Posts Tagged: U.S. Secret Service


23
Jul 14

Feds: Hackers Ran Concert Ticket Racket

A Russian man detained in Spain is facing extradition to the United States on charges of running an international cyber crime ring that allegedly stole more than $10 million in electronic tickets from e-tickets vendor StubHub.

stubhubVadim Polyakov, 30, was detained while vacationing in Spain. Polyakov is wanted on conspiracy charges to be unsealed today in New York, where investigators with the Manhattan District Attorney’s office and the U.S. Secret Service are expected to announce coordinated raids of at least 20 people in the United States, Canada and the United Kingdom accused of running an elaborate scam to resell stolen e-tickets and launder the profits.

Sources familiar with the matter describe Polyakov, from St. Petersburg, Russia, as the ringleader of the gang, which allegedly used thousands of compromised StubHub user accounts to purchase huge volumes of electronic, downloadable tickets that were fed to a global network of resellers.

Robert Capps, senior director of customer success for RedSeal Networks and formerly head of StubHub’s global trust and safety organization, said the fraud against StubHub — which is owned by eBay — largely was perpetrated with usernames and passwords stolen from legitimate StubHub customers. Capps noted that while banks have long been the target of online account takeovers, many online retailers are unprepared for the wave of fraud that account takeovers can bring.

“In the last year online retailers have come under significant attack by cyber criminals using techniques such as account takeover to commit fraud,” Capps said. “Unfortunately, the transactional risk systems employed by most online retailers are not tuned to detect and defend against malicious use of existing customer accounts.  Retooling these systems to detect account takeovers can take some time, leaving retailers exposed to significant financial losses in the intervening time.”

Polyakov is the latest in a recent series of accused Russian hackers detained while traveling abroad and currently facing extradition to the United States. Dmitry Belorossov, a Russian citizen wanted in connection with a federal investigation into a cyberheist gang that leveraged the Gozi Trojan, also is facing extradition to the United States from Spain. He was arrested in Spain in August 2013 while attempting to board a flight back to Russia. 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 →


8
Jul 14

Feds Charge Carding Kingpin in Retail Hacks

The U.S. Justice Department on Monday announced the arrest of a Russian hacker accused of running a network of online crime shops that sold credit and debit card data stolen in breaches at restaurants and retailers throughout the United States.

The government alleges that the hacker known in the underground as “nCux” and “Bulba” was Roman Seleznev, a 30-year-old Russian citizen who was recently arrested by the U.S. Secret Service.

Seleznev was initially identified by the government in 2012, when it named him as part of a conspiracy involving more than three dozen popular merchants on carder[dot]su, a bustling fraud forum where Bulba and other members openly marketed various cybercrime-oriented services.

According to Seleznev’s own indictment, which was filed in 2011 but made public this week, he was allegedly part of a group that hacked into restaurants between 2009 and 2011 and planted malicious software to steal card data from store point-of-sale devices.

The indictment further alleges that Seleznev and unnamed accomplices used his online monikers to sell stolen credit and debit cards at bulba[dot]cc and track2[dot]name. Customers of these services paid for their cards with virtual currencies, including WebMoney and Bitcoin. As explained in the screen shot below, the track2[dot]name site stopped accepting new members in 2011, and new applicants were directed to bulba[dot]cc, which claimed to be an authorized reseller.

Bulba[dot]cc, as it looked in May 2011.

Bulba[dot]cc, as it looked in May 2011.

Recently, however, track2[dot]name began accepting new members who agreed to pay up-front deposits. The deposits ranged from one bitcoin (about $624 USD) for a basic account, to 20 bitcoins (roughly $12,484 USD) for a “corporate” account that is eligible for generous volume discounts and lengthy replacement times for purchased cards that turn out later to be canceled by issuing banks. 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 →


21
Apr 14

An Allegation of Harm

In December 2013, an executive from big-three credit reporting bureau Experian told Congress that the company was not aware of any consumers who had been harmed by an incident in which a business unit of Experian sold consumer records directly to an online identity theft service for nearly 10 months. This blog post examines the harm allegedly caused to consumers by just one of the 1,300 customers of that ID theft service — an Ohio man the government claims used the data to file fraudulent tax returns on dozens of Americans last year.

