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    A Little Sunshine / Target: Small Businesses — 32 Comments
    8
    Nov 10

    Authorities Nab More ZeuS-Related Money Mules

    Authorities in the United States and Moldova apprehended at least eight individuals alleged to have helped launder cash for an international cyber crime gang that stole more than $70 million from small to mid-sized organizations in recent months.

    In Wisconsin, police arrested two young men who were wanted as part of a crackdown in late September on money mules who were in the United States on J1 student visas. The men, both 21 years old, are thought to have helped transfer money overseas that was stolen from U.S. organizations with the help of malicious software planted by attackers in Eastern Europe.

    Codreanu and Adam

    Dorin Codreanu and Lilian Adam, both originally from Moldova, are being transferred to New York, where they were charged on Sept. 30 in connection with the international money laundering scheme (hat tip to Sophos).

    In related news, the government of Moldova’s Specialized Services Center for Combating Economic Crimes and Corruption (CCECC) announced late last month that it had detained six individuals suspected of helping the same international ZeuS gang launder money.

    All six of those detained were bank employees, and one worked at the Bank of Moldova. According to Moldovan authorities, the suspects allegedly specialized in intercepting Western Union and MoneyGram payments that mules had sent to Eastern Europe after receiving bank transfers from organizations victimized by the ZeuS Trojan.

    Altogether, Moldovan prosecutors are looking at 12 suspects, including a government official who is alleged to have provided the group with copies of ID cards needed to open bank accounts. That nation’s anti-corruption center said it has conducted over 30 searches at detainees’ houses, and seized at least $300,000, a gun, and two luxury cars.

    Eleven of the 37 money mules charged in September in connection with these attacks are still at large. Photos of the suspects are available at this alert posted by the FBI.

    Target: Small Businesses — 28 Comments
    2
    Nov 10

    Your Money or Your Business

    New fees levied by financial institutions are likely to push many small businesses into banking online, whether or not they are aware of and prepared for the types of sophisticated cyber attacks that have cost organizations tens of millions of dollars in recent months.

    On the way home from the store last week I caught a Public Radio/Marketplace story in which the radio show interviewed a small business owner who was nudged into banking online after discovering a $9.99 fee had been added to her business banking account for the privilege of continuing to receive paper statements each month.

    The angle of the story was the unfairness of the new fees, considering the estimated 12 million people in the United States who have no or only slow access to the Internet. In the following snippet from that program, Marketplace’s David Brancaccio interviewed a woman from Northern New Hampshire:

    “The bank with her personal account still sends monthly statements printed on paper, through the mail, for free. Old school. But this year, one of her business accounts started charging money for paper statements.

    Johnson: That’s right.

    Brancaccio: How much?

    Johnson: $9.99 a month.

    Brancaccio: Really?

    Johnson: Yes.

    Brancaccio: When did you actually notice?

    Johnson: My bank statement, my paper bank statement! is how I found it!

    “It’s a growing trend in banking. For instance, Bank of America has something called the E-banking account where paper statements and routine visits to a human teller cost money. It’s now in more than three dozen states. B of A says techno-savvy customers seem fine with online-only in exchange for no minimum cash balances in the account.”

    Johnson didn’t say which bank her commercial account was at.  And for its part, BofA’s eBanking plan only applies to consumer accounts, not businesses. But if this type of trend becomes more mainstream among commercial banking customers, more and more small businesses will be pushed into banking online without knowing how to protect themselves from organized cyber thieves that have stolen at least $70 million from small to mid-sized organizations over the last few years.

    Continue reading →

    A Little Sunshine / Target: Small Businesses — 19 Comments
    2
    Oct 10

    Ukraine Detains 5 Individuals Tied to $70 Million in U.S. eBanking Heists

    Authorities in Ukraine this week detained five individuals believed to be the masterminds behind sophisticated cyber thefts that siphoned $70 million – out of an attempted $220 million — from hundreds of U.S.-based small to mid-sized businesses over the last 18 months, the FBI said Friday.

    At a press briefing on “Operation Trident Breach,” FBI officials described the Ukrainian suspects as the “coders and exploiters” behind a series of online banking heists that have led to an increasing number of disputes and lawsuits between U.S. banks and the victim businesses that are usually left holding the bag.

    The FBI said five individuals detained by the Security Service of Ukraine (SBU) on Sept. 30 were members of a gang responsible for creating specialized versions of the password-stealing ZeuS banking Trojan and deploying the malware in e-mails targeted at small to mid-sized businesses.

    Investigators say the Ukrainian gang used the software to break into computers belonging to at least 390 U.S. companies, transferring victim funds to more than 3,500 so-called “money mules,” individuals in the United States willingly or unwittingly recruited to receive the cash and forward it overseas to the attackers. In connection with the investigation, some 50 SBU officials also executed eight search warrants in the eastern region of Ukraine this week.

