preventing it. Based on CCD’s
experience, some possible preventive
measures include:(i) Tightening procedures for theregistration of marine vessels toprevent registration through the useof false or forged documents;(ii) Installation of technologicallyadvanced gadgets on board marine
vessels, such as black boxes, toenhance the identifying and tracingof movements of vessels; and(iii)Working in partnership with theshipping, freight and insurance
industries, as well as with other law
enforcement agencies.
IV. DOCUMENTS OF IDENTITY
FRAUD
A. BackgroundThe enhanced movement of people
across borders has given rise to the use off r a u d u l e n t d o c u m e n t s o f i d e n t i t y.
Fraudulent identification documents areused by illegal aliens to enter a country.
Criminals also use fraudulent
identification documents to prevent
detection from law enforcement
authorities. The use of fraudulent
documents would make it laborious for law
enforcers to establish a criminal’s identity.
Whilst advanced technology has
facilitated the production of high-quality
identification documents, with improved
anti-counterfeiting features, fraudsters

108

have been able to match this by producing
convincing fakes. Indeed, technology willcontinue to facilitate such fraud and posechallenges to law enforcement.
B. Types of Fraudulent Documentsof Identity
In Singapore, four main types offraudulent documents of identity havesurfaced in recent years. They are:(i) Photo Substituted Passports: where
the genuine passport is eitherpurchased or stolen from the owner.
The syndicates would tamper withthe passport’s laminate and security
features to change the photograph on
it. Biological data may also be alteredin the photo-substituted passport;(ii) Altered Passports: which are often
used by syndicate runners to smuggle
children. A common ploy is to imprinta child’s photograph with forgedimmigration endorsement onto arunner ’s passport. Fictitious
biographical data may also be
imprinted on the passport. An
altered passport enables the runnerto pass off as a guardian or parent of
the smuggled child. Syndicates haveattempted to smuggle Sri Lankanchildren using altered passports;(iii) Counterfeit Passports: which are theleast common of fraudulent
passports. The distinguishingfeatures in a counterfeit passport are
the inferior quality and lack of
security features. Counterfeit
Singapore international passports
were detected in the mid 1990s.
However, this is a dwindling trend
due to improved anti-counterfeiting
security features in genuine
passports; and110TH INTERNATIONAL TRAINING COURSE
VISITING EXPERTS’ PAPERS(iv) C o u n t e r f e i t I d e n t i t y C a r d s :Counterfeit Singapore identity cards
were recently detected. The
distinguishing features in acounterfeit identity card are the lackof security features and inferior
quality. Most of the counterfeit
identity cards had been used byillegal immigrants and illegal
overstayers who tried to make theirstay in Singapore appear legal.
C. Proliferation of Syndicates
Syndicates have grown significantly inrecent years because of two main reasons.
The first is the constant demand for such
fraudulent documents. Fraudulent
passports are in high demand as they areneeded for illegal migration purposes. This
demand is created when people want tomigrate and look for jobs in other countries,
but could not meet immigration
requirements. The Singapore passport,
particularly, is highly sought after for
illegal entry purposes. The Singapore
passport is popular because Singapore’s
multi-racial community enables illegals
from various nationalities to pass off as
Singaporeans in other countries. Its highdemand has resulted in the emergence offraudulent passport cross-border
syndicates made up of Singaporeans,
Chinese or Indians.
The second reason for the proliferationof such syndicates is profitability.
Trafficking in fraudulent documents ofidentity has become a profitable venture.
Alien smuggling rackets, for instance, may
charge between S$6,000 and S$12,000 fora ‘package’ which could include afraudulent passport, accommodation and
air ticket. During an operation in June
1996, police arrested 20 Chinese nationals
who attempted to leave Singapore withfraudulent Singapore international
passports. If we assume the subjects werecharged S$6,000 each, this particular

venture would have generated S$120,000
for the syndicate.
D. Countermeasures
Document fraud, in particular involving
criminal syndicates, may be tackled from
4 broad angles:(i) Prevention: A preventive strategy
may be adopted to counter such
fraud. For instance, the document ofidentity may be made tamper-proof
and forgery-proof. In the case of
Singapore passports, much of theabuse occurs in other countries.
P r e s e n t l y, t h e S i n g a p o r einternational passport is being redesigned. Features deterring photosubstitution, counterfeit and forgery
have been factored into the passport’s
new design and make. The re-design
process is still in progress. Other
countries could similarly review their
passport design to prevent document
fraud.
(ii) Detection: Another vital strategy isdetection. This may be facilitated bya good intelligence network which
can ferret out the criminals.
Currently, information on criminals
involved in such activities is scarce.
End-users of these fraudulent
documents are often reluctant tocooperate with law enforcers.
Intelligence is often the key todetection. For instance, theintelligence and investigation
initiatives of the Singapore Police
have resulted in the prosecution ofseveral alien smuggling syndicates.
Between 1995 and 1997, 465 personsof various nationalities wereidentified and prosecuted in
Singapore for passport-related
offences. These persons included
both syndicate leaders and runners,
as well as users of the fraudulent

