Data Breaches


31
Jul 14

Sandwich Chain Jimmy John’s Investigating Breach Claims

Sources at a growing number of financial institutions in the United States say they are tracking a pattern of fraud that indicates nationwide sandwich chain Jimmy John’s may be the latest retailer dealing with a breach involving customer credit card data. The company says it is working with authorities on an investigation.

jjohnsMultiple financial institutions tell KrebsOnSecurity that they are seeing fraud on cards that have all recently been used at Jimmy John’s locations.

Champaign, Ill.-based Jimmy John’s initially did not return calls seeking comment for two days. Today, however, a spokesperson for the company said in a short emailed statement that “Jimmy John’s is currently working with the proper authorities and investigating the situation. We will provide an update as soon as we have additional information.”

The unauthorized card activity witnessed by various financial institutions contacted by this author is tied to so-called “card-present” fraud, where the fraudsters are able to create counterfeit copies of stolen credit cards. Continue reading →


28
Jul 14

Hackers Plundered Israeli Defense Firms that Built ‘Iron Dome’ Missile Defense System

Three Israeli defense contractors responsible for building the “Iron Dome” missile shield currently protecting Israel from a barrage of rocket attacks were compromised by hackers and robbed of huge quantities of sensitive documents pertaining to the shield technology, KrebsOnSecurity has learned.

The never-before publicized intrusions, which occurred between 2011 and 2012, illustrate the continued challenges that defense contractors and other companies face in deterring organized cyber adversaries and preventing the theft of proprietary information.

The Iron Dome anti-missile system in operation, 2011.

A component of the ‘Iron Dome’ anti-missile system in operation, 2011.

According to Columbia, Md.-based threat intelligence firm Cyber Engineering Services Inc. (CyberESI), between Oct. 10, 2011 and August 13, 2012, attackers thought to be operating out of China hacked into the corporate networks of three top Israeli defense technology companies, including Elisra Group, Israel Aerospace Industries, and Rafael Advanced Defense Systems.

By tapping into the secret communications infrastructure set up by the hackers, CyberESI determined that the attackers exfiltrated large amounts of data from the three companies. Most of the information was intellectual property pertaining to Arrow III missiles, Unmanned Aerial Vehicles (UAVs), ballistic rockets, and other technical documents in the same fields of study.

Joseph Drissel, CyberESI’s founder and chief executive, said the nature of the exfiltrated data and the industry that these companies are involved in suggests that the Chinese hackers were looking for information related to Israel’s all-weather air defense system called Iron Dome.

The Israeli government has credited Iron Dome with intercepting approximately one-fifth of the more than 2,000 rockets that Palestinian militants have fired at Israel during the current conflict. The U.S. Congress is currently wrangling over legislation that would send more than $350 million to Israel to further development and deployment of the missile shield technology. If approved, that funding boost would make nearly $1 billion from the United States over five years for Iron Dome production, according to The Washington Post.

Neither Elisra nor Rafael responded to requests for comment about the apparent security breaches. A spokesperson for Israel Aerospace Industries brushed off CyberESI’s finding, calling it “old news.” When pressed to provide links to any media coverage of such a breach, IAI was unable to locate or point to specific stories. The company declined to say whether it had alerted any of its U.S. industry partners about the breach, and it refused to answer any direct questions regarding the incident.

arrow3“At the time, the issue was treated as required by the applicable rules and procedures,” IAI Spokeswoman Eliana Fishler wrote in an email to KrebsOnSecurity. “The information was reported to the appropriate authorities. IAI undertook corrective actions in order to prevent such incidents in the future.”

Drissel said many of the documents that were stolen from the defense contractors are designated with markings indicating that their access and sharing is restricted by International Traffic in Arms Regulations (ITAR) — U.S. State Department controls that regulate the defense industry. For example, Drissel said, among the data that hackers stole from IAI is a 900-page document that provides detailed schematics and specifications for the Arrow 3 missile.

