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Before yesterdayKrebs on Security

T-Mobile: Breach Exposed SSN/DOB of 40M+ People

18 August 2021 at 16:24

T-Mobile is warning that a data breach has exposed the names, date of birth, Social Security number and driver’s license/ID information of more than 40 million current, former or prospective customers who applied for credit with the company. The acknowledgment came less than 48 hours after millions of the stolen T-Mobile customer records went up for sale in the cybercrime underground.

In a statement Tuesday evening, T-Mobile said a “highly sophisticated” attack against its network led to the breach of data on millions of customers.

“Our preliminary analysis is that approximately 7.8 million current T-Mobile postpaid customer accounts’ information appears to be contained in the stolen files, as well as just over 40 million records of former or prospective customers who had previously applied for credit with T-Mobile,” the company wrote in a blog post. “Importantly, no phone numbers, account numbers, PINs, passwords, or financial information were compromised in any of these files of customers or prospective customers.”

Nevertheless, T-Mobile is urging all T-Mobile postpaid customers to proactively change their account PINs by going online into their T-Mobile account or calling customer care at 611. “This precaution is despite the fact that we have no knowledge that any postpaid account PINs were compromised,” the advisory reads.

It is not clear how many people total may be impacted by this breach. T-Mobile hasn’t yet responded to requests for clarification regarding how many of the 7.8 million current customers may also have been affected by the credit application breach.

The intrusion first came to light on Twitter when the account @und0xxed started tweeting the details, and someone on a cybercrime forum began selling what they claimed were more than 100 million freshly hacked records from T-Mobile. The hackers claimed one of those databases held the name, date of birth, SSN, drivers license information, plaintext security PIN, address and phone number of 36 million T-Mobile customers in the United States — all going back to the mid-1990s.

T-Mobile said it was also able to confirm approximately 850,000 active T-Mobile prepaid customer names, phone numbers and account PINs were also exposed.

“We have already proactively reset ALL of the PINs on these accounts to help protect these customers, and we will be notifying accordingly right away. No Metro by T-Mobile, former Sprint prepaid, or Boost customers had their names or PINs exposed,” T-Mobile said. “We have also confirmed that there was some additional information from inactive prepaid accounts accessed through prepaid billing files. No customer financial information, credit card information, debit or other payment information or SSN was in this inactive file.”

T-Mobile said it would pay for two years of identity theft protection services for any affected customers, and that it was offering “an extra step to protect your mobile account with our Account Takeover Protection capabilities for postpaid customers, which makes it harder for customer accounts to be fraudulently ported out and stolen.” Why it wouldn’t make that extra protection standard for all accounts all the time is not entirely clear.

This stolen data is being actively sold, but if the past is any teacher much of it will wind up posted online soon. It is a safe bet that scammers will use some of this information to target T-Mobile users with phishing messages, account takeovers and harassment.

T-Mobile customers should expect to see phishers taking advantage of public concern over the breach to impersonate the company — and possibly even messages that include the recipient’s compromised account details to make the communications look more legitimate.

Data stolen and exposed in this breach may also be used for identity theft. Credit monitoring and ID theft protection services can help you recover from having your identity stolen, but most will do nothing to stop the ID theft from happening. If you want the maximum control over who should be able to view your credit or grant new lines of credit in your name, then a security freeze is your best option.

If you’re a current T-Mobile customer, by all means change your account PIN as instructed. But regardless of which mobile provider you patronize, consider removing your phone number from as many online accounts as you can. Many online services require you to provide a phone number upon registering an account, but in many cases that number can be removed from your profile afterwards.

Why do I suggest this? Many online services allow users to reset their passwords just by clicking a link sent via SMS, and this unfortunately widespread practice has turned mobile phone numbers into de facto identity documents. Which means losing control over your phone number thanks to an unauthorized SIM swap or mobile number port-out, divorce, job termination or financial crisis can be devastating.

T-Mobile Investigating Claims of Massive Data Breach

16 August 2021 at 23:53

Communications giant T-Mobile said today it is investigating the extent of a breach that hackers claim has exposed sensitive personal data on 100 million T-Mobile USA customers, in many cases including the name, Social Security number, address, date of birth, phone number, security PINs and details that uniquely identify each customer’s mobile device.

On Sunday, Vice.com broke the news that someone was selling data on 100 million people, and that the data came from T-Mobile. In a statement published on its website today, the company confirmed it had suffered an intrusion involving “some T-Mobile data,” but said it was too soon in its investigation to know what was stolen and how many customers might be affected.

A sales thread tied to the allegedly stolen T-Mobile customer data.

“We have determined that unauthorized access to some T-Mobile data occurred, however we have not yet determined that there is any personal customer data involved,” T-Mobile wrote.

“We are confident that the entry point used to gain access has been closed, and we are continuing our deep technical review of the situation across our systems to identify the nature of any data that was illegally accessed,” the statement continued. “This investigation will take some time but we are working with the highest degree of urgency. Until we have completed this assessment we cannot confirm the reported number of records affected or the validity of statements made by others.”

The intrusion came to light on Twitter when the account @und0xxed started tweeting the details. Reached via direct message, Und0xxed said they were not involved in stealing the databases but was instead in charge of finding buyers for the stolen T-Mobile customer data.

Und0xxed said the hackers found an opening in T-Mobile’s wireless data network that allowed access to two of T-Mobile’s customer data centers. From there, the intruders were able to dump a number of customer databases totaling more than 100 gigabytes.

They claim one of those databases holds the name, date of birth, SSN, drivers license information, plaintext security PIN, address and phone number of 36 million T-Mobile customers in the United States — all going back to the mid-1990s.

The hacker(s) claim the purloined data also includes IMSI and IMEI data for 36 million customers. These are unique numbers embedded in customer mobile devices that identify the device and the SIM card that ties that customer’s device to a telephone number.

“If you want to verify that I have access to the data/the data is real, just give me a T-Mobile number and I’ll run a lookup for you and return the IMEI and IMSI of the phone currently attached to the number and any other details,” @und0xxed said. “All T-Mobile USA prepaid and postpaid customers are affected; Sprint and the other telecoms that T-Mobile owns are unaffected.”

Other databases allegedly accessed by the intruders included one for prepaid accounts, which had far fewer details about customers.

“Prepaid customers usually are just phone number and IMEI and IMSI,” Und0xxed said. “Also, the collection of databases includes historical entries, and many phone numbers have 10 or 20 IMEIs attached to them over the years, and the service dates are provided. There’s also a database that includes credit card numbers with six digits of the cards obfuscated.”

T-Mobile declined to comment beyond what the company said in its blog post today.

In 2015, a computer breach at big three credit bureau Experian exposed the Social Security numbers and other data on 15 million people who applied for financing from T-Mobile.

Like other mobile providers, T-Mobile is locked in a constant battle with scammers who target its own employees in SIM swapping attacks and other techniques to wrest control over employee accounts that can provide backdoor access to customer data. In at least one case, retail store employees were complicit in the account takeovers.

WHO HACKED T-MOBILE?

The Twitter profile for the account @Und0xxed includes a shout out to @IntelSecrets, the Twitter account of a fairly elusive hacker who also has gone by the handles IRDev and V0rtex. Asked if @IntelSecrets was involved in the T-Mobile intrusion, @und0xxed confirmed that it was.

The IntelSecrets nicknames correspond to an individual who has claimed responsibility for modifying the source code for the Mirai “Internet of Things” botnet to create a variant known as “Satori,” and supplying it to others who used it for criminal gain and were later caught and prosecuted. Like Kenny “NexusZeta” Schuchmann, who pleaded guilty in 2019 to operating the Satori botnet. Two other young men have been charged in connection with Satori — but not IntelSecrets.

How do we know all this about IntelSecrets/IRDev/V0rtex? That identity has acknowledged as much in a series of bizarre lawsuits filed by a person who claims their real name is John Erin Binns. The same Binns identity operates the website intelsecrets[.]su. 

On that site, Binns claims he fled to Germany and Turkey to evade prosecution in the Satori case, only to be kidnapped in Turkey and subjected to various forms of psychological and physical torture. According to Binns, the U.S. Central Intelligence Agency (CIA) falsely told their counterparts in Turkey that he was a supporter or member of the Islamic State (ISIS), a claim he says led to his alleged capture and torture by the Turks.

Since then, Binns has filed a flood of lawsuits naming various federal agencies — including the FBI, the CIA, and the U.S. Special Operations Command (PDF), demanding that the government turn over information collected about him and seeking restitution for his alleged kidnapping at the hands of the CIA.

Speaking to the researcher Alon Gal (@underthebreach), the hackers responsible for the T-Mobile intrusion said they did it to “retaliate against the US for the kidnapping and torture of John Erin Binns in Germany by the CIA and Turkish intelligence agents in 2019. We did it to harm US infrastructure.”

Update, Aug. 18, 9:15 a.m. ET: In a blog post Monday evening, T-Mobile acknowledged that a data breach has exposed the names, date of birth, Social Security number and driver’s license/ID information of more than 40 million current, former or prospective customers.

New Anti Anti-Money Laundering Services for Crooks

13 August 2021 at 17:28

A new dark web service is marketing to cybercriminals who are curious to see how their various cryptocurrency holdings and transactions may be linked to known criminal activity. Dubbed “Antinalysis,” the service purports to offer a glimpse into how one’s payment activity might be flagged by law enforcement agencies and private companies that try to link suspicious cryptocurrency transactions to real people.

Sample provided by Antinalysis.

“Worried about dirty funds in your BTC address? Come check out Antinalysis, the new address risk analyzer,” reads the service’s announcement, pointing to a link only accessible via Tor. “This service is dedicated to individuals that have the need to possess complete privacy on the blockchain, offering a perspective from the opponent’s point of view in order for the user to comprehend the possibility of his/her funds getting flagged down under autocratic illegal charges.”

The ad continues:

Some people might ask, why go into all that? Just cash out in XMR and be done with it. The problem is, cashing out in Monero raises eyebrows on exchanges and mail by cash method is sometimes risky as well. If you use BTC->XMR->BTC method, you’ll still get flagged down by our services labelled as high risk exchange (not to mention LE and exchanges). Our service provides you with a view from LE/exchange’s perspective of things (with similar accuracy, but quite different approach) that provides you with basic knowledge of how “clean” your address is.”

Tom Robinson, co-founder of blockchain intelligence firm Elliptic, said Antinalysis is designed to help crypto money launderers test whether their funds will be identified as proceeds of crime by regulated financial exchanges.

“Cryptoassets have become an important tool for cybercriminals,” Robinson wrote. “The likes of ransomware and darknet markets rely on payments being made in Bitcoin and other cryptocurrencies. However, laundering and cashing-out these proceeds is a major challenge.”

Cryptocurrency exchanges make use of blockchain analytics tools, he said, to check customer deposits for links to illicit activity. By tracing a transaction back through the blockchain, these tools can identify whether the funds originated from a wallet associated with ransomware or any other criminal activity.

“The launderer therefore risks being identified as a criminal and being reported to law enforcement whenever they send funds to a business using such a tool,” Robinson said. “Antinalysis seeks to help crypto launderers to avoid this, by giving them a preview of what a blockchain analytics tool will make of their bitcoin wallet and the funds it contains.”