Defendant Lance Ealy.

Defendant Lance Ealy.

In February, I was contacted via Facebook by 28-year-old Lance Ealy from Dayton, Ohio. Mr. Ealy said he needed to speak with me about the article I wrote in October 2013 — Experian Sold Consumer Data to ID Theft Service. Ealy told me he’d been arrested by the U.S. Secret Service on Nov. 25, 2013 for allegedly using his email account to purchase Social Security numbers and other personal information from an online identity theft service run by guy named Hieu Minh Ngo.

“I really need to speak with u about this case because the US attorney assigned to this case and the Secret Service agent are trying to cover up Experian involvement in this case,” Ealy said, without elaborating on his theory about the alleged cover-up.

Ngo is a Vietnamese national who for several years ran an online identity theft service called Superget.info. Shortly after my 2011 initial story about his service, Ngo tauntingly renamed his site to findget.me. The Secret Service took him up on that challenge, and succeeded in luring him out of Vietnam into Guam, where he was arrested and brought to New Hampshire for trial. He pleaded guilty earlier this year to running the ID theft service, and the government has been working on rounding up his customers ever since.

Mr. Ealy appears to be one of several individuals currently battling charges of identity theft after allegedly buying data from Ngo’s service, which relied in part on data obtained through a company owned by Experian.

According to the complaint (PDF) against Ealy, government investigators obtained a search warrant for Ngo’s email account in March 2013. Going through that email, investigators found that a customer of Ngo’s who used the address lanceealy123@yahoo.com had already purchased from Ngo some 363 “fullz” — a term used in the underground to describe a package of everything one would need to steal someone’s identity, including their Social Security number, mother’s maiden name, birth date, address, phone number, email address, bank account information and passwords.

The Justice Department alleges that between Jan. 28, 2013 and Oct. 17, 2013, Ealy filed at least 150 fraudulent tax returns on Americans, instructing the IRS to send the refund money to prepaid credit card accounts he controlled. The government claims that about 50 of those bogus claims were made with Social Security numbers and other data obtained from Ngo’s ID theft service. Continue reading →


3
Apr 14

U.S. States Investigating Breach at Experian

An exclusive KrebsOnSecurity investigation detailing how a unit of credit bureau Experian ended up selling consumer records to an identity theft service in the cybercrime underground has prompted a multi-state investigation by several attorneys general, according to wire reports.

Ngo's Identity theft service, superget.info

Ngo’s Identity theft service, superget.info

Reuters moved a story this afternoon quoting Illinois Attorney General Lisa Madigan saying that  “it’s part of a multistate investigation,” and that Connecticut Attorney General George Jepsen said that Connecticut is looking into the matter as well.

News of the breach first came to light on this blog in October 2013, when KrebsOnSecurity published an exclusive story detailing how a Vietnamese man running an online identity theft service bought personal and financial records on Americans directly from a company owned by Experian, one of the three major U.S. credit bureaus.

Hieu Minh Ngo, a 24-year-old Vietnamese national, pleaded guilty last month to running an identity theft service out of his home in Vietnam. Ngo was arrested last year in Guam by U.S. Secret Service agents after he was lured into visiting the U.S. territory to consummate a business deal with a man he believed could deliver huge volumes of consumers’ personal and financial data for resale.

But according to prosecutors, Ngo had already struck deals with one of the world’s biggest data brokers: Experian. Court records just released last week show that Ngo tricked an Experian subsidiary into giving him direct access to personal and financial data on more than 200 million Americans. 

Continue reading →


10
Mar 14

Experian Lapse Allowed ID Theft Service Access to 200 Million Consumer Records

In October 2013, KrebsOnSecurity published an exclusive story detailing how a Vietnamese man running an online identity theft service bought personal and financial records on Americans directly from a company owned by Experian, one of the three major U.S. credit bureaus. Today’s story looks deeper at the damage wrought in this colossal misstep by one of the nation’s largest data brokers.

Vietnamese national Hieu Minh Ngo pleaded guilty last week to running the ID theft service Superget.info.