    Friday’s media briefing at the FBI Hoover building in Washington, D.C. was designed to give reporters a clearer view of the sophistication of an organized crime group whose handiwork had largely escaped broader national media attention until this week. On Wednesday, authorities in the United Kingdom charged 11 people there – all Eastern Europeans – with recruiting and managing money mules. Then on Thursday, officials in New York announced they had charged 92 and arrested 39 money mules, including dozens of Russians who allegedly acted as mules while visiting the United States on student visas.

    According to sources familiar with the investigation, the arrests, charges and announcements were intended to be executed simultaneously, but U.K. authorities were forced to act early in response to intelligence that several key suspects under surveillance were planning to flee the country.

    SBU officials could not be reached for comment. But FBI agents described the Ukrainian group as the brains behind the attacks. Gordon M. Snow, assistant director of the FBI’s Cyber Division, said the individuals detained by the SBU are thought to have worked with the developer of the ZeuS Trojan to order up custom-made components and versions of ZeuS.

    For example, security researchers identified one ZeuS variant that was specific to the Ukrainians known as JabberZeuS because it alerted the gang via Jabber instant message whenever online banking credentials for customers of specific institutions were stolen.

    Snow said this week’s law enforcement action was a particularly big deal because of the unprecedented level of cooperation from foreign governments, particularly Ukraine and the Netherlands.

    “We worked with legal attachés in 75 countries, and we are very proud of the level of coordination that took place to get this done,” Snow said.

    Pim Takkenberg, team leader for the Netherlands Police Agency’s High Tech Crime Unit, said his group played a “small but important role” in helping to identify the hackers by monitoring the miscreants’ use of Dutch infrastructure.

    “We helped in connecting all the dots together,” Takkenberg said in a phone interview. “The Netherlands provide for a large portion of the critical internet infrastructure, of which we can monitor certain parts. When criminals are unaware of the fact that they use Dutch infrastructure, that gives us good investigative opportunities. In this particular case we had an interest of our own, since the ZeuS malware made a lot of Dutch victims as well.”

    The FBI’s Snow said the investigation began in May 2009, when FBI agents in Omaha, Neb. were alerted to automated clearing house (ACH) batch payments to 46 separate bank accounts through the United States.

    I will continue to follow this important story in the days ahead, particularly as more information about the Ukrainian suspects is made public. Stay tuned.

    A Little Sunshine / Target: Small Businesses — 33 Comments
    1
    Sep 10

    Cyber Thieves Steal Nearly $1,000,000 from University of Virginia College

    Cyber crooks stole just shy of $1 million from a satellite campus of The University of Virginia last week, KrebsOnSecurity.com has learned.

    The attackers stole the money from The University of Virginia’s College at Wise, a 4-year public liberal arts college located in the town of Wise in southwestern Virginia.

    Kathy Still, director of news and media relations at UVA Wise, declined to offer specifics on the theft, saying only that the school was investigating a hacking incident.

    “All I can say now is we have a possible computer hacking situation under investigation,” Still said. “I can also tell you that as far as we can tell, no student data has been compromised.”

    According to several sources familiar with the case, thieves stole the funds after compromising a computer belonging to the university’s comptroller. The attackers used a computer virus to steal the online banking credentials for the University’s accounts at BB&T Bank, and initiated a single fraudulent wire transfer in the amount of $996,000 to the Agricultural Bank of China. BB&T declined to comment for this story.

    Sources said the FBI is investigating and has possession of the hard drive from the controller’s PC. A spokeswoman at FBI headquarters in Washington, D.C. said that as a matter of policy the FBI does not confirm or deny the existence of investigations.

    The attack on UVA Wise is the latest in a string of online bank heists targeting businesses, schools, towns and nonprofits. Last week, cyber thieves stole more than $600,000 from the Catholic Diocese of Des Moines, Iowa.

    Update, Sept. 4, 4:27 p.m. ET: Jordan Fifer, a reporter for the Highland Cavalier, the official student newspaper for UVA-Wise, writes that school officials now say they have recovered the stolen money.

    A Little Sunshine / Target: Small Businesses / Web Fraud 2.0 — 43 Comments
    30
    Aug 10

    Crooks Who Stole $600,000 From Catholic Diocese Said Money Was for Clergy Sex Abuse Victims

    Organized cyber thieves stole more than $600,000 from the Catholic Diocese of Des Moines, Iowa earlier this month. The funds were spirited away with the help of dozens of unwitting co-conspirators hired through work-at-home job scams, at least one of whom was told the money was being distributed to victims of the Catholic Church sex abuse scandals, KrebsOnSecurity.com has learned.

    In a statement released last week, the diocese said the fraud occurred between Aug. 13 and Aug. 16, apparently after criminals had stolen the diocese’s online banking credentials. The Diocese it was alerted to the fraud on Aug. 17 by its financial institution, Bankers Trust of Des Moines.

