Lawyers study implications of Hayes Trade Me sentence

The sentence raises questions of whether computer crimes should be punished more severely than equivalent types of non-computer fraud

Lawyers are pondering the implications of Trade Me cracker Mark Hayes’ three-year fraud sentence, confirmed on appeal late last year.

The sentence raises questions of whether computer crimes should be punished more severely than equivalent types of non-computer fraud, say two lawyers from Simpson Grierson, who question whether “technological neutrality” should apply to the sentencing of an offender.

The principal of technological neutrality means the law should treat a computer transaction as far as possible as equivalent to a paper transaction.

Hayes was convicted last year of stealing $17,000 worth of goods by putting key-logging software into PCs in internet cafes and stealing the account numbers and passwords of Trade Me users. He then impersonated them and used their accounts to buy goods and had them shipped to an abandoned house.

Among his offences were 91 counts of “accessing a computer system for a dishonest purpose”, the first test of a section added to the Crimes Act in 2003.

He was sentenced to nearly three years’ imprisonment. That sentence was upheld on appeal in late 2006.

The two Simpson Grierson lawyers, Jenny Te and Karen Ngan, say an important point in the appeal was whether technological neutrality and the related principle of “functional equivalence” should be influential in the sentencing. Functional equivalence means that organisations should be able to choose whether to do business by paper or electronic means, because the functions and purposes of the two are the same. Technological neutrality means the law does not discriminate between different forms of technology

As Hayes’ lawyer pointed out during the appeal hearing, the average sentence for similar crimes committed on paper is about three months. Nevertheless, the Court of Appeal upheld the prison sentence, to discourage computer-based crime.

“The Court emphasised the commercial need to encourage the use of electronic technology for business purposes, particularly as a means of overcoming New Zealand’s twin problems of distance and time,” says Simpson Grierson’s commentary on the case.

“There is a public interest in providing strong sanctions against behaviour which could inhibit or undermine the use of electronic communication devices both generally and, more specifically, in commerce.

“The Court also noted the importance of holding an offender accountable for the emotional and financial harm done to the victims, as well as the community.”

Trade Me has since cautioned its customers not to transact business with the auction site or do other confidential business from internet cafes.

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Tags hayeskey loggingTrade Mecomputer crimetechnological neutralitylawyer

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