Vietnamese national Hieu Minh Ngo pleaded guilty last week to running the ID theft service Superget.info.

Last week, Hieu Minh Ngo, a 24-year-old Vietnamese national, pleaded guilty to running an identity theft service out of his home in Vietnam. Ngo was arrested last year in Guam by U.S. Secret Service agents after he was lured into visiting the U.S. territory to consummate a business deal with a man he believed could deliver huge volumes of consumers’ personal and financial data for resale.

But according to prosecutors, Ngo had already struck deals with one of the world’s biggest data brokers: Experian. Court records just released last week show that Ngo tricked an Experian subsidiary into giving him direct access to personal and financial data on more than 200 million Americans. 

HIEU KNOWS YOUR SECRETS?

As I reported last year, the data was not obtained directly from Experian, but rather via Columbus, Ohio-based US Info Search. US Info Search had a contractual agreement with a California company named Court Ventures, whereby customers of Court Ventures had access to the US Info Search data as well as Court Ventures’ data, and vice versa.

Posing as a private investigator operating out of Singapore, Ngo contracted with Court Ventures, paying for his access to consumer records via regular cash wire transfers from a bank in Singapore. Through that contract, Ngo was able to make available to his clients access to the US Info Search database containing Social Security, date of birth and other records on more than 200 million Americans.

Experian came into the picture in March 2012, when it purchased Court Ventures (along with all of its customers — including Mr. Ngo). For almost ten months after Experian completed that acquisition, Ngo continued siphoning consumer data and making his wire transfers.

Until last week, the government had shared few details about the scope and the size of the data breach, such as how many Americans may have been targeted by thieves using Ngo’s identity theft service.  According to a transcript of Ngo’s guilty plea proceedings obtained by KrebsOnSecurity, Ngo’s ID theft business attracted more than 1,300 customers who paid at least $1.9 million between 2007 and Feb. 2013 to look up Social Security numbers, dates of birth, addresses, previous addresses, phone numbers, email addresses and other sensitive data.

The government alleges that the service’s customers used the information for a variety of fraud schemes, including filing fraudulent tax returns on Americans, and opening new lines of credit and racking up huge bills in the names of unsuspecting victims. The transcript shows government investigators found that over an 18-month period ending Feb. 2013, Ngo’s customers made approximately 3.1 million queries on Americans.

Continue reading →


28
Feb 14

Breach Blind Spot Puts Retailers on Defensive

In response to rumors in the financial industry that Sears may be the latest retailer hit by hackers, the company said today it has no indications that it has been breached. Although the Sears investigation is ongoing, experts say there is a good chance the identification of Sears as a victim is a false alarm caused by a common weaknesses in banks’ anti-fraud systems that becomes apparent mainly in the wake of massive breaches like the one at Target late last year.

Earlier this week, rumors began flying that Sears was breached by the same sort of attack that hit Target. In December, Target disclosed that malware installed on its store cash registers compromised credit and debit card data on 40 some million transactions. This publication reached out on Wednesday to Sears to check the validity of those rumors, and earlier today Bloomberg moved a brief story saying that the U.S. Secret Service was said to be investigating a possible data breach at Sears.

But in a short statement issued today, Sears said the company has found no information indicating a breach at the company.

“There have been rumors and reports throughout the retail industry of security incidents at various retailers, and we are actively reviewing our systems to determine if we have been a victim of a breach,” Sears said in a written statement. “We have found no information based on our review of our systems to date indicating a breach.”

The Secret Service declined to comment.

Media stories about undisclosed breaches in the retail sector have fueled rampant speculation about the identities of other victim companies. Earlier this week, The Wall Street Journal ran a piece quoting Verizon Enterprise Solutions’s Bryan Sartin saying that the company — which investigates data breaches — was responding to two different currently undisclosed breaches at major retailers.

Interestingly, Sartin gave an interview last week to this publication specifically to discuss a potential blind spot in the approach used by most banks to identify companies that may have had a payment card breach — a weakness that he said almost exclusively manifests itself directly after large breaches like the Target break-in.

