December, 2017


29
Dec 17

Kansas Man Killed In ‘SWATting’ Attack

A 28-year-old Kansas man was shot and killed by police officers on the evening of Dec. 28 after someone fraudulently reported a hostage situation ongoing at his home. The false report was the latest in a dangerous hoax known as “swatting,” wherein the perpetrator falsely reports a dangerous situation at an address with the goal of prompting authorities to respond to that address with deadly force. This particular swatting reportedly originated over a $1.50 wagered match in the online game Call of Duty. Compounding the tragedy is that the man killed was an innocent party who had no part in the dispute.

The following is an analysis of what is known so far about the incident, as well as a brief interview with the alleged and self-professed perpetrator of this crime.

It appears that the dispute and subsequent taunting originated on Twitter. One of the parties to that dispute — allegedly using the Twitter handle “SWauTistic” — threatened to swat another user who goes by the nickname “7aLeNT“. @7aLeNT dared someone to swat him, but then tweeted an address that was not his own.

Swautistic responded by falsely reporting to the Kansas police a domestic dispute at the address 7aLenT posted, telling the authorities that one person had already been murdered there and that several family members were being held hostage.

Image courtesey @mattcarries

A story in the Wichita Eagle says officers responded to the 1000 block of McCormick and got into position, preparing for a hostage situation.

“A male came to the front door,” Livingston said. “As he came to the front door, one of our officers discharged his weapon.”

“Livingston didn’t say if the man, who was 28, had a weapon when he came to the door, or what caused the officer to shoot the man. Police don’t think the man fired at officers, but the incident is still under investigation, he said. The man, who has not been identified by police, died at a local hospital.

“A family member identified that man who was shot by police as Andrew Finch. One of Finch’s cousins said Finch didn’t play video games.”

Not long after that, Swautistic was back on Twitter saying he could see on television that the police had fallen for his swatting attack. When it became apparent that a man had been killed as a result of the swatting, Swautistic tweeted that he didn’t get anyone killed because he didn’t pull the trigger (see image above).

Swautistic soon changed his Twitter handle to @GoredTutor36, but KrebsOnSecurity managed to obtain several weeks’ worth of tweets from Swautistic before his account was renamed. Those tweets indicate that Swautistic is a serial swatter — meaning he has claimed responsibility for a number of other recent false reports to the police.

Among the recent hoaxes he’s taken credit for include a false report of a bomb threat at the U.S. Federal Communications Commission (FCC) that disrupted a high-profile public meeting on the net neutrality debate. Swautistic also has claimed responsibility for a hoax bomb threat that forced the evacuation of the Dallas Convention Center, and another bomb threat at a high school in Panama City, Fla, among others.

After tweeting about the incident extensively this afternoon, KrebsOnSecurity was contacted by someone in control of the @GoredTutor36 Twitter account. GoredTutor36 said he’s been the victim of swatting attempts himself, and that this was the reason he decided to start swatting others.

He said the thrill of it “comes from having to hide from police via net connections.” Asked about the FCC incident, @GoredTutor36 acknowledged it was his bomb threat. “Yep. Raped em,” he wrote.

“Bomb threats are more fun and cooler than swats in my opinion and I should have just stuck to that,” he wrote. “But I began making $ doing some swat requests.”

Asked whether he feels remorse about the Kansas man’s death, he responded “of course I do.”

But evidently not enough to make him turn himself in.

“I won’t disclose my identity until it happens on its own,” the user said in a long series of direct messages on Twitter. “People will eventually (most likely those who know me) tell me to turn myself in or something. I can’t do that; though I know its [sic] morally right. I’m too scared admittedly.”

Update, 7:15 p.m.: A recording of the call to 911 operators that prompted this tragedy can be heard at this link. The playback of the recorded emergency calls starts around 10 minutes into the video.

Update, Dec. 30, 8:06 a.m. ET: Police in Los Angeles reportedly have arrested 25-year-old Tyler Raj Barriss in connection with the swatting attack.

Continue reading →


29
Dec 17

Happy 8th Birthday, KrebsOnSecurity!