Each lookup at Antinalysis costs roughly USD $3, with a minimum $30 purchase. Other plans go as high as $6,000 for 5,000 requests.

Robinson says the creator of Antinalysis is also one of the developers of Incognito Market, a darknet marketplace specializing in the sale of narcotics.

“Incognito was launched in late 2020, and accepts payments in both Bitcoin and Monero, a cryptoasset offering heightened anonymity,” he wrote. “The launch of Antinalysis likely reflects the difficulties faced by the market and its vendors in cashing out their Bitcoin proceeds.”

Elliptic wasn’t impressed with the quality of the intelligence provided by Antinalysis, saying it performs poorly on detecting links to major darknet markets and other criminal entities. But with countless criminals now making millions from ransomware, there is certainly a vast, untapped market for services that help those folks improve their operational security.

“It is also significant because it makes blockchain analytics available to the public for the first time,” Robinson wrote. “To date, this type of analysis has been used primarily by regulated financial service providers.”

That may not be entirely true. Nick Bax is an independent expert in tracing cryptocurrency transactions, and he said it appears Antinalysis may be little more than a clone of AMLBot, an anti- anti-money laundering intelligence service that first came online in 2019.

AMLBot’s user interface.

“It looks almost identical to the cheap version of AMLBot,” Bax told KrebsOnSecurity. “My guess is they’re just white-labeling that.”

Bax said a lookup at AMLBot on the virtual currency address used in the sample provided by Antinalysis shows a near identical result. Here’s AMLBot’s result for the same crypto analysis performed by Antinalysis in the screenshot at the top of this story:

AMLBot’s response for the same cryptocurrency address provided as an example by Antinalysis.

“If you look at the breakdown the percentages are all almost identical,” Bax said. “I use AMLBot occasionally for good and righteous purposes. And it could also be useful for people who are just selling stuff online to make sure they aren’t receiving tainted funds.”

Update, 1:42 p.m. ET: Corrected the story to note that AMLBot has been around since 2019.

Update, 1:52 p.m. ET: Elliptic updated its blog post to confirm the connection between Antinanlysis and AMLBot, noting that AMLBot itself is a reseller of yet another service: “As first suggested in an article by Brian Krebs, we can now confirm that the results provided by Antinalysis are identical to those provided by AMLBot. It is therefore likely that Antinalysis makes use of the AMLBot API. AMLBot is itself a reseller for Crystal Blockchain, an analytics provider.”

Microsoft Patch Tuesday, August 2021 Edition

10 August 2021 at 21:12

Microsoft today released software updates to plug at least 44 security vulnerabilities in its Windows operating systems and related products. The software giant warned that attackers already are pouncing on one of the flaws, which ironically enough involves an easy-to-exploit bug in the software component responsible for patching Windows 10 PCs and Windows Server 2019 machines.

Microsoft said attackers have seized upon CVE-2021-36948, which is a weakness in the Windows Update Medic service. Update Medic is a new service that lets users repair Windows Update components from a damaged state so that the device can continue to receive updates.

Redmond says while CVE-2021-36948 is being actively exploited, it is not aware of exploit code publicly available. The flaw is an “elevation of privilege” vulnerability that affects Windows 10 and Windows Server 2019, meaning it can be leveraged in combination with another vulnerability to let attackers run code of their choice as administrator on a vulnerable system.

“CVE-2021-36948 is a privilege escalation vulnerability – the cornerstone of modern intrusions as they allow attackers the level of access to do things like hide their tracks and create user accounts,” said Kevin Breen of Immersive Labs. “In the case of ransomware attacks, they have also been used to ensure maximum damage.”

According to Microsoft, critical flaws are those that can be exploited remotely by malware or malcontents to take complete control over a vulnerable Windows computer — and with little to no help from users. Top of the heap again this month: Microsoft also took another stab at fixing a broad class of weaknesses in its printing software.

Last month, the company rushed out an emergency update to patch “PrintNightmare” — a critical hole in its Windows Print Spooler software that was being attacked in the wild. Since then, a number of researchers have discovered holes in that patch, allowing them to circumvent its protections.

Today’s Patch Tuesday fixes another critical Print Spooler flaw (CVE-2021-36936), but it’s not clear if this bug is a variant of PrintNightmare or a unique vulnerability all on its own, said Dustin Childs at Trend Micro’s Zero Day Initiative.

“Microsoft does state low privileges are required, so that should put this in the non-wormable category, but you should still prioritize testing and deployment of this Critical-rated bug,” Childs said.

Microsoft said the Print Spooler patch it is pushing today should address all publicly documented security problems with the service.

“Today we are addressing this risk by changing the default Point and Print driver installation and update behavior to require administrator privileges,” Microsoft said in a blog post. “This change may impact Windows print clients in scenarios where non-elevated users were previously able to add or update printers. However, we strongly believe that the security risk justifies the change. This change will take effect with the installation of the security updates released on August 10, 2021 for all versions of Windows, and is documented as CVE-2021-34481.

August brings yet another critical patch (CVE-2021-34535) for the Windows Remote Desktop service, and this time the flaw is in the Remote Desktop client instead of the server.

CVE-2021-26424 — a scary, critical bug in the Windows TCP/IP component — earned a CVSS score of 9.9 (10 is the worst), and is present in Windows 7 through Windows 10, and Windows Server 2008 through 2019 (Windows 7 is no longer being supported with security updates).

Microsoft said it was not aware of anyone exploiting this bug yet, although the company assigned it the label “exploitation more likely,” meaning it may not be difficult for attackers to figure out. CVE-2021-26424 could be exploited by sending a single malicious data packet to a vulnerable system.

For a complete rundown of all patches released today and indexed by severity, check out the always-useful Patch Tuesday roundup from the SANS Internet Storm Center. And it’s not a bad idea to hold off updating for a few days until Microsoft works out any kinks in the updates: AskWoody.com usually has the lowdown on any patches that are causing problems for Windows users.

On that note, before you update please make sure you have backed up your system and/or important files. It’s not uncommon for a Windows update package to hose one’s system or prevent it from booting properly, and some updates have been known to erase or corrupt files.

So do yourself a favor and backup before installing any patches. Windows 10 even has some built-in tools to help you do that, either on a per-file/folder basis or by making a complete and bootable copy of your hard drive all at once.

And if you wish to ensure Windows has been set to pause updating so you can back up your files and/or system before the operating system decides to reboot and install patches on its own schedule, see this guide.

If you experience glitches or problems installing any of these patches this month, please consider leaving a comment about it below; there’s a decent chance other readers have experienced the same and may chime in here with useful tips.

Phishing Sites Targeting Scammers and Thieves

9 August 2021 at 15:21

I was preparing to knock off work for the week on a recent Friday evening when a curious and annoying email came in via the contact form on this site:

“Hello I go by the username Nuclear27 on your site Briansclub[.]com,” wrote “Mitch,” confusing me with the proprietor of perhaps the underground’s largest bazaar for stolen credit and identity data. “I made a deposit to my wallet on the site but nothing has shown up yet and I would like to know why.”

The real BriansClub login page.

Several things stood out in Mitch’s message. For starters, that is not the actual domain for BriansClub. And it’s easy to see why Mitch got snookered: The real BriansClub site is currently not at the top of search results when one queries that shop name at Google.

Also, this greenhorn criminal clearly had bought into BriansClub’s advertising, which uses my name and likeness in a series of ads that run on all the top cybercrime forums. In those ads, a crab with my head on it zigs and zags on the sand. This is all meant to be a big joke: Krebs means “crab” or “cancer” in German, but a “crab” is sometimes used in Russian hacker slang to refer to a “carder,” or a person who regularly engages in street-level credit card fraud. Like Mitch.

In late 2019, BriansClub changed its homepage to include doctored images of my Social Security and passport cards, credit report and mobile phone bill information. That was right after KrebsOnSecurity broke the news that someone had hacked BriansClub and siphoned information on 26 million stolen debit and credit accounts. The hacked BriansClub database had an estimated collective street value of $566 million, and that data was subsequently shared with thousands of financial institutions.

Mitch said he’d just made a deposit of $240 worth of bitcoin at BriansClub[.]com, and was wondering when the funds would be reflected in the balance of his account on the shop.

Playing along, I said I was sorry to hear about his ordeal, and asked Mitch if there were any stolen cards issued by a particular bank or to a specific region that he was seeking.

Mitch didn’t bite, but neither would he be dissuaded that I was at fault for his wayward funds. He shared a picture showing funds he’d sent to the bitcoin address instructed by BriansClub[.]com — 1PLALmM5rrmLTGGVRHHTnB6VnZd3FFwh1Zusing a Bitcoin ATM in Canada.

The real BriansClub uses a dodgy virtual currency exchange service based in St. Petersburg, Russia called PinPays. The company’s website has long featured little more than a brand icon and an instant messenger address to reach the proprietor. The fake BriansClub told Mitch the Bitcoin address he was asked to pay was a PinPays address that would change with each transaction.

The payment message displayed by the carding site phishing domain BriansClub[.]com.

However, upon registering at the phishing site and clicking to fund my account, I was presented with the exact same Bitcoin address that Mitch said he paid. Also, the site wasn’t using PinPays; it was just claiming to do so to further mimic the real BriansClub.

According to the Blockchain, that Bitcoin address Mitch paid has received more than a thousand payments over the past five months totaling more than USD $40,000 worth of Bitcoin. Most are relatively small payments like Mitch’s.

The screenshot Mitch sent of his deposit.

Unwary scammers like Mitch are a dime a dozen, as are phishing sites that spoof criminal services online. Shortly after it came online as a phishing site last year, BriansClub[.]com was hosted at a company in Moscow with just a handful of other domains phishing popular cybercrime stores, including Jstashbazar[.]com, vclub[.]cards, vclubb[.]com and vclub[.]credit.

Whoever’s behind these sites is making a decent income fleecing clueless crooks. A review of the Bitcoin wallet listed as the payment address for BriansClub[.]org, for example, shows a similar haul: 704 transactions totaling $38,000 in Bitcoin over the past 10 months.

“Wow, thanks for ripping me off,” Mitch wrote, after I’d dozed off for the evening without responding to his increasingly strident emails. “Should have spent the last money on my bills I’m trying to pay off. Should have known you were nothing but a thief.”

Deciding the ruse had gone too far, I confessed to Mitch that I wasn’t really the administrator of BriansClub, and that the person he’d reached out to was an independent journalist who writes about cybercrime. I told him not to feel bad, as more than a thousand people had been similarly duped by the carding shop.

But Mitch did not appear to accept my confession.

“If that’s the case then why is your name all over it including in the window that opens up when you go to make a deposit?,” Mitch demanded, referring to the phishing site.

Clearly, nothing I said was going to deter Mitch at this point. He asked in a follow-up email if a link he included in the message was indeed the “legitimate” BriansClub address. My only reply was that he should maybe consider another line of work before he got ripped off yet again, or the Royal Canadian Mounted Police showed up at his doorstep.

Scammers who fall for fake carding sites can expect to have their accounts taken over at the real shop, which usually means someone spends your balance on stolen cards. But mostly, these imposter carding sites are asking new members to fund their accounts by making deposits in virtual currency like Bitcoin.

In 2018, KrebsOnSecurity examined a huge network of phishing sites masquerading as the top carding stores which all traced back to a web development group in Pakistan that’s apparently been stealing from thieves for years.

