February, 2011


26
Feb 11

Before You Install Windows 7 Service Pack 1

Microsoft is now offering Windows 7 users “Service Pack 1,” a bundle of security updates and minor feature improvements. If you’re thinking about installing this update, read on for a few caveats and tips that may change your mind.

First off, this service pack is mainly a bundle of previously-released security updates. If you are staying up-to-date in security patches, you are not going to gain much by installing this service pack, which contains a few uber-geeky feature improvements that are mostly a bonus for users of Windows Server 2008 R2 — not Windows 7.

My take? I’d say that the main benefit of this service pack for Windows 7 users would be if you were considering re-installing the operating system for some reason. In that case, Service Pack 1 would streamline the process quite a bit. Otherwise, I would urge Windows 7 users who are up-to-date to ignore this offering, at least for now.

If you decide to go forward with this Service Pack, there are several important considerations, particularly if your system has certain hotfixes installed (hotfixes are small patches designed to address specific — not necessarily security — issues). For example, Microsoft says that systems with hotfixes (2406705, 979350 or 983534) will block the installation of the service pack and may experience problems as a result.

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25
Feb 11

Pharma Wars

How do you chronicle the struggle for control of an underground empire when neither combatant wants to admit that he is fighting or even that a war is underway? That’s the nature of a business-feud turned turf-war that is playing out right now between the bosses of two of the Internet’s largest illicit pharmacy operations.

On Thursday, I wrote about an anonymous source using the pseudonym “Despduck” who shared a copy of the back-end database for Glavmed, a.k.a. “SpamIt”, until recently the biggest black market distributor of generic pharmaceuticals on the Internet. The database indicates that Glavmed processed in excess of 1.5 million orders from more than 800,000 consumers who purchased knockoff prescription drugs between May 2007 and June 2010.

Despduck first proffered the Glavmed data through a mutual source in the anti-spam community, and claimed that the alleged owner of the pharmacy program, a Russian businessman named Igor Gusev, would soon be charged with illegal business activities. Sure enough, near the end of September 2010, Russian officials announced a criminal investigation into Gusev and his businesses. Shortly after those charges were brought, SpamIt.com was closed down. Consequently, the volume of spam flowing into inboxes around the world fell precipitously, likely because SpamIt.com affiliates fell into a period of transitioning to other pharmacy networks.

Gusev is now in exile from Russia; he blames his current predicament– and the leak of the Glavmed data — on his former business partner, fellow Muscovite Pavel Vrublevsky. The latter is a founder of Russian e-payment giant ChronoPay, a company Gusev also helped to co-found almost eight years ago (according to incorporation documents I obtained from the Netherlands Chamber of Commerce — where ChronoPay was established — for a time Gusev and Vrublevsky were 50/50 partners in ChronoPay).

As reported in my story earlier this week, tens of thousands of internal documents and emails stolen from ChronoPay and leaked to key individuals suggest that Vrublevsky is managing a competing online pharmacy network called Rx-Promotion. It turns out that the Glavmed database was stolen at about the same time as ChronoPay’s breach.

Vrublevsky denies being the source of the purloined Glavmed/SpamIt database, but the bounty of leaked ChronoPay documents suggests otherwise. Included in the email records are messages sent to and from an inbox that used the display name “Kill Glavmed.” What was the email address tied to that name? “Despduck@gmail.com,” the very same address used to communicate with my anti-spam source.

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24
Feb 11

SpamIt, Glavmed Pharmacy Networks Exposed

An organized crime group thought to include individuals responsible for the notorious Storm and Waledac worms generated more than $150 million promoting rogue online pharmacies via spam and hacking, according to data obtained by KrebsOnSecurity.com.

In June 2010, an anonymous source using the assumed name “Despduck” began an e-mail correspondence with a key anti-spam source of mine, claiming he had access to the back-end database for Glavmed, a.k.a. “SpamIt”, until recently the biggest black market distributor of generic pharmaceuticals on the Internet.