Continue reading →


5
Feb 14

Target Hackers Broke in Via HVAC Company

Last week, Target told reporters at The Wall Street Journal and Reuters that the initial intrusion into its systems was traced back to network credentials that were stolen from a third party vendor. Sources now tell KrebsOnSecurity that the vendor in question was a refrigeration, heating and air conditioning subcontractor that has worked at a number of locations at Target and other top retailers.

hvachooverSources close to the investigation said the attackers first broke into the retailer’s network on Nov. 15, 2013 using network credentials stolen from Fazio Mechanical Services, a Sharpsburg, Penn.-based provider of refrigeration and HVAC systems.

Fazio president Ross Fazio confirmed that the U.S. Secret Service visited his company’s offices in connection with the Target investigation, but said he was not present when the visit occurred. Fazio Vice President Daniel Mitsch declined to answer questions about the visit. According to the company’s homepage, Fazio Mechanical also has done refrigeration and HVAC projects for specific Trader Joe’s, Whole Foods and BJ’s Wholesale Club locations in Pennsylvania, Maryland, Ohio, Virginia and West Virginia.

Target spokeswoman Molly Snyder said the company had no additional information to share, citing a “very active and ongoing investigation.”

It’s not immediately clear why Target would have given an HVAC company external network access, or why that access would not be cordoned off from Target’s payment system network. But according to a cybersecurity expert at a large retailer who asked not to be named because he did not have permission to speak on the record, it is common for large retail operations to have a team that routinely monitors energy consumption and temperatures in stores to save on costs (particularly at night) and to alert store managers if temperatures in the stores fluctuate outside of an acceptable range that could prevent customers from shopping at the store.

“To support this solution, vendors need to be able to remote into the system in order to do maintenance (updates, patches, etc.) or to troubleshoot glitches and connectivity issues with the software,” the source said. “This feeds into the topic of cost savings, with so many solutions in a given organization. And to save on head count, it is sometimes beneficial to allow a vendor to support versus train or hire extra people.”

Continue reading →


10
Jan 14

Hackers Steal Card Data from Neiman Marcus

Responding to inquiries about a possible data breach involving customer credit and debit card information, upscale retailer Neiman Marcus acknowledged today that it is working with the U.S. Secret Service to investigate a hacker break-in that has exposed an unknown number of customer cards.

neimanEarlier this week, I began hearing from sources in the financial industry about an increasing number of fraudulent credit and debit card charges that were being traced to cards that had been very recently used at brick-and-mortar stores run by the Dallas, Texas based high-end retail chain. Sources said that while it appears the fraud on those stolen cards was perpetrated at a variety of other stores, the common point of purchase among the compromised cards was Neiman Marcus.

Today, I reached out to Neiman Marcus and received confirmation that the company is in fact investigating a breach that was uncovered in mid-December.

Neiman Marcus spokesperson Ginger Reeder said the company does not yet know the cause, size or duration of the breach, noting that these are details being sought by a third-party forensics firm which has yet to complete its investigation. But she said there is no evidence that shoppers who purchased from the company’s online stores were affected by this breach.

The entirety of the company’s formal statement is as follows:

“Neiman Marcus was informed by our credit card processor in mid-December of potentially unauthorized payment card activity that occurred following customer purchases at our Neiman Marcus Group stores.

We informed federal law enforcement agencies and are working actively with the U.S. Secret Service, the payment brands, our credit card processor, a leading investigations, intelligence and risk management firm, and a leading forensics firm to investigate the situation. On January 1st, the forensics firm discovered evidence that the company was the victim of a criminal cyber-security intrusion and that some customers’ cards were possibly compromised as a result. We have begun to contain the intrusion and have taken significant steps to further enhance information security.

The security of our customers’ information is always a priority and we sincerely regret any inconvenience. We are taking steps, where possible, to notify customers whose cards we know were used fraudulently after making a purchase at our store.”

The disclosure comes as many in the retail sector are seeking more information about the causes of the breach at nationwide retail giant Target, which extended from around Thanksgiving 2013 to Dec. 15, and affected some 40 million customer debit and credit cards.

Continue reading →