Eight years ago today I set aside my Washington Post press badge and became an independent here at KrebsOnSecurity.com. What a wild ride it has been. Thank you all, Dear Readers, for sticking with me and for helping to build a terrific community.

This past year KrebsOnSecurity published nearly 160 stories, generating more than 11,000 reader comments. The pace of publications here slowed down in 2017, but then again I have been trying to focus on quality over quantity, and many of these stories took weeks or months to report and write.

As always, a big Thank You to readers who sent in tips and personal experiences that helped spark stories here. For anyone who wishes to get in touch, I can always be reached via this site’s contact form, or via email at krebsonsecurity @ gmail dot com.

Here are some other ways to reach out: Continue reading →


28
Dec 17

4 Years After Target, the Little Guy is the Target

Dec. 18 marked the fourth anniversary of this site breaking the news about a breach at Target involving some 40 million customer credit and debit cards. It has been fascinating in the years since that epic intrusion to see how organized cyber thieves have shifted from targeting big box retailers to hacking a broad swath of small to mid-sized merchants.

In many ways, not much has changed: The biggest underground shops that sell stolen cards still index most of their cards by ZIP code. Only, the ZIP code corresponds not to the legitimate cardholder’s billing address but to the address of the hacked store at which the card in question was physically swiped (the reason for this is that buyers of these cards tend to prefer cards used by people who live in their geographic area, as the subsequent fraudulent use of those cards tends to set off fewer alarm bells at the issuing bank).

Last week I was researching a story published here this week on how a steep increase in transaction fees associated with Bitcoin is causing many carding shops to recommend alternate virtual currencies like Litecoin. And I noticed that popular carding store Joker’s Stash had just posted a new batch of cards dubbed “Dynamittte,” which boasted some 7 million cards advertised as “100 percent” valid — meaning the cards were so fresh that even the major credit card issuers probably didn’t yet know which retail or restaurant breach caused this particular breach.

An advertisement for a large new batch of stolen credit card accounts for sale at the Joker’s Stash Dark Web market.

Translation: These stolen cards were far more likely to still be active and useable after fraudsters encode the account numbers onto fake plastic and use the counterfeits to go shopping in big box stores.

I pinged a couple of sources who track when huge new batches of stolen cards hit the market, and both said the test cards they’d purchased from the Joker’s Stash Dynamittte batch mapped back to customers who all had one thing in common: They’d all recently eaten at a Jason’s Deli location.

Jason’s Deli is a fast casual restaurant chain based in Beaumont, Texas, with approximately 266 locations in 28 states. Seeking additional evidence as to the source of the breach, I turned to the Jason’s Deli Web site and scraped the ZIP codes for their various stores across the country. Then I began comparing those ZIPs with the ZIPs tied to this new Dynamittte batch of cards at Joker’s Stash.

Checking my work were the folks at Mindwise.io, a threat intelligence startup in California that monitors Dark Web marketplaces and tries to extract useful information from them. Mindwise found a nearly 100 percent overlap between the ZIP codes on the “Blasttt-US” unit of the Dynamittte cards for sale and the ZIP codes for Jason’s Deli locations.

Reached for comment, Jason’s Deli released the following statement:

“On Friday, Dec. 22, 2017, our company was notified by payment processors – the organizations that manage the electronic connections between Jason’s Deli locations and payment card issuers – that MasterCard security personnel had informed it that a large quantity of payment card information had appeared for sale on the ‘dark web,’ and that an analysis of the data indicated that at least a portion of the data may have come from various Jason’s Deli locations.”

“Jason’s Deli’s management immediately activated our response plan, including engagement of a leading threat response team, involvement of other forensic experts, and cooperation with law enforcement. Among the questions that investigators are working to determine is whether in fact a breach took place, and if so, to determine its scope, the method employed, and whether there is any continuing breach or vulnerability.”

“The investigation is in its early stages and, as is typical in such situations, we expect it will take some time to determine exactly what happened. Jason’s Deli will provide as much information as possible as the inquiry progresses, bearing in mind that security and law enforcement considerations may limit the amount of detail we can provide.”