Source: M86 Security Labs

If you received an unsolicited email in the past few years pimping male enhancement or erectile dysfunction pills, chances are extremely good that it was sent compliments of a Glavmed/Spamit contractor or “affiliate.” According to M86 Security Labs, the sites advertised in those Glavmed/Spamit emails — best known by their “Canadian Pharmacy” brand name — were by far the most prevalent affiliate brands promoted by spam as of June 2010.

Despduck said he could deliver data on hundreds of thousands of consumers who purchased pills through Glavmed’s sizable stable of online pharma shops, as well as detailed financial records of Glavmed/SpamIt affiliates who earned thousands of dollars of month promoting pharmacy sites using spam and hacked Web sites.

After many months of promising the information, Despduck finally came through with a 9-gigabyte database file that contained three years worth of financial books for the massive illicit pharmacy network. My source shared the data with several U.S. law enforcement agencies, and ultimately agreed to share it with me.

The database reads like a veritable rogues gallery of the Underweb; In it are the nicknames, ICQ numbers, email addresses and bank account information on some of the Internet’s most notorious hackers and spammers. This huge cache of information shows that over the course of three years, more than 2,500 “affiliates” earned hefty commissions promoting Glavmed’s pharmacy sites.

In total, these promoters would help Glavmed process in excess of 1.5 million orders from more than 800,000 consumers who purchased knockoff prescription drugs between May 2007 and June 2010. All told, Glavmed generated revenues of at least $150 million.

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23
Feb 11

Sold a Lemon in Internet Banking

An online bank robbery in which computer crooks stole $63,000 from a Kansas car dealership illustrates the deftness with which cyber thieves are flouting the meager security measures protecting commercial accounts at many banks.

At 7:45 a..m. Monday, Nov. 1, 2010, the controller for Abilene, Kansas based Green Ford Sales, Inc. logged into his account at First Bank Kansas to check the company’s accounts. Seven hours later, he logged back in and submitted a payroll batch for company employees totaling $51,970. The bank’s authentication system sent him an e-mail to confirm the batch details, and the controller approved it.

The controller didn’t know it at the time, but thieves had already compromised his Microsoft Windows PC with a copy of the ZeuS trojan, which allowed them to monitor his computer and log in to the company’s bank account using his machine. Less than an hour after the bookkeeper approved the payroll batch, bank records show, the thieves logged in to Green Ford’s account from the same Internet address normally used by the dealership, using the controller’s correct user name and password.

The attackers cased the joint a bit — checking the transaction history, account summary and balance — and then logged out. They waited until 1:04 p.m. the next day to begin creating their own $63,000 payroll batch, by adding nine new “employees” to the company’s books. The employees added were in fact money mules, willing or unwitting individuals recruited through work-at-home job scams to help crooks launder stolen funds.

Green Ford’s controller never received the confirmation email sent by the bank to verify the second payroll batch initiated by the fraudsters, because the crooks also had control over the controller’s e-mail account.

“They went through and deleted it,” said Green Ford owner Lease Duckwall. “If they had control over his machine, they’d have certainly had control over his email and the password for that, too.”

To me, this attack gets to the heart of why these e-banking thefts continue unabated at banks all over the country every week: An attacker who has compromised an account holder’s PC can control every aspect of what the victim sees or does not see, because that bad guy can then intercept, delete, modify or re-route all communications to and from the infected PC. If a bank’s system of authenticating a transaction depends solely on the customer’s PC being infection-free, then that system is trivially vulnerable to compromise in the face of today’s more stealthy banking trojans.

It is difficult to believe that there are still banks that are using nothing more than passwords for online authentication on commercial accounts. Then again, some of the techniques being folded into today’s banking trojans can defeat many of the most advanced client-side authentication mechanisms in use today.

Banks often complain that commercial account takeover victims might have spotted thefts had the customer merely reconciled its accounts at day’s end. But several new malware strains allow attackers to manipulate the balance displayed when the victim logs in to his or her account.

Perhaps the most elegant fraud techniques being built into trojans involve an approach known as “session riding,” where the fraudster in control of a victim PC simply waits until the user logs in, and then silently hijacks that session to move money out of the account.

