Web Fraud 2.0


13
Nov 14

Network Hijackers Exploit Technical Loophole

Spammers have been working methodically to hijack large chunks of Internet real estate by exploiting a technical and bureaucratic loophole in the way that various regions of the globe keep track of the world’s Internet address ranges.

Last week, KrebsOnSecurity featured an in-depth piece about a well-known junk email artist who acknowledged sending from two Bulgarian hosting providers. These two providers had commandeered tens of thousands of Internet addresses from ISPs around the globe, including Brazil, China, India, Japan, Mexico, South Africa, Taiwan and Vietnam.

For example, a closer look at the Internet addresses hijacked by one of the Bulgarian providers — aptly named “Mega-Spred” with an email contact of “abuse@grimhosting” — shows that this provider has been slowly  gobbling up far-flung IP address ranges since late August 2014.

This table, with data from the RIPE NCC -- of the regional Internet Registries, shows IP address hijacking activity by Bulgarian host Mega-Spred.

This table, with data from the RIPE NCC — of the regional Internet Registries, shows IP address hijacking activity by Bulgarian host Mega-Spred.

According to several security and anti-spam experts who’ve been following this activity, Mega-Spred and the other hosting provider in question (known as Kandi EOOD) have been taking advantage of an administrative weakness in the way that some countries and regions of the world keep tabs on the IP address ranges assigned to various hosting providers and ISPs. Neither Kandi nor Mega-Spred responded to requests for comment.

IP address hijacking is hardly a new phenomenon. Spammers sometimes hijack Internet address ranges that go unused for periods of time. Dormant or “unannounced” address ranges are ripe for abuse partly because of the way the global routing system works: Miscreants can “announce” to the rest of the Internet that their hosting facilities are the authorized location for given Internet addresses. If nothing or nobody objects to the change, the Internet address ranges fall into the hands of the hijacker.

Experts say the hijackers also are exploiting a fundamental problem with record-keeping activities of RIPE NCC, the regional Internet registry (RIR) that oversees the allocation and registration of IP addresses for Europe, the Middle East and parts of Central Asia. RIPE is one of several RIRs, including ARIN (which handles mostly North American IP space) and APNIC (Asia Pacific), LACNIC (Latin America) and AFRINIC (Africa). Continue reading →


6
Nov 14

Feds Arrest Alleged ‘Silk Road 2′ Admin, Seize Servers

Federal prosecutors in New York today announced the arrest and charging of a San Francisco man they say ran the online drug bazaar and black market known as Silk Road 2.0. In conjunction with the arrest, U.S. and European authorities have jointly seized control over the servers that hosted Silk Road 2.0 marketplace.

The home page of the Silk Road 2.0 market has been replaced with this message indicating the community's Web servers were seized by authorities.

The home page of the Silk Road 2.0 market has been replaced with this message indicating the community’s Web servers were seized by authorities.

On Wednesday, agents with the FBI and the Department of Homeland Security arrested 26-year-old Blake Benthall, a.k.a. “Defcon,” in San Francisco, charging him with drug trafficking, conspiracy to commit computer hacking, and money laundering, among other alleged crimes.

Benthall’s LinkedIn profile says he is a native of Houston, Texas and was a programmer and “construction worker” at Codespike, a company he apparently founded using another company, Benthall Group, Inc. Benthall’s LinkedIn and Facebook profiles both state that he was a software engineer at Space Exploration Technologies Corp. (SpaceX), although this could not be immediately confirmed. Benthall describes himself on Twitter as a “rocket scientist” and a “bitcoin dreamer.”

Blake Benthall's public profile page at LinkedIn.com

Blake Benthall’s public profile page at LinkedIn.com

Benthall’s arrest comes approximately a year after the launch of Silk Road 2.0, which came online less than a month after federal agents shut down the original Silk Road community and arrested its alleged proprietor — Ross William Ulbricht, a/k/a “Dread Pirate Roberts.” Ulbricht is currently fighting similar charges, and made a final pre-trial appearance in a New York court earlier this week.

According to federal prosecutors, since about December 2013, Benthall has secretly owned and operated Silk Road 2.0, which the government describes as “one of the most extensive, sophisticated, and widely used criminal marketplaces on the Internet today.” Like its predecessor, Silk Road 2.0 operated on the “Tor” network, a special network of computers on the Internet, distributed around the world, designed to conceal the true IP addresses of the computers on the network and thereby the identities of the network’s users.

