Thursday, October 30, 2008

Cyber Crime Wave Rising - UK Report

Cyber crime, those crimes committed via a computing device and networks has risen this past year, and is expected to increase as economic misery deepens. A news story published by the BBC shows that "In 2007, the sharpest rise was in online financial fraud, with more than 250,000 incidents reported in 2007; a 20% rise on the previous year. The report highlighted a growing professionalism among online criminals, with personal and credit details being traded online. Garlik said that the information black market had doubled, with more than 19,000 illicit traders identified. " "Online harassment also increased. More than two million people were the victim of an abusive email, false accusation or blackmail attempt. It is thought the growing popularity of social networking sites helped drive this, providing a new widespread medium for online harassment." Read the article in its entirey at:

Keeping ones head above water in financial turmoil

These are indeed tumultuous financial times and if you have a job, you should do all you can do to keep it. The financial tsunami has hit the capital markets, and now the repercussions are starting to hit. Job layoffs announced this week included a stunning 24,000 RIFs at Hewlett Packard, 7000 RIFs at American Express, 3,000 at Motorola, and these add to the already announced 3,200 Goldman Sachs, 25% cutback in salaried and contract workers at Chrysler, 1,000 jobs cut at Yahoo, and approximately another 10,000 positions lost at the bankrupt Lehman Brothers, to name a few.

In times like these, you need a good lifeboat strategy for preserving your capital, preserving your job, and preparing for rainy days ahead. A short list of 12 financial tools were published today that provide some useful aids for those preparing for the future, or battling financial crises now.

PICKING UP THE PIECES: 12 OF THE BEST RESOURCES FOR INVESTORS IN TOUGH TIMES; 19-Member Alliance Including SEC, Fed, FINRA and States Highlights Timely Investor Education Tools. The new “Picking Up the Pieces" section of the AIE Web site features the following 12 top resources for consumers:

Top Five Facts When Investing in Turbulent Markets - CFA Institute.
Caution to Investors Against Making Uninformed, Sudden Decisions Amid Wall Street Crisis - North American Securities Administrators Association.
Mortgage Foreclosure Resources - Federal Reserve Board.
Treasury's Guarantee Program for Money Market Mutual Funds: What You Should Know - Financial Industry Regulatory Authority.
How Safe Are My Savings? -
Account Protection Concerns During Market Volatility - National Futures Association.
How SIPC Protects You in Case of a Brokerage Firm Failure - Securities Investor Protection Corporation.
Information for Individual Investors on Recent Market Events - Securities and Exchange Commission.
The Importance of Being an Informed Investor - Investment Company Institute.
Bank Failures, Mergers and Takeovers: A “Phish-erman’s Special” - Federal Trade Commission. Is R-I-S-K Really a 4-letter Word? - American Association of Individual Investors.
Life Crisis - Financial Planning Association.

For the full article follow this link

Thursday, October 23, 2008

Thinking ahead: Crime "opportunity blocking" will be essential to curbing the resurgence of organized crime

Make no mistake, the economic conditions are worsening, and in such times inhibitions toward criminal activity are lessened, especially for seasoned criminals. Criminal opportunity, particularly “white collar” crime is increasing and must be abated.

One of the early lessons of fighting crime in the 1930s was the essential requirement to reduce criminal opportunities of organized crime that was allowed to flourish during the age of Prohibition. The essential strategy used to protect the public during then, was a concept characterized in criminal justice research as "opportunity blocking". This same method is used as the purposive hampering of activities of organized crime groups through interrupting or eradicating the supply of illicit goods and services, most notably narcotics. This approach has been referred to by Ronald Goldstock (1990) as “opportunity blocking," a method that "seeks to change the social, economic, physical, or organizational environment so that particular crimes become impossible, or at least very difficult, to carry out;" see full discussion on page 161 in in the "Racketeering in the New York City Construction Industry" Final Report of the New York State Organized Crime Task Force" (1990).

More importantly, while drawing clues and best practices from history, our time is radically different in terms of crime opportunity made available through the internet and communications methods. Thinking about crime control in our age must combat these increased challenges with specific, measured, and targeted approach to cut off the means and instruments of crime used particularly in International organized crime, from the low-level crimes of stolen goods sales on eBay, to the great frauds placed on the public in financial crimes.

Lesson learned becomes proactive action item #005 – Add crime opportunity blocking to the list of directives within the national crime control strategy. Focus on the crime opportunity market in the words of Goldstock (1990), seek to “change the social, economic, physical, or organizational environment so that particular crimes become impossible, or at least very difficult, to carry out.”