As I noted in that piece, creating a network of fake carding sites is the perfect cybercrime. After all, nobody who gets phished or scammed is going to report the crime to the authorities. Nor will anyone help the poor sucker who gets snookered by one of these fake carding sites. Caveat Emptor!

The most one can hope for is that the occasional enterprising phisher is brought to justice. While it may be hard to believe that authorities would go after crooks stealing from one another, in 2017 a Connecticut man pleaded guilty to charges of phishing several criminal dark web markets in a scheme that eventually netted over $365,000 and more than 10,000 stolen user credentials.

And what about the provenance of the phishing domain briansclub[.]com? Looking closer at the original WHOIS registration records for briansclub[.]com via DomainTools (an advertiser on this site), we can see it was registered in November 2015 — several months after the real BriansClub came online. It was registered to a “Brian Billionaire,” a.k.a. Brian O’Connor, an apparently accomplished music deejay, rapper and rap music producer in Florida.

Brian Billionaire.

For several years after it came online, BriansClub[.]com and other domains apparently registered to Mr. Billionaire redirected to his main site — newhotmusic.com, which predates the carding shop BriansClub and also has a members-only section of the site called Brian’s Club.

Mr. Billionaire did not respond to multiple requests for comment, but it looks like his only crime is being a somewhat cringeworthy DJ. DomainTools’ record for briansclub[.]com says the domain was abandoned or dormant for a period in 2019, only to be scooped up again by someone in May 2020 when it became a phishing site spoofing the real BriansClub.

Ransomware Gangs and the Name Game Distraction

5 August 2021 at 11:38

It’s nice when ransomware gangs have their bitcoin stolen, malware servers shut down, or are otherwise forced to disband. We hang on to these occasional victories because history tells us that most ransomware moneymaking collectives don’t go away so much as reinvent themselves under a new name, with new rules, targets and weaponry. Indeed, some of the most destructive and costly ransomware groups are now in their third incarnation.

A rough timeline of major ransomware operations and their reputed links over time.

Reinvention is a basic survival skill in the cybercrime business. Among the oldest tricks in the book is to fake one’s demise or retirement and invent a new identity. A key goal of such subterfuge is to throw investigators off the scent or to temporarily direct their attention elsewhere.

Cybercriminal syndicates also perform similar disappearing acts whenever it suits them. These organizational reboots are an opportunity for ransomware program leaders to set new ground rules for their members — such as which types of victims aren’t allowed (e.g., hospitals, governments, critical infrastructure), or how much of a ransom payment an affiliate should expect for bringing the group access to a new victim network.

I put together the above graphic to illustrate some of the more notable ransom gang reinventions over the past five years. What it doesn’t show is what we already know about the cybercriminals behind many of these seemingly disparate ransomware groups, some of whom were pioneers in the ransomware space almost a decade ago. We’ll explore that more in the latter half of this story.

One of the more intriguing and recent revamps involves DarkSide, the group that extracted a $5 million ransom from Colonial Pipeline earlier this year, only to watch much of it get clawed back in an operation by the U.S. Department of Justice.

After acknowledging someone had also seized their Internet servers, DarkSide announced it was folding. But a little more than a month later, a new ransomware affiliate program called BlackMatter emerged, and experts quickly determined BlackMatter was using the same unique encryption methods that DarkSide had used in their attacks.

DarkSide’s demise roughly coincided with that of REvil, a long-running ransomware group that claims to have extorted more than $100 million from victims. REvil’s last big victim was Kaseya, a Miami-based company whose products help system administrators manage large networks remotely. That attack let REvil deploy ransomware to as many as 1,500 organizations that used Kaseya.

REvil demanded a whopping $70 million to release a universal decryptor for all victims of the Kaseya attack. Just days later, President Biden reportedly told Russian President Vladimir Putin that he expects Russia to act when the United States shares information on specific Russians involved in ransomware activity.

A REvil ransom note.

Whether that conversation prompted actions is unclear. But REvil’s victim shaming blog would disappear from the dark web just four days later.

Mark Arena, CEO of cyber threat intelligence firm Intel 471, said it remains unclear whether BlackMatter is the REvil crew operating under a new banner, or if it is simply the reincarnation of DarkSide.

But one thing is clear, Arena said: “Likely we will see them again unless they’ve been arrested.”

Likely, indeed. REvil is widely considered a reboot of GandCrab, a prolific ransomware gang that boasted of extorting more than $2 billion over 12 months before abruptly closing up shop in June 2019. “We are living proof that you can do evil and get off scot-free,” Gandcrab bragged.

And wouldn’t you know it: Researchers have found GandCrab shared key behaviors with Cerber, an early ransomware-as-a-service operation that stopped claiming new victims at roughly the same time that GandCrab came on the scene.

GOOD GRIEF

The past few months have been a busy time for ransomware groups looking to rebrand. BleepingComputer recently reported that the new “Grief” ransomware startup was just the latest paintjob of DoppelPaymer, a ransomware strain that shared most of its code with an earlier iteration from 2016 called BitPaymer.

All three of these ransom operations stem from a prolific cybercrime group known variously as TA505, “Indrik Spider” and (perhaps most memorably) Evil Corp. According to security firm CrowdStrike, Indrik Spider was formed in 2014 by former affiliates of the GameOver Zeus criminal network who internally referred to themselves as “The Business Club.”

The Business Club was a notorious Eastern European organized cybercrime gang accused of stealing more than $100 million from banks and businesses worldwide. In 2015, the FBI offered a standing $3 million bounty for information leading to the capture of the Business Club’s leader — Evgeniy Mikhailovich Bogachev. By the time the FBI put a price on his head, Bogachev’s Zeus trojan and later variants had been infecting computers for nearly a decade.

The alleged ZeuS Trojan author, Evgeniy Mikhaylovich Bogachev. Source: FBI

Bogachev was way ahead of his colleagues in pursuing ransomware. His Gameover Zeus Botnet was a peer-to-peer crime machine that infected between 500,000 and a million Microsoft Windows computers. Throughout 2013 and 2014, PCs infected with Gameover were seeded with Cryptolocker, an early, much-copied ransomware strain allegedly authored by Bogachev himself.

CrowdStrike notes that shortly after the group’s inception, Indrik Spider developed their own custom malware known as Dridex, which has emerged as a major vector for deploying malware that lays the groundwork for ransomware attacks.

“Early versions of Dridex were primitive, but over the years the malware became increasingly professional and sophisticated,” CrowdStrike researchers wrote. “In fact, Dridex operations were significant throughout 2015 and 2016, making it one of the most prevalent eCrime malware families.”

That CrowdStrike report was from July 2019. In April 2021, security experts at Check Point Software found Dridex was still the most prevalent malware (for the second month running). Mainly distributed via well-crafted phishing emails — such as a recent campaign that spoofed QuickBooks — Dridex often serves as the attacker’s initial foothold in company-wide ransomware attacks, CheckPoint said.

REBRANDING TO AVOID SANCTIONS

Another ransomware family tied to Evil Corp. and the Dridex gang is WastedLocker, which is the latest name of a ransomware strain that has rebranded several times since 2019. That was when the Justice Department put a $5 million bounty on the head of Evil Corp., and the Treasury Department’s Office of Foreign Asset Control (OFAC) said it was prepared to impose hefty fines on anyone who paid a ransom to the cybercrime group.

Alleged Evil Corp leader Maksim “Aqua” Yakubets. Image: FBI

In early June 2021, researchers discovered the Dridex gang was once again trying to morph in an effort to evade U.S. sanctions. The drama began when the Babuk ransomware group announced in May that they were starting a new platform for data leak extortion, which was intended to appeal to ransomware groups that didn’t already have a blog where they can publicly shame victims into paying by gradually releasing stolen data.

On June 1, Babuk changed the name of its leaks site to payload[dot]bin, and began leaking victim data. Since then, multiple security experts have spotted what they believe is another version of WastedLocker dressed up as payload.bin-branded ransomware.

“Looks like EvilCorp is trying to pass off as Babuk this time,” wrote Fabian Wosar, chief technology officer at security firm Emsisoft. “As Babuk releases their PayloadBin leak portal, EvilCorp rebrands WastedLocker once again as PayloadBin in an attempt to trick victims into violating OFAC regulations.”

Experts are quick to point out that many cybercriminals involved in ransomware activity are affiliates of more than one distinct ransomware-as-a-service operation. In addition, it is common for a large number of affiliates to migrate to competing ransomware groups when their existing sponsor suddenly gets shut down.

All of the above would seem to suggest that the success of any strategy for countering the ransomware epidemic hinges heavily on the ability to disrupt or apprehend a relatively small number of cybercriminals who appear to wear many disguises.

Perhaps that’s why the Biden Administration said last month it was offering a $10 million reward for information that leads to the arrest of the gangs behind the extortion schemes, and for new approaches that make it easier to trace and block cryptocurrency payments.

The Life Cycle of a Breached Database

29 July 2021 at 16:20

Every time there is another data breach, we are asked to change our password at the breached entity. But the reality is that in most cases by the time the victim organization discloses an incident publicly the information has already been harvested many times over by profit-seeking cybercriminals. Here’s a closer look at what typically transpires in the weeks or months before an organization notifies its users about a breached database.

Our continued reliance on passwords for authentication has contributed to one toxic data spill or hack after another. One might even say passwords are the fossil fuels powering most IT modernization: They’re ubiquitous because they are cheap and easy to use, but that means they also come with significant trade-offs — such as polluting the Internet with weaponized data when they’re leaked or stolen en masse.

When a website’s user database gets compromised, that information invariably turns up on hacker forums. There, denizens with computer rigs that are built primarily for mining virtual currencies can set to work using those systems to crack passwords.

How successful this password cracking is depends a great deal on the length of one’s password and the type of password hashing algorithm the victim website uses to obfuscate user passwords. But a decent crypto-mining rig can quickly crack a majority of password hashes generated with MD5 (one of the weaker and more commonly-used password hashing algorithms).

“You hand that over to a person who used to mine Ethereum or Bitcoin, and if they have a large enough dictionary [of pre-computed hashes] then you can essentially break 60-70 percent of the hashed passwords in a day or two,” said Fabian Wosar, chief technology officer at security firm Emsisoft.

From there, the list of email addresses and corresponding cracked passwords will be run through various automated tools that can check how many email address and password pairs in a given leaked data set also work at other popular websites (and heaven help those who’ve re-used their email password elsewhere).

This sifting of databases for low-hanging fruit and password re-use most often yields less than a one percent success rate — and usually far less than one percent.

But even a hit rate below one percent can be a profitable haul for fraudsters, particularly when they’re password testing databases with millions of users. From there, the credentials are eventually used for fraud and resold in bulk to legally murky online services that index and resell access to breached data.

Much like WeLeakInfo and others operated before being shut down by law enforcement agencies, these services sell access to anyone who wants to search through billions of stolen credentials by email address, username, password, Internet address, and a variety of other typical database fields.

TARGETED PHISHING

So hopefully by this point it should be clear why re-using passwords is generally a bad idea. But the more insidious threat with hacked databases comes not from password re-use but from targeted phishing activity in the early days of a breach, when relatively few ne’er-do-wells have got their hands on a hot new hacked database.