Continue reading →


26
Dec 17

Skyrocketing Bitcoin Fees Hit Carders in Wallet

Critics of unregulated virtual currencies like Bitcoin have long argued that the core utility of these payment systems lies in facilitating illicit commerce, such as buying drugs or stolen credit cards and identities. But recent spikes in the price of Bitcoin — and the fees associated with moving funds into and out of it — have conspired to make Bitcoin a less useful and desirable payment method for many crooks engaged in these activities.

Bitcoin’s creator(s) envisioned a currency that could far more quickly and cheaply facilitate payments, with tiny transaction fees compared to more established and regulated forms of payment (such as credit cards). And indeed, until the beginning of 2017 those fees were well below $1, frequently less than 10 cents per transaction.

But as the price of Bitcoin has soared over the past few months to more than $15,000 per coin, so have the Bitcoin fees per transaction. This has made Bitcoin far less attractive for conducting small-dollar transactions (for more on this shift, see this Dec. 19 story from Ars Technica).

As a result, several major underground markets that traffic in stolen digital goods are now urging customers to deposit funds in alternative virtual currencies, such as Litecoin. Those who continue to pay for these commodities in Bitcoin not only face far higher fees, but also are held to higher minimum deposit amounts.

“Due to the drastic increase in the Bitcoin price, we faced some difficulties,” reads the welcome message for customers after they log in to Carder’s Paradise, a Dark Web marketplace that KrebsOnSecurity featured in a story last week.

“The problem is that we send all your deposited funds to our suppliers which attracts an additional Bitcoin transaction fee (the same fee you pay when you make a deposit),” Carder’s Paradise explains. “Sometimes we have to pay as much as 5$ from every 1$ you deposited.”

Continue reading →


21
Dec 17

U.K. Man Avoids Jail Time in vDOS Case

A U.K. man who pleaded guilty to launching more than 2,000 cyberattacks against some of the world’s largest companies has avoided jail time for his role in the attacks. The judge in the case reportedly was moved by pleas for leniency that cited the man’s youth at the time of the attacks and a diagnosis of autism.

In early July 2017, the West Midlands Police in the U.K. arrested 19-year-old Stockport resident Jack Chappell and charged him with using a now-defunct attack-for-hire service called vDOS to launch attacks against the Web sites of AmazonBBCBTNetflixT-MobileVirgin Media, and Vodafone, between May 1, 2015 and April 30, 2016.

One of several taunting tweets Chappell sent to his DDoS victims.

Chappell also helped launder money for vDOS, which until its demise in September 2016 was by far the most popular and powerful attack-for-hire service — allowing even completely unskilled Internet users to launch crippling assaults capable of knocking most Web sites offline.

Using the Twitter handle @fractal_warrior, Chappell would taunt his victims while  launching attacks against them. The tweet below was among several sent to the Jisc Janet educational support network and Manchester College, where Chappell was a student. In total, Chappell attacked his school at least 21 times, prosecutors showed.

Another taunting Chappell tweet.

Chappell was arrested in April 2016 after investigators traced his Internet address to his home in the U.K. For more on the clues that likely led to his arrest, check out this story.

Nevertheless, the judge in the case was moved by pleas from Chappell’s lawyer, who argued that his client was just an impressionable youth at the time who has autism, a range of conditions characterized by challenges with social skills, repetitive behaviors, speech and nonverbal communication.

The defense called on an expert who reportedly testified that Chappell was “one of the most talented people with a computer he had ever seen.”

“He is in some ways as much of a victim, he has been exploited and used,” Chappell’s attorney Stuart Kaufman told the court, according to the Manchester Evening News. “He is not malicious, he is mischievous.”

The same publication quoted Judge Maurice Greene at Chappell’s sentencing this week, saying to the young man: “You were undoubtedly taken advantage of by those more criminally sophisticated than yourself. You would be extremely vulnerable in a custodial element.”

