Fraud and Dishonesty in Business
Class Notes

Produced by Group 8 (Michael E. Defazio, Jonathan A. Maxwell, Matt McClinch, Korey S. Mercier, and Scott Willie), CS 3604, Fall 1997.

Definitions via WWWebsters Dictionary

Fraud:

a : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right
b : an act of deceiving or misrepresenting : TRICK
a : a person who is not what he or she pretends to be : IMPOSTOR; also : one who defrauds : CHEAT
b: one that is not what it seems or is represented to be

Wire Fraud:

fraud committed using a means of electronic communication (as a telephone)

Dishonesty:

lack of honesty or integrity : disposition to defraud or deceive
a dishonest act

Ethical Values in the Business World

Consider four distinct situations in defining ethical values in the business world:

Company vs. Society: The marketing department of most companies in the United States devotes much of its time to developing new ways to lie to the American public. Why are these "white lies" considered acceptable when they are fraudulent and misleading to the whole of society?
Company vs. Individuals: Is it ethical for companies to "sniff" their employees personal email? What if they are under suspicion of involvement in crimes or otherwise fraudulent activity against the company or other employees? Is it an individual's obligation to "blow the whistle" on someone else if they discover evidence of their having committed a fraud?
Company vs. Company: Can companies be held responsible for "accidental" loopholes in their joint contracts? Should one company be legally allowed to withhold information from another? What if that information was somehow misleading or harmful in nature?
Company vs. Itself: There are several ways in which a company can leave itself open to attacks involving fraud and deception. Should companies allow encrypted information within its network, which may very well prevent the them from taking an active role discovering such attacks? Should employees be given the responsibility of handling their own file security? Who's responsibility is it to protect sensitive data against hackers?

Legal Implications of Computer Fraud

Federal Laws Governing Computer Fraud:

The US Computer Fraud and Abuse Act was established by the Federal Government to aid in the prevention of fraudulent activity on computers systems throughout the nation, especially those located on a network.
In all cases involving "Federal interest computer[s]" the Federal Computer Fraud and Abuse Statute is brought into action as a defense for national security.

Example Cases of Fraud:

There exists too many legal cases regarding fraud to mention here. A few examples will follow, as well as a web site whose main focus is getting information about incidents of fraud out to the public.