“Since its launch in November 2013, Silk Road 2.0 has been used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to buyers throughout the world, as well as to launder millions of dollars generated by these unlawful transactions,”reads a statement released today by Preet Bharara, the United States Attorney for the Southern District of New York. “As of September 2014, Silk Road 2.0 was generating sales of at least approximately $8 million per month and had approximately 150,000 active users.”

Benthall's profile on Github.

Benthall’s profile on Github.

The complaint against Benthall claims that by October 17, 2014, Silk Road 2.0 had over 13,000 listings for controlled substances, including, among others, 1,783 listings for “Psychedelics,” 1,697 listings for “Ecstasy,” 1,707 listings for “Cannabis,” and 379 listings for “Opioids.” Apart from the drugs, Silk Road 2.0 also openly advertised fraudulent identification documents and computer-hacking tools and services. The government alleges that in October 2014, the Silk Road 2.0 was generating at least approximately $8 million in monthly sales and at least $400,000 in monthly commissions.

The complaint describes how federal agents infiltrated Silk Road 2.0 from the very start, after an undercover agent working for Homeland Security investigators managed to infiltrate the support staff involved in the administration of the Silk Road 2.0 website.

“On or about October 7, 2013, the HSI-UC [the Homeland Security Investigations undercover agent] was invited to join a newly created discussion forum on the Tor network, concerning the potential creation of a replacement for the Silk Road 1.0 website,” the complaint recounts. “The next day, on or about October 8, 2013, the persons operating the forum gave the HSI‐UC moderator privileges, enabling the HSI‐UC to access areas of the forum available only to forum staff. The forum would later become the discussion forum associated with the Silk Road 2.0 website.”

The complaint also explains how the feds located and copied data from the Silk Road 2.0 servers. “In May 2014, the FBI identified a server located in a foreign country that was believed to be hosting the Silk Road 2.0 website at the time. On or about May 30, 2014, law enforcement personnel from that country imaged the Silk Road 2.0 Server and conducted a forensic analysis of it. Based on posts made to the SR2 Forum, complaining of service outages at the time the imaging was conducted, I know that once the Silk Road 2.0 server was taken offline for imaging, the Silk Road 2.0 website went offline as well, thus confirming that the server was used to host the Silk Road 2.0 website.” Continue reading →


27
Oct 14

‘Replay’ Attacks Spoof Chip Card Charges

An odd new pattern of credit card fraud emanating from Brazil and targeting U.S. financial institutions could spell costly trouble for banks that are just beginning to issue customers more secure chip-based credit and debit cards.

emvblueOver the past week, at least three U.S. financial institutions reported receiving tens of thousands of dollars in fraudulent credit and debit card transactions coming from Brazil and hitting card accounts stolen in recent retail heists, principally cards compromised as part of the breach at Home Depot.

The most puzzling aspect of these unauthorized charges? They were all submitted through Visa and MasterCard‘s networks as chip-enabled transactions, even though the banks that issued the cards in question haven’t even yet begun sending customers chip-enabled cards.

The most frustrating aspect of these unauthorized charges? They’re far harder for the bank to dispute. Banks usually end up eating the cost of fraud from unauthorized transactions when scammers counterfeit and use stolen credit cards. Even so, a bank may be able to recover some of that loss through dispute mechanisms set up by Visa and MasterCard, as long as the bank can show that the fraud was the result of a breach at a specific merchant (in this case Home Depot).

However, banks are responsible for all of the fraud costs that occur from any fraudulent use of their customers’ chip-enabled credit/debit cards — even fraudulent charges disguised as these pseudo-chip transactions.

CLONED CHIP CARDS, OR CLONED TRANSACTIONS?

The bank I first heard from about this fraud — a small financial institution in New England — battled some $120,000 in fraudulent charges from Brazilian stores in less than two days beginning last week. The bank managed to block $80,000 of those fraudulent charges, but the bank’s processor, which approves incoming transactions when the bank’s core systems are offline, let through the other $40,000. All of the transactions were debit charges, and all came across MasterCard’s network looking to MasterCard like chip transactions without a PIN.