Judge Greene decided to suspend a sentence of 16 months at a young offenders institution; Chappell will instead “undertake 20 days rehabilitation activity,” although it’s unclear exactly what that will entail.

ANALYSIS/RANT

It’s remarkable when someone so willingly and gleefully involved in a crime spree such as this can emerge from it looking like the victim. “Autistic Hacker Had Been Exploited,” declared a headline about the sentence in the U.K. newspaper The Times.

After reading the coverage of this case in the press, I half expected to see another story saying someone had pinned a medal on Chappell or offered him a job. Continue reading →


19
Dec 17

Buyers Beware of Tampered Gift Cards

Prepaid gift cards make popular presents and no-brainer stocking stuffers, but before you purchase one be on the lookout for signs that someone may have tampered with it. A perennial scam that picks up around the holidays involves thieves who pull back and then replace the decals that obscure the card’s redemption code, allowing them to redeem or transfer the card’s balance online after the card is purchased by an unwitting customer.

Last week KrebsOnSecurity heard from Colorado reader Flint Gatrell, who reached out after finding that a bunch of Sam’s Club gift cards he pulled off the display rack at Wal-Mart showed signs of compromise. The redemption code was obscured by a watermarked sticker that is supposed to make it obvious if it has been tampered with, and many of the cards he looked at clearly had stickers that had been peeled back and then replaced.

“I just identified five fraudulent gift cards on display at my local Wal-Mart,” Gatrell said. “They each had their stickers covering their codes peeled back and replaced. I can only guess that the thieves call the service number to monitor the balances, and try to consume them before the victims can.  I’m just glad I thought to check!”

In the picture below, Gatrell is holding up three of the Sam’s Club cards. The top two showed signs of tampering, but the one on the bottom appeared to be intact.

The top two gift cards show signs that someone previously peeled back the protective sticker covering the redemption code. Image: Flint Gatrell.

Continue reading →


18
Dec 17

The Market for Stolen Account Credentials

Past stories here have explored the myriad criminal uses of a hacked computer, the various ways that your inbox can be spliced and diced to help cybercrooks ply their trade, and the value of a hacked company. Today’s post looks at the price of stolen credentials for just about any e-commerce, bank site or popular online service, and provides a glimpse into the fortunes that an enterprising credential thief can earn selling these accounts on consignment.

Not long ago in Internet time, your typical cybercriminal looking for access to a specific password-protected Web site would most likely visit an underground forum and ping one of several miscreants who routinely leased access to their “bot logs.”

These bot log sellers were essentially criminals who ran large botnets (collections of hacked PCs) powered by malware that can snarf any passwords stored in the victim’s Web browser or credentials submitted into a Web-based login form. For a few dollars in virtual currency, a ne’er-do-well could buy access to these logs, or else he and the botmaster would agree in advance upon a price for any specific account credentials sought by the buyer.

Back then, most of the stolen credentials that a botmaster might have in his possession typically went unused or unsold (aside from the occasional bank login that led to a juicy high-value account). Indeed, these plentiful commodities held by the botmaster for the most part were simply not a super profitable line of business and so went largely wasted, like bits of digital detritus left on the cutting room floor.

But oh, how times have changed! With dozens of sites in the underground now competing to purchase and resell credentials for a variety of online locations, it has never been easier for a botmaster to earn a handsome living based solely on the sale of stolen usernames and passwords alone.

If the old adage about a picture being worth a thousand words is true, the one directly below is priceless because it illustrates just how profitable the credential resale business has become.

This screen shot shows the earnings panel of a crook who sells stolen credentials for hundreds of Web sites to a dark web service that resells them. This botmaster only gets paid when someone buys one of his credentials. So far this year, customers of this service have purchased more than 35,000 credentials he’s sold to this service, earning him more than $288,000 in just a few months.

The image shown above is the wholesaler division of “Carder’s Paradise,” a bustling dark web service that sells credentials for hundreds of popular Web destinations. The screen shot above is an earnings panel akin to what you would see if you were a seller of stolen credentials to this service — hence the designation “Seller’s Paradise” in the upper left hand corner of the screen shot.

