How to Fight Mobile Number Port-out Scams

T-Mobile, AT&T and other mobile carriers are reminding customers to take advantage of free services that can block identity thieves from easily “porting” your mobile number out to another provider, which allows crooks to intercept your calls and messages while your phone goes dark. Tips for minimizing the risk of number porting fraud are available below for customers of all four major mobile providers, including Sprint and Verizon.

Unauthorized mobile phone number porting is not a new problem, but T-Mobile said it began alerting customers about it earlier this month because the company has seen a recent uptick in fraudulent requests to have customer phone numbers ported over to another mobile provider’s network.

“We have been alerting customers via SMS that our industry is experiencing a phone number port out scam that could impact them,” T-Mobile said in a written statement. “We have been encouraging them to add a port validation feature, if they’ve not already done so.”

Crooks typically use phony number porting requests when they have already stolen the password for a customer account (either for the mobile provider’s network or for another site), and wish to intercept the one-time password that many companies send to the mobile device to perform two-factor authentication.

Porting a number to a new provider shuts off the phone of the original user, and forwards all calls to the new device. Once in control of the mobile number, thieves can request any second factor that is sent to the newly activated device, such as a one-time code sent via text message or or an automated call that reads the one-time code aloud.

In these cases, the fraudsters can call a customer service specialist at a mobile provider and pose as the target, providing the mark’s static identifiers like name, date of birth, social security number and other information. Often this is enough to have a target’s calls temporarily forwarded to another number, or ported to a different provider’s network.

“Port out fraud has been an industry problem for a long time, but recently we’ve seen an uptick in this illegal activity,” T-Mobile said.  “We’re not providing specific metrics, but it’s been enough that we felt it was important to encourage customers to add extra security features to their accounts.”

In a blog post published Tuesday, AT&T said bad guys sometimes use illegal porting to steal your phone number, transfer the number to a device they control and intercept text authentication messages from your bank, credit card issuer or other companies.

“You may not know this has happened until you notice your mobile device has lost service,” reads a post by Brian Rexroad, VP of security relations at AT&T. “Then, you may notice loss of access to important accounts as the attacker changes passwords, steals your money, and gains access to other pieces of your personal information.”

Rexroad says in some cases the thieves just walk into an AT&T store and present a fake ID and your personal information, requesting to switch carriers. Porting allows customers to take their phone number with them when they change phone carriers.

The law requires carriers to provide this number porting feature, but there are ways to reduce the risk of this happening to you.

T-Mobile suggests adding its port validation feature to all accounts. To do this, call 611 from your T-Mobile phone or dial 1-800-937-8997 from any phone. The T-Mobile customer care representative will ask you to create a 6-to-15-digit passcode that will be added to your account.

“We’ve included alerts in the T-Mobile customer app and on MyT-Mobile.com, but we don’t want customers to wait to get an alert to take action,” the company said in its statement. “Any customer can call 611 at any time from their mobile phone and have port validation added to their accounts.”

Verizon requires a match on a password or a PIN associated with the account for a port to go through. Subscribers can set their PIN via their Verizon Wireless website account or by visiting a local shop.

Sprint told me that in order for a customer to port their number to a different carrier, they must provide the correct Sprint account number and PIN number for the port to be approved. Sprint requires all customers to create a PIN during their initial account setup.

AT&T calls its two-factor authentication “extra security,” which involves creating a unique passcode on your AT&T account that requires you to provide that code before any changes can be made — including ports initiated through another carrier. Follow this link for more information. And don’t use something easily guessable like your SSN (the last four of your SSN is the default PIN, so make sure you change it quickly to something you can remember but that’s non-obvious).

Bigger picture, these porting attacks are a good reminder to use something other than a text message or a one-time code that gets read to you in an automated phone call. Whenever you have the option, choose the app-based alternative: Many companies now support third-party authentication apps like Google Authenticator and Authy, which can act as powerful two-factor authentication alternatives that are not nearly as easy for thieves to intercept.

Several of the mobile companies referred me to the work of a Mobile Authentication task force created by the carriers last fall. They say the issue of unauthorized ports to commit fraud is being addressed by this initiative.

For more on tightening your mobile security stance, see last year’s story, “Is Your Mobile Carrier Your Weakest Link?“

from
https://krebsonsecurity.com/2018/02/how-to-fight-mobile-number-port-out-scams/

Bot Roundup: Avalanche, Kronos, NanoCore

It’s been a busy few weeks in cybercrime news, justifying updates to a couple of cases we’ve been following closely at KrebsOnSecurity. In Ukraine, the alleged ringleader of the Avalanche malware spam botnet was arrested after eluding authorities in the wake of a global cybercrime crackdown there in 2016. Separately, a case that was hailed as a test of whether programmers can be held accountable for how customers use their product turned out poorly for 27-year-old programmer Taylor Huddleston, who was sentenced to almost three years in prison for making and marketing a complex spyware program.

First, the Ukrainian case. On Nov. 30, 2016, authorities across Europe coordinated the arrest of five individuals thought to be tied to the Avalanche crime gang, in an operation that the FBI and its partners abroad described as an unprecedented global law enforcement response to cybercrime. Hundreds of malicious web servers and hundreds of thousands of domains were blocked in the coordinated action.

The global distribution of servers used in the Avalanche crime machine. Source: Shadowserver.org

The alleged leader of the Avalanche gang — 33-year-old Russian Gennady Kapkanov — did not go quietly at the time. Kapkanov allegedly shot at officers with a Kalashnikov assault rifle through the front door as they prepared to raid his home, and then attempted to escape off of his 4th floor apartment balcony. He was later released, after police allegedly failed to file proper arrest records for him.

But on Monday Agence France-Presse (AFP) reported that Ukrainian authorities had once again collared Kapkanov, who was allegedly living under a phony passport in Poltav, a city in central Ukraine. No word yet on whether Kapkanov has been charged, which was supposed to happen Monday.

Kapkanov’s drivers license. Source: npu.gov.ua.

HOW WELL DO YOU REALLY WANT TO KNOW YOUR CUSTOMERS?

Lawyers for Taylor Huddleston, a 27-year-old programmer from Hot Springs, Ark., originally asked a federal court to believe that the software he sold on the sprawling hacker marketplace Hackforums — a “remote administration tool” or “RAT” designed to let someone remotely administer one or many computers remotely — was just a benign tool.

The bad things done with Mr. Huddleston’s tools, the defendant argued, were not Mr. Huddleston’s doing. Furthermore, no one had accused Mr. Huddleston of even using his own software.

The Daily Beast first wrote about Huddleston’s case in 2017, and at the time suggested his prosecution raised questions of whether a programmer could be held criminally responsible for the actions of his users. My response to that piece was “Dual-Use Software Criminal Case Not So Novel.”

Photo illustration by Lyne Lucien/The Daily Beast

The court was swayed by evidence that yes, Mr. Huddleston could be held criminally responsible for those actions. It sentenced him to 33 months in prison after the defendant acknowledged that he knew his RAT — a Remote Access Trojan dubbed “NanoCore RAT” — was being used to spy on webcams and steal passwords from systems running the software.

Of course Huddleston knew: He didn’t market his wares on some Craigslist software marketplace ad, or via video promos on his local cable channel: He marketed the NanoCore RAT and another software licensing program called Net Seal exclusively on Hackforums[dot]net.

This sprawling, English language forum has a deep bench of technical forum discussions about using RATs and other tools to surreptitiously record passwords and videos of “slaves,” the derisive term for systems secretly infected with these RATs.