Amit Klein, chief technology officer at Trusteer, blogged this week about a relatively new strain of malware dubbed OddJob, which hijacks customers’ online banking sessions in real time using their session ID tokens. According to Klein, OddJob keeps online banking sessions open after customers think they have “logged off,” enabling criminals to extract money and commit fraud unnoticed.

All of these developments illustrate the need for some kind of mechanism on the bank’s end for detecting fraudulent transactions, such as building profiles of what constitutes normal customer activity and looking for activity that appears to deviate from that profile. For example, in almost every case I’ve written about, the victim was robbed after thieves logged in and added multiple new names to the payroll. There are most certainly other such markers that are common to victims of commercial account fraud, and banks should be looking out for them. Unfortunately, far too many small to mid-sized banks outsource much of their visibility at the transaction level to third-party service providers, most of whom have been extremely slow to develop and implement solutions that would enable partner banks to flag many warning signs of account takeovers.

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21
Feb 11

Russian Cops Crash Pill Pusher Party

I recently returned from a trip to Russia, where I traveled partly to interview a few characters involved in running the world’s biggest illicit online pharmacies. I arrived just days after the real fireworks, when several truckloads of masked officers from Russian drug enforcement bureaus raided a party thrown exclusively for the top moneymakers of Rx-Promotion, a major e-pharmacy program co-owned by one of the men I went to meet.

Chronopay founder Pavel Vrublevsky, at his office in Moscow

Within a few hours of my arrival in Moscow, I called Pavel Vrublevsky, the founder of ChronoPay, Russia’s largest processor of online payments. For years, I had heard that Vrublevsky was known online as “RedEye,” and that Rx-Promotion was using ChronoPay as the core credit card processor. Unlike other rogue Internet pharmacies, Rx-Promotion’s claim to fame is that it is one of the few that sells controlled substances, such as addictive painkillers like Oxycontin, Oxycodone and Codeine over the Internet without requiring a prescription.

Late last summer I came into possession of a mountain of evidence showing that not only is ChronoPay the core credit card processor for Rx-Promotion, but that Vrublevsky also is co-owner of the pharmacy program and  that ChronoPay executives have steered the pharmacy’s activities for some time.

In mid-2010, ChronoPay was hacked, and many of the company’s internal documents were posted on random LiveJournal blogs and other places that were mostly shut down shortly thereafter. But a much larger cache of tens of thousands of ChronoPay e-mails, and thousands of recorded phone calls and documents were siphoned from the company and distributed to a handful of people, including me.

Among the few others who have these documents is Igor Gusev, an early co-founder of ChronoPay and the man now charged by Russian officials as the owner of a competing online pharmacy affiliate program called Glavmed. Gusev is currently trickling out the leaked ChronoPay documents in a Russian language blog about Vrublevsky called Redeye-blog.com, mainly because he believes Vrublevsky was responsible for helping to bring the charges against him.

I told Vrublevsky that I’d also received the cache of stolen data, and as a result he has been calling me almost daily for the past eight months. His goals: To keep tabs on my activities and to learn tidbits about others in his industry. But most of all, Vrublevsky has acknowledged he’s been hoping to feed me tips that would lead to other stories that aren’t about him or what’s in those documents.

Some of what he’s told me has checked out and has indeed been useful. Yet, now that I’ve had time to pore over these documents and emails in detail (almost all of them are in Russian), a much clearer picture of Vrublevsky and his businesses is beginning to emerge.

My analysis indicates that in 2010 alone, Rx-Promotion sold tens of millions of dollars worth of generic prescription drugs (mostly to Americans), including millions of controlled pills that have high resale value on the street, such as Valium, Percocet, Tramadol, and Oxycodone. And yes, buyers are getting more or less what they’re seeking from this program, contrary to popular perception (more soon on how I know that).

I hadn’t told Vrublevsky that I was coming to Russia before I arrived on Feb. 8. But I wasted no time in phoning him via Skype, using the line he normally calls me on several times a week.

“Duuuuuuuudddde!,” he answers. “It’s 7 a.m. where you are, who died?”