“Most of the technology in the Arrow 3 wasn’t designed by Israel, but by Boeing and other U.S. defense contractors,” Drissel said. “We transferred this technology to them, and they coughed it all up. In the process, they essentially gave up a bunch of stuff that’s probably being used in our systems as well.”

WHAT WAS STOLEN, AND BY WHOM?

According to CyberESI, IAI was initially breached on April 16, 2012 by a series of specially crafted email phishing attacks. Drissel said the attacks bore all of the hallmarks of the “Comment Crew,” a prolific and state-sponsored hacking group associated with the Chinese People’s Liberation Army (PLA) and credited with stealing terabytes of data from defense contractors and U.S. corporations.

Image: FBI

Image: FBI

The Comment Crew is the same hacking outfit profiled in a February 2013 report by Alexandria, Va. based incident response firm Mandiant, which referred to the group simply by it’s official designation — “P.L.A. Unit 61398.” In May 2014, the U.S. Justice Department charged five prominent military members of the Comment Crew with a raft of criminal hacking and espionage offenses against U.S. firms. Continue reading →


21
Jul 14

Banks: Card Breach at Goodwill Industries

Heads up, bargain shoppers: Financial institutions across the country report that they are tracking what appears to be a series of credit card breaches involving Goodwill locations nationwide. For its part, Goodwill Industries International Inc. says it is working with the U.S. Secret Service on an investigation into these reports.

goodwillHeadquartered in Rockville, Md., Goodwill Industries International, Inc. is a network of 165 independent agencies in the United States and Canada with a presence in 14 other countries. The organizations sell donated clothing and household items, and use the proceeds to fund job training programs, employment placement services and other community-based initiatives.

According to sources in the financial industry, multiple locations of Goodwill Industries stores have been identified as a likely point of compromise for an unknown number of credit and debit cards.

In a statement sent to KrebsOnSecurity, Goodwill Industries said it first learned about a possible incident last Friday, July 18. The organization said it has not yet confirmed a breach, but that it is working with federal authorities on an investigation into the matter.

“Goodwill Industries International was contacted last Friday afternoon by a payment card industry fraud investigative unit and federal authorities informing us that select U.S. store locations may have been the victims of possible theft of payment card numbers,” the company wrote in an email. Continue reading →


20
Jun 14

Oil Co. Wins $350,000 Cyberheist Settlement

A California oil company that sued its bank after being robbed of $350,000 in a 2011 cyberheist has won a settlement that effectively reimbursed the firm for the stolen funds.

oilmoneysmallTRC Operating Co. Inc., an oil production firm based in Taft, Calif., had its online accounts hijacked after an account takeover that started late in the day on Friday, November 10, 2011. In the ensuing five days, the thieves would send a dozen fraudulent wires out of the company’s operating accounts, siphoning nearly $3.5 million to accounts in Ukraine.

The oil firm’s financial institution, Fresno-based United Security Bank, successfully blocked or recalled all but one of the wires – for $299,000. Nevertheless, TRC  later sued its bank to recover the remaining wire amount, arguing that USB failed to offer a commercially reasonable security procedure because the bank offered little more than a user name and password to help secure the account.

“For all intents and purposes, they got a user name and password, but were never offered any other security,” said Julie Rogers, an attorney for the Dincel Law Group, the San Jose firm that represented TRC in the dispute (as well as another California cyberheist victim that successfully sued its bank for $400,000 in 2012).  “TRC had a cash management liaison assigned to them by the bank who assured them that this was all safe and reliable.”

Last week, just days before the case was set to go to trial, the insurance company for the bank settled the lawsuit, agreeing to cut a check for $350,000 to the oil company and with neither side admitting fault in the incident. Under California law, the most that any business can recover from a cyber fraud lawsuit is the amount stolen from its accounts — plus interest. Continue reading →


12
Jun 14

P.F. Chang’s Confirms Credit Card Breach

Nationwide restaurant chain P.F. Chang’s Chinese Bistro on Thursday confirmed news first reported on this blog: That customer credit and debit card data had been stolen in a cybercrime attack on its stores. The company had few additional details to share about the breach, other than to say that it would temporarily be switching to a manual credit card imprinting system for all P.F. Chang’s restaurants in the United States.

