Krebs on Security

Chip Card ATM ‘Shimmer’ Found in Mexico

August 11, 2015

Fraud experts in Mexico have discovered an unusual ATM skimming device that can be inserted into the mouth of the cash machine’s card acceptance slot and used to read data directly off of chip-enabled credit or debit cards.

The device pictured below is a type of skimmer known as a “shimmer,” so named because it acts a shim that sits between the chip on the card and the chip reader in the ATM — recording the data on the chip as it is read by the ATM.

This card ‘shimming’ device is made to read chip-enabled cards and can be inserted directly into the ATM’s card acceptance slot.

The chip reading component includes the eight gold rectangular leads seen on the right side of this device; the electronics that power the data storage on the shimmer can be seen in black at the top of the image.

According to information from Damage Control S.A., a security and investigations company based in Mexico, this device was found inside a Diebold Opteva 520 with Dip reader (the kind of card reader that requires you to briefly insert your card and then quickly remove it). The device is inserted from the outside of the ATM and no access is required to the ATM internals. Damage Control, which disseminated the information via a service called CrimeDex, didn’t say whether this shimmer was accompanied by a component to steal card PINs, such as a hidden camera or PIN pad overlay.

Here’s a look at what this thing looks like while it’s sitting inside a compromised ATM’s reader (notice how the chip-reading components shown in the first image are obscured in this one by the ATM’s chip reader): Continue reading →

Tech Firm Ubiquiti Suffers $46M Cyberheist

August 7, 2015

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Networking firm Ubiquiti Networks Inc. disclosed this week that cyber thieves recently stole $46.7 million using an increasingly common scam in which crooks spoof communications from executives at the victim firm in a bid to initiate unauthorized international wire transfers.

Ubiquiti, a San Jose based maker of networking technology for service providers and enterprises, disclosed the attack in a quarterly financial report filed this week with the U.S. Securities and Exchange Commission (SEC). The company said it discovered the fraud on June 5, 2015, and that the incident involved employee impersonation and fraudulent requests from an outside entity targeting the company’s finance department.

“This fraud resulted in transfers of funds aggregating $46.7 million held by a Company subsidiary incorporated in Hong Kong to other overseas accounts held by third parties,” Ubiquiti wrote. “As soon as the Company became aware of this fraudulent activity it initiated contact with its Hong Kong subsidiary’s bank and promptly initiated legal proceedings in various foreign jurisdictions. As a result of these efforts, the Company has recovered $8.1 million of the amounts transferred.”

Known variously as “CEO fraud,” and the “business email compromise,” the swindle that hit Ubiquiti is a sophisticated and increasingly common one targeting businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments. In January 2015, the FBI warned that cyber thieves stole nearly $215 million from businesses in the previous 14 months through such scams, which start when crooks spoof or hijack the email accounts of business executives or employees.

In February, con artists made off with $17.2 million from one of Omaha, Nebraska’s oldest companies — The Scoular Co., an employee-owned commodities trader. According to Omaha.com, an executive with the 800-employee company wired the money in installments last summer to a bank in China after receiving emails ordering him to do so.

In March 2015, I posted the story Spoofing the Boss Turns Thieves a Tidy Profit, which recounted the nightmarish experience of an Ohio manufacturing firm that came within a whisker of losing $315,000 after an employee received an email she thought was from her boss asking her to wire the money to China to pay for some raw materials.

Ubiquiti didn’t disclose precisely how it was scammed, but CEO fraud usually begins with the thieves either phishing an executive and gaining access to that individual’s inbox, or emailing employees from a look-alike domain name that is one or two letters off from the target company’s true domain name. For example, if the target company’s domain was “example.com” the thieves might register “examp1e.com” (substituting the letter “L” for the numeral 1) or “example.co,” and send messages from that domain.

In these cases, the fraudsters will forge the sender’s email address displayed to the recipient, so that the email appears to be coming from example.com. In all cases, however, the “reply-to” address is the spoofed domain (e.g. examp1e.com), ensuring that any replies are sent to the fraudster.

In the case of the above-mentioned Ohio manufacturing firm that nearly lost $315,000, that company determined that the fraudsters had just hours before the attack registered the phony domain and associated email account with Vistaprint, which offers a free one-month trial for companies looking to quickly set up a Web site.