Tuesday, October 21, 2008

FBI lacks agents to probe financial crimes

It was reported this week that the "FBI lacks agents to probe financial crimes." Crimes of the modern era have migrated to complex finance, geography-less domains of electronic trading. The article relates that the FBI must hire more, or repurpose FBI agents to White Collar Crime investigation. From the Associated Press, WASHINGTON (AFP) — The US Federal Bureau of Investigation lacks agents and resources to investigate white-collar financial crime because of personnel cuts and a shift in the agency's focus on terrorism, The New York Times reported Sunday. Citing current and former FBI officials, the newspaper said that since the September 11, 2001, attacks the bureau had shifted more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. "Clearly, we have felt the effects of moving resources from criminal investigations to national security," said The Times quotes John Miller, an assistant director at the FBI as saying. "In white-collar crime, while we initiated fewer cases over all, we targeted the areas where we could have the biggest impact." The Times report follows a series of US government moves to prop up failing banks weighed down by faltering mortgage loans and other financial woes. Key US data showed starts on building new homes slumped an additional 6.3 percent in September to the lowest level since the 1991 recession, the latest evidence of the burst housing bubble that shook the US economy and triggered the global financial crisis.
According to The Times, the FBI is now under pressure to investigate some of the largest players in the financial collapse, including mortgage giants Fannie Mae and Freddie Mac.
It is planning to double the number of agents working on financial crimes, the report said, but some people inside and outside the justice department wonder where the agents will come from.
According to FBI data, the cutbacks have been particularly severe in staffing for investigations into white-collar crimes like mortgage fraud, the paper said. These units lost a total of 625 agents, or 36 percent of their 2001 levels. Overall, the number of criminal cases brought by the FBI to federal prosecutors dropped 26 percent in the last seven years, the report said.

Monday, October 20, 2008

Tough economy, crime spike expected this holiday season

Tough economy, crime spike expected this holiday season Tough economy, holiday could bring crime spike, reads the headline. "SALISBURY -- Tough economic times and the holiday season closing in has some law enforcement officials cautioning residents about a possible crime spike and urging them to be more alert. "We're in a very tough economic environment where there are a number of people out of work," said Davis Ruark, Wicomico County state's attorney. "Those factors, coupled with the fact that around the holidays we tend to see an increase in robberies and thefts, I anticipate this will be a difficult year."Salisbury Mayor Barrie Parsons Tilghman's Crime Task Force has taken measures to prepare for a possible increase in crime. A subcommittee headed by City Councilwoman Debbie Campbell requested a plan of action from the Salisbury Police Department that outlines how it plans to reduce crime activity Nov. 1 through Dec. 31 -- what the subcommittee referred to as "active armed robbery season." "People on the committee related to the issue that we have a spike in crime this time of year and thought this was a really important action step," Campbell said. "People are tired of being victims of crime. I am hopeful that the task force is going to be action-oriented." Economic conditions have caused a shift in crime where some law enforcement agencies are seeing an increase in metal thefts, said Wicomico County Sheriff Mike Lewis."We're in for some serious economic hardships," Lewis said. "As a result of that, people will resort to anything to feed themselves and feed their families." Control Recommendation #004Increase funding for public education on how to become less of a target or victim for crime. Here is a good start to a short-list of things to educate from the article above:"Tips to reduce your chances of becoming a victim of crime:Don't leave packages in visible places in your car.Be aware of your surroundings; know where you are; remember where you parked.Park in a well-lit area.Shop in groupsBe aware of strange people and cars on your street and in your neighborhood.Report any suspicious vehicles and people to your local law enforcement agency."SOURCE: Area law enforcement agencies and the State's Attorney's Office