Earlier this month, customers of the soccer jersey retailer classicfootballshirts.co.uk started receiving emails with a “cash back” offer. The messages addressed customers by name and referenced past order numbers and payment amounts tied to each account. The emails encouraged recipients to click a link to accept the cash back offer, and the link went to a look-alike domain that requested bank information.

The targeted phishing message that went out to classicfootballshirts.co.uk customers this month.

“It soon became clear that customer data relating to historic orders had been compromised to conduct this attack,” Classicfootballshirts said in a statement about the incident.

Allison Nixon, chief research officer with New York City-based cyber intelligence firm Unit221B, recalled what happened in the weeks leading up to Dec. 22, 2020, when cryptocurrency wallet company Ledger acknowledged that someone had released the names, mailing addresses and phone numbers for 272,000 customers.

Nixon said she and her colleagues noticed in the preceding months a huge uptick in SIM-swapping attacks, a scheme in which fraudsters trick or bribe employees at wireless phone companies into redirecting the target’s text messages and phone calls to a device they control. From there, the attackers can reset the password for any online account that allows password resets via SMS.

“A week or two prior to that we were seeing a whole lot of SIM swapping activity,” Nixon said. “We knew the information was coming from some database but we couldn’t figure out what service they all had in common. After the Ledger database got leaked publicly, we started looking at the [SIM swapping] victims and found 100 percent of them were present in the Ledger database.”

In a statement about the breach, Ledger said the data was likely stolen in June 2020, meaning hackers had roughly six months to launch targeted attacks using extremely detailed information about customers.

“If you were to look [on cybercrime forums] at the past history of people posting about that Ledger database, you’d see people were selling it privately for months prior to that,” Nixon said. “It seems like this database was slowly percolating out wider and wider, until someone decided to remove a lot of its value by posting the whole thing publicly.”

Here are some tips to help avoid falling prey to incessant data breaches and increasingly sophisticated phishing schemes:

Avoid clicking on links and attachments in email, even in messages that appear to be sent from someone you have heard from previously. And as the phishing examples above demonstrate, many of today’s phishing scams use elements from hacked databases to make their lures more convincing.

Urgency should be a giant red flag. Most phishing scams invoke a temporal element that warns of negative consequences should you fail to respond or act quickly. Take a deep breath. If you’re unsure whether the message is legitimate, visit the site or service in question manually (ideally, using a browser bookmark so as to avoid potential typosquatting sites).

Don’t re-use passwords. If you’re the kind of person who likes to use the same password across multiple sites, then you definitely need to be using a password manager. That’s because password managers handle the tedious task of creating and remembering unique, complex passwords on your behalf; all you need to do is remember a single, strong master password or passphrase. In essence, you effectively get to use the same password across all Web sites. Some of the more popular password managers include DashlaneKeepassLastPass and Roboform.

–Phone-based phishing uses hacked databases, too: A great many scams are perpetrated over the phone, leveraging personal and financial information gleaned from past data breaches to make them sound more believable. If you think you’d never fall for someone trying to scam you over the phone, check out this story about how a tech-savvy professional got taken for thousands of dollars by a fraudster masquerading as his credit union. Remember, When in Doubt: Hang Up, Look Up, & Call Back.

PlugwalkJoe Does the Perp Walk

26 July 2021 at 18:18

Joseph “PlugwalkJoe” O’Connor, in a photo from a paid press release on Sept. 02, 2020, pitching him as a trustworthy cryptocurrency expert and advisor.

One day after last summer’s mass-hack of Twitter, KrebsOnSecurity wrote that 22-year-old British citizen Joseph “PlugwalkJoe” O’Connor appeared to have been involved in the incident. When the U.S. Justice Department last week announced O’Connor’s arrest and indictment, his alleged role in the Twitter compromise was well covered in the media.

But most of the coverage seems to have overlooked the far more sinister criminal charges in the indictment, which involve an underground scene wherein young men turn to extortion, sextortion, SIM swapping, death threats and physical attacks — all in a frenzied effort to seize control over social media accounts.

Skim the government’s indictment and you might overlook a footnote on Page 4 that says O’Connor is part of a group that had exactly zero reservations about using their playbook of harassment tactics against law enforcement agents who were already investigating their alleged crimes.

O’Connor has potentially been linked to additional prior swatting incidents and possibly (although not confirmed and currently still under investigation) the swatting of a U.S. law enforcement officer,” the footnote reads.

Swatting involves making a false report to authorities in a target’s name with the intention of sending a heavily armed police force to that person’s address. It’s a potentially deadly hoax: Earlier this month, a Tennessee man was sentenced to 60 months in prison for setting in motion a swatting attack that led to the death of a 60-year-old grandfather.

As for the actual criminal charges, O’Connor faces ten counts, including conspiracy, computer intrusion, extortive communications, stalking and threatening communications.

FEMALE TARGETS

All of those come into play in the case of the Snapchat account of actor Bella Thorne, who was allegedly targeted by PlugwalkJoe and associates in June 2019.

Investigators say O’Connor was involved in a “SIM swap” against Thorne’s mobile phone number. Unauthorized SIM swapping is a scheme in which fraudsters trick or bribe employees at wireless phone companies into redirecting the target’s text messages and phone calls to a device they control. From there, the attackers can reset the password for any online account that allows password resets via SMS.

In this case, the SIM swap was done to wrest control over Thorne’s Snapchat account. Once inside, the attackers found nude photos of Thorne, which they then threatened to release unless she agreed to post on social media thanking the hackers using their online handles.

The intruders posted on Thorne’s Snapchat, “Will drop nudes if 5000 of you follow @PlugwalkJoe.” Thorne told the feds her phone lost service shortly before her account was hijacked. Investigators later found the same Internet address used to access Thorne’s Snapchat account also was used minutes later to access “@Joe” on Instagram, which O’Connor has claimed publicly.

On June 15, 2019, Thorne posted on Twitter that she’d been “threatened with my own nudes,” and posted screenshots of the text message with the individual who had extorted him/her. Thorne said she was releasing the photographs so that the individual would not be able to “take yet another thing from me.”

The indictment alleges O’Connor also swatted and cyberstalked a 16-year-old girl, sending her nude photos and threatening to rape and/or murder her and her family.

Social media personality Addison Rae had 55 million followers when her TikTok account got hacked last August. I noted on Twitter at the time that PlugWalkJoe had left his calling card yet again. The indictment alleges O’Connor also was involved in a SIM-swap against Rae’s mobile number.


BAD REACTION

Prosecutors believe that roughly a week after the Twitter hack O’Connor called in bomb threats and swatting attacks targeting a high school and an airport in California. They’re confident it was O’Connor making the swatting and bomb threat calls because his voice is on record in a call he made to federal investigators, as well as to an inmate arrested for SIM swapping.

Curiously left out of the media coverage of O’Connor’s alleged crimes is that PlugwalkJoe appears to have admitted in a phone call with the FBI to being part of a criminal conspiracy. In the days following the Twitter mass-hack, O’Connor was quoted in The New York Times denying any involvement in the Twitter bitcoin scam. “I don’t care,” O’Connor told The Times. “They can come arrest me. I would laugh at them. I haven’t done anything.”

Speaking with KrebsOnSecurity via Instagram instant message just days after the Twitter hack, O’Connor demanded that his name be kept out of future blog posts here. After he was told that couldn’t be promised, he mentioned that some people in his circle of friends had been known to hire others to deliver physical beatings on people they didn’t like. In nearly the same breath, O’Connor said he was open to talking to federal investigators and telling his side of the story.

According to the indictment, a week after the Twitter hack a man identifying himself as O’Connor called federal investigators in Northern California. Specifically, the call went to the REACT Task Force. REACT is a team of law enforcement officers and prosecutors based in Santa Clara, Calif. that is focused on catching criminal SIM swappers, and by this point REACT already had plenty of audio from phone calls traced back to O’Connor in which he allegedly participated in a SIM swapping or swatting attack.

“REACT began receiving tips in 2018 regarding illegal activity of an individual using the online moniker ‘PlugwalkJoe,’ purportedly identified as O’Connor from the United Kingdom,” the indictment states.

Prosecutors redacted the name of the law enforcement officer who allegedly was swatted by PlugwalkJoe, referring to him only as “C.T.,” a criminal investigator for the Santa Clara District Attorney and a REACT Task Force member.

FBI agents called O’Connor back at the number he left. O’Connor told the FBI that on the afternoon of July 15, 2020 he’d been in contact with other associates who were in communications with the alleged mastermind of the Twitter bitcoin scam. Those intermediaries worked directly with Graham Clark, then 17, who pleaded guilty to fraud charges last summer in connection with the Twitter hack and agreed to serve three years in prison followed by three years of probation.

The indictment says O’Connor told the feds he only wanted his friends to relay his desire for Clark to secure several different short Twitter usernames that belonged to other people, accounts that were to be later sold for a profit. The other associates who allegedly helped PlugwalkJoe interact with Clark also have since been charged in connection with the Twitter hack.

A copy of the indictment is here (PDF).

Serial Swatter Who Caused Death Gets Five Years in Prison

21 July 2021 at 19:59

A 18-year-old Tennessee man who helped set in motion a fraudulent distress call to police that led to the death of a 60-year-old grandfather in 2020 was sentenced to 60 months in prison today.

60-year-old Mark Herring died of a heart attack after police surrounded his home in response to a swatting attack.

Shane Sonderman, of Lauderdale County, Tenn. admitted to conspiring with a group of criminals that’s been “swatting” and harassing people for months in a bid to coerce targets into giving up their valuable Twitter and Instagram usernames.

At Sonderman’s sentencing hearing today, prosecutors told the court the defendant and his co-conspirators would text and call targets and their families, posting their personal information online and sending them pizzas and other deliveries of food as a harassment technique.

Other victims of the group told prosecutors their tormentors further harassed them by making false reports of child abuse to social services local to the target’s area, and false reports in the target’s name to local suicide prevention hotlines.

Eventually, when subjects of their harassment refused to sell or give up their Twitter and Instagram usernames, Sonderman and others would swat their targets — or make a false report to authorities in the target’s name with the intention of sending a heavily armed police response to that person’s address.

For weeks throughout March and April 2020, 60-year-old Mark Herring of Bethpage, Tenn. was inundated with text messages asking him to give up his @Tennessee Twitter handle. When he ignored the requests, Sonderman and his buddies began having food delivered to Herring’s home via cash on delivery.

At one point, Sonderman posted Herring’s home address in a Discord chat room used by the group, and a minor in the United Kingdom quickly followed up by directing a swatting attack on Herring’s home.

Ann Billings was dating Mr. Herring and was present when the police surrounded his home. She recalled for the Tennessee court today how her friend died shortly thereafter of a heart attack.

Billings said she first learned of the swatting when a neighbor called and asked why the street was lined with police cars. When Mr. Herring stepped out on the back porch to investigate, police told him to put his hands up and to come to the street.

Unable to disengage a lock on his back fence, Herring was instructed to somehow climb over the fence with his hands up.

“He was starting to get more upset,” Billings recalled. “He said, ‘I’m a 60-year-old fat man and I can’t do that.'”

Billings said Mr. Herring then offered to crawl under a gap in the fence, but when he did so and stood up, he collapsed of a heart attack. Herring died at a nearby hospital soon after.