Ubiquiti said in addition to the $8.1 million it already recovered, some $6.8 million of the amounts transferred are currently subject to legal injunction and reasonably expected to be recovered. It added that an internal investigation completed last month uncovered no evidence that its systems were penetrated or that any corporate information, including our financial and account information, was accessed. Likewise, the investigation reported no evidence of employee criminal involvement in the fraud.

“The Company is continuing to pursue the recovery of the remaining $31.8 million and is cooperating with U.S. federal and numerous overseas law enforcement authorities who are actively pursuing a multi-agency criminal investigation,” the 10-K filing reads. “The Company may be limited in what information it can disclose due to the ongoing investigation. The Company currently believes this is an isolated event and does not believe its technology systems have been compromised or that Company data has been exposed.”

The FBI’s advisory on these scams urges businesses to adopt two-step or two-factor authentication for email, where available, and/or to establish other communication channels — such as telephone calls — to verify significant transactions. Businesses are also advised to exercise restraint when publishing information about employee activities on their Web sites or through social media, as attackers perpetrating these schemes often will try to discover information about when executives at the targeted organization will be traveling or otherwise out of the office.

Ubiquiti noted that as a result of its investigation, the company and its audit committee and advisors concluded that its internal control over financial reporting were ineffective due to one or more material weaknesses, though it didn’t disclose what measures it took to close those security gaps.

“The Company has implemented enhanced internal controls over financial reporting since June 5, 2015 and is in the process of implementing additional procedures and controls pursuant to recommendations from the investigation,” it said.

There are probably some scenarios in which legitimate emails between two parties carry different display and “reply-to” addresses. But if the message also involves a “reply-to” domain that has virtually no reputation (it was registered within hours or days of the message being sent), the chances that the email is fraudulent go up dramatically.

Business Email Compromise (BEC) or man-in-the-email (MITE) scams are adaptive and surprisingly complicated.

Business Email Compromise (BEC) or man-in-the-email (MITE) scams are adaptive and surprisingly complex.

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Inside the $100M ‘Business Club’ Crime Gang

August 5, 2015

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New research into a notorious Eastern European organized cybercrime gang accused of stealing more than $100 million from banks and businesses worldwide provides an unprecedented, behind-the-scenes look at an exclusive “business club” that dabbled in cyber espionage and worked closely with phantom Chinese firms on Russia’s far eastern border.

In the summer of 2014, the U.S. Justice Department joined multiple international law enforcement agencies and security firms in taking down the Gameover ZeuS botnet, an ultra-sophisticated, global crime machine that infected upwards of a half-million PCs.

Thousands of freelance cybercrooks have used a commercially available form of the ZeuS banking malware for years to siphon funds from Western bank accounts and small businesses. Gameover ZeuS, on the other hand, was a closely-held, customized version secretly built by the ZeuS author himself (following a staged retirement) and wielded exclusively by a cadre of hackers that used the systems in countless online extortion attacks, spam and other illicit moneymaking schemes.

Last year’s takedown of the Gameover ZeuS botnet came just months after the FBI placed a $3 million bounty on the botnet malware’s alleged author — a Russian programmer named Evgeniy Mikhailovich Bogachev who used the hacker nickname “Slavik.” But despite those high-profile law enforcement actions, little has been shared about the day-to-day operations of this remarkably resourceful cybercrime gang.

That changed today with the release of a detailed report from Fox-IT, a security firm based in the Netherlands that secretly gained access to a server used by one of the group’s members. That server, which was rented for use in launching cyberattacks, included chat logs between and among the crime gang’s core leaders, and helped to shed light on the inner workings of this elite group.

The alleged ZeuS Trojan author, Yevgeniy Bogachev, Evgeniy Mikhaylovich Bogachev, a.k.a. “lucky12345”, “slavik”, “Pollingsoon”. Source: FBI.gov “most wanted, cyber.