109

RESOURCE MATERIAL SERIES No. 55
passports;(iii) Deterrence: In Singapore, theauthorities take a stern view offraudulent passport offences. Courts
are urged to impose deterrent
sentences on those convicted of suchactivities. Those convicted of selling
their passports are also denied future
passport facilities. These measures
help deter fraudulent passport
syndicates and quell the supply of
Singapore passports to illegal aliens;
and(iv) International Co-operation: Close
cooperation on a regional andinternational basis, is another key
strategy which could be adopted.
Law enforcement agencies could
work closely and pinpoint transit
points and sources of illegal aliens.
Singapore participates in ASEANorganised discussions on trends inalien smuggling and coordinatedefforts in combating the problem.
Regional states could also work
closely through existing Interpol
channels to combat these problems.
Accelerated enforcement pressure willcause criminals to change tactics. Also,with access to the latest technology, it isunlikely that fraudulent identity document
syndicates can be easily eradicated. In fact,
documents of identity fraud will become
more sophisticated. Law enforcement
agencies may also have to employ new
measures and seek new alliances, eg
working closely with the airline industry,in order to identify emerging trends andnip these developments in the bud.

110

V. ADVANCED FEE &TELEGRAPHIC TRANSFER FRAUD
A. Advanced Fee Fraud - Nigerian
Scams
In recent years, African nationals,
operating alone or as part of larger
syndicates, have employed several methods
to perpetrate large scale and elaborate
scams in this region. One such target isSingapore, perhaps because of its
reputation as a business and financial
centre. Such scams often involve
extracting an advance fee from victims totransfer non-existent overseas funds.
In the early 1990s, such fraud wasperpetrated largely by syndicates in
Nigeria. There are several variations in
the modus operandi of Nigerian scams.
The following are the two more common
scams:(i) Bank Deposit Scams: A syndicate
member claiming to be a highranking government official, would
send letters to various recipients,
mostly businessmen. The victims areinvited to receive transfers of large
sums of money into their bankaccounts in return for a commission.
The syndicate would claim that themoney is excess government funds
left from over-invoiced government
projects. The victims are advised tosend them their bank accountparticulars, company letterheads andpre-signed company invoices, andalso lured to Africa to purportedly
arrange for the funds. Once the offer
is accepted, the syndicates make therecipients pay various forms ofadvance fees, ostensibly foradministrative purposes such as local
taxes, legal fees, money-transfer feesand bribery. In Singapore, local
companies and individuals in
Singapore have been forwarding