This screen shot was taken from the logged-in account belonging to one of the more successful vendors at Carder’s Paradise. We can see that in just the first seven months of 2017, this botmaster sold approximately 35,000 credential pairs via the Carder’s Paradise market, earning him more than $288,000. That’s an average of $8.19 for each credential sold through the service.

Bear in mind that this botmaster only makes money based on consignment: Regardless of how much he uploads to Seller’s Paradise, he doesn’t get paid for any of it unless a Carder’s Paradise customer chooses to buy what he’s selling.

Fortunately for this guy, almost 9,000 different customers of Carder’s Paradise chose to purchase one or more of his username and password pairs. It was not possible to tell from this seller’s account how many credential pairs total that he has contributed to this service which went unsold, but it’s a safe bet that it was far more than 35,000.

[A side note is in order here because there is some delicious irony in the backstory behind the screenshot above: The only reason a source of mine was able to share it with me was because this particular seller re-used the same email address and password across multiple unrelated cybercrime services]. Continue reading →


15
Dec 17

Former Botmaster, ‘Darkode’ Founder is CTO of Hacked Bitcoin Mining Firm ‘NiceHash’

On Dec. 6, 2017, approximately USD $52 million worth of Bitcoin mysteriously disappeared from the coffers of NiceHash, a Slovenian company that lets users sell their computing power to help others mine virtual currencies. As the investigation into the heist nears the end of its second week, many Nice-Hash users have expressed surprise to learn that the company’s chief technology officer recently served several years in prison for operating and reselling a massive botnet, and for creating and running ‘Darkode,” until recently the world’s most bustling English-language cybercrime forum.

In December 2013, NiceHash CTO Matjaž Škorjanc was sentenced to four years, ten months in prison for creating the malware that powered the ‘Mariposa‘ botnet. Spanish for “Butterfly,” Mariposa was a potent crime machine first spotted in 2008. Very soon after, Mariposa was estimated to have infected more than 1 million hacked computers — making it one of the largest botnets ever created.

An advertisement for the ButterFly Flooder, a crimeware product based on the ButterFly Bot.

ButterFly Bot, as it was more commonly known to users, was a plug-and-play malware strain that allowed even the most novice of would-be cybercriminals to set up a global operation capable of harvesting data from thousands of infected PCs, and using the enslaved systems for crippling attacks on Web sites. The ButterFly Bot kit sold for prices ranging from $500 to $2,000.

Prior to his initial arrest in Slovenia on cybercrime charges in 2010, Škorjanc was best known to his associates as “Iserdo,” the administrator and founder of the exclusive cybercrime forum Darkode.

A message from Iserdo warning Butterfly Bot subscribers not to try to reverse his code.

On Darkode, Iserdo sold his Butterfly Bot to dozens of other members, who used it for a variety of illicit purposes, from stealing passwords and credit card numbers from infected machines to blasting spam emails and hijacking victim search results. Microsoft Windows PCs infected with the bot would then try to spread the disease over MSN Instant Messenger and peer-to-peer file sharing networks.

In July 2015, authorities in the United States and elsewhere conducted a global takedown of the Darkode crime forum, arresting several of its top members in the process. The U.S. Justice Department at the time said that out of 800 or so crime forums worldwide, Darkode represented “one of the gravest threats to the integrity of data on computers in the United States and around the world and was the most sophisticated English-speaking forum for criminal computer hackers in the world.”

Following Škorjanc’s arrest, Slovenian media reported that his mother Zdenka Škorjanc was accused of money laundering; prosecutors found that several thousand euros were sent to her bank account by her son. That case was dismissed in May of this year after prosecutors conceded she probably didn’t know how her son had obtained the money.

Matjaž Škorjanc did not respond to requests for comment. But local media reports state that he has vehemently denied any involvement in the disappearance of the NiceHash stash of Bitcoins.