The fraud expert with the New England bank said the institution had decided against reissuing customer cards that were potentially compromised in the five-month breach at Home Depot, mainly because that would mean reissuing a sizable chunk of the bank’s overall card base and because the bank had until that point seen virtually no fraud on the accounts.

“We saw very low penetration rates on our Home Depot cards, so we didn’t do a mass reissue,” the expert said. “And then in one day we matched a month’s worth of fraud on those cards thanks to these charges from Brazil.” Continue reading →


22
Sep 14

Who’s Behind the Bogus $49.95 Charges?

Hardly a week goes by when I don’t hear from a reader wondering about the origins of a bogus credit card charge for $49.95 or some similar amount for a product they never ordered. As this post will explain, such charges appear to be the result of crooks trying to game various online affiliate programs by using stolen credit cards.

Bogus $49.95 charges for herbal weight loss products like these are showing up on countless consumer credit statements.

Bogus $49.95 charges for herbal weight loss products like these are showing up on countless consumer credit statements.

Most of these charges are associated with companies marketing products of dubious value and quality, typically by knitting a complex web of front companies, customer support centers and card processing networks. Whether we’re talking about a $49.95 payment for a bottle of overpriced vitamins, $12.96 for some no-name software title, or $9.84 for a dodgy Internet marketing program, the unauthorized charge usually is for a good or service that is intended to be marketed by an online affiliate program.

Affiliate programs are marketing machines built to sell a huge variety of products or services that are often of questionable quality and unknown provenance. Very often, affiliate programs are promoted using spam, and the stuff pimped by them includes generic prescription drugs, vitamins and “nutriceuticals,” and knockoff designer purses, watches, handbags, shoes and sports jerseys.

At the core of the affiliate program is a partnership of convenience: The affiliate managers handle the boring backoffice stuff, including the customer service, product procurement (suppliers) and order fulfillment (shipping). The sole job of the “affiliates” — the commission-based freelance marketers who sign up to promote whatever is being sold by the affiliate program — is to drive traffic and sales to the program.

THE NEW FACE OF SPAM

It is no surprise, then, that online affiliate programs like these often are overrun with scammers, spammers and others easily snagged by the lure of get-rich-quick schemes. In June, I began hearing from dozens of readers about unauthorized charges on their credit card statements for $49.95. The charges all showed up alongside various toll-free 888- numbers or names of customer support Web sites, such as supportacr[dot]com and acrsupport[dot]com. Readers who called these numbers or took advantage of the chat interfaces at these support sites were all told they’d ordered some kind of fat-burning pill or vitamin from some random site, such as greenteahealthdiet[dot]com or naturalfatburngarcinia[dot]com.

Those sites were among tens of thousands that are being promoted via spam, according to Gary Warner, chief technologist at Malcovery, an email security firm. The Web site names themselves are not included in the spam; rather, the spammers include a clickable URL for a hacked Web site that, when visited, redirects the user to the pill shop’s page. This redirection is done to avoid having the pill shop pages indexed by anti-spam filters and other types of blacklists used by security firms, Warner said. Continue reading →


18
Sep 14

Medical Records For Sale in Underground Stolen From Texas Life Insurance Firm

How much are your medical records worth in the cybercrime underground? This week, KrebsOnSecurity discovered medical records being sold in bulk for as little as $6.40 apiece. The digital documents, several of which were obtained by sources working with this publication, were apparently stolen from a Texas-based life insurance company that now says it is working with federal authorities on an investigation into a possible data breach.

The "Fraud Related" section of the Evolution Market.

The “Fraud Related” section of the Evolution Market.

Purloined medical records are among the many illicit goods for sale on the Evolution Market, a black market bazaar that traffics mostly in narcotics and fraud-related goods — including plenty of stolen financial data. Evolution cannot be reached from the regular Internet. Rather, visitors can only browse the site using Tor, software that helps users disguise their identity by bouncing their traffic between different servers, and by encrypting that traffic at every hop along the way.

Last week, a reader alerted this author to a merchant on Evolution Market nicknamed “ImperialRussia” who was advertising medical records for sale. ImperialRussia was hawking his goods as “fullz” — street slang for a package of all the personal and financial records that thieves would need to fraudulently open up new lines of credit in a person’s name.