110TH INTERNATIONAL TRAINING COURSE
VISITING EXPERTS’ PAPERS
Nigerian letters to CCD. In 1995, a
total of 551 letters was received but
this decreased to 414 in 1996 and 187
in 1997; and(ii) Money Duplicating Scams: Anothermodus operandi commonly applied isthe ‘money duplicating scams’.
Syndicates lure victims into believingthat US dollar notes may be
duplicated after treatment by ‘special
chemicals’. Victims are shown
demonstrations during whichcurrency notes are duplicated. The
culprits then cheat their victims into
making advance payments ostensibly
to purchase the ‘special chemicals’.
The increasing number of such scams
has prompted Interpol’s Secretary General
to label them as “advance-fee frauds”. He
has also issued a general alert to allmember countries. African advance fee
fraud, like other economic crime, is subject
to changes in technology. With hi-techchannels replacing conventional modes ofcommercial transactions, criminals now
have a wider, global reach. The Internet
for example is increasingly being used as acommunication means. Its relative low costhas facilitated the entry of new players andproviders. Its usefulness, however, isfrequently abused by criminal enterprises.
It is therefore not surprising that African
advance fee fraud is increasingly
perpetuated via the Internet. Again, law
enforcement agencies would have to find
updated means to combat these newproblems.
B. Telegraphic Transfer Fraud
Recent cases investigated by Singapore’s
CCD indicate that syndicates emanatingfrom Africa were engaged in telegraphictransfer fraud. In these cases, banks in
Britain and the USA received letters
purportedly from their account holders,authorising the wire transfer of money tothe culprits at Singapore banks. Between
March and April 1998, CCD handled 3 suchcases. The sums involved ranged from
US$10,000 to US$40,000. However, theAfrican culprits were not able to withdraw
the money successfully when they calledat the Singapore banks. This was because
the local authorities were alerted in timeby the UK and US enforcement agencies.
The close working relationship between thebanks and CCD resulted in the arrest of
the African culprits. They were charged
in court for offences of attempted cheating
and possession of forged documents andsentenced to imprisonment terms ranging
from 12 to 24 months.
Like many types of cross-border crime,
telegraphic transfer fraud confronts the
problem of comprehensive solvability. In
telegraphic transfer fraud, a fraudulent
release of money in one country would
result in the illegal receipt of money inanother country. Even though the offenderis successfully prosecuted in one country,
the law enforcement agency would have
solved only a part of the crime.
Jurisdictional limits often hamper suchcrime from being solved as a whole.
C. Countermeasures
Advance fee fraud and telegraphictransfer fraud may be tackled using thefollowing broad strategies:(i) Prevention: Public awareness of such
scams is a key preventive strategy.
The Singapore Police works with thelocal media to increase Singaporeans’awareness of such scams. As such
scams may come on and off, the publicshould be alerted on a periodic basis.
This has proven to be a successful
strategy as the number of victims
cheated have declined over the years;(ii) Detection: As with most cross-bordercrime, detection through a good111

RESOURCE MATERIAL SERIES No. 55
intelligence network is another usefulstrategy. Currently, victims often
hesitate to report the crimes for fearof embarrassment. There is thus
little information for law enforcers towork on. In Singapore, Policeinitiated intelligence efforts haveresulted in the detection of several
African nationals involved inadvanced fee fraud. Between 1995
and 1998, 7 different syndicates were
uncovered and prosecuted for
criminal offences;(iii) Deterrence: In Singapore, courts areoften urged to impose deterrent
sentences on those convicted offraudulent advance fee activities.
The tough penalties could serve todeter such fraudsters from making
Singapore a target of such scams; and(iv) Enforcement: In view of the crossborder nature of advance fee andtelegraphic transfer fraud, law
enforcement agencies should work
closely with one another to fight suchcrime. This would facilitate
detection, investigation andsuccessful prosecution of criminals
involved in these transnational
illegal activities. Close cooperation
between the local law enforcement
agencies and the private sector, suchas banks, could also lead to early
detection and apprehension of theculprits. In the 3 cases of telegraphictransfer fraud mentioned earlier, theclose coordination between the UK,
US law enforcement agencies, thelocal banks and the Singapore Police
resulted in the arrest of the culprits.
VI. COMPUTER CRIME
A. Introduction
Commercial and non-commercialorganisations increasingly realize the112

strategic potential of Information
Technology (IT) and they use IT to gain
competitive advantage in the rapidchanging global environment. IT enables
business enterprises to compete globallyand ensures that we will enjoy a higher
quality of life. Unfortunately, the progressof IT also enables criminals to commit awhole new range of high-technology crimes
eg computer hacking, unauthorized access,and sabotage of computer materials.
Organized crime syndicates also employed
IT to facilitate commission of traditional
offences such as forgery, cyber gaming andprostitution.
B. Computer Crime in Singapore
A global definition of computer crime has
not been achieved. In Singapore, what
constitutes computer crime is defined
under the Computer Misuse Act, enacted
in August 1993. There are four maino f f e n c e s u n d e r t h i s A c t , n a m e l y,
unauthorised access to computer material(eg. hacking), unauthorised access tocommit further offences involving property
or fraud, unauthorised modification ofcomputer material (eg. introduction ofviruses) and unauthorised use/interceptionof computer service (eg. unauthorised useof other’s Internet account). The Act wasamended in middle of 1998 to include
another two offences, namely, unauthorised
obstruction of use of computer andunauthorised disclosure of access code forany wrongful gain or for unlawful purposes.
There are other computer-related crimes
where a computer is used as an instrument
in committing crimes. These cases aredealt with under other existing legislation,for example, the Penal Code. The numberof computer crime cases in Singapore isrelatively low compared to other crimes.
However, the numbers are increasing over
the years. In 1993 and 1994, only 1 casewas reported. In 1995, only 3 cases werereported. The number of cases reported