In an interview with Slovenian news outlet Delo.si, the NiceHash CTO described the theft “as if his kid was kidnapped and his extremities would be cut off in front of his eyes.” A roughly-translated English version of that interview has been posted to Reddit. Continue reading →


13
Dec 17

Mirai IoT Botnet Co-Authors Plead Guilty

The U.S. Justice Department on Tuesday unsealed the guilty pleas of two men first identified in January 2017 by KrebsOnSecurity as the likely co-authors of Mirai, a malware strain that remotely enslaves so-called “Internet of Things” devices such as security cameras, routers, and digital video recorders for use in large scale attacks designed to knock Web sites and entire networks offline (including multiple major attacks against this site).

Entering guilty pleas for their roles in developing and using Mirai are 21-year-old Paras Jha from Fanwood, N.J. and Josiah White, 20, from Washington, Pennsylvania.

Jha and White were co-founders of Protraf Solutions LLC, a company that specialized in mitigating large-scale DDoS attacks. Like firemen getting paid to put out the fires they started, Jha and White would target organizations with DDoS attacks and then either extort them for money to call off the attacks, or try to sell those companies services they claimed could uniquely help fend off the attacks.

CLICK FRAUD BOTNET

In addition, the Mirai co-creators pleaded guilty to charges of using their botnet to conduct click fraud — a form of online advertising fraud that will cost Internet advertisers more than $16 billion this year, according to estimates from ad verification company Adloox. 

The plea agreements state that Jha, White and another person who also pleaded guilty to click fraud conspiracy charges — a 21-year-old from Metairie, Louisiana named Dalton Norman — leased access to their botnet for the purposes of earning fraudulent advertising revenue through click fraud activity and renting out their botnet to other cybercriminals.

As part of this scheme, victim devices were used to transmit high volumes of requests to view web addresses associated with affiliate advertising content. Because the victim activity resembled legitimate views of these websites, the activity generated fraudulent profits through the sites hosting the advertising content, at the expense of online advertising companies.

Jha and his co-conspirators admitted receiving as part of the click fraud scheme approximately two hundred bitcoin, valued on January 29, 2017 at over $180,000.

Prosecutors say Norman personally earned over 30 bitcoin, valued on January 29, 2017 at approximately $27,000. The documents show that Norman helped Jha and White discover new, previously unknown vulnerabilities in IoT devices that could be used to beef up their Mirai botnet, which at its height grew to more than 300,000 hacked devices.

MASSIVE ATTACKS

The Mirai malware is responsible for coordinating some of the largest and most disruptive online attacks the Internet has ever witnessed. The biggest and first to gain widespread media attention began on Sept. 20, 2016, when KrebsOnSecurity came under a sustained distributed denial-of-service attack from more than 175,000 IoT devices (the size estimates come from this Usenix paper (PDF) on the Mirai botnet evolution).

That September 2016 digital siege maxed out at 620 Gbps, almost twice the size of the next-largest attack that Akamai — my DDoS mitigation provider at the time — had ever seen.

Continue reading →


12
Dec 17

Patch Tuesday, December 2017 Edition

The final Patch Tuesday of the year is upon us, with Adobe and Microsoft each issuing security updates for their software once again. Redmond fixed problems with various flavors of WindowsMicrosoft Edge, Office, Exchange and its Malware Protection Engine. And of course Adobe’s got another security update available for its Flash Player software.

The December patch batch addresses more than 30 vulnerabilities in Windows and related software. As per usual, a huge chunk of the updates from Microsoft tackle security problems with the Web browsers built into Windows.

Also in the batch today is an out-of-band update that Microsoft first issued last week to fix a critical issue in its Malware Protection Engine, the component that drives the Windows Defender/Microsoft Security Essentials embedded in most modern versions of Windows, as well as Microsoft Endpoint Protection, and the Windows Intune Endpoint Protection anti-malware system.

Microsoft was reportedly made aware of the malware protection engine bug by the U.K.’s National Cyber Security Centre (NCSC), a division of the Government Communications Headquarters — the United Kingdom’s main intelligence and security agency. As spooky as that sounds, Microsoft said it is not aware of active attacks exploiting this flaw. Continue reading →