Huddleston knew what many of his customers were doing because many NanoCore users also used Huddleston’s Net Seal program to keep their own RATs and other custom hacking tools from being disassembled or “cracked” and posted online for free. In short: He knew what programs his customers were using Net Seal on, and he knew what those customers had done or intended to do with tools like NanoCore.

The sentencing suggests that where you choose to sell something online says a lot about what you think of your own product and who’s likely buying it.

Daily Beast author Kevin Poulsen noted in a July 2017 story that Huddleston changed his tune and pleaded guilty. The story pointed to an accompanying plea in which Huddleston stipulated that he “knowingly and intentionally aided and abetted thousands of unlawful computer intrusions” in selling the program to hackers and that he “acted with the purpose of furthering these unauthorized computer intrusions and causing them to occur.”

NEVER HAD NO CUSTOMERS TO KNOW?

Bleeping Computer’s Catalin Cimpanu observes that Huddleston’s case is similar to another being pursued by U.S. prosecutors against Marcus “MalwareTech” Hutchins, the security researcher who helped stop the spread of the global WannaCry ransomware outbreak in May 2017. Prosecutors allege Hutchins was the author and proprietor of “Kronos,” a strain of malware designed to steal online banking credentials.

Marcus Hutchins, just after he was revealed as the security expert who stopped the WannaCry worm. Image: twitter.com/malwaretechblog

On Sept. 5, 2017, KrebsOnSecurity published “Who is Marcus Hutchins?“, a breadcrumbs research piece on the public user profiles known to have been wielded by Hutchins. The data did not implicate him in the Kronos trojan, but it chronicles the evolution of a young man who appears to have sold and published online quite a few unique and powerful malware samples — including several RATs and custom exploit packs (as well as access to hacked PCs).

MalwareTech declined to be interviewed by this publication in light of his ongoing prosecution. But Hutchins has claimed he never had any customers because he didn’t write the Kronos trojan.

Hutchins has pleaded not guilty to all four counts against him, including conspiracy to distribute malicious software with the intent to cause damage to 10 or more affected computers without authorization, and conspiracy to distribute malware designed to intercept protected electronic communications.

Hutchins said through his @MalwareTechBlog account on Twitter Feb. 26 that he wanted to publicly dispute my Sept. 2017 story. But he didn’t specify why other than saying he was “not allowed to.”

MWT wrote: “mrw [my reaction when] I’m not allowed to debunk the Krebs article so still have to listen to morons telling me why I’m guilty based on information that isn’t even remotely correct.”

Hutchins’ tweet on Feb. 26, 2018.

According to a story at BankInfoSecurity, the evidence submitted by prosecutors for the government includes:

• Statements made by Hutchins after he was arrested.
• A CD containing two audio recordings from a county jail in Nevada where he was detained by the FBI.
• 150 pages of Jabber chats between the defendant and an individual.
• Business records from Apple, Google and Yahoo.
• Statements (350 pages) by the defendant from another internet forum, which were seized by the government in another district.
• Three to four samples of malware.
• A search warrant executed on a third party, which may contain some privileged information.

The case against Hutchins continues apace in Wisconsin. A scheduling order for pretrial motions filed Feb. 22 suggests the court wishes to have a speedy trial that concludes before the end of April 2018.

from
https://krebsonsecurity.com/2018/02/bot-roundup-avalanche-kronos-nanocore/

USPS Finally Starts Notifying You by Mail If Someone is Scanning Your Snail Mail Online

In October 2017, KrebsOnSecurity warned that ne’er-do-wells could take advantage of a relatively new service offered by the U.S. Postal Service that provides scanned images of all incoming mail before it is slated to arrive at its destination address. We advised that stalkers or scammers could abuse this service by signing up as anyone in the household, because the USPS wasn’t at that point set up to use its own unique communication system — the U.S. mail — to alert residents when someone had signed up to receive these scanned images.

Image: USPS

The USPS recently told this publication that beginning Feb. 16 it started alerting all households by mail whenever anyone signs up to receive these scanned notifications of mail delivered to that address. The notification program, dubbed “Informed Delivery,” includes a scan of the front and back of each envelope or package destined for a specific address each day.

The Postal Service says consumer feedback on its Informed Delivery service has been overwhelmingly positive, particularly among residents who travel regularly and wish to keep close tabs on any bills or other mail being delivered while they’re on the road. It has been available to select addresses in several states since 2014 under a targeted USPS pilot program, but it has since expanded to include many ZIP codes nationwide. U.S. residents can find out if their address is eligible by visiting informeddelivery.usps.com.

According to the USPS, some 8.1 million accounts have been created via the service so far (Oct. 7, 2017, the last time I wrote about Informed Delivery, there were 6.3 million subscribers, so the program has grown more than 28 percent in five months).

Roy Betts, a spokesperson for the USPS’s communications team, says post offices handled 50,000 Informed Delivery notifications the week of Feb. 16, and are delivering an additional 100,000 letters to existing Informed Delivery addresses this coming week.

Currently, the USPS allows address changes via the USPS Web site or in-person at any one of more than 35,000 USPS retail locations nationwide. When a request is processed, the USPS sends a confirmation letter to both the old address and the new address.

If someone already signed up for Informed Delivery later posts a change of address request, the USPS does not automatically transfer the Informed Delivery service to the new address: Rather, it sends a mailer with a special code tied to the new address and to the username that requested the change. To resume Informed Delivery at the new address, that code needs to be entered online using the account that requested the address change.

A review of the methods used by the USPS to validate new account signups last fall suggested the service was wide open to abuse by a range of parties, mainly because of weak authentication and because it is not easy to opt out of the service.

Signing up requires an eligible resident to create a free user account at USPS.com, which asks for the resident’s name, address and an email address. The final step in validating residents involves answering four so-called “knowledge-based authentication” or KBA questions.

The USPS told me it uses two ID proofing vendors: Lexis Nexis; and, naturally, recently breached big three credit bureau Equifax — to ask the magic KBA questions, rotating between them randomly.

KrebsOnSecurity has assailed KBA as an unreliable authentication method because so many answers to the multiple-guess questions are available on sites like Spokeo and Zillow, or via social networking profiles.

It’s also nice when Equifax gives away a metric truckload of information about where you’ve worked, how much you made at each job, and what addresses you frequented when. See: How to Opt Out of Equifax Revealing Your Salary History for how much leaks from this lucrative division of Equifax.

All of the data points in an employee history profile from Equifax will come in handy for answering the KBA questions, or at least whittling away those that don’t match salary ranges or dates and locations of the target identity’s previous addresses.

Once signed up, a resident can view scanned images of the front of each piece of incoming mail in advance of its arrival. Unfortunately, anyone able to defeat those automated KBA questions from Equifax and Lexis Nexis — be they stalkers, jilted ex-partners or private investigators — can see who you’re communicating with via the Postal mail.

Maybe this is much ado about nothing: Maybe it’s just a reminder that people in the United States shouldn’t expect more than a post card’s privacy guarantee (which in can leak the “who” and “when” of any correspondence, and sometimes the “what” and “why” of the communication). We’d certainly all be better off if more people kept that guarantee in mind for email in addition to snail mail. At least now the USPS will deliver your address a piece of paper letting you know when someone signs up to look at those W’s in your snail mail online.

from
https://krebsonsecurity.com/2018/02/usps-finally-starts-notifying-you-by-mail-if-someone-is-scanning-your-snail-mail-online/

Chase ‘Glitch’ Exposed Customer Accounts

Multiple Chase.com customers have reported logging in to their bank accounts, only to be presented with another customer’s bank account details. Chase has acknowledged the incident, saying it was caused by an internal “glitch” Wednesday evening that did not involve any kind of hacking attempt or cyber attack.