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18
Feb 11

KrebsOnSecurity.com Wins Award

KrebsOnSecurity.com was honored at the annual Social Security Blogger Awards at the RSA security conference in San Francisco this week. Judges and voters picked this blog as the one they thought best represents the security industry today.

Among the four other finalists in this category were some fairly big names (in no particular order):

* Threat Post
* CSO Online Blog
* Threat Level (Wired)
* Schneier On Security

This is the second year in a row KrebsOnSecurity.com was recognized at the blogger awards gathering: Last year, it was named the “Best Non-Technical Security Blog“. Thanks to the judges, voters and to all you readers who make the discussion here so much more interesting, informative and worthwhile!

Sophos’s Naked Security blog won for “Most Educational”; Veracode’s Zero Day Labs won for “Best Corporate Security blog”; “Best Podcast” went to Pauldotcom; the Securosis blog earned the “Most Entertaining” award.

Below is a great video from Chris Eng who won the “The single best security blog post of the year” award, with the following text-to-movie clip on what it takes to be an authentic “thought leader” in the information security space:


17
Feb 11

Java 6 Update 24 Plugs 21 Security Holes

A new version of Java fixes at least 21 security flaws in the widely-distributed software bundle. Updates are available for Windows, Linux and Solaris users.

If you’re curious about the security updates included in Java 6 Update 24, see the release notes from Oracle. As I have shown in many stories on this blog, outdated Java installations can give bad guys and malware a foothold on your system, so if you use Java, please keep it updated. If you have Java installed but can’t remember why, you might consider simply uninstalling it altogether (you can always reinstall it later). I only keep Java installed on one system of mine, and I disable the Java plugin from within Mozilla Firefox (Tools, Add-ons, Plugins).

Updates are available from within Java (click the Update tab from the Java entry in the Windows control panel), or from Java.com. Mac users will need to wait until Apple releases a separate update to fix these flaws on OS X because the company maintains its own version of Java (for now, anyway).


16
Feb 11

Having a Ball with ATM Skimmers

On February 8, 2009, a customer at an ATM at a Bank of America branch in Sun Valley, Calif., spotted something that didn’t look quite right about the machine: A silver, plexiglass device had been attached to the ATM’s card acceptance slot, in a bid to steal card data from unsuspecting ATM users.

But the customer and the bank’s employees initially overlooked a secondary fraud device that the unknown thief had left at the scene: A sophisticated, battery operated and motion activated camera designed to record victims entering their personal identification numbers at the ATM.

The camera was discovered more than a day later by a maintenance worker who was servicing the ATM. The device, pictured below with the boxy housing in which it was discovered, was designed to fit into the corner of the ATM framework and painted to match.

The self-contained camera and box attached to the Bank of America ATM

The ATM pictured on the right below is shown with the card skimmer and video camera attached (click the image for a slightly larger look).

California police say the video camera and skimmer were installed by the person pictured below. The entire scam ran only for about three hours, and was reported about 11 AM. Police recovered both the skimmer and video camera, so no customer or bank losses ensued as a result of the attack. Meanwhile, the crook responsible remains at large.

The image below shows some of the manufacturer’s specs on the “Camball-2″ camera that was used in this attack, which retails for around $200 and runs for about 48 hours on motion detection mode.

Here’s a closer look at the relatively crude device attached to the mouth of the card insert slot, designed to steal data recorded on the magnetic stripe on the back of all bank cards. Criminals can then encode the information onto counterfeit cards, and — armed with the victim’s PIN — withdraw money from the victim’s account from ATMs around the world.

The authorities I’ve been interviewing about skimmer scams say the devices are most commonly installed on weekends, when many banks are closed or have limited hours. It’s difficult — once you know about the existence of these fraud devices — not to pull on parts of ATMs to make sure they aren’t compromised. If something comes off of the machine when you yank on it, and the bank is closed or the ATM isn’t attached to a financial institution, it’s probably best just to leave the device at the scene and not try to make off with it. Otherwise, consider the difficulty in explaining your actions should you be confronted by police after walking away. What’s more, in many skimmer cases, the fraudster who placed it there is monitoring the scene from somewhere within viewing distance of the compromised ATM.

