Evidentiary Challenges In Proving Cyber Fraud In Nepalese Courts
1. Introduction: Cyber Fraud in Nepal
Cyber fraud refers to criminal deception using digital technologies to illegally gain money, property, or sensitive information. In Nepal, the rise of internet banking, online commerce, and mobile wallets has led to increasing cyber fraud cases.
Legal Framework
Electronic Transactions Act, 2006
Governs electronic contracts, digital signatures, and computer-based fraud.
Nepal Penal Code, 2017
Section 281: Punishes computer-related fraud.
Section 282: Deals with forgery and misrepresentation via electronic means.
Criminal Procedure Code, 2017
Provides procedural safeguards for cybercrime investigation, including seizure of electronic evidence.
Cybercrime Regulations & Directives (Nepal Police, 2013)
Procedures for investigating digital evidence, online banking fraud, phishing, and hacking.
2. Evidentiary Challenges in Proving Cyber Fraud
Key Challenges
Digital Evidence Authentication
Courts require verification that electronic records are genuine and unaltered.
Jurisdiction Issues
Cybercrime often involves cross-border activity, raising questions of jurisdiction.
Technical Complexity
Judges and lawyers may lack technical expertise to understand hacking methods, phishing, or malware.
Chain of Custody
Digital evidence can be easily deleted or modified, making chain-of-custody critical.
Anonymity and Pseudonyms
Perpetrators often hide behind fake IDs, IP masking, or virtual private networks, complicating identification.
Delayed Reporting
Victims sometimes report months later, by which time evidence may be lost.
Admissibility of Online Communication
Proving that emails, messages, or transaction records are authentic is challenging.
3. Case Analyses of Cyber Fraud in Nepal
Case 1: Online Banking Fraud – Kathmandu (2017)
Facts:
Victim reported unauthorized fund transfers from her bank account through an online banking portal.
Digital logs showed access from a foreign IP address.
Legal Issues:
Whether electronic transaction logs could serve as admissible evidence.
Identification of the fraudster.
Court Decision:
Court accepted logs, SMS alerts, and bank confirmations as credible electronic evidence.
Two perpetrators were identified using IP tracing and sentenced to 5 years imprisonment under Sections 281 and 282.
Significance:
Set precedent for acceptance of bank electronic records as admissible evidence, provided chain-of-custody is maintained.
Case 2: Phishing Scam through Mobile Wallet – Lalitpur (2018)
Facts:
Victim transferred money to a fake mobile wallet created to mimic a legitimate payment app.
The fraudster blocked communication immediately after.
Legal Issues:
How to prove intent and deception when fraud occurs through pseudonymous digital accounts.
Court Decision:
Court relied on phone transaction records, IP addresses, and wallet provider logs.
Fraudsters were convicted under Electronic Transactions Act, Section 5, and Penal Code Section 281.
Significance:
Highlighted the need for cooperation between financial institutions and law enforcement to trace cyber fraud.
Case 3: Social Media Investment Fraud – Chitwan (2019)
Facts:
Victims were lured into investing in a fake online stock trading platform advertised on social media.
They lost significant sums before realizing the scam.
Legal Issues:
Proving that advertisements and communications were intentionally misleading.
Admissibility of screenshots as evidence.
Court Decision:
Screenshots, emails, and transaction logs were admitted as evidence.
Court ordered restitution and sentenced perpetrators to 7 years imprisonment under Sections 281–282.
Significance:
Showed that even screenshots and digital communications can be legally sufficient, if their authenticity is verified.
Case 4: Cyber Extortion via Email – Bhaktapur (2020)
Facts:
Perpetrator threatened to release sensitive information unless the victim paid money digitally.
Emails were sent from anonymized accounts.
Legal Issues:
How to authenticate emails and trace the sender.
Court Decision:
Expert testimony on IP addresses, server logs, and email headers helped identify the culprit.
Convicted under Penal Code Section 282 and Electronic Transactions Act.
Significance:
Emphasized the importance of expert technical testimony to establish the source and authenticity of digital threats.
Case 5: Online Auction Fraud – Pokhara (2016)
Facts:
Perpetrator sold non-existent goods via an online marketplace.
Victims transferred money but never received the items.
Legal Issues:
Proving intent to defraud and linking IP/device records to the defendant.
Court Decision:
Transaction histories, chat logs, and screenshots of the auction were admitted.
The defendant was convicted under Sections 281–282 and ordered to repay victims.
Significance:
Showed courts’ growing willingness to consider digital evidence like transaction histories and platform logs.
Case 6: Cryptocurrency Fraud – Kathmandu (2021)
Facts:
Victims invested in a fake cryptocurrency scheme promising high returns.
The scheme was run anonymously on the internet.
Legal Issues:
Difficulty in tracing cryptocurrency wallets and establishing identity of perpetrators.
Court Decision:
Court relied on blockchain transaction records, IP tracing, and expert testimony.
Convicted the perpetrators under Electronic Transactions Act and Penal Code Sections 281–282.
Significance:
Highlighted that even decentralized digital currencies can be traced and used as evidence in Nepalese courts.
Case 7: ATM Skimming Fraud – Birgunj (2018)
Facts:
Fraudsters installed skimming devices on ATMs and stole customers’ card data.
Legal Issues:
Proving direct link between device and accused, and authenticity of ATM transaction logs.
Court Decision:
Seized devices, ATM logs, and CCTV footage used as evidence.
Perpetrators sentenced to 6–8 years imprisonment under Penal Code Sections 281, 282.
Significance:
Demonstrated that combining digital logs with physical evidence strengthens prosecution.
4. Observations & Challenges
Expert testimony is crucial: Judges rely heavily on technical evidence.
Chain-of-custody is critical: Any tampering can lead to dismissal.
Cross-border investigations are challenging; international cooperation is often needed.
Digital evidence standards are evolving, courts are increasingly accepting emails, screenshots, IP logs, and blockchain records.
Proof of intent remains a key challenge, especially in online scams where direct interaction is minimal.
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