In statement released to this reporter this evening, P.F. Chang’s said it first learned of the breach on June 10, the same day this publication pointed to evidence that the eatery chain may have been compromised. Their complete statement is as follows: Continue reading →


10
Jun 14

Banks: Credit Card Breach at P.F. Chang’s

Nationwide chain P.F. Chang’s China Bistro said today that it is investigating claims of a data breach involving credit and debit card data reportedly stolen from restaurant locations nationwide.

pfchangsOn June 9, thousands of newly-stolen credit and debit cards went up for sale on rescator[dot]so, an underground store best known for selling tens of millions of cards stolen in the Target breach. Several banks contacted by KrebsOnSecurity said they acquired from this new batch multiple cards that were previously issued to customers, and found that all had been used at P.F. Chang’s locations between the beginning of March 2014 and May 19, 2014.

Contacted about the banks’ claims, the Scottsdale, Arizona-based restaurant chain said it has not yet been able to confirm a card breach, but that the company “has been in communications with law enforcement authorities and banks to investigate the source.”

“P.F. Chang’s takes these matters very seriously and is currently investigating the situation, working with the authorities to learn more,” the company said in an emailed statement. “We will provide an update as soon as we have additional information.”

A spokesperson for the U.S. Secret Service, which typically investigates breaches involving counterfeit credit and debit cards, declined to comment.

It is unclear how many P.F. Chang’s locations may have been impacted. According to the company’s Wikipedia entry, as of January 2012 there were approximately 204 P.F. Chang’s restaurants in the United States, Puerto Rico, Mexico, Canada, Argentina, Chile and the Middle East. Banks contacted for this story reported cards apparently stolen from PFC locations in Florida, Maryland, New Jersey, Pennsylvania, Nevada and North Carolina.

The new batch of stolen cards, dubbed “Ronald Reagan” by the card shop’s owner, is the first major glut of cards released for sale on the fraud shop since March 2014, when curators of the crime store advertised the sale of some 282,000 cards stolen from nationwide beauty store chain Sally Beauty.

The items for sale are not cards, per se, but instead data copied from the magnetic stripe on the backs of credit cards. Armed with this information, thieves can re-encode the data onto new plastic and then use the counterfeit cards to buy high-priced items at big box stores, goods that can be quickly resold for cash (think iPads and gift cards, for example).

The most common way that thieves steal this type of card data is by hacking into cash registers at retail locations and planting malicious software that surreptitiously records mag stripe data when cards are swiped through the machines. The breaches at Target, Neiman Marcus, Michaels and Sally Beauty all were powered by malware that thieves planted on point-of-sale systems.

Unlike with the Target and Sally Beauty batches, however, the advertisement on Rescator’s shop for cards sold under the Ronald Reagan batch does not list the total number of cards that are for sale currently. Instead, it appears to list just the first 100 pages of results, at approximately 50 cards per page. The cards range in price from $18 to $140 per card. Many factors can influence the price of an individual card, such as whether the card is a Visa or American Express card; similarly, Platinum and Business cards tend to fetch far higher prices than Classic and Standard cards.

A new ad that debuted on June 10 for a fresh batch of cards apparently stolen from PF Chang's China Bistro locations.

A new ad that debuted on June 9 for a fresh batch of cards apparently stolen from PF Chang’s China Bistro locations.

The ad for the Ronald Reagan batch of cards also includes guidance for potential customers who wish to fund their accounts via Western Union or MoneyGram wire transfers, advice that strongly suggests those involved in this apparent heist are once again from Russia and Eastern Europe: Continue reading →


27
Mar 14

Who Built the ID Theft Service SSNDOB.ru?

Previous stories on this blog have highlighted the damage wrought by an identity theft service marketed in the underground called ssndob[dot]ru, which sold Social Security numbers, credit reports, drivers licenses and other sensitive information on more than four million Americans. Today’s post looks at a real-life identity behind the man likely responsible for building this service.