THE ‘BUSINESS CLUB’

The chat logs show that the crime gang referred to itself as the “Business Club,” and counted among its members a core group of a half-dozen people supported by a network of more than 50 individuals. In true Oceans 11 fashion, each Business Club member brought a cybercrime specialty to the table, including 24/7 tech support technicians, third-party suppliers of ancillary malicious software, as well as those engaged in recruiting “money mules” — unwitting or willing accomplices who could be trained or counted on to help launder stolen funds.

“To become a member of the business club there was typically an initial membership fee and also typically a profit sharing agreement,” Fox-IT wrote. “Note that the customer and core team relationship was entirely built on trust. As a result not every member would directly get full access, but it would take time until all the privileges of membership would become available.”

Michael Sandee, a principal security expert at Fox-IT and author of the report, said although Bogachev and several other key leaders of the group were apparently based in or around Krasnodar — a temperate area of Russia on the Black Sea — the crime gang had members that spanned most of Russia’s 11 time zones.

Geographic diversity allowed the group — which mainly worked regular 9-5 hour days Monday through Friday — to conduct their cyberheists against banks by following the rising sun across the globe — emptying accounts at Australia and Asian banks in the morning there, European banks in the afternoon, before handing the operations over to a part of the late afternoon team based in Eastern Europe that would attempt to siphon funds from banks that were just starting their business day in the United States.

“They would go along with the time zone, starting with banks in Australia, then continuing in Asia and following the business day wherever it was, ending the day with [attacks against banks in] the United States,” Sandee said.

Image: Timetemperature.com

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Chinese VPN Service as Attack Platform?

August 4, 2015

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Hardly a week goes by without a news story about state-sponsored Chinese cyberspies breaking into Fortune 500 companies to steal intellectual property, personal data and other invaluable assets. Now, researchers say they’ve unearthed evidence that some of the same Chinese hackers also have been selling access to compromised computers within those companies to help perpetrate future breaches.

The so-called “Great Firewall of China” is an effort by the Chinese government to block citizens from accessing specific content and Web sites that the government has deemed objectionable. Consequently, many Chinese seek to evade such censorship by turning to virtual private network or “VPN” services that allow users to tunnel their Internet connections to locations beyond the control of the Great Firewall.

Security experts at RSA Research say they’ve identified an archipelago of Chinese-language virtual private network (VPN) services marketed to Chinese online gamers and those wishing to evade censorship, but which also appear to be used as an active platform for launching attacks on non-Chinese corporations while obscuring the origins of the attackers.

Dubbed by RSA as “Terracotta VPN” (a reference to the Chinese Terracotta Army), this satellite array of VPN services “may represent the first exposure of a PRC-based VPN operation that maliciously, efficiently and rapidly enlists vulnerable servers around the world,” the company said in a report released today.

The hacker group thought to be using Terracotta to launch and hide attacks is known by a number of code names, including the “Shell_Crew” and “Deep Panda.” Security experts have tied this Chinese espionage gang to some of the largest data breaches in U.S. history, including the recent attack on the U.S. Office of Personnel Management, as well as the breaches at U.S. healthcare insurers Anthem and Premera.

According to RSA, Terracotta VPN has more than 1,500 nodes around the world where users can pop up on the Internet. Many of those locations appear to be little more than servers at Internet service providers in the United States, Korea, Japan and elsewhere that offer cheap virtual private servers.

But RSA researchers said they discovered that many of Terracotta’s exit nodes were compromised Windows servers that were “harvested” without the victims’ knowledge or permission, including systems at a Fortune 500 hotel chain; a hi-tech manufacturer; a law firm; a doctor’s office; and a county government of a U.S. state.

The report steps through a forensics analysis that RSA conducted on one of the compromised VPN systems, tracking each step the intruders took to break into the server and ultimately enlist the system as part of the Terracotta VPN network.

“All of the compromised systems, confirmed through victim-communication by RSA Research, are Windows servers,” the company wrote. “RSA Research suspects that Terracotta is targeting vulnerable Windows servers because this platform includes VPN services that can be configured quickly (in a matter of seconds).”

RSA says suspected nation-state actors have leveraged at least 52 Terracotta VPN nodes to exploit sensitive targets among Western government and commercial organizations. The company said it received a specific report from a large defense contractor concerning 27 different Terracotta VPN node Internet addresses that were used to send phishing emails targeting users in their organization.