Trish Weller, director of communications for the retail side of JP Morgan Chase, said the incident happened Wednesday evening, for “a pretty limited number of customers” between 6:30 pm  and 9 pm ET who “sporadically during that time while logged in to chase.com could see someone else’s account details.”

“We know for sure the glitch was on our end, not from a malicious actor,” Weller said, noting that Chase is still trying to determine how many customers may have been affected. “We’re going through Tweets from customers and making sure that if anyone is calling us with issues we’re working one on one with customers. If you see suspicious activity you should give us a call.”

Weller urged customers to “practice good security hygiene” by regularly reviewing their account statements, and promptly reporting any discrepancies. She said Chase is still working to determine the precise cause of the mix-up, and that there have been no reports of JPMC commercial customers seeing the account information of other customers.

“This was all on our side,” Well said. “I don’t know what did happen yet but I know what didn’t happen. What happened last night was 100 percent not the result of anything malicious.”

The account mix-up was documented on Wednesday by Fly & Dine, an online publication that chronicles the airline food industry. Fly & Dine included screenshots of one of their writer’s spouses logged into the account of a fellow Chase customer with an Amazon and Chase card and a balance of more than $16,000.

Kenneth White, a security researcher and director of the Open Crypto Audit Project, said the reports he’s seen on Twitter and elsewhere suggested the screwup was somehow related to the bank’s mobile apps. He also said the Chase retail banking app offered an update first thing Thursday morning.

Chase says the oddity occurred for both chase.com and users of the Chase mobile app. 

“We don’t have any evidence it was related to any update,” Weller said.

“There’s only so many kind of logic errors where Kenn logs in and sees Brian’s account,” White said.  “It can be a devil to track down because every single time someone logs in it’s a roll of the dice — maybe they get something in the warmed up cache or they get a new hit. It’s tricky to debug, but this is like as bad as it gets in terms of screwup of the app.”

White said the incident is reminiscent of a similar glitch at online game giant Steam, which caused many customers to see account information for other Steam users for a few hours. He said he suspects the problem was a configuration error someplace within Chase.com “caching servers,” which are designed to ease the load on a Web application by periodically storing some common graphical elements on the page — such as images, videos and GIFs.

“The images, the site banner, all that’s fine to be cached, but you never want to cache active content or raw data coming back,” White said. “If you’re CNN, you’re probably caching all the content on the homepage. But for a banking app that has access to live data, you never want that to be cached.”

“It’s fairly easy to fix once you identify the problem,” he added. “I can imagine just getting the basics of the core issue [for Chase] would be kind of tricky and might mean a lot of non techies calling your Tier 1 support people.”

Update, 8:10 p.m. ET: Added comment from Chase about the incident affecting both mobile device and Web browser users.

from
https://krebsonsecurity.com/2018/02/chase-glitch-exposed-customer-accounts/

Money Laundering Via Author Impersonation on Amazon?

Patrick Reames had no idea why Amazon.com sent him a 1099 form saying he’d made almost $24,000 selling books via Createspace, the company’s on-demand publishing arm. That is, until he searched the site for his name and discovered someone has been using it to peddle a $555 book that’s full of nothing but gibberish.

The phony $555 book sold more than 60 times on Amazon using Patrick Reames’ name and Social Security number.

Reames is a credited author on Amazon by way of several commodity industry books, although none of them made anywhere near the amount Amazon is reporting to the Internal Revenue Service. Nor does he have a personal account with Createspace.

But that didn’t stop someone from publishing a “novel” under his name. That word is in quotations because the publication appears to be little more than computer-generated text, almost like the gibberish one might find in a spam email.

“Based on what I could see from the ‘sneak peak’ function, the book was nothing more than a computer generated ‘story’ with no structure, chapters or paragraphs — only lines of text with a carriage return after each sentence,” Reames said in an interview with KrebsOnSecurity.

The impersonator priced the book at $555 and it was posted to multiple Amazon sites in different countries. The book — which as been removed from most Amazon country pages as of a few days ago — is titled “Lower Days Ahead,” and was published on Oct 7, 2017.

Reames said he suspects someone has been buying the book using stolen credit and/or debit cards, and pocketing the 60 percent that Amazon gives to authors. At $555 a pop, it would only take approximately 70 sales over three months to rack up the earnings that Amazon said he made.

“This book is very unlikely to ever sell on its own, much less sell enough copies in 12 weeks to generate that level of revenue,” Reames said. “As such, I assume it was used for money laundering, in addition to tax fraud/evasion by using my Social Security number. Amazon refuses to issue a corrected 1099 or provide me with any information I can use to determine where or how they were remitting the royalties.”

Reames said the books he has sold on Amazon under his name were done through his publisher, not directly via a personal account (the royalties for those books accrue to his former employer) so he’d never given Amazon his Social Security number. But the fraudster evidently had, and that was apparently enough to convince Amazon that the imposter was him.

Reames said after learning of the impersonation, he got curious enough to start looking for other examples of author oddities on Amazon’s Createspace platform.

“I have reviewed numerous Createspace titles and its clear to me that there may be hundreds if not thousands of similar fraudulent books on their site,” Reames said. “These books contain no real content, only dozens of pages of gibberish or computer generated text.”

For example, searching Amazon for the name Vyacheslav Grzhibovskiy turns up dozens of Kindle “books” that appear to be similar gibberish works — most of which have the words “quadrillion,” “trillion” or a similar word in their titles. Some retail for just one or two dollars, while others are inexplicably priced between $220 and $320.

Some of the “books” for sale on Amazon attributed to a Vyacheslav Grzhibovskiy.

“Its not hard to imagine how these books could be used to launder money using stolen credit cards or facilitating transactions for illicit materials or funding of illegal activities,” Reames said. “I can not believe Amazon is unaware of this and is unwilling to intercede to stop it. I also believe they are not properly vetting their new accounts to limit tax fraud via stolen identities.”

Reames said Amazon refuses to send him a corrected 1099, or to discuss anything about the identity thief.

“They say all they can do at this point is send me a letter acknowledging than I’m disputing ever having received the funds, because they said they couldn’t prove I didn’t receive the funds. So I told them, ‘If you’re saying you can’t say whether I did receive the funds, tell me where they went?’ And they said, “Oh, no, we can’t do that.’ So I can’t clear myself and they won’t clear me.”

Amazon said in a statement that the security of customer accounts is one of its highest priorities.

“We have policies and security measures in place to help protect them. Whenever we become aware of actions like the ones you describe, we take steps to stop them. If you’re concerned about your account, please contact Amazon customer service immediately using the help section on our website.”

Beware, however, if you plan to contact Amazon customer support via phone. Performing a simple online search for Amazon customer support phone numbers can turn up some dubious and outright fraudulent results.

Earlier this month, KrebsOnSecurity heard from a fraud investigator for a mid-sized bank who’d recently had several customers who got suckered into scams after searching for the customer support line for Amazon. She said most of these customers were seeking to cancel an Amazon Prime membership after the trial period ended and they were charged a $99 fee.