Mary Frances Herring, who was married to Mr. Herring for 28 years, said her late husband was something of a computer whiz in his early years who secured the @Tennessee Twitter handle shortly after Twitter came online. Internet archivist Jason Scott says Herring was the creator of the successful software products Sparkware and QWIKMail; Scott has 2 hours worth of interviews with Herring from 20 years ago here.

Perhaps the most poignant testimony today came when Ms. Herring said her husband — who was killed by people who wanted to steal his account — had a habit of registering new Instagram usernames as presents for friends and family members who’d just had children.

“If someone was having a baby, he would ask them, ‘What are your naming the baby?’,” Ms. Herring said. “And he would get them that Instagram name and give it to them as a gift.”

Valerie Dozono also was an early adopter of Instagram, securing the two-letter username “VD” for her initials. When Dozono ignored multiple unsolicited offers to buy the account, she and many family and friends started getting unrequested pizza deliveries at all hours.

When Dozono continued to ignore her tormentors, Sonderman and others targeted her with a “SIM-swapping attack,” a scheme in which fraudsters trick or bribe employees at wireless phone companies into redirecting the target’s text messages and phone calls to a device they control. From there, the attackers can reset the password for any online account that allows password resets via SMS.

But it wasn’t the subsequent bomb threat that Sonderman and friends called in to her home that bothered Dozono most. It was the home invasion that was ordered at her address using strangers on social media.

Dozono said Sonderman created an account on Grindr — the location-based social networking and dating app for gay, bi, trans and queer people — and set up a rendezvous at her address with an unsuspecting Grindr user who was instructed to waltz into her home as if he was invited.

“This gentleman was sent to my home thinking someone was there, and he was given instructions to walk into my home,” Dozono said.

The court heard from multiple other victims targeted by Sonderman and friends over a two-year period. Including Shane Glass, who started getting harassed in 2019 over his @Shane Instagram handle. Glass told the court that endless pizza deliveries, as well as SIM swapping and swatting attacks left him paranoid for months that his assailant could be someone stalking him nearby.

Judge Mark Norris said Sonderman’s agreement to plead to one count of extortion by threat of serious injury or damage carries with it a recommended sentence of 27 to 33 months in prison. However, the judge said other actions by the defendant warranted up to 60 months (5 years) in prison.

Sonderman might have been eligible to knock a few months off his sentence had he cooperated with investigators and refrained from committing further crimes while out on bond.

But prosecutors said that shortly after his release, Sonderman went right back to doing what he was doing when he got caught. Investigators who subpoenaed his online communications found he’d logged into the Instagram account “FreeTheSoldiers,” which was known to have been used by the group to harass people for their social media handles.

Sonderman was promptly re-arrested for violating the terms of his release, and prosecutors played for the court today a recording of a phone call Sonderman made from jail in which he brags to a female acquaintance that he wiped his mobile phone two days before investigators served another search warrant on his home.

Sonderman himself read a lengthy statement in which he apologized for his actions, blaming his “addiction” on several psychiatric conditions — including bipolar disorder. While his recitation was initially monotone and practically devoid of emotion, Sonderman eventually broke down in tears that made the rest of his statement difficult to hear over the phone-based conference system the court made available to reporters.

The bipolar diagnoses was confirmed by his mother, who sobbed as she simultaneously begged the court for mercy while saying her son didn’t deserve any.

Judge Norris said he was giving Sonderman the maximum sentenced allowed by law under the statute — 60 months in prison followed by three years of supervised release, but implied that his sentence would be far harsher if the law permitted.

“Although it may seem inadequate, the law is the law,” Norris said. “The harm it caused, the death and destruction….it’s almost unspeakable. This is not like cases we frequently have that involve guns and carjacking and drugs. This is a whole different level of insidious criminal behavior here.”

Sonderman’s sentence pales in comparison to the 20-year prison time handed down in 2019 to serial swatter Tyler Barriss, a California man who admitted making a phony emergency call to police in late 2017 that led to the shooting death of an innocent Kansas resident.

Spam Kingpin Peter Levashov Gets Time Served

20 July 2021 at 21:30


Peter Levashov, appearing via Zoom at his sentencing hearing today.

A federal judge in Connecticut today handed down a sentence of time served to spam kingpin Peter “Severa” Levashov, a prolific purveyor of malicious and junk email, and the creator of malware strains that infected millions of Microsoft computers globally. Levashov has been in federal custody since his extradition to the United States and guilty plea in 2018, and was facing up to 12 more years in prison. Instead, he will go free under three years of supervised release and a possible fine.

A native of St. Petersburg, Russia, the 40-year-old Levashov operated under the hacker handle “Severa.” Over the course of his 15-year cybercriminal career, Severa would emerge as a pivotal figure in the cybercrime underground, serving as the primary moderator of a spam community that spanned multiple top Russian cybercrime forums.

Severa created and then leased out to others some of the nastiest cybercrime engines in history — including the Storm worm, and the Waledac and Kelihos spam botnets. His central role in the spam forums gave Severa a prime spot to advertise the services tied to his various botnets, while allowing him to keep tabs on the activities of other spammers.

Severa rented out segments of his Waledac botnet to anyone seeking a vehicle for sending spam. For $200, vetted users could hire his botnet to blast one million emails containing malware or ads for male enhancement drugs. Junk email campaigns touting employment or “money mule” scams cost $300 per million, and phishing emails could be blasted out through Severa’s botnet for the bargain price of $500 per million.

Severa was a moderator on the Russian spam community Spamdot[.]biz. In this paid ad from 2004, Severa lists prices to rent his spam botnet.

Early in his career, Severa worked very closely with two major purveyors of spam. One was Alan Ralsky, an American spammer who was convicted in 2009 of paying Severa and other spammers to promote pump-and-dump stock scams.

The other was a major spammer who went by the nickname “Cosma,” the cybercriminal thought to be responsible for managing the Rustock botnet (so named because it was a Russian botnet frequently used to send pump-and-dump stock spam). Microsoft, which has battled to scrub botnets like Rustock off of millions of PCs, later offered a still-unclaimed $250,000 reward for information leading to the arrest and conviction of the Rustock author.

Severa ran several affiliate programs that paid cybercriminals to trick people into installing fake antivirus software. In 2011, KrebsOnSecurity dissected “SevAntivir” — Severa’s eponymous fake antivirus affiliate program  — showing it was used to deploy new copies of the Kelihos spam botnet.

A screenshot of the “SevAntivir” fake antivirus or “scareware” affiliate program run by Severa.

In 2010, Microsoft — in tandem with a number of security researchers — launched a combined technical and legal sneak attack on the Waledac botnet, successfully dismantling it. The company would later do the same to the Kelihos botnet, a global spam machine which shared a great deal of code with Waledac and infected more than 110,000 Microsoft Windows PCs.

Levashov was arrested in 2017 while in Barcelona, Spain with his family. According to a lengthy April 2017 story in Wired.com, he got caught because he violated a basic security no-no: He used the same log-in credentials to both run his criminal enterprise and log into sites like iTunes.

In fighting his extradition to the United States, Levashov famously told the media, “If I go to the U.S., I will die in a year.” But a few months after his extradition, Levashov would plead guilty to four felony counts, including intentional damage to protected computers, conspiracy, wire fraud and aggravated identity theft.

At his sentencing hearing today, Levashov thanked his wife, attorney and the large number of people who wrote the court in support of his character, but otherwise declined to make a statement. His attorney read a lengthy statement explaining that Levashov got into spamming as a way to provide for his family, and that over a period of many years that business saw him supporting countless cybercrime operations.

The plea agreement Levashov approved in 2018 gave Judge Robert Chatigny broad latitude to impose a harsh prison sentence. The government argued that under U.S. federal sentencing guidelines, Levashov’s crimes deserved an “offense level” of 32, which for a first-time offender means a sentence of anywhere from 121 to 151 months (10 to 12 years).

But Judge Chatigny said he had concerns that “the total offense level does overstate the seriousness of Mr. Levashov’s crimes and his criminal culpability,” and said he believed Levashov was unlikely to offend again.

“33 months is a long time and I’m sure it was especially difficult for you considering that you were away from your wife and child and home,” Chatigny told the defendant. “I believe you have a lot to offer and hope that you will do your best to be a positive and contributing member of society.”

Mark Rasch, a former federal prosecutor with the U.S. Justice Department, said the sentencing guidelines are no longer mandatory, but they do reflect the position of Congress, the U.S. Sentencing Commission, and the Administrative Office of the U.S. Courts about the seriousness of the offenses.

“One of the problems you have here is it’s hard enough to catch and prosecute and convict cybercriminals, but at the end of the day the courts often don’t take these offenses seriously,” Rasch said. “On the one hand, sentences like these do tend to diminish the deterrent effect, but also I doubt there are any hackers in St. Petersburg right now who are watching this case and going, ‘Okay, great now I can keep doing what I’m doing.'”

Judge Chatigny deferred ruling on what — if any — financial damages Levashov may have to pay as a result of the plea.

The government acknowledged that it was difficult to come to an accurate accounting of how much Levashov’s various botnets cost companies and consumers. But the plea agreement states a figure of approximately $7 million — which prosecutors say represents a mix of actual damages and ill-gotten gains.

However, the judge delayed ruling on whether to impose a fine because prosecutors had yet to supply a document to back up the defendant’s alleged profit/loss figures. The judge also ordered Levashov to submit to three years of supervised release, which includes constant monitoring of his online communications.

Don’t Wanna Pay Ransom Gangs? Test Your Backups.

19 July 2021 at 21:11

Browse the comments on virtually any story about a ransomware attack and you will almost surely encounter the view that the victim organization could have avoided paying their extortionists if only they’d had proper data backups. But the ugly truth is there are many non-obvious reasons why victims end up paying even when they have done nearly everything right from a data backup perspective.

This story isn’t about what organizations do in response to cybercriminals holding their data for hostage, which has become something of a best practice among most of the top ransomware crime groups today. Rather, it’s about why victims still pay for a key needed to decrypt their systems even when they have the means to restore everything from backups on their own.

Experts say the biggest reason ransomware targets and/or their insurance providers still pay when they already have reliable backups is that nobody at the victim organization bothered to test in advance how long this data restoration process might take.

“In a lot of cases, companies do have backups, but they never actually tried to restore their network from backups before, so they have no idea how long it’s going to take,” said Fabian Wosar, chief technology officer at Emsisoft. “Suddenly the victim notices they have a couple of petabytes of data to restore over the Internet, and they realize that even with their fast connections it’s going to take three months to download all these backup files. A lot of IT teams never actually make even a back-of-the-napkin calculation of how long it would take them to restore from a data rate perspective.”

Wosar said the next most-common scenario involves victims that have off-site, encrypted backups of their data but discover that the digital key needed to decrypt their backups was stored on the same local file-sharing network that got encrypted by the ransomware.

The third most-common impediment to victim organizations being able to rely on their backups is that the ransomware purveyors manage to corrupt the backups as well.

“That is still somewhat rare,” Wosar said. “It does happen but it’s more the exception than the rule. Unfortunately, it is still quite common to end up having backups in some form and one of these three reasons prevents them from being useful.”

Bill Siegel, CEO and co-founder of Coveware, a company that negotiates ransomware payments for victims, said most companies that pay either don’t have properly configured backups, or they haven’t tested their resiliency or the ability to recover their backups against the ransomware scenario.