The administration page of ssndob[dot]ru. Note the logged in user, ssndob@ssa.gov, is the administrator.

The administration page of ssndob[dot]ru. Note the logged in user, ssndob@ssa.gov, is the administrator.

Last summer, ssndob[dot]ru (hereafter referred to as “SSNDOB”) was compromised by multiple attackers, its own database plundered. A copy of the SSNDOB database was exhaustively reviewed by KrebsOnSecurity.com. The database shows that the site’s 1,300 customers have spent hundreds of thousands of dollars looking up SSNs, birthdays, drivers license records, and obtaining unauthorized credit and background reports on more than four million Americans.

Private messages and postings on various crime forums show that the service offered at ssndob[dot]ru was originally registered in 2009 at a domain called ssndob-search.info. A historic records lookup purchased from domaintools.com shows that ssndob-search was first registered to an Armand Ayakimyan from Apsheronsk, Russia. This registrant used the email address lxg89@rambler.ru.

In 2013, a copy of the carding forum carder[dot]pro was leaked online. Forum records show that the lxg89@rambler.ru address was used by a member who picked the username “Zack,” and who told other members to contact him on the ICQ instant messenger account 383337. On Vkontakte.ru, a popular Russian social networking site, Mr. Zack is the name of a profile for a 24-year-old Armand Ayakimyan from Sukhumi, a city in western Georgia and the capital of Abkhazia — a disputed region on the Black Sea coast.

Mr. Zack lists his date of birth as August 27 and current town as Sochi, the site of the 2014 Winter Olympics, (although the Mr. Zack account appears to have been dormant for some time). We can see some pictures of Mr. Ayakimyan (DOB: Aug. 27, 1989) at this profile by the same name at promodj.com, a music mixing site. That profile is tied to a group profile created by an Armand Ayakimyan in Sochi.

Mr. Ayakimyan appears to have used a number of different nicknames on various forums, including “Darkill,” “Darkglow” and “Planovoi”. That’s according to the administrators of verified[dot]cm, a top Russian crime forum at which he had apparently created numerous accounts. In an amusing multi-page thread on verified, the administrators respond to multiple member complaints about Plaovoi’s behavior by “doxing” him, essentially listing all of the identifiers that point from various email addresses, ICQ numbers and aliases back to accounts tied to Armand Ayakimyan.

KrebsOnSecurity attempted to reach Ayakimyan via multiple email addresses tied to his various profiles, including Facebook. An individual responding at the main Jabber address used by the operator of SSNDOB — ssndob@swissjabber.ch — declined to comment for this story, saying only “Я против блога. Выберите другой сервис,” or, “I am against the blog. Choose another service.” This reply came immediately after the user of this profile updated his status message notifying customers that his identity theft service was just freshly stocked with a huge new update of personal data on Americans.

The conclusion that Ayakimyan is/was involved with the operation of SSNDOB is supported with evidence gathered from Symantec, which published a blog post last week linking the young man to the identity theft service. According to Big Yellow, Ayakimyan is but one of several men allegedly responsible for creating and stocking the ID theft bazaar, a group Symantec calls the “Cyclosa gang.” From their report:

Continue reading →


22
Mar 14

Sources: Credit Card Breach at California DMV

The California Department of Motor Vehicles appears to have suffered a wide-ranging credit card data breach involving online payments for DMV-related services, according to banks in California and elsewhere that received alerts this week about compromised cards that all had been previously used online at the California DMV.

CAdmvThe alert, sent privately by MasterCard to financial institutions this week, did not name the breached entity but said the organization in question experienced a “card-not-present” breach — industry speak for transactions conducted online. The alert further stated that the date range of the potentially compromised transactions extended from Aug. 2, 2013 to Jan. 31, 2014, and that the data stolen included the card number, expiration date, and three-digit security code printed on the back of cards.