Crimewave - it starts gradually, then suddenly

There is a tipping point in criminological theory that suggests that orderly conditions can decay gradually, then suddenly if not abatted. A crime wave is in its earliest stages developing, first gradually, noticed here or there, and if conditions do not improve in employment and market confidence, may deteriorate further. Layoffs, unemployment, and lost opportunities hit the poor hardest as they frequently have less savings accumulated to weather financial crises.Articles in the news point to the return of mean streets. Consider this one published 10/19/08, titled, "Rockaways' 'Wild West': Housing project, 101st Precinct see crime wave," "A sharp uptick in robberies and felony assaults at the 1,800-unit Ocean Bay Apartments in Far Rockaway is troubling residents and police. A recent spike in crime in the Rockaways is causing added misery for residents of a local housing complex already plagued by violence. There have been 10 homicides so far this year in the 101st Precinct, up from four during the same period last year, according to new NYPD statistics. Robberies and felony assaults are also up in the precinct, which patrols the Ocean Bay Apartments in Far Rockaway. Beleaguered residents of the nearly 1,800-unit housing project said the area is becoming like the Wild West, with gun violence on a regular basis."It's very difficult raising kids in a development where there's shooting every day," said one mother of four who was afraid to give her name. "I feel like giving up on this place. I'm ready to go. It's getting out of hand." Marq Claxton, a retired cop and cofounder of the group 100 Blacks in Law Enforcement Who Care, described the Ocean Bay Apartments as "a fishbowl of violence and apathy." "It's amazing that the front of the projects are at war with the back of the projects," Claxton said of the gang violence."# # #Warehousing the poor was never a good solution. Research has shown that congregating the poor and disadvantaged in large groups such as tower-based multi-family housing is a prescription for victimization of the poor; in downturned economic conditions, the victimization can become much worse. The point of my including the article in this blog is not to discuss public housing, but to highlight the dramatic spike in violent crime recently occuring -- up 66% increase in homicide in one year, this coming at a time when police and city budgets are in contraction. If unabated, the cancer of crime violence can be expected to slide down a hill into lawlessness not unlike the wild, wild west.

Ailing U.S. economy brings fears of a crime wave

In an article appearing 10/10/08, Ailing U.S. economy brings fears of a crime wave, the reporter asks, "If the city's economy sinks to depths not seen in decades, will crime return with a vengeance?" The article goes on to say, "Expert opinions differ, but the question is hardly illogical. The last time stocks on Wall Street fell hard, in 1987, crime was exploding, and the city saw historic highs in murders in the following years. Before that, the fiscal crisis of the 1970s helped lead to the abandonment of neighborhoods, failing schools and startling crime rates: Robberies built through those years to a high in 1981, when there were 107,495 of them, for an average of 294 a day. (The number of total reported robberies last year, 21,787, was the lowest figure in modern history.) "Every recession since the late '50s has been associated with an increase in crime and, in particular, property crime and robbery, which would be most responsive to changes in economic conditions," said Richard Rosenfeld, a sociologist at the University of Missouri-St. Louis. Typically, he said, "there is a year lag between the economic change and crime rates."