    The diocese also said the FBI and U.S. Treasury Department were notified, and that the FBI had taken possession of several diocesan computers. To date, roughly $180,000 has been recovered.

    The diocese added that law enforcement had advised them that the theft seems to have been the work of a highly sophisticated operation based overseas, which moved the stolen money out of the United States by recruiting people who unknowingly act as intermediaries.

    “While the Diocese of Des Moines is protected by insurance and anticipates the restoration of the funds, we have been advised that such criminal activity is rampant,” Des Moines Bishop Richard Pates said. “Obviously, any entity that experiences such a crime should be significantly concerned.”

    Once again, the theft involves so-called money mules willingly or unwittingly recruited by a specific money mule cash-out gang whose work I have written about several times already. Among the mules involved in this incident was a man in Newnan, Ga. who received almost $30,000 of the church’s cash. Daniel Huggins, the 29-year-old owner of Masonry Construction Group LLC, got mixed up with a company calling itself the Impeccable Group, claiming to be an international finance company operating out of New York.

    Huggins said the Impeccable Group recruited him via e-mail, claiming it had found his resume on job search site Monster.com. The Impeccable Group told him he would be doing payment processing for the company, and on Aug. 16, Huggins’ erstwhile employers sent him two payments, one for almost $20,000 and another for slightly less than $10,000.

    Huggins said he contacted the Impeccable Group shortly after the transfers because the amounts seemed quite high and the transfers appeared to be coming from the Catholic Church. The scammers apparently were ready for this question and were quick on their feet with a reply that was as plausible as it was diabolical: Huggins was told the money was going to be distributed as legal settlements to people who had been affected by the clergy sexual abuse scandals that have rocked the church in recent years.

    “The told me it was going to be payouts to some of the settlements in the sex crimes cases against the Church,” Huggins said.

    Continue reading →

    A Little Sunshine / Target: Small Businesses — 32 Comments
    27
    May 10

    Cyber Thieves Rob Treasury Credit Union

    Organized cyber thieves stole more than $100,000 from a small credit union in Salt Lake City last week, in a brazen online robbery that involved dozens of co-conspirators, KrebsOnSecurity has learned.

    Treasury Credit Union -- Image courtesy Google Streetview

    In most of the e-banking robberies I’ve written about to date, the victims have been small to mid-sized businesses that had their online bank accounts cleaned out after cyber thieves compromised the organization’s computers. This incident is notable because the entity that was both compromised and robbed was a bank.

    The attack began Thursday, May 20, when the unidentified perpetrators started transferring funds out of an internal account at Treasury Credit Union, a financial institution that primarily serves employees of the U.S. Treasury Department in the state of Utah and their families. Treasury Credit Union President Steve Melgar said the thieves made at least 70 transfers before the fraud was stopped.

    Melgar declined to say how much money was stolen, stating only that the total amount was likely to be in the “low six-figures.”

    “We’re still trying to find out what net [loss] is, because some of the money came back or for whatever reason the transfers were rejected by the recipient bank,” Melgar said, adding that the FBI also is currently investigating the case. A spokeswoman for the Salt Lake City field office of the FBI declined to comment, saying the agency does not confirm or deny investigations.

    Many of the transfers were in the sub-$5,000 range and went to so-called  “money mules,” willing or unwitting individuals recruited over the Internet through work-at-home job schemes. Melgar said other, larger, transfers appear to have been sent to commercial bank accounts tied to various small businesses.

    Continue reading →

    Target: Small Businesses — 47 Comments
    11
    May 10

    FBI Promises Action Against Money Mules

    The FBI’s top anti-cyber crime official today said the agency is planning a law enforcement action against so-called “money mules,” individuals willingly or unwittingly roped into helping organized computer crooks launder money stolen through online banking fraud.

    Patrick Carney, acting chief of the FBI’s cyber criminal section, said mules are an integral component of an international crime wave that is costing U.S. banks and companies hundreds of millions of dollars. He said the agency hopes the enforcement action will help spread awareness that money mules are helping to perpetrate crimes.

    “We want to make sure that public understands this is illegal activity and one of the best ways we can think of to give that message is to have some prosecutions,” Carney said at a Federal Deposit Insurance Corporation (FDIC) symposium in Arlington, Va. today on combating commercial payments fraud. “We realize it’s not going to make the problem go away, but it should help raise awareness and send a signal.”

    Continue reading →

    A Little Sunshine / Web Fraud 2.0 — 14 Comments
    20
    Apr 10

    Call Centers for Computer Criminals

    A call service that catered to bank and identity thieves has been busted up by U.S. and international authorities. The takedown provides a fascinating glimpse into a bustling and relatively crowded niche of fraud services in the criminal hacker underground.

