Cross border economic crime : the agenda for reform (2001)

Cross-border economic crime can occur in a wide variety of ways. It can involve acts of dishonesty directed at consumers in other countries, manipulation of overseas bank accounts to obtain funds illegally, or fraud directed against governments such as through the evasion of customs duties or taxation when goods are imported from overseas. Laundering of the proceeds of crime also regularly takes place across jurisdictional borders. The commission of cross-border crime has been greatly facilitated by modern modes of transport, communications, banking and information processing. This paper presents four case studies that are illustrative of cross-border economic crime in the twenty-first century. It then examines the criminal justice issues that are involved, and sets the agenda for reform of this global crime problem. Adam Graycar Director Unlike crimes involving personal violence, in which the offender and the victim have to be present together in one place at one time, economic criminals and their victims can be located anywhere in the world-and sometimes never meet in person. In order to illustrate the range and complexity of the issues involved in crossborder economic crime, this paper presents four case studies, grouped according to the nature and location of the offender and victim. Each raises specific problems with respect to investigation and prosecution that cross as many borders as the offenders have crossed in order to carry out their offence. Cross-Border Economic Crime Scenarios One Offender-One Victim The first situation involves an offender who commits an offence in one country against a victim located in another country. Sometimes even this relatively simple scenario has complications in terms of determining legal jurisdiction. In the English case of R v. Thompson ([1984] 1 WLR 962), for example, the defendant was a computer programmer employed by the Commercial Bank of Kuwait. He opened savings accounts at five local branches of the bank in Kuwait and then programmed the bank's computer to debit various dormant accounts of customers and credit the five accounts he had opened. He then left Kuwait for England where he opened five new accounts with an English bank. He then requested the Kuwaiti bank to transfer the sums in his five Kuwaiti accounts to his English accounts. The Kuwaiti bank transferred about £45,000 in full which he then withdrew. Thompson was charged in England with six counts of obtaining property by deception. The English Court of Appeal held that he had obtained control of the funds in England rather than Kuwait and so was triable in England. The deception had occurred in England when Thompson requested that the funds be transferred from the Kuwaiti bank to the English bank. He was also physically present in England when he received the funds. One Offender-Multiple Victims The second situation concerns a single offender who deceives multiple victims in other countries. The Internet has greatly facilitated the commission of such crimes. One recent case concerned a 24-year-old man living in a Melbourne suburb who manipulated the share price of an American company by posting information on the Internet and sending email messages around the globe that contained false and misleading information about the company. On 8 and 9 May 1999, he posted messages on Internet bulletin boards in the United States and sent more than four million unsolicited email messages, colloquially referred to as spam, to recipients in the United States, Australia and other parts of the world. The messages contained a statement that the share value of the company would increase from the then current price of US$0.33 to US$3.00 once pending patents were released by the company, and that the price would increase up to 900 per cent within the next few months. The effect of the information was that the company's share price on the NASDAQ doubled, with trading volume increasing by more than 10 times the previous month's average trading volume. …