The fraud investigator said her customers ended up calling fake Amazon support numbers, which were answered by people with a foreign accent who proceeded to request all manner of personal data, including bank account and credit card information. In short order, the customers’ accounts were used to set up new Amazon accounts as well as accounts at Coinbase.com, a service that facilitates the purchase of virtual currencies like Bitcoin.

This Web site does a good job documenting the dozens of phony Amazon customer support numbers that are hoodwinking unsuspecting customers. Amazingly, many of these numbers seem to be heavily promoted using Amazon’s own online customer support discussion forums, in addition to third-party sites like Facebook.com.

Interestingly, clicking on the Customer Help Forum link link from the Amazon Support Options and Contact Us page currently sends visitors to a the page pictured below, which displays a “Sorry, We Couldn’t Find That Page” error. Perhaps the company is simply cleaning things up after being notified last week by KrebsOnSecurity about the bogus phone numbers being promoted on the forum.

In any case, it appears some of these fake Amazon support numbers are being pimped by a number dubious-looking e-books for sale on Amazon that are all about — you guessed it — how to contact Amazon customer support.

If you wish to contact Amazon by phone, the only numbers you should use are 888-280-3321 and 888-280-4331. Amazon’s main customer help page is here.

from
https://krebsonsecurity.com/2018/02/money-laundering-via-author-impersonation-on-amazon/

IRS Scam Leverages Hacked Tax Preparers, Client Bank Accounts

Identity thieves who specialize in tax refund fraud have been busy of late hacking online accounts at multiple tax preparation firms, using them to file phony refund requests. Once the Internal Revenue Service processes the return and deposits money into bank accounts of the hacked firms’ clients, the crooks contact those clients posing as a collection agency and demand that the money be “returned.”

In one version of the scam, criminals are pretending to be debt collection agency officials acting on behalf of the IRS. They’ll call taxpayers who’ve had fraudulent tax refunds deposited into their bank accounts, claim the refund was deposited in error, and threaten recipients with criminal charges if they fail to forward the money to the collection agency.

This is exactly what happened to a number of customers at a half dozen banks in Oklahoma earlier this month. Elaine Dodd, executive vice president of the fraud division at the Oklahoma Bankers Association, said many financial institutions in the Oklahoma City area had “a good number of customers” who had large sums deposited into their bank accounts at the same time.

Dodd said the bank customers received hefty deposits into their accounts from the U.S. Treasury, and shortly thereafter were contacted by phone by someone claiming to be a collections agent for a firm calling itself DebtCredit and using the Web site name debtcredit[dot]us.

“We’re having customers getting refunds they have not applied for,” Dodd said, noting that the transfers were traced back to a local tax preparer who’d apparently gotten phished or hacked. Those banks are now working with affected customers to close the accounts and open new ones, Dodd said. “If the crooks have breached a tax preparer and can send money to the client, they can sure enough pull money out of those accounts, too.”

Several of the Oklahoma bank’s clients received customized notices from a phony company claiming to be a collections agency hired by the IRS.

The domain debtcredit[dot]us hasn’t been active for some time, but an exact copy of the site to which the bank’s clients were referred by the phony collection agency can be found at jcdebt[dot]com — a domain that was registered less than a month ago. The site purports to be associated with a company in New Jersey called Debt & Credit Consulting Services, but according to a record (PDF) retrieved from the New Jersey Secretary of State’s office, that company’s business license was revoked in 2010.

“You may be puzzled by an erroneous payment from the Internal Revenue Service but in fact it is quite an ordinary situation,” reads the HTML page shared with people who received the fraudulent IRS refunds. It includes a video explaining the matter, and references a case number, the amount and date of the transaction, and provides a list of personal “data reported by the IRS,” including the recipient’s name, Social Security Number (SSN), address, bank name, bank routing number and account number.

All of these details no doubt are included to make the scheme look official; most recipients will never suspect that they received the bank transfer because their accounting firm got hacked.

The scammers even supposedly assign the recipients an individual “appointed debt collector,” complete with a picture of the employee, her name, telephone number and email address. However, the emails to the domain used in the email address from the screenshot above (debtcredit[dot]com) bounced, and no one answers at the provided telephone number.

Along with the Web page listing the recipient’s personal and bank account information, each recipient is given a “transaction error correction letter” with IRS letterhead (see image below) that includes many of the same personal and financial details on the HTML page. It also gives the recipient instructions on the account number, ACH routing and wire number to which the wayward funds are to be wired.

A phony letter from the IRS instructing recipients on how and where to wire the money that was deposited into their bank account as a result of a fraudulent tax refund request filed in their name.

Tax refund fraud affects hundreds of thousands, if not millions, of U.S. citizens annually. Victims usually first learn of the crime after having their returns rejected because scammers beat them to it. Even those who are not required to file a return can be victims of refund fraud, as can those who are not actually due a refund from the IRS.

On Feb. 2, 2018, the IRS issued a warning to tax preparers, urging them to step up their security in light of increased attacks. On Feb. 13, the IRS warned that phony refunds through hacked tax preparation accounts are a “quickly growing scam.”

“Thieves know it is more difficult to identify and halt fraudulent tax returns when they are using real client data such as income, dependents, credits and deductions,” the agency noted in the Feb. 2 alert. “Generally, criminals find alternative ways to get the fraudulent refunds delivered to themselves rather than the real taxpayers.”

The IRS says taxpayer who receive fraudulent transfers from the IRS should contact their financial institution, as the account may need to be closed (because the account details are clearly in the hands of cybercriminals). Taxpayers receiving erroneous refunds also should consider contacting their tax preparers immediately.

If you go to file your taxes electronically this year and the return is rejected, it may mean fraudsters have beat you to it. The IRS advises taxpayers in this situation to follow the steps outlined in the Taxpayer Guide to Identity Theft. Those unable to file electronically should mail a paper tax return along with Form 14039 (PDF) — the Identity Theft Affidavit — stating they were victims of a tax preparer data breach.

from
https://krebsonsecurity.com/2018/02/irs-scam-leverages-hacked-tax-preparers-client-bank-accounts/

New EU Privacy Law May Weaken Security

Companies around the globe are scrambling to comply with new European privacy regulations that take effect a little more than three months from now. But many security experts are worried that the changes being ushered in by the rush to adhere to the law may make it more difficult to track down cybercriminals and less likely that organizations will be willing to share data about new online threats.

On May 25, 2018, the General Data Protection Regulation (GDPR) takes effect. The law, enacted by the European Parliament, requires technology companies to get affirmative consent for any information they collect on people within the European Union. Organizations that violate the GDPR could face fines of up to four percent of global annual revenues.

In response, the Internet Corporation for Assigned Names and Numbers (ICAAN) — the nonprofit entity that manages the global domain name system — is poised to propose changes to the rules governing how much personal information Web site name registrars can collect and who should have access to the data.

Specifically, ICANN has been seeking feedback on a range of proposals to redact information provided in WHOIS, the system for querying databases that store the registered users of domain names and blocks of Internet address ranges (IP addresses).

Under current ICANN rules, domain name registrars should collect and display a variety of data points when someone performs a WHOIS lookup on a given domain, such as the registrant’s name, address, email address and phone number. (Most registrars offer a privacy protection service that shields this information from public WHOIS lookups; some registrars charge a nominal fee for this service, while others offer it for free).

In a bid to help domain registrars comply with the GDPR regulations, ICANN has floated several proposals, all of which would redact some of the registrant data from WHOIS records. Its mildest proposal would remove the registrant’s name, email, and phone number, while allowing self-certified 3rd parties to request access to said data at the approval of a higher authority — such as the registrar used to register the domain name.