    In an indictment unsealed on Monday, New York authorities said two Belarusian nationals suspected of operating a rent-a-fraudster service called Callservice.biz were arrested overseas. Wired.com’s Kim Zetter has the lowdown:

    According to the indictment (.pdf), the two entrepreneurs launched the site in Lithuania in June 2007 and filled a much-needed niche in the criminal world — providing English- and German-speaking “stand-ins” to help crooks thwart bank security screening measures.

    In order to conduct certain transactions — such as initiating wire transfers, unblocking accounts or changing the contact information on an account — some financial institutions require the legitimate account holder to authorize the transaction by phone.

    Thieves could provide the stolen account information and biographical information of the account holder to CallService.biz, along with instructions about what needed to be authorized. The biographical information sometimes included the account holder’s name, address, Social Security number, e-mail address and answers to security questions the financial institution might ask, such as the age of the victim’s father when the victim was born, the nickname of the victim’s oldest sibling or the city where the victim was married.

    U.S. authorities have seized the Callservice.biz Web site, which now features the seals for the FBI and Justice Department prominently on its homepage. The feds also seized Cardingworld.cc, a highly-restricted online criminal forum where Callservice.biz was hosted.

    If you spend any amount of time on underground forums like Cardingworld.cc, however, you’ll quickly discover that these criminal call centers are among the most popular of fraud services offered. For example, another fraud forum — Verified.su — is home to a number of calling services. Among them are two competing call centers that each began as point-and-click fraud shops that helped customers purchase electronics with stolen credit cards and then split the profits after selling the goods on eBay.

    One such service, Atlanta Alliance, used to offer paying members a password-protected Web site where customers could select a range of high-priced gadgets — such as digital cameras, laptops and smart phones — that could be bought with stolen credit cards. The service even allowed customers to manage the shipment of these products to awaiting “reshipping mules,” individuals in the United States recruited for the purpose of receiving stolen goods and reshipping them to Russia, Ukraine and other nations where many vendors refuse to ship due to the high incidence of fraud from those areas.

    Continue reading →

    Target: Small Businesses — 65 Comments
    30
    Mar 10

    Online Thieves Take $205,000 Bite Out of Missouri Dental Practice

    Organized computer criminals yanked more than $200,000 out of the online bank accounts of a Missouri dental practice this month, in yet another attack that exposes the financial risks that small- to mid-sized organizations face when banking online.

    Dentists working at the Smile Zone, a Springfield, Mo. based dental practice that caters specifically to the needs of children, weren’t exactly all smiles on March 22. That was the day unidentified crooks sent at least $205,000 of the practice’s money to nearly a dozen individuals around the country.

    Eric Hudkins, the office manager and husband of one of the dentists at Smile Zone, said the money was taken in 11 different transfers, including three large wires. Once again, it seems the attack was carried out with the help of money mules, willing or unwitting individuals hired through work-at-home job schemes over the Internet and lured into helping the attackers launder the stolen money.

    “I’ve got the names, account numbers, and phone numbers for most of them, and have even looked some of them up on Facebook,” Hudkins said of the co-conspirators. “The bank talked to two of the [mule] account holders and asked them why they opened the account, who it was for, that kind of thing. Both of them said they’d had their resumes out on careerbuilder.com or monster.com and that someone they’d never met contacted them and offered to help them make some money.”

    Hudkins said he contacted the FBI, and that the agent he spoke with told him the FBI wouldn’t open a case on the theft unless it was over $500,000 in losses. As it stands, he was told, his case would be lumped into a group of similar investigations that is being run out of an FBI task force in Omaha, Nebraska. It also appears there is little appetite for prosecuting the money mules, he said.

    “The FBI said prosecuting these [mules] for doing anything wrong is near impossible,” Hudkins said.

    Continue reading →

    A Little Sunshine / Other — 21 Comments
    13
    Mar 10

    FBI: Online Fraud Costs Skyrocketed in 2009

    Source: ic3.gov

    Reported losses from online fraud more than doubled last year, from $265 million in 2008 to nearly $560 million in 2009, according to figures released Friday by the FBI.

    The figures come from complaints referred to the Internet Crime Complaint Center, a partnership between the FBI and the National White Collar Crime Center. Last year, the IC3 received some 336,655 complaints, a 22.3 percent increase from the year prior.

    Ironically, among the largest sources of complaints (16.6 percent) were e-mail scams that fraudulently used the FBI’s name to gain information from the recipient. Of the top five categories reported to law enforcement during 2009, non-delivered merchandise and/or payment fraud ranked nearly 20 percent; identity theft 14 percent; credit card and auction fraud, just over 10 percent each. The median dollar loss was $575, while the highest median losses were associated with investment fraud ($3,200), overpayment fraud ($2,500) and advanced-fee fraud ($1,500).

    The full report is available from this link at ic3.gov (.pdf).

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