I will add what I write up here to the OP.
Crime works differently now. By default, all players have a fail-safe to their actions called
Villainy Mode. This is similar to Oblivion and Skyrim, where you have to crouch to pickpocket. Villainy is toggled through a keybind; I use Mouse 3. When Villainy is enabled, this icon appears above Super Shift:
Without this enabled,
you can do no evil. Shooting people does no damage, running people over halts your vehicle miraculously, stray gunfire does not damage other people's property, and so on. You can defend yourself safely, however. Gunfire towards aggressive criminals will work just fine, and police can safely tackle spree killers in a crowd without risking their own welfare.
Enabling crime will allow you to whatever you please. Incurring demerits of any form will force you into Crime mode.
Demerits also function differently. Crimes can either be blatant (automatic demerit incursion), witness only (innocent or police must be in viewing distance of the crime), or they drop a clue. Clues can either be visible or invisible, depending on the crime. If a cop touches a clue that is visible, it incurs demerits on the player. If a Law Enforcer uses his magnifying glass in the vicinity of a clue, it becomes visible. If a civilian uses his Cellphone in 9-11 mode near a clue, visible or not, it incurs demerits on the perpetrator.
Clues are dropped by all sorts of events and last for different periods of times. Clues tend to collect around shady lots were lots of illegal activity happens, but drop where people are shot or killed, where bricks are destroyed with a pick-axe, and so on.
This is a clue: