Posts Tagged: U.S. Secret Service

All About Skimmers — 39 Comments
1
Feb 13

Pro-Grade Point-of-Sale Skimmer

Every so often, the sophistication of the technology being built into credit card skimmers amazes even the experts who are accustomed to studying such crimeware. This post focuses on one such example — images from one of several compromised point-of-sale devices that used Bluetooth technology to send the stolen data to the fraudsters wirelessly.

This point-of-sale device was one of several found in an as-yet undisclosed merchant breach.

This point-of-sale device was one of several found in an as-yet undisclosed merchant breach.

In October 2012, forensics experts with Trustwave Spiderlabs were called in to examine the handiwork of several Bluetooth based point-of-sale skimmers found at a major U.S. retailer. The skimmers described and pictured in this blog post were retrieved from a retail breach that has not yet been disclosed, said Jonathan Spruill, a security consultant at Trustwave.

Spruill said the card-skimming devices that had been added to the small point-of-sale machines was beyond anything he’d encountered in skimmer technology to date.

“The stuff we’ve been seeing lately is a leap forward in these types of crimes,” said Spruill, a former special agent with the U.S. Secret Service. “You hate to say you admire the work, but at some point you say, ‘Wow, that’s pretty clever.’ From a technical and hardware standpoint, this was really well thought-out.”

Spruill declined to name the breached merchant, and said it was unclear how long the devices had been in place prior to their discovery, or how they were introduced into the stores. But the incident is the latest in a string of breaches involving bricks-and-mortar merchants discovering compromised point-of-sale devices at their retail stores. Late last year, bookseller Barnes & Noble disclosed that it had found modified point-of-sale devices at 60 locations nationwide.

The picture below shows the card skimmer in more detail. The entire green square circuit board with the grey square heat shield and the blue element to the left are the brains of the device. The eight-legged black component in the upper right is the memory module that stored stolen credit and debit card and PIN data from unwitting store customers.

Beneath the large grey heat shield in the center of the circuit board are the chips that control the Bluetooth radio. That entire component is soldered to the base of the board. The blue and white wires leading from the skimming device connect the skimming module to the card reader on the point-of-sale device, while the group of eight orange wires that come out of the bottom connect directly to the device’s PIN pad.

The Bluetooth point-of-sale skimmer, up close.

The Bluetooth point-of-sale skimmer, up close.

The image below shows the eight orange wires from the skimmer soldered to the POS device. Spruill said the quality of the soldering job indicates this was not made by some kid in his mom’s basement.

“One of the reasons suggesting that the attacker was fairly accomplished is the quality of the solder done with those very small connections to the PIN pad,” he said.

Continue reading →

A Little Sunshine / The Coming Storm — 25 Comments
6
Jun 12

Alleged Romanian Subway Hackers Were Lured to U.S.

The alleged ringleader of a Romanian hacker gang accused of breaking into and stealing payment card data from hundreds of Subway restaurants made news late last month when he was extradited to face charges in the United States. But perhaps the more interesting story is how his two alleged accomplices were lured here by undercover U.S. Secret Service agents, who promised to shower the men with love and riches.

Adrian-Tiberiu Oprea, 27, appeared in a New Hampshire federal court a week ago Tuesday, after being extradited from Constanta, Romania to face charges of hacking into the point-of-sale terminals at more than 150 Subway restaurants and at least 50 other retailers. Oprea was among four men indicted last year on charges of conspiracy to commit computer fraud, wire fraud and access device fraud.

Two of Oprea’s alleged accomplices arrived in Boston one day apart in August 2011, and were arrested immediately after stepping off of their respective flights. Previous news stories have noted their arrests and detentions in the United States, but all of the accounts I read neglected to mention one very interesting fact: Both men entered the country of their own volition.

I spoke last week with Michael Shklar, the public defender appointed to 27-year-old Iulian Dolan — the man authorities say helped Oprea sell credit and debit card accounts harvested in the break-ins. According to Shklar, U.S. Secret Service agents tricked his client into voluntarily visiting the United States by posing as representatives from a local resort and casino that was offering him a complimentary weekend getaway.

“My client was actually smart enough to say, ‘Oh, I don’t believe this. Why would you invite me to a weekend for free?’ And they basically told him, ‘Well, we know you gamble online, and we would like to comp you a weekend because it gives us a cosmopolitan feel.”

Shklar said his client apparently was taken in by the ruse, and thought he’d struck a rapport with the female casino employee who’d invited him. Dolan didn’t know it, but the Secret Service and the casino had set up a dedicated telephone line for the female “employee,” and gave her an email with the casino’s domain name. When a suspicious Dolan sought to verify her story, it checked out. The airline ticket itself was even purchased by the casino, in case Dolan checked on that detail as well.