Each document for sale by this seller includes the would-be identity theft victim’s name, their medical history, address, phone and driver license number, Social Security number, date of birth, bank name, routing number and checking/savings account number. Customers can purchase the records using the digital currency Bitcoin.

A set of five fullz retails for $40 ($8 per record). Buy 20 fullz and the price drops to $7 per record. Purchase 50 or more fullz, and the per record cost falls to just $6.40 — roughly the price of a value meal at a fast food restaurant. Incidentally, even at $8 per record, that’s cheaper than the price most stolen credit cards fetch on the underground markets.

Imperial Russia's ad on Evolution pimping medical and financial records stolen from a Texas life insurance firm.

Imperial Russia’s ad pimping medical and financial records stolen from a Texas life insurance firm.

“Live and Exclusive database of US FULLZ from an insurance company, particularly from NorthWestern region of U.S.,” ImperialRussia’s ad on Evolution enthuses. The pitch continues:

“Most of the fullz come with EXTRA FREEBIES inside as additional policyholders. All of the information is accurate and confirmed. Clients are from an insurance company database with GOOD to EXCELLENT credit score! I, myself was able to apply for credit cards valued from $2,000 – $10,000 with my fullz. Info can be used to apply for loans, credit cards, lines of credit, bank withdrawal, assume identity, account takeover.”

Sure enough, the source who alerted me to this listing had obtained numerous fullz from this seller. All of them contained the personal and financial information on people in the Northwest United States (mostly in Washington state) who’d applied for life insurance through American Income Life, an insurance firm based in Waco, Texas.

Continue reading →


6
Sep 14

Dread Pirate Sunk By Leaky CAPTCHA

Ever since October 2013, when the FBI took down the online black market and drug bazaar known as the Silk Road, privacy activists and security experts have traded conspiracy theories about how the U.S. government managed to discover the geographic location of the Silk Road Web servers. Those systems were supposed to be obscured behind the anonymity service Tor, but as court documents released Friday explain, that wasn’t entirely true: Turns out, the login page for the Silk Road employed an anti-abuse CAPTCHA service that pulled content from the open Internet, thus leaking the site’s true location.

leakyshipTor helps users disguise their identity by bouncing their traffic between different Tor servers, and by encrypting that traffic at every hop along the way. The Silk Road, like many sites that host illicit activity, relied on a feature of Tor known as “hidden services.” This feature allows anyone to offer a Web server without revealing the true Internet address to the site’s users.

That is, if you do it correctly, which involves making sure you aren’t mixing content from the regular open Internet into the fabric of a site protected by Tor. But according to federal investigators,  Ross W. Ulbricht — a.k.a. the “Dread Pirate Roberts,” the 30-year-old arrested last year and charged with running the Silk Road — made this exact mistake. Continue reading →


4
Aug 14

‘White Label’ Money Laundering Services

Laundering the spoils from cybercrime can be a dicey affair, fraught with unreliable middlemen and dodgy, high-priced services that take a huge cut of the action. But large-scale cybercrime operations can avoid these snares and become much more profitable when they’re able to disguise their operations as legitimate businesses operating in the United States, and increasingly they are doing just that.

The typical process of "cashing out" stolen credit card accounts.

The typical process of “cashing out” stolen credit card accounts.

Today’s post looks at one such evolution in a type of service marketed to cybercrooks that has traditionally been perhaps the most common way that thieves overseas “cash out” cybercrimes committed against American and European businesses, banks and consumers: The reshipping of goods purchased through stolen credit cards.

Cybercrooks very often rely on international reshipping services to help move electronics and other goods that are bought with stolen credit cards, shipped abroad, and then sold for cash. Many fraudsters use stolen credit cards to pay for U.S. Postal Service and FedEx shipping labels — a.k.a. “black labels” — but major shipping providers appear to be getting better at blocking or intercepting packages sent with stolen credit cards (at least according to anecdotal evidence from the cybercrime forums).

As a result, crooks increasingly are turning to a more reliable freight: So-called “white label” shipping services that are paid for with cybercrime-funded bank accounts via phony but seemingly legitimate companies in the United States. Continue reading →


25
Jul 14

Service Drains Competitors’ Online Ad Budget

The longer one lurks in the Internet underground, the more difficult it becomes to ignore the harsh reality that for nearly every legitimate online business there is a cybercrime-oriented anti-business. Case in point: Today’s post looks at a popular service that helps crooked online marketers exhaust the Google AdWords budgets of their competitors.