110TH INTERNATIONAL TRAINING COURSE
VISITING EXPERTS’ PAPERS
more than doubled in 1996 to 7 and theincrease was more than 5 times in 1997 to
38 cases. Until the middle of 1998, 39 cases
have been reported and the figures are still
increasing (table 1). Although the majorityof these cases are unauthorised access to
obtain computer service, committed byteenagers, there are a few cases of economic
computer crime which resulted insignificant losses.
Most of the economic computer crimewere perpetrated by employees of thevictimised companies. Some examples
include a case where an ex-employee of abank siphoned away S$1.2 million from thebank. In this case, the ex-employee wasallowed entry into the working area of thebank manager and left alone to move freely.
He managed to find an unattended
terminal, keyed in his account number andbank over-riding codes, and credited a sumof S$1.2 million into his account. He knew
the bank’s over-riding code through‘shoulder surfing’. (i.e. peeping over theofficer’s shoulder to observe the keying inof the over-riding code). Later in the sameday, he withdrew the entire sum of S$1.2
million and fled from Singapore. He was
eventually arrested in Malaysia andextradited. He was charged in court andsentenced to five years’ imprisonment. In
another case, an employee gained accessto the payroll system and credited morethan S$30,000 to his own salary. This was
not detected until three years later.
In another case involving smart card
technology reported in early 1997, twomanagers of a major cinema chain modified
the cinema’s ticketing system to siphon off
cash amounting to about S$500,000. The
managers were convicted and sentenced to
36 months and 24 months’ imprisonment.
A Computer Service Engineer who assisted
the manager to illegally modify thecomputer system, was also convicted andsentenced to one month’s imprisonment.
Sabotage of companies’ computer
systems usually occurs when the offenderis unhappy with the company
management. In one such case, adisgruntled System Administrator inserted
a Trojan horse program that replaced theoriginal system files with damaged files
while the back up of the system was done.
He also used a logic bomb program to time
the back up process so that he would not
be in the country at that point of time. As
a result, the company’s system crashed andthe entire manufacturing process came to

TABLE I40

COMPUTER CRIME TRENDS

35
30
25
20
15
10
5
0

1993/
1994

1995

1996

1997

1st halfof 1998

113

RESOURCE MATERIAL SERIES No. 55
a stand still. The offender was convictedunder the Computer Misuse Act and fined
S$20,000.
The profile of criminals committing casesof unauthorised access commonly known
as ‘hacking’ is quite different from
criminals who commit economic computer
crime. Generally, hackers are teenage
students. They usually commit
unauthorised access to a computer systemfor kicks, without further criminal intent.
Our Computer Crime Branch has solved
cases where students ‘hacked’ into local andoverseas servers for free access to theInternet. They obtained the knowledge of‘hacking’ through the Internet or fromfriends. The technical knowledge of acomputer criminal varies from novice toprofessionals (e.g. with tertiary educationin computer related subjects). In our
experience, computer criminals are often
bright, serious and relish a technicalchallenge, but they are not geniuses.
C. Countermeasures
Cyberspace will present newopportunities for criminals and change themodus operandi of crime. This has
implications on the strategies andcapabilities required for detecting,enforcing and preventing of crime. The
integrity of the social and economic
environment in which law enforcement
agencies operate is therefore likely to beaffected by these characteristics in the newmillennium.
Countermeasures
implemented to fight computer crime
include the following:(i) Expertise in criminal investigation;(ii) Preventive measures;(iii)Detection measures;(iv)Legislation; and(v) Partnerships and International cooperation.

114

1. Expertise in Criminal Investigation
The Singapore Police Force has
responded to this challenge as early as 1981
when an officer was sent to the FBI
Academy, USA, for training in computer
crime investigation. Since then, officers
have been sent to the USA, UK, Canadaand Hong Kong for training andattachment. To further enhance ourcapabilities, the Computer Crime Branchof CID was set up in January 1997 tohandle the investigations of computer
crimes and to conduct computer forensic
examination. Most of the officers of theComputer Crime Branch have received
formal education in computer studies.
They were also trained locally byprofessional trainers from the USA and UK
to handle computer forensic examination.
Criminals who commit high-technology
crime usually leave behind electronic
fingerprints. We start by asking, “Whatneeds to be done?” in order to leverage on
the opportunities provided by IT. Our
experience shows that electronic
fingerprints has helped the investigation
agency to solve crimes. We must take on
the challenge of technology and develop
capabilities to retrieve and examine theseelectronic fingerprints.
2. Preventive Measures
The importance of IT security is always
neglected by the users. Generally, there isa lack of security standards for thosesystems operating in cyberspace. A soundsecurity system will deter, if not reduce,
the incidence of computer crime. Public
education is a means to bring security
awareness to the community. Towards thisend, our National Computer Board and theComputer Crime Branch have held regularseminars and talks to highlight theimportance of computer security to theindustry.