“Out of the thirteen different IP addresses used during this campaign against this one (APT) target, eleven (85%) were associated with Terracotta VPN nodes,” RSA wrote of one cyber espionage campaign it investigated. “Perhaps one of the benefits of using Terracotta for Advanced Threat Actors is that their espionage related network traffic can blend-in with ‘otherwise-legitimate’ VPN traffic.”

DIGGING DEEPER

RSA’s report includes a single screen shot of software used by one of the commercial VPN services marketed on Chinese sites and tied to the Terracotta network, but for me this was just a tease: I wanted a closer look at this network, yet RSA (or more likely, the company’s lawyers) carefully omitted any information in its report that would make it easy to locate the sites selling or offering the Terracotta VPN.

RSA said the Web sites advertising the VPN services are marketed on Chinese-language Web sites that are for the most part linked by common domain name registrant email addresses and are often hosted on the same infrastructure with the same basic Web content. Along those lines, the company did include one very useful tidbit in its report: A section designed to help companies detect servers that may be compromised warned that any Web servers seen phoning home to 8800free[dot]info should be considered hacked.

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‘Like Cutting Off a Limb to Save the Body’

August 3, 2015

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This author has spent many years chronicling the exploits of black hat spammers who use hacked computers to relay junk email. But I’ve dedicated comparatively little time delving into ways of email marketers who technically follow U.S. anti-spam laws yet nevertheless engage in spammy practices. The latter is able to ply their trade because there are thousands of Internet hosting companies operating on thin profit margins that are happy to host spammy but lucrative clients. This is the story of how one hosting company heroically kicked out all of its email marketing customers at great expense and ended up building a stronger, more profitable company in the process.

A serial entrepreneur as a young teenager, Peter Holden founded several online companies by the time he turned 20 and started Tulsa, Okla.-based hosting firm HostWinds. The company grew modestly but steadily — relying on more than two dozen servers and bringing in revenues of about $15,000 per month.

That is, until Holden got his first email marketing client who offered to double HostWind’s monthly income in one day.

“I remember driving down from Tulsa to Oklahoma City to visit this client,” said Holden, now 25. “It was July 2012, and it was super hot in the car because I didn’t have air conditioning. But I remember thinking it was really cool to have a client who was local and interested in using our services.”

That one client’s business would not only double HostWind’s income, but it gave the company much-needed funds to invest in building out the firm’s technical infrastructure. Good thing, too, because the email marketing client soon referred more e-mailers to HostWinds, which was forced to petition the American Registry for Internet Numbers (ARIN) for thousands of additional Internet addresses to accommodate its new clientele.

“Fast forward about two years, and we now have a lot of mailers on our network,” Holden said. “Throughout all of this, one client introduced me to another client, and another.”

All of them swore up and down that they were following U.S. anti-spam laws to the letter. The CAN-SPAM Act was intended to make it more expensive and difficult for email marketers and spammers to send unsolicited junk email, but critics say it is essentially toothless and rarely enforced. Under CAN-SPAM, commercial emails can’t be spoofed (i.e., the address in the “from;” field can’t be faked or obfuscated), and the messages must give recipients a simple way to opt-out of receiving future missives.

“Legally speaking, we didn’t have any client on our network who broke the law. My dad was a lawyer and we’d routinely terminate anyone who violated our policies,” Holden said. “Ultimately, I think the fact that these clients were able to pay their bills on time — and their bills were massive — gave them some sort of air of legitimacy.”

HOW MANY SPAMS CAN A SPAMMER SPAM IF A SPAMMER CAN-SPAM SPAMS?

From the perspective of anti-spam groups, the main problem with the CAN-SPAM act is that it doesn’t require marketers to get opt-in approval from people before spamming them. Also, many large-scale junk email operations are not too dissimilar from spam campaigns run by cybercrooks — except instead of routing the mail through PCs that have been seeded with malware, commercial emailers send email from huge numbers of distinct Internet addresses that they rent from a vast network of hosting companies. Continue reading →

Windows 10 Shares Your Wi-Fi With Contacts

July 29, 2015

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Starting today, Microsoft is offering most Windows 7 and Windows 8 users a free upgrade to the software giant’s latest operating system — Windows 10. But there’s a very important security caveat that users should know about before transitioning to the new OS: Unless you opt out, Windows 10 will by default prompt to you share access to WiFi networks to which you connect with any contacts you may have listed in Outlook and Skype — and, with an opt-in, your Facebook friends.