Youtube ads from "GoodGoogle" pitching his AdWords click fraud service.

Youtube ads from “GoodGoogle” pitching his AdWords click fraud service.

AdWords is Google’s paid advertising product, displaying ads on the top or the right side of your screen in search results. Advertisers bid on specific keywords, and those who bid the highest will have their ads show up first when Internet users search for those terms. In turn, advertisers pay Google a small amount each time a user clicks on one of their ads.

One of the more well-known forms of online ad fraud (a.k.a. “click fraud“) involves Google AdSense publishers that automate the clicking of ads appearing on their own Web sites in order to inflate ad revenue. But fraudsters also engage in an opposite scam involving AdWords, in which advertisers try to attack competitors by raising their costs or exhausting their ad budgets early in the day.

Enter “GoodGoogle,” the nickname chosen by one of the more established AdWords fraudsters operating on the Russian-language crime forums.  Using a combination of custom software and hands-on customer service, GoodGoogle promises clients the ability to block the appearance of competitors’ ads.

“Are you tired of the competition in Google AdWords that take your first position and quality traffic,?” reads GoodGoogle’s pitch. “I will help you get rid once and for all competitors in Google Adwords.”

The service, which appears to have been in the offering since at least January 2012, provides customers both a la carte and subscription rates. The prices range from $100 to block between three to ten ad units for 24 hours to $80 for 15 to 30 ad units. For a flat fee of $1,000, small businesses can use GoodGoogle’s software and service to sideline a handful of competitors’s ads indefinitely. Fees are paid up-front and in virtual currencies (WebMoney, e.g.), and the seller offers support and a warranty for his work for the first three weeks. Continue reading →


2
Jul 14

Brazilian ‘Boleto’ Bandits Bilk Billions

With the eyes of the world trained on Brazil for the 2014 FIFA World Cup, it seems a fitting time to spotlight a growing form of computer fraud that’s giving Brazilian banks and consumers a run for their money. Today’s post looks at new research into a mostly small-time cybercrime practice that in the aggregate appears to have netted thieves the equivalent of billions of dollars over the past two years.

A boleto.

A boleto.

At issue is the “boleto” (officially “Boleto Bancario”), a popular payment method in Brazil that is used by consumers and for most business-to-business payments. Brazilians can use boletos to complete online purchases via their bank’s Web site, but unlike credit card payments — which can be disputed and reversed — payments made via boletos are not subject to chargebacks and can only be reverted by bank transfer.

Brazil has an extremely active and talented cybercrime underground, and increasingly Brazilian organized  crime gangs are setting their sights on boleto users who bank online. This is typically done through malware that lies in wait until the user of the hacked PC visits their bank’s site and fills out the account information for the recipient of a boleto transaction. In this scenario, the unwitting victim submits the transfer for payment and the malware modifies the request by substituting a recipient account that the attackers control.

Many of the hijacked boleto transactions are low-dollar amounts, but in the aggregate these purloined payments can generate an impressive income stream for even a small malware gang. On Tuesday, for example, a source forwarded me a link to a Web-based control panel for a boleto-thieving botnet (see screenshot below); in this operation, we can see that the thieves had hijacked some 383 boleto transactions between February 2014 and the end of June, but had stolen the equivalent of nearly USD $250,000 during that time.

The records kept by a boleto-stealing botnet. Next to the date and time is the account of the intended recipient of the transfer; the "linea alterada" column shows the accounts used by the thieves to accept diverted payments. "Valor" refers to the amount, expressed in Brazilian Real.

The records kept by a boleto-stealing botnet. Next to the date and time is the account of the intended recipient of the transfer; the “linha alterada” column shows the accounts used by the thieves to accept diverted payments. “Valor” refers to the amount, expressed in Brazilian Real.