“It can be [that they] have 50 petabytes of backups … but it’s in a … facility 30 miles away.… And then they start [restoring over a copper wire from those remote backups] and it’s going really slow … and someone pulls out a calculator and realizes it’s going to take 69 years [to restore what they need],” Siegel told Kim Zetter, a veteran Wired reporter who recently launched a cybersecurity newsletter on Substack.

“Or there’s lots of software applications that you actually use to do a restore, and some of these applications are in your network [that got] encrypted,” Siegel continued. “So you’re like, ‘Oh great. We have backups, the data is there, but the application to actually do the restoration is encrypted.’ So there’s all these little things that can trip you up, that prevent you from doing a restore when you don’t practice.”

Wosar said all organizations need to both test their backups and develop a plan for prioritizing the restoration of critical systems needed to rebuild their network.

“In a lot of cases, companies don’t even know their various network dependencies, and so they don’t know in which order they should restore systems,” he said. “They don’t know in advance, ‘Hey if we get hit and everything goes down, these are the services and systems that are priorities for a basic network that we can build off of.'”

Wosar said it’s essential that organizations drill their breach response plans in periodic tabletop exercises, and that it is in these exercises that companies can start to refine their plans. For example, he said, if the organization has physical access to their remote backup data center, it might make more sense to develop processes for physically shipping the backups to the restoration location.

“Many victims see themselves confronted with having to rebuild their network in a way they didn’t anticipate. And that’s usually not the best time to have to come up with these sorts of plans. That’s why tabletop exercises are incredibly important. We recommend creating an entire playbook so you know what you need to do to recover from a ransomware attack.”

Microsoft Patch Tuesday, July 2021 Edition

13 July 2021 at 21:41

Microsoft today released updates to patch at least 116 security holes in its Windows operating systems and related software. At least four of the vulnerabilities addressed today are under active attack, according to Microsoft.

Thirteen of the security bugs quashed in this month’s release earned Microsoft’s most-dire “critical” rating, meaning they can be exploited by malware or miscreants to seize remote control over a vulnerable system without any help from users.

Another 103 of the security holes patched this month were flagged as “important,” which Microsoft assigns to vulnerabilities “whose exploitation could result in compromise of the confidentiality, integrity, or availability of user data, or of the integrity or availability of processing resources.”

Among the critical bugs is of course the official fix for the PrintNightmare print spooler flaw in most versions of Windows (CVE-2021-34527) that prompted Microsoft to rush out a patch for a week ago in response to exploit code for the flaw that got accidentally published online. That patch seems to have caused a number of problems for Windows users. Here’s hoping the updated fix resolves some of those issues for readers who’ve been holding out.

CVE-2021-34448 is a critical remote code execution vulnerability in the scripting engine built into every supported version of Windows — including server versions. Microsoft says this flaw is being exploited in the wild.

Both CVE-2021-33771 and CVE-2021-31979 are elevation of privilege flaws in the Windows kernel. Both are seeing active exploitation, according to Microsoft.

Chad McNaughton, technical community manager at Automox, called attention to CVE-2021-34458, a remote code execution flaw in the deepest areas of the operating system. McNaughton said this vulnerability is likely to be exploited because it is a “low-complexity vulnerability requiring low privileges and no user interaction.”

Another concerning critical vulnerability in the July batch is CVE-2021-34494, a dangerous bug in the Windows DNS Server.

“Both core and full installations are affected back to Windows Server 2008, including versions 2004 and 20H2,” said Aleks Haugom, also with Automox.

“DNS is used to translate IP addresses to more human-friendly names, so you don’t have to remember the jumble of numbers that represents your favorite social media site,” Haugom said. “In a Windows Domain environment, Windows DNS Server is critical to business operations and often installed on the domain controller. This vulnerability could be particularly dangerous if not patched promptly.”

Microsoft also patched six vulnerabilities in Exchange Server, an email product that has been under siege all year from attackers. Satnam Narang, staff research engineer at Tenable, noted that while Microsoft says two of the Exchange bugs tackled this month (CVE-2021-34473 and CVE-2021-34523) were addressed as part of its security updates from April 2021, both CVEs were somehow omitted from that April release. Translation: If you already applied the bevy of Exchange updates Microsoft made available in April, your Exchange systems have protection against these flaws.

Other products that got patches today include Microsoft Office, Bing, SharePoint Server, Internet Explorer, and Visual Studio. The SANS Internet Storm Center as always has a nice visual breakdown of all the patches by severity.

Adobe also issued security updates today for Adobe Acrobat and Reader, as well as Dimension, Illustrator, Framemaker and Adobe Bridge.

Chrome and Firefox also recently have shipped important security updates, so if you haven’t done so recently take a moment to save your tabs/work, completely close out and restart the browser, which should apply any pending updates.

The usual disclaimer:

Before you update with this month’s patch batch, please make sure you have backed up your system and/or important files. It’s not uncommon for Windows updates to hose one’s system or prevent it from booting properly, and some updates even have been known to erase or corrupt files.

So do yourself a favor and backup before installing any patches. Windows 10 even has some built-in tools to help you do that, either on a per-file/folder basis or by making a complete and bootable copy of your hard drive all at once.

And if you wish to ensure Windows has been set to pause updating so you can back up your files and/or system before the operating system decides to reboot and install patches on its own schedule, see this guide.

As always, if you experience glitches or problems installing any of these patches this month, please consider leaving a comment about it below; there’s a better-than-even chance other readers have experienced the same and may chime in here with some helpful tips. Also, check out AskWoody, which keeps a close eye out for specific patches that may be causing problems for users.

Spike in “Chain Gang” Destructive Attacks on ATMs

9 July 2021 at 19:31

Last summer, financial institutions throughout Texas started reporting a sudden increase in attacks involving well-orchestrated teams that would show up at night, use stolen trucks and heavy chains to rip Automated Teller Machines (ATMs) out of their foundations, and make off with the cash boxes inside. Now it appears the crime — known variously as “ATM smash-and-grab” or “chain gang” attacks — is rapidly increasing in other states.

Four different ATM “chain gang” attacks in Texas recently. Image: Texas Bankers Association.

The Texas Bankers Association documented at least 139 chain gang attacks against Texas financial institutions in the year ending November 2020. The association says organized crime is the main source of the destructive activity, and that Houston-based FBI officials have made more than 50 arrests and are actively tracking about 250 individuals suspected of being part of these criminal rings.

From surveillance camera footage examined by fraud investigators, the perpetrators have followed the same playbook in each incident. The bad guys show up in the early morning hours with a truck or tractor that’s been stolen from a local construction site.

Then two or three masked men will pry the front covering from the ATM using crowbars, and attach heavy chains to the cash machine. The canisters of cash inside are exposed once the crooks pull the ATM’s safe door off using the stolen vehicle.

In nearly all cases, the perpetrators are done in less than five minutes.

Tracey Santor is the bond product manager for Travelers, which insures a large number of financial institutions against this type of crime. Santor said investigators questioning some of the suspects learned that the smash-and-grabs are used as a kind of initiation for would-be gang members.

“One of the things they found out during the arrest was the people wanting to be in the gang were told they had to bring them $250,000 within a week,” Santor said. “And they were given instructions on how to do it. I’ve also heard of cases where the perpetrators put construction cones around the ATM so it looks to anyone passing by that they’re legitimately doing construction at the site.”

Santor said the chain gang attacks have spread to other states, and that in the year ending June 2021 Travelers saw a 257 percent increase in the number of insurance claims related to ATM smash-and-grabs.

That 257 percent increase also includes claims involving incidents where attackers will crash a stolen car into a convenience store, and then in the ensuing commotion load the store’s ATM into the back of the vehicle and drive away.

In addition to any cash losses — which can often exceed $200,000 — replacing destroyed ATMs and any associated housing can take weeks, and newer model ATMs can cost $80,000 or more.

“It’s not stopping,” Santor said of the chain gang attacks. “In the last year we counted 32 separate states we’ve seen this type of attack in. Normally we are seeing single digits across the country. 2021 is going to be the same or worse for us than last year.”

Increased law enforcement scrutiny of the crime in Texas might explain why a number of neighboring states are seeing a recent uptick in the number of chain gang attacks, said Elaine Dodd, executive vice president of the fraud division for the Oklahoma Bankers Association.

“We have a lot of it going on here now and they’re getting good at it,” Dodd said. “The numbers are surging. I think since Texas has focused law enforcement attention on this it’s spreading like fingers out from there.”

Chain gang members at work on a Texas bank ATM. Image: Texas Bankers Association.

It’s not hard to see why physical attacks against ATMs are on the rise. In 2019, the average amount stolen in a traditional bank robbery was just $1,797, according to the FBI.

In contrast, robbing ATMs is way less risky and potentially far more rewarding for the perpetrators. That’s because bank ATMs can typically hold hundreds of thousands of dollars in cash.

Dodd said she hopes to see more involvement from federal investigators in fighting chain gang attacks, and that it would help if more of these attacks were prosecuted as bank robberies, which can carry stiff federal penalties. As it is, she said, most incidents are treated as property crimes and left to local investigators.

“We had a rash of three attacks recently and contacted the FBI, and were told, ‘We don’t work these,'” Dodd said. “The FBI looks at these attacks not as bank robbery, but just the theft of cash.”

In January, Texas lawmakers are introduced legislation that would make destroying an ATM a third degree felony offense. Such a change would mean chain gang members could be prosecuted with the same zeal Texas applies to people who steal someone’s livestock, a crime which is punishable by 2-10 years in prison and a fine of up to $10,000 (or both).

“The bottom line is, right now bank robbery is a felony and robbing an unattended ATM is not,” Santor said.

KrebsOnSecurity checked in with the European ATM Security Team (EAST), which maintains statistics about fraud of all kinds targeting ATM operators in Europe. EAST Executive Director Lachlan Gunn said overall physical attacks on ATMs in Europe have been a lot quieter since the pandemic started.

“Attacks fell right away during the lockdowns and have started to pick up a little as the restrictions are eased,” Gunn said. “So no major spike here, although [the United States is] further ahead when it comes to the easing of restrictions.”

Gunn said the most common physical attacks on European ATMs continue to involve explosives —  such as gas tanks and solid explosives that are typically stolen from mining and construction sites.

“The biggest physical attack issue in Europe remains solid explosive attacks, due to the extensive collateral damage and the risk to life,” Gunn said.

The Texas Bankers Association report, available here (PDF), includes a number of recommended steps financial institutions can take to reduce the likelihood of being targeted by chain gangs.

Kaseya Left Customer Portal Vulnerable to 2015 Flaw in its Own Software

8 July 2021 at 15:22

Last week cybercriminals deployed ransomware to 1,500 organizations, including many that provide IT security and technical support to other companies. The attackers exploited a vulnerability in software from Kaseya, a Miami-based company whose products help system administrators manage large networks remotely. Now it appears Kaseya’s customer service portal was left vulnerable until last week to a data-leaking security flaw that was first identified in the same software six years ago.

On July 3, the REvil ransomware affiliate program began using a zero-day security hole (CVE-2021-30116) to deploy ransomware to hundreds of IT management companies running Kaseya’s remote management software — known as the Kaseya Virtual System Administrator (VSA).