Apparently convinced he was headed for a weekend of fun, Dolan packed a suitcase with three days’ worth of clothes — plus jewelry for his erstwhile casino friend — and hopped on a complimentary flight from Bucharest to Logan International Airport…where he was presented with complimentary silver bracelets.

“He arrived in the U.S. with some clothes, a cheap necklace, a little bit of money, and three very large boxes of grape-flavored Romanian condoms,” Shklar said. Continue reading →

A Little Sunshine — 87 Comments
20
Sep 11

Gang Used 3D Printers for ATM Skimmers

An ATM skimmer gang stole more than $400,000 using skimming devices built with the help of high-tech 3D printers, federal prosecutors say.

Before I get to the gang, let me explain briefly how ATM skimmers work, and why 3D printing is a noteworthy development in this type of fraud. Many of the ATM skimmers profiled in my skimmer series are carefully hand-made and crafted to blend in with the targeted cash machine in both form and paint color. Some skimmer makers even ask customers for a photo of the targeted cash machine before beginning their work.

The skimmer components typically include a card skimmer that fits over the card acceptance slot and steals the data stored on the card’s magnetic stripe, and a pinhole camera built into a false panel that thieves can fit above or beside the PIN pad. If these components don’t match just-so, they’re more likely to be discovered and removed by customers or bank personnel, leaving the thieves without their stolen card data.

Enter the 3D printer. This fascinating technology, explained succinctly in the video below from 3D printing company i.materialise, takes two dimensional computer images and builds them into three dimensional models by laying down successive layers of powder that are heated, shaped and hardened.

3D printing in action from i.materialise on Vimeo.

Apparently, word is spreading in the cybercrime underworld that 3D printers produce flawless skimmer devices with exacting precision. Last year, i-materialise blogged about receiving a client’s order for building a card skimmer. The company said it denied the request when it became clear the ordered product was a fraud device.

3D printer firm i.materialise received and promptly declined orders for this skimmer device - a card acceptance slot overlay

In June, a federal court indicted four men from South Texas (PDF) whom authorities say had reinvested the profits from skimming scams to purchase a 3D printer. According to statements by the U.S. Secret Service, the gang’s leader, Jason Lall of Houston, was sent to prison for ATM fraud in 2009. Lall was instrumental in obtaining skimming devices, and the gang soon found themselves needing to procure their own skimmers. The trouble is, skimmer kits aren’t cheap: They range from $2,000 to more than $10,000 per kit.

Secret Service agents said in court records that on May 4, 2011, their undercover informer engaged in a secretly taped discussion with the ring’s members about a strategy for obtaining new skimmers. John Paz of Houston, one of the defendants, was allegedly the techie who built the skimming devices using a 3-D printer that the suspects purchased together. The Secret Service allege they have Paz on tape explaining the purchase of the expensive printer.

“When [Lall was] put in jail, we asked, ‘What are we going to do?’ and we had to figure it out and that’s when we came up with this unit,” Paz allegedly told the undercover officer.

Continue reading →

A Little Sunshine / Latest Warnings — 59 Comments
10
May 11

Breach at Michaels Stores Extends Nationwide

Earlier this month, arts & crafts chain Michaels Stores disclosed that crooks had tampered with some point-of-sale devices at store registers in the Chicago area in a scheme to steal credit and debit card numbers and associated PINs. But new information on the investigation shows that many Michaels stores across the country have discovered compromised payment terminals.

Investigators close to the case, but who asked to remain anonymous because they did  not have permission to speak publicly, said that at least 70 compromised POS terminals have been discovered so far in Michaels stores from Washington D.C. to the West Coast.

In an alert (PDF) sent to customers, Irving, Texas based Michaels Stores said it learned of the fraud after being contacted by banking and law enforcement authorities regarding fraudulent debit card transactions traced back to specific stores.  The Beacon-News, a Chicago Sun-Times publication, last week cited local police reports from several victims, describing the typical fraud as multiple unauthorized withdrawals of up to $500 made from ATMs at banks on the West Coast. It remains unclear when affected stores were compromised.

Continue reading →

Other — 18 Comments
28
Jul 10

Hacked Companies Hit by the Obvious in 2009

As a rule, I tend to avoid writing about reports and studies unless they offer truly valuable and actionable insights: Too often, reports have preconceived findings that merely serve to increase hype and drum up business for the companies that commission them. But I always make an exception for the annual data breach report issued by the Verizon Business RISK team, which is consistently so chock full of hype-slaying useful data and conclusions that it is often hard to know what not to write about from its contents.