But a recent discovery by researchers at RSA, the security division of EMC, exposes far more lucrative and ambitious boleto banditry. RSA says the fraud ring it is tracking — known as the “Bolware” operation — affects more than 30 different banks in Brazil, and may be responsible for up to $3.75 billion USD in losses. RSA arrived at this estimate based on the discovery of a similar botnet control panel that tracked nearly a half-million fraudulent transactions. Continue reading →


23
Jun 14

Card Wash: Card Breaches at Car Washes

Ooh, you might not ever get rich
But let me tell ya, it’s better than diggin’ a ditch

Car Wash” by Rose Royce

An investigation into a string of credit card breaches at dozens of car wash locations across the United States illustrates the challenges facing local law enforcement as they seek to connect the dots between cybercrime and local gang activity that increasingly cross multiple domestic and international borders.

Car WashEarlier this month, police in Everett, Massachusetts arrested a local man named Jean Pierre for possessing nine stolen credit card accounts. The cards themselves weren’t stolen: They were gift cards that had been re-encoded with data from cards that were stolen from a variety of data breaches at merchants, including a Splash Car Wash in Connecticut.

How authorities in Massachusetts connected Pierre to a cybercrime at a Connecticut car wash is a mix of odd luck and old-fashioned police work. In May, the Everett police department received a complaint from a sheriff’s department in South Carolina about a resident who’d had his credit card account used repeatedly for fraudulent transactions at a Family Dollar store in Everett.

Everett PD Detective Michael Lavey obtained security camera footage from the local Dollar Store in question. When Lavey asked the store clerk if he knew the individuals pictured at the date and time of the fraudulent transactions, the clerk said the suspects had been coming in for months — several times each week — always purchasing gift cards.

“The clerk told me they would come into the store in pairs, using multiple credit cards until one of them was finally approved, at which point they’d buy $500 each in prepaid gift cards,” Lavey said. “We have two Family Dollar stores in Everett and a bunch in the surrounding area, and these guys would come in three to four times a week at each location, laundering money from stolen cards.”

Not long after Lavey posted snapshots from the video footage on a state-wide police network, he heard from an officer in Boston who said a suspect resembling one of the men in the photos was recently questioned at a city hospital after being stabbed in the legs and buttocks in an unrelated robbery. The assailant in that attack was arrested, but his victim — Jean Pierre — refused to answer questions about the incident. The police seized Jean Pierre’s pants as evidence in the assault case, and discovered numerous prepaid cards in the pockets of the trousers.

Lavey said he subpoenaed the credit card records, and working with investigators at American Express and Citibank was able to determine that at least one of the cards had been stolen from the Splash Car Wash in Connecticut. In effect, thieves were buying stolen cards to finance the purchase of gift cards, some of which would later serve as hosts for new stolen card data once their balance was exhausted. The cops call it money laundering, but in this case it might as well be called card washing.

WILL THAT BE A SUPER OR DELUXE WASH?

Soon enough, Lavey had linked up with Michael Chaves, a detective with the police department in Monroe, Conn. who’d been investigating card breaches at 14 separate car washes in his state, including the Splash case. Working with the Connecticut Financial Crimes Task Force, a broad law enforcement group that includes the U.S. Secret Service and state police, they determined that the local company was but one of at least 40 car washes across the country that had been hacked and relieved of countless customer credit and debit cards since at least February 2014.

A list of car washes allegedly compromised by card thieves this year.

A list of car washes identified by various banks as compromised by card thieves this year.

Chaves said he interviewed several of the car wash owners, and discovered that they were all using the same point-of-sale systems developed by Randolph, N.J.-based Micrologic Associates. Chaves said the store owners told him the devices had remote access via Symantec’s pcAnywhere enabled, access that was granted to anyone who knew the same set of default credentials.

“The pcAnywhere credentials were created by Micrologic, but unchanged for years,” Chaves said.

That was the same conclusion independently reached by Detective Steven LaMears with the police department in Keene, N.H. Earlier this month, a police captain at the Keene Police Dept. saw fraudulent charges show up on his credit card shortly after using it at the town’s Key Road Car Wash, an establishment which used Micrologic’s point-of-sale system.

LaMears also heard from a company in New York which reported that two its executives each had their cards compromised multiple times after visiting the Key Road Car Wash in Keene.

“We confronted them, and working with the U.S. Secret Service got them back up and running,” LaMears said of the local compromised car wash. “The Secret Service told us they were running an old version of Micrologic that had the same, one login for everything, and were using an old version of Windows XP.” Continue reading →