Deepening recession brings with it concerns of coming crime wave

10/15/08. These are extraordinary times as we witness the collapse of the US stock markets, the demand destruction caused by lost confidence, fear, and credit tightening, and consequent belt tightening by individuals, businesses, and local governments that will have the unintended consequence of serving as a catalyst for a downward spiraling economy. Recession is assured, and Depression 2 is not unlikely.
So what to do? After you have moved to safeguard your financial resources and preserve capital, we would do well to consider the consequence of later dominoes to fall in the progression of this crises. Today governments speak of stabilizing banks, on a near and future day, the discussion will be about maintaining the rule of law. With history as our guide, we are likely to experience a spiking crime wave as the economic misery index worsens. Wise leaders should prepare for the coming crime of great proportions not seen on this planet in 100 years.
Now, this blog is not published to scare, but to forewarn, so that individuals, families, communities, businesses, governments, can protect themselves from the coming crime wave. There is a sage biblical verse that reads, 'if you are prepared, you shall not fear.' We are indeed experiencing a 100-year economic storm, and we are only at the beginning. With the stair-step-drops marking the collapse of financial markets, and deep recession upon us, we may soon enter a phase approximating the Great Depression. Marking semantic differences of recession and depression are frequently meaningless, and have a greater bearing to ones relative position to the proximate pain of the recession -- leading President Ronald Reagan to quip, "in a recession your neighbor is out of work, in a depression, you are out of work," as it becomes very personal. In the 1930s, a great crime wave ensued with the economic misery. We may well experience a resurgence of Great Depression level crime wave.
From the published "History of the FBI, The New Deal: 1933 - Late 1930's" we read that "The 1929 stock market crash and the Great Depression brought hard times to America. Hard times, in turn, created more criminals--and also led Americans to escape their troubles through newspapers, radio, and movies. To combat the crime wave, President Franklin D. Roosevelt influenced Congress in his first administration to expand federal jurisdiction, and his Attorney General, Homer Cummings, fought an unrelenting campaign against rampant crime. One case highlighting the rampant crime included the swindling and murder of members of the Osage Indian tribe in Oklahoma for the rights to their oil fields. Noting the widespread interest of the media in this war against crime, Hoover carried the message of FBI work through them to the American people."
The Home Office of the British Government released, or inadvertently released, a draft document in early September 2008 focusing on the potential crime wave that could ensue if the recession deepens to depression. From September 3, 2008, and the headline, "Credit crunch could lead to crime wave, Home Office warns Downing Street: The economic downturn is set to lead to more crime, fewer police, more illegal immigration and a rise in far right extremism, a leaked Home Office letter reveals. " The author writes -- "A blunt assessment of the pressures that a recession will bring on law and order is detailed in a document which is to be sent to Number 10 from Jacqui Smith, the Home Secretary. It outlines the potential rises in crime, including violent crime, that could occur because of the credit crisis. Overall crime is expected to rise as a result of the more difficult economic times, which could also fuel terrorism, it warns. The document also claims there will be an increase in "hostility" towards migrants as people question the financial assistance newcomers are given by the state." "Having studied previous recessions and downturns and its effect on crime and policing, the Home Office's modelling indicates that "an economic downturn would place significant upward pressure on acquisitive crime and therefore overall crime figures," according to the leaked letter. It points to the 1992 recession which saw sharp rises in violent crime of 19 per cent. "#
With budgets tightening for local governments, the already low ratios of officers per population may become over stretched. In general terms, public safety officers per 1,000 population are far too small to be of any real impact during a crime wave that creates moral hazard for hungry, stressed, financially broke individuals that resort to base survival ignoring civil rules of good behavior, and acting civilly disobedient, or worse. With increased moral hazard, and weakening of commitment to obey the rule of law, crime waves can increase rapidly, and virally with contagion.
This blog will be used to track the progressing crime wave development, and forecast the tipping point with an aim of providing preparations and plans to safeguard individuals, families, communities, businesses, and governments.
Idea #001 -- Create a Crime Control strategy and plan to curb and combat the coming crime wave.
Just as Chairman Bernake has schooled himself on the economics of the Great Depression, and has moved rather dramatically to fund banks to forestall bank collapse. Our next US president should also seek to proactively preempt the rise and speed of the coming crime wave by reducing crime opportunity. A package of coordinated measures should be prepared much like the financial plan envisioned by the Federal Reserve.
Ideal #002 -- Create and fund a Crime Prevention Through Environmental Design (CPTED) and situational crime prevention educational initiative for cities and communities to help them prepare for the coming crime wave. This will serve both to create employment opportunities, but also to help communities and individuals protect themselves through the built environment, as there wont be sufficient police to respond to their specific needs do to potentially overwhelming calls for police assistance demand.
Develop and teach measures of CPTED to: increase surveillance, access control, territoriality, image and maintenance, and locational or place setting requirements for crime prevention.
Develop and teach Situational Crime Prevention techniques for specific places that:
(1) increase the risks for offenders committing crime
(2) increase the effort required for offenders to commit crime
(3) reduce the rewards for crime
(4) remove excuses for committing crimes, and introduce cultural inculcation, shaming, and other reinforcements to encourage support of the rule of law
Idea #003 -- Do more with less. Figure out what law enforcement is doing that is ineffective and stop doing it. First issue up -- consider decriminalizing Marijuana, as a means of reducing rewards for crime, and redistributing scarce law enforcement resources to greater crime problems
In terms of crime control, the era of Prohibition from 1920 to 1933 created great criminal opportunity for mobs and organized crime. In hindsight, it was necessary to decriminalize distribution of alcohol to remove the demand for bootleg liquor and deny criminal organizations of product sales and revenue.
In like kind, as the market collapse continues and the expected D2 Crime Wave develops, it is not unthinkable that criminal organizations involved in legitimate enterprise may look to resume some illegal operations to recapture revenue. Alcohol is legal and not a great threat. However, there may be a resurgence of illegal drug distribution at the street-level in the US in coming months and years. As radical as it may seem to me (as a long-term drug control policy advocate and former ONDCP employee), it may be advisable in the near future for the next President to decriminalize marijuana in the US, to reduce the market incentive of organized crime, and to reduce law enforcement resources required on marijuana eradication in order to re-direct the limited resources to cocaine, meth, and harder drugs that are known to be greater influences in terms of exacerbating criminal behavior. This obviously would have moral hazard, insurance, and liability impacts for marijuana use in the workplace, and potentially signal greater use by youth, but this could be controlled and managed similar to youth alcohol policy controls.
The greater issue however is to denying criminal market activity of the less baneful marijuana, and focusing attention on greater crime problems. Such radical policy thinking seems to me to be quite rational to combat the coming crime wave.
# # #
This is the first post, and there will be others. I welcome the constructive thought, opinion, and contribution to this dialog that may serve as a benefit for individuals, families, communities, businesses, and governments seeking to create safe havens, and positive environments for living through the coming crime wave.