Once again, some of the best stuff is buried deep in this year’s report and is likely to be missed in the mainstream coverage. But let’s get the headline-grabbing findings out of the way first:

-Verizon’s report on 2009 breaches for the first time includes data from the U.S. Secret Service. Yet, the report tracks a sharp decline in the total number of compromised records (143 million compromised records vs.  285 million in 2008).

-85 percent of records last year were compromised by organized criminal groups (this is virtually unchanged from the previous report).

-94 percent of compromised records were the result of breaches at companies in the financial services industry.

-45 percent of breaches were from external sources only, while 27 percent were solely perpetrated from the inside by trusted employees.

Among the most counter-intuitive findings in the report?

There wasn’t a single confirmed intrusion that exploited a patchable vulnerability. Rather, 85 percent of the breaches involved common configuration errors or weaknesses that led to things like SQL database injection attacks, and did not require the exploitation of a flaw that could be fixed with a software patch. In most cases, the breaches were caused by weaknesses that could be picked up by a free Web vulnerability scanner:

“Organizations exert a great deal of effort around the testing and deployment of patches — and well they should. Vulnerability management is a critical aspect of any security program. However, based on evidence collected over the last six years, we have to wonder if we’re going about it in the most efficient and effective manner. Many organizations treat patching as if it were all they had to do to be secure. We’ve observed multiple companies that were hell-bent on getting patch X deployed by week’s end but hadn’t even glanced at their log files in months.”

Speaking of log files, one of the most interesting sections of the 66-page report comes in a sidebar titled “Of Needles and Haystacks,” which states that 86 percent of all breaches last year could have been prevented if victim companies had simply looked for unusual patterns in the log files created by their Web servers.

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A Little Sunshine / All About Skimmers / Other — 44 Comments
7
May 10

Fun with ATM Skimmers, Part III

ATM skimmers, or devices that thieves secretly attach to cash machines in order to capture and ultimately clone ATM cards, have captured the imagination of many readers. Past posts on this blog about ATM skimmers have focused on their prevalence and stealth in attacking cash machines in the United States, but these devices also are a major problem in Europe as well.

According to the European ATM Security Team (EAST), a not-for-profit payment security organization, ATM crimes in Europe jumped 149 percent form 2007 to 2008, and most of that increase has been linked to a dramatic increase in ATM skimming attacks. During 2008, a total of 10,302 skimming incidents were reported in Europe. Below is a short video authorities in Germany released recently showing two men caught on camera there installing a skimmer and a pinhole camera panel above to record PINs.

EAST estimates that European ATM fraud losses in 2008 were nearly 500 million Euros, although roughly 80 percent of those losses resulted from fraud committed outside Europe by criminals using stolen card details. EAST believes this is because some 90 percent of European ATMs now are compliant with the so-called “chip and pin” or EMV (an initialism for Europay, Mastercard and VISA) standard.

ATM cards store account data on magnetic strips on the backs of the cards, and thieves have focused their attention on lifting the data from customer cards — either through handheld skimmers — or via magnetic strip readers on ATM skimmers. The data can then be re-encoded onto blank ATM cards, and used at ATM along with the victim’s PIN to withdraw cash. The EMV approach uses a secret algorithm embedded in the chip planted into each ATM card. The chip encodes the card data, making it harder (but certainly not impossible) for fraudsters to read information from them or clone them. RSA‘s Idan Aharoni wrote an informative post about this technology earlier this year.

Needless to say, U.S. based financial institutions do not require chip-and-PIN, and that may be a contributor to the high fraud rates in the United States. The U.S. Secret Service estimates that annual losses from ATM fraud totaled about $1 billion in 2008, or about $350,000 each day.

While many of the images below are not new, they showcase some of the actual ATM skimmers deployed against European cash machines (click any of the images to view a slideshow).

Have you seen:

All-in-one Skimmers…ATM skimmers come in all shapes and sizes, and most include several components — such as a tiny spy cam hidden in a brochure rack, or fraudulent PIN pad overlay. The problem from the thief’s perspective is that the more components included in the skimmer kit, the greater the chance that he will get busted attaching or removing the devices from ATMs. Thus, the appeal of the all-in-one ATM skimmer: It stores card data using an integrated magnetic stripe reader, and it has a built-in hidden camera designed to record the PIN sequence after an unsuspecting customer slides his bank card into the compromised machine.