The most restrictive proposal would remove all registrant data from public WHOIS records, and would require legal due process (such as a subpoena or court order) to reveal any information supplied by the domain registrant.

ICANN’s various proposed models for redacting information in WHOIS domain name records.

The full text of ICANN’s latest proposed models (from which the screenshot above was taken) can be found here (PDF). A diverse ICANN working group made up of privacy activists, technologists, lawyers, trademark holders and security experts has been arguing about these details since 2016. For the curious and/or intrepid, the entire archive of those debates up to the current day is available at this link.

WHAT IS THE WHOIS DEBATE?

To drastically simplify the discussions into two sides, those in the privacy camp say WHOIS records are being routinely plundered and abused by all manner of ne’er-do-wells, including spammers, scammers, phishers and stalkers. In short, their view seems to be that the availability of registrant data in the WHOIS records causes more problems than it is designed to solve.

Meanwhile, security experts are arguing that the data in WHOIS records has been indispensable in tracking down and bringing to justice those who seek to perpetrate said scams, spams, phishes and….er….stalks.

Many privacy advocates seem to take a dim view of any ICANN system by which third parties (and not just law enforcement officials) might be vetted or accredited to look at a domain registrant’s name, address, phone number, email address, etc. This sentiment is captured in public comments made by the Electronic Frontier Foundation‘s Jeremy Malcolm, who argued that — even if such information were only limited to anti-abuse professionals — this also wouldn’t work.

“There would be nothing to stop malicious actors from identifying as anti-abuse professionals – neither would want to have a system to ‘vet’ anti-abuse professionals, because that would be even more problematic,” Malcolm wrote in October 2017. “There is no added value in collecting personal information – after all, criminals are not going to provide correct information anyway, and if a domain has been compromised then the personal information of the original registrant isn’t going to help much, and its availability in the wild could cause significant harm to the registrant.”

Anti-abuse and security experts counter that there are endless examples of people involved in spam, phishing, malware attacks and other forms of cybercrime who include details in WHOIS records that are extremely useful for tracking down the perpetrators, disrupting their operations, or building reputation-based systems (such as anti-spam and anti-malware services) that seek to filter or block such activity.

Moreover, they point out that the overwhelming majority of phishing is performed with the help of compromised domains, and that the primary method for cleaning up those compromises is using WHOIS data to contact the victim and/or their hosting provider.

Many commentators observed that, in the end, ICANN is likely to proceed in a way that covers its own backside, and that of its primary constituency — domain registrars. Registrars pay a fee to ICANN for each domain a customer registers, although revenue from those fees has been falling of late, forcing ICANN to make significant budget cuts.

Some critics of the WHOIS privacy effort have voiced the opinion that the registrars generally view public WHOIS data as a nuisance issue for their domain registrant customers and an unwelcome cost-center (from being short-staffed to field a constant stream of abuse complaints from security experts, researchers and others in the anti-abuse community).

“Much of the registrar market is a race to the bottom, and the ability of ICANN to police the contractual relationships in that market effectively has not been well-demonstrated over time,” political blogger Andrew Sullivan observed.

In any case, sources close to the debate tell KrebsOnSecurity that ICANN is poised to recommend a WHOIS model loosely based on Model 1 in the chart above.

Specifically, the system that ICANN is planning to recommend, according to sources, would ask registrars and registries to display just the domain name, city, state/province and country of the registrant in each record; the public email addresses would be replaced by a form or message relay link that allows users to contact the registrant. The source also said ICANN plans to leave it up to the registries/registrars to apply these changes globally or only to natural persons living in the European Economic Area (EEA).

In addition, sources say non-public WHOIS data would be accessible via a credentialing system to identify law enforcement agencies and intellectual property rights holders. However, it’s unlikely that such a system would be built and approved before the May 25, 2018 effectiveness date for the GDPR, so the rumor is that ICANN intends to propose a self-certification model in the meantime.

ICANN spokesman Brad White declined to confirm or deny any of the above, referring me instead to a blog post published Tuesday evening by ICANN CEO Göran Marby. That post does not, however, clarify which way ICANN may be leaning on the matter.

“Our conversations and work are on-going and not yet final,” White wrote in a statement shared with KrebsOnSecurity. “We are converging on a final interim model as we continue to engage, review and assess the input we receive from our stakeholders and Data Protection Authorities (PDAs).”

But with the GDPR compliance deadline looming, some registrars are moving forward with their own plans on WHOIS privacy. GoDaddy, one of the world’s largest domain registrars, recently began redacting most registrant data from WHOIS records for domains that are queried via third-party tools. And it seems likely that other registrars will follow GoDaddy’s lead.

ANALYSIS

For my part, I can say without hesitation that few resources are as critical to what I do here at KrebsOnSecurity than the data available in the public WHOIS records. WHOIS records are incredibly useful signposts for tracking cybercrime, and they frequently allow KrebsOnSecurity to break important stories about the connections between and identities behind various cybercriminal operations and the individuals/networks actively supporting or enabling those activities. I also very often rely on WHOIS records to locate contact information for potential sources or cybercrime victims who may not yet be aware of their victimization.

In a great many cases, I have found that clues about the identities of those who perpetrate cybercrime can be found by following a trail of information in WHOIS records that predates their cybercriminal careers. Also, even in cases where online abusers provide intentionally misleading or false information in WHOIS records, that information is still extremely useful in mapping the extent of their malware, phishing and scamming operations.

Anyone looking for copious examples of both need only to search this Web site for the term “WHOIS,” which yields dozens of stories and investigations that simply would not have been possible without the data currently available in the global WHOIS records.

Many privacy activists involved in to the WHOIS debate have argued that other data related to domain and Internet address registrations — such as name servers, Internet (IP) addresses and registration dates — should also be considered private information. My chief concern if this belief becomes more widely held is that security companies might stop sharing such information for fear of violating the GDPR, thus hampering the important work of anti-abuse and security professionals.

This is hardly a theoretical concern. Last month I heard from a security firm based in the European Union regarding a new Internet of Things (IoT) botnet they’d discovered that was unusually complex and advanced. Their outreach piqued my curiosity because I had already been working with a researcher here in the United States who was investigating a similar-sounding IoT botnet, and I wanted to know if my source and the security company were looking at the same thing.

But when I asked the security firm to share a list of Internet addresses related to their discovery, they told me they could not do so because IP addresses could be considered private data — even after I assured them I did not intend to publish the data.

“According to many forums, IPs should be considered personal data as it enters the scope of ‘online identifiers’,” the researcher wrote in an email to KrebsOnSecurity, declining to answer questions about whether their concern was related to provisions in the GDPR specifically.  “Either way, it’s IP addresses belonging to people with vulnerable/infected devices and sharing them may be perceived as bad practice on our end. We consider the list of IPs with infected victims to be private information at this point.”

Certainly as the Internet matures and big companies develop ever more intrusive ways to hoover up data on consumers, we also need to rein in the most egregious practices while giving Internet users more robust tools to protect and preserve their privacy. In the context of Internet security and the privacy principles envisioned in the GDPR, however, I’m worried that cybercriminals may end up being the biggest beneficiaries of this new law.

from
https://krebsonsecurity.com/2018/02/new-eu-privacy-law-may-weaken-security/

Microsoft Patch Tuesday, February 2018 Edition

Microsoft today released a bevy of security updates to tackle more than 50 serious weaknesses in Windows, Internet Explorer/Edge, Microsoft Office and Adobe Flash Player, among other products. A good number of the patches issued today ship with Microsoft’s “critical” rating, meaning the problems they fix could be exploited remotely by miscreants or malware to seize complete control over vulnerable systems — with little or no help from users.