It’s easy to be frightened by ATM skimmers, but try not to let these fraud devices spook you away entirely: Stick to machines in well-lit areas, places where you feel relatively safe physically. On top of that, cover your hand when entering your PIN, as many skimmers rely on hidden cameras and can’t steal your account credentials without recording those digits. Also, remember that any losses you may incur from skimmers should be fully reimbursable by your bank (at least in the United States). While the temporary loss of funds may not cover the cost of any checks that bounce because of the incident, these also are losses that your financial institution should cover if they were incurred because of a skimmer incident.

Have you seen:

Green Skimmers Skimming Green…To combat an increase in ATM fraud from skimmer devices, cash machine makers have been outfitting ATMs with a variety of anti-skimming technologies. In many cases, these anti-skimming tools take the shape of green or blue semi-transparent plastic casings that protrude from the card acceptance slot to prevent would-be thieves from easily attaching skimmers. But in a surprising number of incidents, skimmer scammers have simply crafted their creations to look exactly like the anti-skimming devices.


12
Feb 11

Imageshack Swaps Spam Pages for Scam Alerts

Late this week, I heard from several anti-spam activists who alerted me to a nice reminder that spammers don’t always win: Spammers have been promoting their rogue pharmacy sites via images uploaded to free image hosting service imageshack.us. In response, the company appears to have simply replaced those images with the following subtle warning:

The spammers' images were replaced with scam warnings like this one.

Imageshack did not respond to a request for comment sent Thursday.

Update, Feb. 13, 3:20 a.m. ET: I heard from Imageshack co-founder Alexander Levin, who said the image swaps aren’t automated. “We need a source to provide us with image links to replace. Thankfully, we found one using a honey pot,” Levin wrote in an e-mail. “With some rudimentary analysis we were able to find over 300 images uploaded to our services in this way, and were able to replace them with this image within an hour of them being reported.”


10
Feb 11

eHarmony Hacked

Online dating giant eHarmony has begun urging many users to change their passwords, after being alerted by KrebsOnSecurity.com to a potential security breach of customer information. The individual responsible for all the ruckus is an Argentinian hacker who recently claimed responsibility for a similar breach at competing e-dating site PlentyOfFish.com.

Late last year, Chris “Ch” Russo, a self-styled “security researcher” from Buenos Aires, told me he’d discovered vulnerabilities in eHarmony’s network that allowed him to view passwords and other information on tens of thousands of eHarmony users.

Russo first alerted me to his findings in late December, right after he said he first began contacting site administrators about the flaw. At the time, I sent messages to several of the administrative eHarmony e-mail addresses whose passwords Russo said he was able to discover, although I received no response. Russo told me shortly thereafter that he’d hit a brick wall in his research, and I let the matter drop after that.

Then, about a week ago, I heard from a source in the hacker underground who remarked, “You know eHarmony got hacked, too, right?” I quickly checked several fraud forums that I monitor, and soon found a curious solicitation from a user at Carder.biz, an online forum that enables cyber crooks to engage in a variety of shady transactions, from buying and selling hacked data and accounts to the purchase and/or renting of criminal services, such as botnet hosting, exploit packs, purloined credit card and consumer identity data. The seller, using the nickname “Provider” and pictured in the screen shot below, purported to have access to “different parts of the [eHarmony] infrastructure,” including a compromised database and e-mail channels. Provider was offering this information for prices ranging from $2,000 to $3,000.

A hacker named "Provider" is shown selling access to parts of eHarmony.com

When I contacted Russo about this development, he initially said that he never did anything with his findings, although later in the conversation he conceded it was possible that an associate of his who also was privy to details of the discovery may have acted on his own. At that point, I contacted eHarmony’s corporate offices and shared a copy of the screen shot and information I’d obtained from Russo.

Joseph Essas, chief technology officer at eHarmony, said Russo found a SQL injection vulnerability in one of the third party libraries that eHarmony has  been using for content management on the company’s advice site – advice.eharmony.com. Essas said there were no signs that accounts at its main user site — eharmony.com — were affected.

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