According to this entry for CVE-2021-30116, the security flaw that powers that Kaseya VSA zero-day was assigned a vulnerability number on April 2, 2021, indicating Kaseya had roughly three months to address the bug before it was exploited in the wild.

Also on July 3, security incident response firm Mandiant notified Kaseya that their billing and customer support site —portal.kaseya.net — was vulnerable to CVE-2015-2862, a “directory traversal” vulnerability in Kaseya VSA that allows remote users to read any files on the server using nothing more than a Web browser.

As its name suggests, CVE-2015-2862 was issued in July 2015. Six years later, Kaseya’s customer portal was still exposed to the data-leaking weakness.

The Kaseya customer support and billing portal. Image: Archive.org.

Mandiant notified Kaseya after hearing about it from Alex Holden, founder and chief technology officer of Milwaukee-based cyber intelligence firm Hold Security. Holden said the 2015 vulnerability was present on Kaseya’s customer portal until Saturday afternoon, allowing him to download the site’s “web.config” file, a server component that often contains sensitive information such as usernames and passwords and the locations of key databases.

“It’s not like they forgot to patch something that Microsoft fixed years ago,” Holden said. “It’s a patch for their own software. And it’s not zero-day. It’s from 2015!”

The official description of CVE-2015-2862 says a would-be attacker would need to be already authenticated to the server for the exploit to work. But Holden said that was not the case with the vulnerability on the Kaseya portal that he reported via Mandiant.

“This is worse because the CVE calls for an authenticated user,” Holden said. “This was not.”

Michael Sanders, executive vice president of account management at Kaseya, confirmed that the customer portal was taken offline in response to a vulnerability report. Sanders said the portal had been retired in 2018 in favor of a more modern customer support and ticketing system, yet somehow the old site was still left available online.

“It was deprecated but left up,” Sanders said.

In a written statement shared with KrebsOnSecurity, Kaseya said that in 2015 CERT reported two vulnerabilities in its VSA product.

“We worked with CERT on responsible disclosure and released patches for VSA versions V7, R8, R9 and R9 along with the public disclosure (CVEs) and notifications to our customers. Portal.kaseya.net was not considered by our team to be part of the VSA shipping product and was not part of the VSA product patch in 2015. It has no access to customer endpoints and has been shut down – and will no longer be enabled or used by Kaseya.”

“At this time, there is no evidence this portal was involved in the VSA product security incident,” the statement continued. “We are continuing to do forensic analysis on the system and investigating what data is actually there.”

The REvil ransomware group said affected organizations could negotiate independently with them for a decryption key, or someone could pay $70 million worth of virtual currency to buy a key that works to decrypt all systems compromised in this attack.

But Sanders said every ransomware expert Kaseya consulted so far has advised against negotiating for one ransom to unlock all victims.

“The problem is that they don’t have our data, they have our customers’ data,” Sanders said. “We’ve been counseled not to do that by every ransomware negotiating company we’ve dealt with. They said with the amount of individual machines hacked and ransomwared, it would be very difficult for all of these systems to be remediated at once.”

In a video posted to Youtube on July 6, Kaseya CEO Fred Voccola said the ransomware attack had “limited impact, with only approximately 50 of the more than 35,000 Kaseya customers being breached.”

“While each and every customer impacted is one too many, the impact of this highly sophisticated attack has proven to be, thankfully, greatly overstated,” Voccola said.

The zero-day vulnerability that led to Kaseya customers (and customers of those customers) getting ransomed was discovered and reported to Kaseya by Wietse Boonstra, a researcher with the Dutch Institute for Vulnerability Disclosure (DIVD).

In a July 4 blog post, DIVD’s Victor Gevers wrote that Kaseya was “very cooperative,” and “asked the right questions.”

“Also, partial patches were shared with us to validate their effectiveness,” Gevers wrote. “During the entire process, Kaseya has shown that they were willing to put in the maximum effort and initiative into this case both to get this issue fixed and their customers patched. They showed a genuine commitment to do the right thing. Unfortunately, we were beaten by REvil in the final sprint, as they could exploit the vulnerabilities before customers could even patch.”

Still, Kaseya has yet to issue an official patch for the flaw Boonstra reported in April. Kaseya told customers on July 7 that it was working “through the night” to push out an update.

Gevers said the Kaseya vulnerability was discovered as part of a larger DIVD effort to look for serious flaws in a wide array of remote network management tools.

“We are focusing on these types of products because we spotted a trend where more and more of the products that are used to keep networks safe and secure are showing structural weaknesses,” he wrote.

Microsoft Issues Emergency Patch for Windows Flaw

7 July 2021 at 14:34

Microsoft on Tuesday issued an emergency software update to quash a security bug that’s been dubbed “PrintNightmare,” a critical vulnerability in all supported versions of Windows that is actively being exploited. The fix comes a week ahead of Microsoft’s normal monthly Patch Tuesday release, and follows the publishing of exploit code showing would-be attackers how to leverage the flaw to break into Windows computers.

At issue is CVE-2021-34527, which involves a flaw in the Windows Print Spooler service that could be exploited by attackers to run code of their choice on a target’s system. Microsoft says it has already detected active exploitation of the vulnerability.

Satnam Narang, staff research engineer at Tenable, said Microsoft’s patch warrants urgent attention because of the vulnerability’s ubiquity across organizations and the prospect that attackers could exploit this flaw in order to take over a Windows domain controller.

“We expect it will only be a matter of time before it is more broadly incorporated into attacker toolkits,” Narang said. “PrintNightmare will remain a valuable exploit for cybercriminals as long as there are unpatched systems out there, and as we know, unpatched vulnerabilities have a long shelf life for attackers.”

In a blog post, Microsoft’s Security Response Center said it was delayed in developing fixes for the vulnerability in Windows Server 2016, Windows 10 version 1607, and Windows Server 2012. The fix also apparently includes a new feature that allows Windows administrators to implement stronger restrictions on the installation of printer software.

“Prior to installing the July 6, 2021, and newer Windows Updates containing protections for CVE-2021-34527, the printer operators’ security group could install both signed and unsigned printer drivers on a printer server,” reads Microsoft’s support advisory. “After installing such updates, delegated admin groups like printer operators can only install signed printer drivers. Administrator credentials will be required to install unsigned printer drivers on a printer server going forward.”

Windows 10 users can check for the patch by opening Windows Update. Chances are, it will show what’s pictured in the screenshot below — that KB5004945 is available for download and install. A reboot will be required after installation.

Friendly reminder: It’s always a good idea to backup your data before applying security updates. Windows 10 has some built-in tools to help you do that, either on a per-file/folder basis or by making a complete and bootable copy of your hard drive all at once.

Microsoft’s out-of-band update may not completely fix the PrinterNightmare vulnerability. Security researcher Benjamin Delpy posted on Twitter that the exploit still works on a fully patched Windows server if the server also has Point & Print enabled — a Windows feature that automatically downloads and installs available printer drivers.

Delpy said it’s common for organizations to enable Point & Print using group policies because it allows users to install printer updates without getting approval first from IT.

This post will be updated if Windows users start reporting any issues in applying the patch.

Another 0-Day Looms for Many Western Digital Users

2 July 2021 at 16:05

Some of Western Digital’s MyCloud-based data storage devices. Image: WD.

Countless Western Digital customers saw their MyBook Live network storage drives remotely wiped in the past month thanks to a bug in a product line the company stopped supporting in 2015, as well as a previously unknown zero-day flaw. But there is a similarly serious zero-day flaw present in a much broader range of newer Western Digital MyCloud network storage devices that will remain unfixed for many customers who can’t or won’t upgrade to the latest operating system.

At issue is a remote code execution flaw residing in all Western Digital network attached storage (NAS) devices running MyCloud OS 3, an operating system the company only recently stopped supporting.

Researchers Radek Domanski and Pedro Ribeiro originally planned to present their findings at the Pwn2Own hacking competition in Tokyo last year. But just days before the event Western Digital released MyCloud OS 5, which eliminated the bug they found. That update effectively nullified their chances at competing in Pwn2Own, which requires exploits to work against the latest firmware or software supported by the targeted device.

Nevertheless, in February 2021, the duo published this detailed YouTube video, which documents how they discovered a chain of weaknesses that allows an attacker to remotely update a vulnerable device’s firmware with a malicious backdoor — using a low-privileged user account that has a blank password.

The researchers said Western Digital never responded to their reports. In a statement provided to KrebsOnSecurity, Western Digital said it received their report after Pwn2Own Tokyo 2020, but that at the time the vulnerability they reported had already been fixed by the release of My Cloud OS 5.

“The communication that came our way confirmed the research team involved planned to release details of the vulnerability and asked us to contact them with any questions,” Western Digital said. “We didn’t have any questions so we didn’t respond. Since then, we have updated our process and respond to every report in order to avoid any miscommunication like this again. We take reports from the security research community very seriously and conduct investigations as soon as we receive them.”

Western Digital ignored questions about whether the flaw found by Domanski and Ribeiro was ever addressed in OS 3. A statement published on its support site March 12, 2021 says the company will no longer provide further security updates to the MyCloud OS 3 firmware.

“We strongly encourage moving to the My Cloud OS5 firmware,” the statement reads. “If your device is not eligible for upgrade to My Cloud OS 5, we recommend that you upgrade to one of our other My Cloud offerings that support My Cloud OS 5. More information can be found here.” A list of MyCloud devices that can support OS 5 is here.

But according to Domanski, OS 5 is a complete rewrite of Western Digital’s core operating system, and as a result some of the more popular features and functionality built into OS3 are missing.

“It broke a lot of functionality,” Domanski said of OS 5. “So some users might not decide to migrate to OS 5.”

In recognition of this, the researchers have developed and released their own patch that fixes the vulnerabilities they found in OS 3 (the patch needs to be reapplied each time the device is rebooted). Western Digital said it is aware of third parties offering security patches for My Cloud OS 3.

“We have not evaluated any such patches and we are unable to provide any support for such patches,” the company stated.

A snippet from the video showing the researchers uploading their malicious firmware via a remote zero-day flaw in MyCloud OS 3.

Domanski said MyCloud users on OS 3 can virtually eliminate the threat from this attack by simply ensuring that the devices are not set up to be reachable remotely over the Internet. MyCloud devices make it super easy for customers to access their data remotely, but doing so also exposes them to attacks like last month’s that led to the mass-wipe of MyBook Live devices.

“Luckily for many users they don’t expose the interface to the Internet,” he said. “But looking at the number of posts on Western Digital’s support page related to OS3, I can assume the userbase is still considerable. It almost feels like Western Digital without any notice jumped to OS5, leaving all the users without support.”

Dan Goodin at Ars Technica has a fascinating deep dive on the other zero-day flaw that led to the mass attack last month on MyBook Live devices that Western Digital stopped supporting in 2015. In response to Goodin’s report, Western Digital acknowledged that the flaw was enabled by a Western Digital developer who removed code that required a valid user password before allowing factory resets to proceed.

Facing a backlash of angry customers, Western Digital also pledged to provide data recovery services to affected customers starting this month. “MyBook Live customers will also be eligible for a trade-in program so they can upgrade to MyCloud devices,” Goodin wrote. “A spokeswoman said the data recovery service will be free of charge.”

