The report speculates that we shouldn't be surprised that online fraud and abuse are at high levels and calls for stronger deterrents. They believe that stronger action by the state attorneys general is key to this effort.
While more support at the state level is needed, I'm not sure if the states can control Internet crime all by themselves. Internet crime moves across borders with a click of a mouse and it's going to be difficult for Alabama to prosecute a spammer or phisherman living in Moscow, Shanghai, Montreal, or London.
Two so-called spam kings were recently prosecuted by the federal government. One later escaped and killed himself and family members in the process. These arrests didn't seem to make much of a dent in the amount of spam being sent. Both of the government press releases on these stories mentioned they were catering to commercial clients. Anyone proposing solutions to crime on the Internet will have to take a long and hard look at what makes the activity easy to facilitate in the first place.
Some blame the Internet Service Providers (which seem to be a dime a dozen) for looking the other way because spam brings in revenue for them. Of course, auction sites like eBay have also long been criticized for ignoring the criminal activity on their sites. Since Internet Service Providers and auction sites operate worldwide with a click of the mouse, it's difficult to prosecute or investigate anything on the Internet.
This list of Internet crime enablers is long and the ones referenced regarding service providers and auction sites are merely two examples of them. But if you were to take a look at all them, they have one thing in common: they maintain an environment conducive to making money easily. The question is how long will it take for the financial and social costs of Internet fraud and abuse to inspire a more responsible and practical approach to the problem?