February’s Patch Tuesday batch includes fixes for at least 55 security holes. Some of the scarier bugs include vulnerabilities in Microsoft Outlook, Edge and Office that could let bad guys or bad code into your Windows system just by getting you to click on a booby trapped link, document or visit a compromised/hacked Web page.

As per usual, the SANS Internet Storm Center has a handy rundown on the individual flaws, neatly indexing them by severity rating, exploitability and whether the problems have been publicly disclosed or exploited.

One of the updates addresses a pair of serious vulnerabilities in Adobe Flash Player (which ships with the latest version of Internet Explorer/Edge). As KrebsOnSecurity warned last week, there are active attacks ongoing against these Flash vulnerabilities.

Adobe is phasing out Flash entirely by 2020, but most of the major browsers already take steps to hobble Flash. And with good reason: It’s a major security liability. Chrome also bundles Flash, but blocks it from running on all but a handful of popular sites, and then only after user approval.

For Windows users with Mozilla Firefox installed, the browser prompts users to enable Flash on a per-site basis. Through the end of 2017 and into 2018, Microsoft Edge will continue to ask users for permission to run Flash on most sites the first time the site is visited, and will remember the user’s preference on subsequent visits.

The latest standalone version of Flash that addresses these bugs is 28.0.0.161 for Windows, Mac, Linux and Chrome OS. But most users probably would be better off manually hobbling or removing Flash altogether, since so few sites actually require it still. Disabling Flash in Chrome is simple enough. Paste “chrome://settings/content” into a Chrome browser bar and then select “Flash” from the list of items. By default it should be set to “Ask first” before running Flash, although users also can disable Flash entirely here or whitelist and blacklist specific sites.

People running Adobe Reader or Acrobat also need to update, as Adobe has shipped new versions of these products that fix at least 39 security holes. Adobe Reader users should know there are alternative PDF readers that aren’t so bloated or full of security issues. Sumatra PDF is a good, lightweight alternative.

Experience any issues, glitches or problems installing these updates? Sound off about it in the comments below.

from
https://krebsonsecurity.com/2018/02/microsoft-patch-tuesday-february-2018-edition/

Domain Theft Strands Thousands of Web Sites

Newtek Business Services Corp. [NASDAQ:NEWT], a Web services conglomerate that operates more than 100,000 business Web sites and some 40,000 managed technology accounts, had several of its core domain names stolen over the weekend. The theft shut off email and stranded Web sites for many of Newtek’s customers.

An email blast Newtek sent to customers late Saturday evening made no mention of a breach or incident, saying only that the company was changing domains due to “increased” security. A copy of that message can be read here (PDF).

In reality, three of their core domains were hijacked by a Vietnamese hacker, who replaced the login page many Newtek customers used to remotely manage their Web sites (webcontrolcenter[dot]com) with a live Web chat service. As a result, Newtek customers seeking answers to why their Web sites no longer resolved correctly ended up chatting with the hijacker instead.

The PHP Web chat client that the intruder installed on Webcontrolcenter[dot]com, a domain that many Newtek customers used to manage their Web sites with the company. The perpetrator can be seen in this chat using the name “admin.” Click to enlarge.

In a follow-up email sent to customers 10 hours later (PDF), Newtek acknowledged the outage was the result of a “dispute” over three domains, webcontrolcenter[dot]com, thesba[dot]com, and crystaltech[dot]com.

“We strongly request that you eliminate these domain names from all your corporate or personal browsers, and avoid clicking on them,” the company warned its customers. “At this hour, it has become apparent that as a result over the dispute for these three domain names, we do not currently have control over the domains or email coming from them.”

The warning continued: “There is an unidentified third party that is attempting to chat and may engage with clients when visiting the three domains. It is imperative that you do not communicate or provide any sensitive data at these locations.”

Newtek did not respond to requests for comment.

Domain hijacking is not a new problem, but it can be potentially devastating to the victim organization. In control of a hijacked domain, a malicious attacker could seamlessly conduct phishing attacks to steal personal information, or use the domain to foist malicious software on visitors.

Newtek is not just a large Web hosting firm: It aims to be a one-stop shop for almost any online service a small business might need. As such, it’s a mix of very different business units rolled up into one since its founding in 1998, including lending solutions, HR, payroll, managed cloud solutions, group health insurance and disaster recovery solutions.

“NEWT’s tentacles go deep into their client’s businesses through providing data security, human resources, employee benefits, payments technology, web design and hosting, a multitude of insurance solutions, and a suite of IT services,” reads a Sept. 2017 profile of the company at SeekingAlpha, a crowdsourced market analysis publication.

Newtek’s various business lines. Source: Newtek.

Reached via the Web chat client he installed at webcontrolcenter[dot]com, the person who claimed responsibility for the hijack said he notified Newtek five days ago about a “bug” he found in the company’s online operations, but that he received no reply.

A Newtek customer who resells the company’s products to his clients said he had to spend much of the weekend helping clients regain access to email accounts and domains as a result of the incident. The customer, who asked to remain anonymous, said he was shocked that Newtek made little effort to convey the gravity of the hijack to its customers — noting that the company’s home page still makes no mention of the incident.

“They also fail to make it clear that any data sent to any host under the domain could be recorded (email passwords, web credentials, etc.) by the attacker,” he said. “I’m floored at how bad their communication was to their users. I’m not surprised, but concerned, that they didn’t publish the content in the emails directly on their website.”

The source said that at a minimum Newtek should have expired all passwords immediately and required resets through non-compromised hosts.

“And maybe put a notice about this on their home page instead of relying on email, because a lot of my customers can’t get email right now as a result of this,” the source said.

There are a few clues that suggest the perpetrator of these domain hijacks is indeed being truthful about both his nationality and that he located a bug in Newtek’s service. Two of the hijacked domains were moved to a Vietnamese domain registrar (inet.vn).

This individual gave me an email address to contact him at — hd2416@gmail.com — although he has so far not responded to questions beyond promising to reply in Vietenamese. The email is tied to two different Vietnamese-language social networking profiles.

A search at Domaintools indicates that this address is linked to the registration records for four domains, including one (giakiemnew[dot]com) that was recently hosted on a dedicated server operated by Newtek’s legacy business unit Crystaltek [full disclosure: Domaintools is an advertiser on this site]. Recall that Crystaltek[dot]com was among the three hijacked domains.

In addition, the domain giakiemnew[dot]com was registered through Newtek Technology Services, a domain registration service offered by Newtek. This suggests that the perpetrator was in fact a customer of Newtek, and perhaps did discover a vulnerability while using the service.

from
https://krebsonsecurity.com/2018/02/domain-theft-strands-thousands-of-web-sites/

U.S. Arrests 13, Charges 36 in ‘Infraud’ Cybercrime Forum Bust

The U.S. Justice Department announced charges on Wednesday against three dozen individuals thought to be key members of ‘Infraud,” a long-running cybercrime forum that federal prosecutors say cost consumers more than a half billion dollars. In conjunction with the forum takedown, 13 alleged Infraud members from the United States and six other countries were arrested.

A screenshot of the Infraud forum, circa Oct. 2014. Like most other crime forums, it had special sections dedicated to vendors of virtually every kind of cybercriminal goods or services imaginable. Click to enlarge.

