Internet Vulnerabilities & Criminal Activity

1. Internet Vulnerabilities & Criminal Activity Online Pharmaceuticals & Online Gambling 7.1 3/8/10

2. Drugs Online Federal law prohibits buying controlled substances such as narcotic pain relievers, sedatives, stimulants, and anabolic steroids without a valid prescription from a doctor. Most state laws requires a physical examination. Prescriptions written by "cyber doctors" relying on online questionnaires are not legitimate under the law DOJ - DEA

3. Problems with Prescription Drugs Sold Online • Selling drugs not approved by the FDA • Selling drugs without a prescription • Making fraudulent claims about drugs • Selling contaminated or altered drugs

4. How Illegal Online Pharmacies Operate • Purchaser fills out online questionnaire • Online pharmacy pays doctor to review questionnaire • Purchaser’s order is filled without a prescription • Some allow faxing of prescription • Often advertise services via spam e-mail

5. Problems with Illegal Pharmacy Drugs • Past expiration date • Banned in the United states • Counterfeit • Mislabeled • Adulterated • Sub-potent or over-potent • Contaminated • Made from suspect raw materials

6. Worst Countries for Drug Impurities • Argentina • Costa Rica • Fiji • India • Mexico • Pakistan • The Philippines • Spain • Thailand • Turkey

7. Why Consumers Buy Drugs Online • Price • Privacy • Abuse • “More Americans used narcotic pain medicines recreationally than all other drugs except alcohol.” Crimes of the Internet p.103

8. Law Enforcement Challenges Online Drug Sellers • Outside of the US • Most sales in small amounts • Maybe doctors or work with doctors • Sites may redirect to other sites

9. Online Pharmacy Statistics

10. Ryan Haight Online Pharmacy Consumer Protection Act of 2008 • Amends the Controlled Substances Act to prohibit the delivery, distribution, or dispensing of a controlled substance that is a prescription drug over the Internet without a valid prescription. • Defines "valid prescription" as a prescription that is issued for a legitimate medical purpose in the usual course of professional practice by a practitioner who has conducted at least one in-person medical evaluation of a patient.

11. Law Enforcement & Online Drug Sales • Overwhelming to law enforcement • Using same skills as used in child exploitation • Difficult to intercept shipments • Need foreign government cooperation • Easy to change domain name & location

12. Gambling “Risk-creating device as compared with Insurance which is a risk-reducing or eliminating device. Risking something of value.”

13. Online Gambling “An activity that takes place through a non-redirected, live Web site that allows monetary transactions in one or more of the following categories of gaming: casinos, lotteries, sports betting, or horse or dog racing.” US Government Accounting Office

14. The Appeal of Gambling Recreation Challenge Heightened emotions Sense of excitement Plays into human desire to obtain money with little work Income to states & other organizations

15. Online Gambling vs. Gambling Solitary activity No external checks Not occurring in real time No time lags between wage & results Borderless Loss of revenue States Gambling casinos Native-American casinos

16. Individual’s Gambling Behavior Based on three dimensions Personal motivation Willingness to take risks Overall intensity of behavior Time and money spent on gambling

17. Typology of Internet Gamblers The Accidental Tourist Casual Internet users Rarely plays online for money Beachcombers Wastes hours per day on the Internet Sporadic, binge gambling Recreational Surfers Casual online user Prefers traditional gambling atmosphere Card Sharks Primary focus is card playing

18. Typology of Internet Gamblers Steamers Flashy games with little skill Higher likelihood of addiction Wi-Fi Trekkers Access gambling sites through mobile means Handicappers Primary focus is sports events Fad Gamers Imagination gamblers Will place wagers on almost anything

19. Internet Gambling Concerns Money laundering Loss of tax revenue Addiction Underage gamblers Identity theft Fraud

20. States Outlawing Internet Gambling Illinois Indiana Louisiana Nevada Oregon South Dakota

21. Foreign Jurisdictions Outlawing Internet Gambling Estonia Hong Kong Iceland Norway Uruguay Approximately 50 countries have legalized Internet Gambling

22. The Wire Act of 1961 • 18 U.S.C. § 1084(a) • Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

23. The Travel Act of 1961 • 18 U.S.C. § 1952 • Aimed at prohibiting interstate travel or use of an interstate facility in aid of a racketeering or an unlawful business enterprise • “Unlawful business” - liquor, gambling, drugs, extortion, bribery, or arson • “Interstate travel” - mail, telephone or telegraph, newspapers, credit cards and tickertape

24. SAFE Port Act of 2006 • Unlawful Internet Gambling Enforcement Act • 31 U.S.C. § §5361-5367 • Amendment to indirectly outlaw Internet gambling • Does not apply to individual bettors • Bettor must risk something of value • Prohibits illegal Internet gambling sites from accepting payments • Onus on banks, financial institutions, & Internet Service Providers (ISP)

25. Is Internet Gambling a Victimless Crime? “Willing & private exchange of strongly demanded yet officially proscribed goods and services” Crimes of the Internet pg. 418

26. Internet Gambling - Victimless? Willing exchange Informed consent Lack of harm to others Immediate - friends, family Removed - society at large No willing complainant Online gamblers lose more $$