110TH INTERNATIONAL TRAINING COURSE
VISITING EXPERTS’ PAPERS
3. Detection
Most of the computer crime cases areeither not detected or are discovered
sometime later. In one of the cases
highlighted earlier, the offence was only
discovered three years later. In our public
education seminars/talks, we constantly
remind the business community to adopt
security practices to detect the occurrenceof crimes. Such measures include physicalsecurity, proper procedures and audit
capabilities. Early detection of a crime will
prevent the victim from suffering drastic
losses.

5. Partnerships and International
Co-operation
Law enforcement agencies needs to tap
industry and academic expertise in thefield of forensic computing. Information
technology is wide ranging and no one
person can profess to know everything
about information technology. Partneringwith various organisations having
expertise in the related fields willcomplement our capabilities. We will needto liaise and employ the services of industry
experts to retrieve and analyse evidence on
proprietary devices or software.

4. Legislation
Legislation has to be constantly
reviewed to ensure that it can keep up withtechnological progress and adequately deal
with computer crime. The Computer
Misuse Act was enacted in August 1993 tomake provision for securing computermaterial against unauthorised access or
modification. With the increasing use ofcomputers, not only has the number ofcomputer crimes increased, but new crimes
have also come about. The Act was thus
amended in July 1998 to enhance thepenalties against computer criminals andprovide stiffer penalties for repeat
offenders. It also introduces new offencesof unauthorised obstruction of use of acomputer and unauthorised disclosure ofaccess code for any wrongful gain or for any
unlawful purpose. The concept of‘protected computers’, which are systems
used in connection with national security,banking and finance, emergency services
and essential public services, was also
introduced and offences committed against
these systems would attract enhanced
penalties. The tough laws will serve as adeterrent to potential computer criminals.
In addition, the amended Act also provides
additional police powers for investigation
into computer crime.

There is also increasing need forcountries to cooperate in the fight against
computer and computer-related crimes.
With the rapid expansion of large-scaletransnational computer networks and theeasy accessibility of many systems throughcommunication lines, such crimes areeasily committed on an international scale.
A criminal can physically operate in one
country, access systems in another country,
and cause the consequences to be felt in athird country. Committed and concerted
mutual co-operation and assistance canassist to combat transnational computer
crimes more effectively. The commitment
among nations to assist each other ininvestigation and prosecution can also
resolve potentially complex issues ofterritorial jurisdiction, extradition andtrans-border searches and seizures ofelectronic evidence.
VII. CONCLUSION
Organised economic crime andtransnational computer crime can result insignificant losses of revenue and resources.
It could render the financial and legal
systems vulnerable and diminish the Asia
Pacific region’s credibility as an investment
and business hub. This would in turnadversely affect the region’s economic
wealth.

115

RESOURCE MATERIAL SERIES No. 55
Effective responses are needed tocounter organised economic crime andcomputer crime, both at the national andinternational levels. At the national level,a review of existing legislation may benecessary to address the difficulties inprosecuting cross-border criminals. Close
cooperation between the police and private
sector (e.g. banks, credit card service
providers, IT service providers) would
facilitate better exchange of information.
This could lead to the early detection andapprehension of culprits.
On an international level, regional
States should work closely with one
another to fight economic and computer
crime. This would facilitate investigationand prosecution of cross-border criminals.
States would eventually recognise thatpolicing is now carried out over a global
community. In the region, there are
currently conferences organised by regionalgroupings such as ASEANAPOL on crossbroder crime and enforcement concerns.
Such regular meetings are helpful infostering mutual understanding andcooperation. They may also enable regional
States to map out long-term working
relationships with one another.
In the next millennium, policing will be
carried out over a borderless community,
rather than within the confines of nationalboundaries. Therefore, Asia Pacific Statesshould aim towards cultivating strong links
in the areas of intelligence and operations.
In this way, we can overcome the limits
posed by such crimes’ cross-border natureand speed at which the criminals work. We
could then look forward to solving suchcrimes in a more effective andcomprehensive manner.

116