Started in October 2010, Infraud was short for “In Fraud We Trust,” and collectively the forum referred to itself as the “Ministry of Fraudulently [sic] Affairs.” As a mostly English-language fraud forum, Infraud attracted nearly 11,000 members from around the globe who sold, traded and bought everything from stolen identities and credit card accounts to ATM skimmers, botnet hosting and malicious software.

“Today’s indictment and arrests mark one of the largest cyberfraud enterprise prosecutions ever undertaken by the Department of Justice,” said John P. Cronan, acting assistant attorney general of the Justice Department’s criminal division. “As alleged in the indictment, Infraud operated like a business to facilitate cyberfraud on a global scale.”

The complaint released by the DOJ lists 36 Infraud members — some only by their hacker nicknames, others by their alleged real names and handles, and still others just as “John Does.” Having been a fairly regular lurker on Infraud over the past seven year who has sought to independently identify many of these individuals, I can say that some of these names and nick associations sound accurate but several do not.

The government says the founder and top member of Infraud was Svyatoslav Bondarenko, a hacker from Ukraine who used the nicknames “Rector” and “Helkern.” The first nickname is well supported by copies of the forum obtained by this author several years back; indeed, Rector’s profile listed him an administrator, and Rector can be seen on countless Infraud discussion threads vouching for sellers who had paid the monthly fee to advertise their services in “sticky” threads on the forum.

However, I’m not sure the Helkern association with Bondarenko is accurate. In December 2014, just days after breaking the story about the theft of some 40 million credit and debit cards from retail giant Target, KrebsOnSecurity posted a lengthy investigation into the identity of “Rescator” — the hacker whose cybercrime shop was identified as the primary vendor of cards stolen from Target.

That story showed that Rescator changed his nickname from Helkern after Helkern’s previous cybercrime forum (Darklife) got massively hacked, and it presented clues indicating that Rescator/Helkern was a different Ukrainian man named Andrey Hodirevski. For more on that connection, see Who’s Selling Cards from Target.

Also, Rescator was a separate vendor on Infraud, and there are no indications that I could find suggesting that Rector and Rescator were the same people. Here is Rescator’s most recent sales thread for his credit card shop on Infraud — dated almost a year after the Target breach. Notice the last comment on that thread alleges that Rescator had recently been arrested and that his shop was being run by law enforcement officials: 

Another top administrator of Infraud used the nickname “Stells.” According to the Justice Department, Stells’ real name is Sergey Medvedev. The government doesn’t describe his exact role, but it appears to have been administering the forum’s escrow service (see screenshot below).

Most large cybercrime forums have an escrow service, which holds the buyer’s virtual currency until forum administrators can confirm the seller has consummated the transaction acceptably to both parties. The escrow feature is designed to cut down on members ripping one another off — but it also can add considerably to the final price of the item(s) for sale.

In April 2016, Medvedev would take over as the “admin and owner” of Infraud, after he posting a note online saying that Bondarenko had gone missing, the Justice Department said.

One defendant in the case, a well-known vendor of stolen credit and debit cards who goes by the nickname “Zo0mer,” is listed as a John Doe. But according to a New York Times story from 2006, Zo0mer’s real name is Sergey Kozerev, and he hails from St. Petersburg, Russia.

The indictments also list two other major vendors of stolen credit and debit cards: hackers who went by the nicknames “Unicc” and “TonyMontana” (the latter being a reference to the fictional gangster character played by Al Pacino in the 1983 movie Scarface). Both hackers have long operated and operate to this day their own carding shops:

Unicc shop, which sells stolen credit card data as well as Social Security numbers and other consumer information that can be used for identity theft.

The government says Unicc’s real name is Andrey Sergeevich Novak. TonyMontana is listed in the complaint as John Doe #1.

TonyMontana’s carding shop.

Perhaps the most successful vendor of skimming devices made to be affixed to ATMs and fuel pumps was a hacker known on Infraud and other crime forums as “Rafael101.” Several of my early stories about new skimming innovations came from discussions with Rafael in which this author posed as an interested buyer and asked for videos, pictures and technical descriptions of his skimming devices.

A confidential source who asked not to be named told me a few years back that Rafael had used the same password for his skimming sales accounts on multiple competing cybercrime forums. When one of those forums got hacked, it enabled this source to read Rafael’s emails (Rafael evidently used the same password for his email account as well).

The source said the emails showed Rafael was ordering the parts for his skimmers in bulk from Chinese e-commerce giant Alibaba, and that he charged a significant markup on the final product. The source said Rafael had the packages all shipped to a Jose Gamboa in Norwalk, Calif — a suburb of Los Angeles. Sure enough, the indictment unsealed this week says Rafael’s real name is Jose Gamboa and that he is from Los Angeles.

A private message from the skimmer vendor Rafael101, from on a competing cybercrime forum (carder.su) in 2012.

The Justice Department says the arrests in this case took place in Australia, France, Italy, Kosovo, Serbia, the United Kingdom and the United States. The defendants face a variety of criminal charges, including identity theft, bank fraud, wire fraud and money laundering. A copy of the indictment is available here.

from
https://krebsonsecurity.com/2018/02/u-s-arrests-13-charges-36-in-infraud-cybercrime-forum-bust/

Would You Have Spotted This Skimmer?

When you realize how easy it is for thieves to compromise an ATM or credit card terminal with skimming devices, it’s difficult not to inspect or even pull on these machines when you’re forced to use them personally — half expecting something will come detached. For those unfamiliar with the stealth of these skimming devices and the thieves who install them, read on.

Police in Lower Pottsgrove, PA are searching for a pair of men who’ve spent the last few months installing card and PIN skimmers at checkout lanes inside of Aldi supermarkets in the region. These are “overlay” skimmers, in that they’re designed to be installed in the blink of an eye just by placing them over top of the customer-facing card terminal.

The top of the overlay skimmer models removed from several Aldi grocery story locations in Pennsylvania over the past few months.

The underside of the skimmer hides the brains of this little beauty, which is configured to capture the personal identification number (PIN) of shoppers who pay for their purchases with a debit card. This likely describes a great number of loyal customers at Aldi; the discount grocery chain only in 2016 started accepting credit cards, and previously only took cash, debit cards, SNAP, and EBT cards.

The underside of this skimmer found at Aldi is designed to record PINs.

The Lower Pottsgrove police have been asking local citizens for help in identifying the men spotted on surveillance cameras installing the skimming devices, noting that multiple victims have seen their checking accounts cleaned out after paying at compromised checkout lanes.

Local police released the following video footage showing one of the suspects installing an overlay skimmer exactly like the one pictured above. The man is clearly nervous and fidgety with his feet, but the cashier can’t see his little dance and certainly doesn’t notice the half second or so that it takes him to slip the skimming device over top of the payment terminal.

I realize a great many people use debit cards for everyday purchases, but I’ve never been interested in assuming the added risk and so pay for everything with cash or a credit card. Armed with your PIN and debit card data, thieves can clone the card and pull money out of your account at an ATM. Having your checking account emptied of cash while your bank sorts out the situation can be a huge hassle and create secondary problems (bounced checks, for instance).

The Lower Pottsgrove Police have been admonishing people for blaming Aldi for the incidents, saying the thieves are extremely stealthy and that this type of crime could hit virtually any grocery chain.