Five different financial institutions contacted by this publication — including two mid-sized banks in California — confirmed receipt of the MasterCard notice, and said that all of the cards MasterCard alerted them about as compromised had been used for charges bearing the notation “STATE OF CALIF DMV INT”.

A representative from MasterCard, speaking on background, confirmed sending out an alert this week. According to bank sources, Visa has not sent out a similar alert. A Visa spokesperson said “Visa cannot comment on potential third party data compromises or ongoing investigations.”

Contacted about the alerts early Friday afternoon pacific time, California DMV Spokesperson Jessica Gonzalez said the agency would investigate the matter. Reached again at 6:30 p.m. PT (well after DMV business hours on a Friday), Ms. Gonzalez said her office was working late as a result of the inquiry from KrebsOnSecurity. She said the agency was still in the process of getting a statement approved, but that it planned to email the statement later that evening. So far, however, the California DMV has yet to issue a statement or respond to further requests for comment.

Update, 6:44 p.m. ET: The CA DMV just issued the following statement, which placed blame for the incident on the organization’s external card processing firm:

“The Department of Motor Vehicles has been alerted by law enforcement authorities to a potential security issue within its credit card processing services.”

” There is no evidence at this time of a direct breach of the DMV’s computer system. However, out of an abundance of caution and in the interest of protecting the sensitive information of California drivers, the DMV has opened an investigation into any potential security breach in conjunction with state and federal law enforcement.”

“In its investigation, the department is performing a forensic review of its systems and seeking information regarding any potential breach from both the external vendor that processes the DMV’s credit card transactions and the credit card companies themselves.”

The CA DMV did not say who their card processor is, but this document from the California Department of General Services seems to suggest that the processor is Elavon, a company based in Atlanta, Ga. Representatives for Elavon could not be immediately reached for comment [hat tip to @walshman23 for finding this document].

Update, Mar. 24, 10:54 a.m.: Elavon officials could not be reached for comment. But a spokesperson for Elavon parent firm U.S. Bank told this publication that “there has been NO confirmation of a breach. We are in touch with the CA-DMV and the authorities to determine if there is an issue.”

Original story:

If indeed the California DMV has suffered a breach of their online payments system, it’s unclear how many card numbers may have been stolen. But the experience of one institution that received the MasterCard alert this week may offer some perspective.

Continue reading →


17
Mar 14

Sally Beauty Confirms Card Data Breach

Nationwide cosmetics and beauty retailer Sally Beauty today confirmed that hackers had broken into its networks and stolen credit card data from stores. The admission comes nearly two weeks after KrebsOnSecurity first reported that the company had likely been compromised by the same criminal hacking gang that stole 40 million credit and debit cards from Target.

The advertisement run by thieves who stole the Sally Beauty card data.

The advertisement run by thieves who stole the Sally Beauty card data.

Previously, Denton, Texas-based Sally Beauty had confirmed a breach, but said it had no evidence that card data was stolen in the break-in. But in a statement issued Monday morning, the company acknowledged it has now discovered evidence that “fewer than 25,000 records containing card present (track 2) payment card data have been illegally accessed on our systems and we believe have been removed.” Their statement continues:

“As experience has shown in prior data security incidents at other companies, it is difficult to ascertain with certainty the scope of a data security breach/incident prior to the completion of a comprehensive forensic investigation. As a result, we will not speculate as to the scope or nature of the data security incident.”

“We take this criminal activity very seriously. We continue to work diligently with Verizon on this investigation and are taking necessary actions and precautions to mitigate and remediate the issues caused by this security incident. In addition, we are working with the United States Secret Service on their preliminary investigation into the matter.”

On Mar. 5, this blog reported that hackers appeared to have broken into Sally Beauty’s network and stolen at least 282,000 cards from the retailer. That conclusion stemmed from purchases made by several banks at an archipelago of fraud sites that have been selling cards stolen in the Target breach. The first new batch of non-Target cards sold by this fraud network — a group of cards marketed under the label “Desert Strike” — all were found by three different financial institutions to have been recently used at Sally Beauty stores nationwide.

Continue reading →