If attackers get around to exploiting this OS 3 bug, Western Digital might soon be paying for data recovery services and trade-ins for a whole lot more customers.

Intuit to Share Payroll Data from 1.4M Small Businesses With Equifax

1 July 2021 at 18:56

Financial services giant Intuit this week informed 1.4 million small businesses using its QuickBooks Online Payroll and Intuit Online Payroll products that their payroll information will be shared with big-three consumer credit bureau Equifax starting later this year unless customers opt out by the end of this month.

Intuit says the change is tied to an “exciting” and “free” new service that will let millions of small business employees get easy access to employment and income verification services when they wish to apply for a loan or line of credit.

“In early fall 2021, your QuickBooks Online Payroll subscription will include an automated income and employment verification service powered by The Work Number from Equifax,” reads the Intuit email, which includes a link to the new Terms of Service. “Your employees may need to verify their income and employment info when applying for things like loans, credit, or public aid. Before, you likely had to manually provide this info to lenders, creditors or government agencies. These verifications will be automated by The Work Number, which helps employees get faster approvals and saves you time.”

An Intuit spokesperson clarified that the new service is not available through QuickBooks Online or to QuickBooks Online users as a whole. Intuit’s FAQ on the changes is here.

Equifax’s 2017 megabreach that exposed the personal and financial details of 145.5 million Americans may have shocked the public, but it did little to stop more than a million employers from continuing to sell Equifax their employee payroll data, Bloomberg found in late 2017.

“The workforce-solutions unit is now among Equifax’s fastest-growing businesses, contributing more than a fifth of the firm’s $3.1 billion of revenue last year,” wrote Jennifer Surane. “Using payroll data from government agencies and thousands of employers — including a vast majority of Fortune 500 companies — Equifax has cultivated a database of 300 million current and historic employment records, according to regulatory filings.”

QuickBooks Online user Anthony Citrano posted on Twitter about receiving the notice, noting that the upcoming changes had yet to receive any attention in the financial or larger media space.

“The way I read the terms, Equifax gets to proactively collect all payroll data just in case they need to share it later — similar to how they already handle credit reporting,” said Citrano, who is founder and CEO of Acquicent, a company that issues non-fungible tokens (NFTs). “And that feels like a disaster waiting to happen, especially given Equifax’s history.”

In selling payroll data to Equifax, Intuit will be joining some of the world’s largest payroll providers. For example, ADP — the largest payroll software provider in the United States — has long shared payroll data with Equifax.

But Citrano said this move by Intuit will incorporate a large number of fairly small businesses.

“ADP participates in some way already, but QuickBooks Online jumping on the bandwagon means a lot of employees of small to mid-sized businesses are going to be affected,” he said.

Why might small businesses want to think twice before entrusting Equifax with their payroll data? The answer is the company doesn’t have a great track record of protecting that information.

In the days following the 2017 breach at Equifax, KrebsOnSecurity pointed out that The Work Number made it a little too easy for anyone to learn your salary history. At the time, all you needed to view someone’s entire work and salary history was their Social Security number and date of birth. It didn’t help that for roughly half the U.S. population, both pieces of information were known to be in the possession of criminals behind the breach.

Equifax responded by taking down its Work Number website until it was able to include additional authentication requirements, saying anyone could opt out of Equifax revealing their salary history.

Equifax’s security improvements included the addition of four multiple-guess questions whose answers were based on publicly-available data. But these requirements were easily bypassed, as evidenced by a previous breach at Equifax’s employment division.

The Work Number is a user-paid verification of employment database created by TALX Corp., a data broker acquired by Equifax in 2007. Four months before the epic 2017 breach became public, KrebsOnSecurity broke the news that fraudsters who specialize in tax refund fraud had been successfully guessing the answers to those secret questions to reset TALX account PINs, which then let them view past W-2 tax forms for employees at many Fortune 500 companies.

Intuit says affected customers that do not want this new service included must update their preferences and opt-out by July 31, 2021. Otherwise, they will be automatically will be opted in. According to Intuit, customers can opt out by following these steps:

1. Sign in to QuickBooks Online Payroll.

2. Go to Payroll Settings.

3. In the Shared data section, select the pencil and uncheck the box.

4. Select Save.

We Infiltrated a Counterfeit Check Ring! Now What?

30 June 2021 at 20:34

Imagine waking up each morning knowing the identities of thousands of people who are about to be mugged for thousands of dollars each. You know exactly when and where each of those muggings will take place, and you’ve shared this information in advance with the authorities each day for a year with no outward indication that they are doing anything about it. How frustrated would you be?

A counterfeit check image [redacted] that was intended for a person helping this fraud gang print and mail phony checks tied to a raft of email-based scams. One fraud-fighting group is intercepting hundreds to thousands of these per day.

Such is the curse of the fraud fighter known online by the handles “Brianna Ware” and “B. Ware” for short, a longtime member of a global group of volunteers who’ve infiltrated a cybercrime gang that disseminates counterfeit checks tied to a dizzying number of online scams.

For the past year, B. Ware has maintained contact with an insider from the criminal group that’s been sending daily lists of would-be victims who are to receive counterfeit checks printed using the real bank account information of legitimate companies.

“Some days we’re seeing thousands of counterfeit checks going out,” B. Ware said.

The scams used in connection with the fraudulent checks vary widely, from fake employment and “mystery shopper” schemes to those involving people who have been told they can get paid to cover their cars in advertisements (a.k.a. the “car wrap” scam).

A form letter mailed out with a counterfeit check urges the recipient to text a phone number after the check has been deposited.

Most of the counterfeit checks being disseminated by this fraud group are in amounts ranging from $2,500 to $5,000. The crimes that the checks enable are known variously as “advanced fee” scams, in that they involve tricking people into making payments in anticipation of receiving something of greater value in return.

But in each scheme the goal is the same: Convince the recipient to deposit the check and then wire a portion of the amount somewhere else. A few days after the check is deposited, it gets invariably canceled by the organization whose bank account information was on the check. And then person who deposited the phony check is on the hook for the entire amount.

“Like the car wrap scam, where they send you a check for $5,000, and you agree to keep $1,000 for your first payment and send the rest back to them in exchange for the car wrap materials,” B. Ware said. “Usually the check includes a letter that says they want you to text a specific phone number to let them know you received the check. When you do that, they’ll start sending you instructions on how and where to send the money.”

A typical confirmation letter that accompanies a counterfeit check for a car wrap scam.

Traditionally, these groups have asked recipients to transit money via wire transfer. But these days, B. Ware said, the same crooks are now asking people to forward the money via mobile applications like CashApp and Venmo.

B. Ware and other volunteer fraud fighters believe the fake checks gang is using people looped into phony employment schemes and wooed through online romance scams to print the counterfeit checks, and that other recruits are responsible for mailing them out each day.

“More often than not, the scammers creating the shipping labels will provide those to an unwitting accomplice, or the accomplice is told to log in to an account and print the labels,” B. Ware explained.

Often the counterfeit checks and labels forwarded by B. Ware’s informant come with notes attached indicating the type of scam with which they are associated.

“Sometimes they’re mystery shopper scams, and other times it’s overpayment for an item sold on Craigslist,” B. Ware said. “We don’t know how the scammers are getting the account and routing numbers for these checks, but they are drawn on real companies and always scan fine through a bank’s systems initially. The recipients can deposit them at any bank, but we try to get the checks to the banks when we can so they have a heads up.”

SHRINKING FROM THE FIREHOSE?

Roughly a year ago, B. Ware’s group started sharing its intelligence with fraud investigators at FedEx and the U.S. Postal Service — the primary delivery mechanisms for these counterfeit checks.

Both the USPS and FedEx have an interest in investigating because the fraudsters in this case are using stolen shipping labels paid for by companies who have no idea their FedEx or USPS accounts are being used for such purposes.

“In most cases, the name of the sender will be completely unrelated to what’s being sent,” B. Ware said. “For example, you’ll see a label for a letter to go out with a counterfeit check for a car wrap scam, and the sender on the shipping label will be something like XYZ Biological Resources.”

But B. Ware says a year later, there is little sign that anyone is interested in acting on the shared intelligence.

“It’s so much information that they really don’t want it anymore and they’re not doing anything about it,” B. Ware said of FedEx and the USPS. “It’s almost like they’re turning a blind eye. There are so many of these checks going out each day that instead of trying to drink from the firehouse, they’re just turning their heads.”

FedEx did not respond to requests for comment. The U.S. Postal Inspection Service responded with a statement saying it “does not comment publicly on its investigative procedures and operational protocols.”

ANY METHOD THAT WORKS

Ronnie Tokazowski is a threat researcher at Agari, a security firm that has closely tracked many of the groups behind these advanced fee schemes [KrebsOnSecurity interviewed Tokazowski in 2018 after he received a security industry award for his work in this area].

Tokazowski said it’s likely the group B. Ware has infiltrated is involved in a myriad other email fraud schemes, including so-called “business email compromise” (BEC) or “CEO scams,” in which the fraudsters impersonate executives at a company in the hopes of convincing someone at the firm to wire money for payment of a non-existent invoice. According to the FBI, BEC scams netted thieves nearly $2 billion in 2020 — far more than any other type of cybercrime.

In a report released in 2019 (PDF), Agari profiled a group it dubbed “Scattered Canary” that is operating principally out of West Africa and dabbles in a dizzying array of schemes, including BEC and romance scams, FEMA and SBA loans, unemployment insurance fraud, counterfeit checks and of course money laundering.

Image: Agari.

Tokazowski said he doesn’t know if the group B. Ware is watching has any affiliation with Scattered Canary. But he said his experience with Scattered Canary shows these groups tend to make money via any and all methods that reliably produce results.

“One of the things that came out of the Scattered Canary report was that the actors we saw doing BEC scams were the same actors doing the car wrap and various Craigslist scams involving fake checks,” he said. “The people doing this type of crime will have tutorials on how to run the scam, how to wire money out for unemployment fraud, how to target people on Craigslist, and so on. It’s very different from the way a Russian hacking group might go after one industry vertical or piece of software or focus on one or two types of fraud. They will follow any method they can that works.”

Tokazowski said he’s taken his share of flack from people on social media who say his focus on West African nations as the primary source of these advanced fee and BEC scams is somehow racist [KrebsOnSecurity experienced a similar response to the 2013 stories, Spy Service Exposes Nigerian ‘Yahoo Boys’, and ‘Yahoo Boys’ Have 419 Facebook Friends].

But Tokazowski maintains he has been one of the more vocal proponents of the idea that trying to fight these problems by arresting those involved is something of a Sisyphean task, and that it makes way more sense to focus on changing the economic realities in places like Nigeria, which has been a hotbed of advanced fee activity for decades.

Nigeria has the world’s second-highest unemployment rate — rising from 27.1 percent in 2019 to 33 percent in 2020, according to the National Bureau of Statistics. The nation also is among the world’s most corrupt, according to 2020 findings from Transparency International.

“Education is definitely one piece, as raising awareness is hands down the best way to get ahead of this,” Tokazowski said. “But we also need to think about ways to create more business opportunities there so that people who are doing this to put food on the table have more legitimate opportunities. Unfortunately, thanks to the level of corruption of government officials, there are a lot of cultural reasons that fighting this type of crime at the source is going to be difficult.”

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