While Aldi payment terminals in the United States are capable of accepting more secure chip-based card transactions, the company has yet to enable chip payments (although it does accept mobile contactless payment methods such as Apple Pay and Google Pay). This is important because these overlay skimmers are designed to steal card data stored on the magnetic stripe when customers swipe their cards.

However, many stores that have chip-enabled terminals are still forcing customers to swipe the stripe instead of dip the chip.

Want to learn more about self-checkout skimmers? Check out these other posts:

How to Spot Ingenico Self-Checkout Skimmers

Self-Checkout Skimmers Go Bluetooth

More on Bluetooth Ingenico Overlay Skimmers

Safeway Self-Checkout Skimmers Up Close

Skimmers Found at Wal-Mart: A Closer Look

from
https://krebsonsecurity.com/2018/02/would-you-have-spotted-this-skimmer/

Alleged Spam Kingpin ‘Severa’ Extradited to US

Peter Yuryevich Levashov, a 37-year-old Russian computer programmer thought to be one of the world’s most notorious spam kingpins, has been extradited to the United States to face federal hacking and spamming charges.

Levashov, in an undated photo.

Levashov, who allegedly went by the hacker names “Peter Severa,” and “Peter of the North,” hails from St. Petersburg in northern Russia, but he was arrested last year while in Barcelona, Spain with his family.

Authorities have long suspected he is the cybercriminal behind the once powerful spam botnet known as Waledac (a.k.a. “Kelihos”), a now-defunct malware strain responsible for sending more than 1.5 billion spam, phishing and malware attacks each day.

According to a statement released by the U.S. Justice Department, Levashov was arraigned last Friday in a federal court in New Haven, Ct. Levashov’s New York attorney Igor Litvak said he is eager to review the evidence against Mr. Levashov, and that while the indictment against his client is available, the complaint in the case remains sealed.

“We haven’t received any discovery, we have no idea what the government is relying on to bring these allegations,” Litvak said. “Mr. Levashov maintains his innocence and is looking forward to resolving this case, clearing his name, and returning home to his wife and 5-year-old son in Spain.”

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 computer code with Waledac.

Severa routinely 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 pieces of spam. 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.

Waledac first surfaced in April 2008, but many experts believe the spam-spewing machine was merely an update to the Storm worm, the engine behind another massive spam botnet that first surfaced in 2007. Both Waledac and Storm were major distributors of pharmaceutical and malware spam.

According to Microsoft, in one month alone approximately 651 million spam emails attributable to Waledac/Kelihos were directed to Hotmail accounts, including offers and scams related to online pharmacies, imitation goods, jobs, penny stocks, and more. The Storm worm botnet also sent billions of messages daily and infected an estimated one million computers worldwide.

Both Waledac/Kelihos and Storm were hugely innovative because they each included self-defense mechanisms designed specifically to stymie security researchers who might try to dismantle the crime machines.

Waledac and Storm sent updates and other instructions via a peer-to-peer communications system not unlike popular music and file-sharing services. Thus, even if security researchers or law-enforcement officials manage to seize the botnet’s back-end control servers and clean up huge numbers of infected PCs, the botnets could respawn themselves by relaying software updates from one infected PC to another.

FAKE NEWS

According to a lengthy April 2017 story in Wired.com about Levashov’s arrest and the takedown of Waledac, Levashov 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.

After Levashov’s arrest, numerous media outlets quoted his wife saying he was being rounded up as part of a dragnet targeting Russian hackers thought to be involved in alleged interference in the 2016 U.S. election. Russian news media outlets made much hay over this claim. In contesting his extradition to the United States, Levashov even reportedly told the RIA Russian news agency that he worked for Russian President Vladimir Putin‘s United Russia party, and that he would die within a year of being extradited to the United States.

“If I go to the U.S., I will die in a year,” Levashov is quoted as saying. “They want to get information of a military nature and about the United Russia party. I will be tortured, within a year I will be killed, or I will kill myself.”

But there is so far zero evidence that anyone has accused Levashov of being involved in election meddling. However, the Waledac/Kelihos botnet does have a historic association with election meddling: It was used during the Russian election in 2012 to send political messages to email accounts on computers with Russian Internet addresses. Those emails linked to fake news stories saying that Mikhail D. Prokhorov, a businessman who was running for president against Putin, had come out as gay.

SEVERA’S PARTNERS

If Levashov was to plead guilty in the case being prosecuted by U.S. authorities, it could shed light on the real-life identities of other top spammers.

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

The other was a 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). In 2011, Microsoft offered a still-unclaimed $250,000 reward for information leading to the arrest and conviction of the Rustock author.

Spamdot.biz moderator Severa listing prices to rent his Waledac spam botnet.

Microsoft believes Cosma’s real name may be Dmitri A. Sergeev, Artem Sergeev, or Sergey Vladomirovich Sergeev. In June 2011, KrebsOnSecurity published a brief profile of Cosma that included Sergeev’s resume and photo, both of which indicated he is a Belorussian programmer who once sought a job at Google. For more on Cosma, see “Flashy Car Got Spam Kingpin Mugged.”

Severa and Cosma had met one another several times in their years together in the stock spamming business, and they appear to have known each other intimately enough to be on a first-name basis. Both of these titans of junk email are featured prominently in “Meet the Spammers,” the 7th chapter of my book, Spam Nation: The Inside Story of Organized Cybercrime.

Much like his close associate — Cosma, the Rustock botmaster — Severa may also have a $250,000 bounty on his head, albeit indirectly. The Conficker worm, a global contagion launched in 2009 that quickly spread to an estimated 9 to 15 million computers worldwide, prompted an unprecedented international response from security experts. This group of experts, dubbed the “Conficker Cabal,” sought in vain to corral the spread of the worm.

But despite infecting huge numbers of Microsoft Windows systems, Conficker was never once used to send spam. In fact, the only thing that Conficker-infected systems ever did was download and spread a new version of the the malware that powered the Waledac botnet. Later that year, Microsoft announced it was offering a $250,000 reward for information leading to the arrest and conviction of the Conficker author(s). Some security experts believe this proves a link between Severa and Conficker.

Both Cosma and Severa were quite active on Spamit[dot]com, a once closely-guarded forum for Russian spammers. In 2010, Spamit was hacked, and a copy of its database was shared with this author. In that database were all private messages between Spamit members, including many between Cosma and Severa. For more on those conversations, see “A Closer Look at Two Big Time Botmasters.”

In addition to renting out his spam botnet, Severa also managed multiple affiliate programs in which he paid other cybercriminals to distribute so-called fake antivirus products. Also known as “scareware,” fake antivirus was at one time a major scourge, using false and misleading pop-up alerts to trick and mousetrap unsuspecting computer users into purchasing worthless (and in many cases outright harmful) software disguised as antivirus software.

A screenshot of the eponymous scareware affiliate program run by “Severa,” allegedly the cybercriminal alias of Peter Levashov.

In 2011, KrebsOnSecurity published Spam & Fake AV: Like Ham & Eggs, which sought to illustrate the many ways in which the spam industry and fake antivirus overlapped. That analysis included data from Brett Stone-Gross, a cybercrime expert who later would assist Microsoft and other researchers in their successful efforts to dismantle the Waledac/Kelihos botnet.

Levashov faces federal criminal charges on eight counts, including aggravated identity theft, wire fraud, conspiracy, and intentional damage to protected computers. The indictment in his case is available here (PDF).

Further reading: Mr Waledac — The Peter North of Spamming

from
https://krebsonsecurity.com/2018/02/alleged-spam-kingpin-severa-extradited-to-us/