This brilliant new feature, which Microsoft has dubbed Wi-Fi Sense, doesn’t share your WiFi network password per se — it shares an encrypted version of that password. But it does allow anyone in your Skype or Outlook or Hotmail contacts lists to waltz onto your Wi-Fi network — should they ever wander within range of it or visit your home (or hop onto it secretly from hundreds of yards away with a good ‘ole cantenna!).

I first read about this over at The Register, which noted that Microsoft’s Wi-Fi Sense FAQ seeks to reassure would-be Windows 10 users that the Wi-Fi password will be sent encrypted and stored encrypted — on a Microsoft server. According to PCGamer, if you use Windows 10’s “Express” settings during installation, Wi-Fi Sense is enabled by default.

“For networks you choose to share access to, the password is sent over an encrypted connection and stored in an encrypted file on a Microsoft server, and then sent over a secure connection to your contacts’ phone if they use Wi-Fi Sense and they’re in range of the Wi-Fi network you shared,” the FAQ reads.

The company says your contacts will only be able to share your network access, and that Wi-Fi Sense will block those users from accessing any other shared resources on your network, including computers, file shares or other devices. But these words of assurance probably ring hollow for anyone who’s been paying attention to security trends over the past few years: Given the myriad ways in which social networks and associated applications share and intertwine personal connections and contacts, it’s doubtful that most people are aware of who exactly all of their social network followers really are from one day to the next.

Update, July 30, 12:35 p.m. ET: Ed Bott over at ZDNet takes issue with the experience described in the stories referenced above, stating that while Wi-Fi Sense is turned on by default, users still have to explicitly choose to share a network. “When you first connect to a password-protected Wi-Fi network, you choose if you want to share access to that network with your contacts,” Bott writes. Nevertheless, many users are conditioned to click “yes” to these prompts, and shared networks will be shared to all Facebook, Outlook, and Skype contacts (users can’t pick individual contacts; the access is shared with all contacts on a social network). Updated the lead to clarify that users are prompted to share. Continue reading →

The Wheels of Justice Turn Slowly

July 27, 2015

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On the evening March 14, 2013, a heavily-armed police force surrounded my home in Annandale, Va., after responding to a phony hostage situation that someone had alerted authorities to at our address. I’ve recently received a notice from the U.S. Justice Department stating that one of the individuals involving in that “swatting” incident had pleaded guilty to a felony conspiracy charge.

“A federal investigation has revealed that several individuals participated in a scheme to commit swatting in the course of which these individuals committed various federal criminal offenses,” reads the DOJ letter, a portion of which is here (PDF). “You were the victim of the criminal conduct which resulted in swattings in that you were swattted.”

The letter goes on to state that one of the individuals who participated in the scheme has pleaded guilty to conspiracy charges (Title 18, Section 371) in federal court in Washington, D.C.

The notice offers little additional information about the individual who pleaded guilty or about his co-conspirators, and the case against him is sealed. It could be the individual identified at the conclusion of this story, or someone else. In any case, my own digging on this investigation suggests the government is in the process of securing charges or guilty pleas in connection with a group of young men who ran the celebrity “doxing” Web site exposed[dot]su (later renamed exposed[dot]re).

As I noted in a piece published just days after my swatting incident, the attack came not long after I wrote a story about the site, which was posting the Social Security numbers, previous addresses, phone numbers and credit reports on a slew of high-profile individuals, from the director of the FBI to Kim Kardashian, Bill Gates and First Lady Michelle Obama. Many of those individuals whose personal data were posted at the site also were the target of swatting attacks, including P. Diddy, Justin Timberlake and Ryan Seacrest.

The Web site exposed[dot]su featured the personal data of celebrities and public figures.

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Spike in ATM Skimming in Mexico?

July 22, 2015

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Several sources in the financial industry say they are seeing a spike in fraud on customer cards used at ATMs in Mexico. The reason behind that apparent increase hopefully will be fodder for another story. In this post, we’ll take a closer look at a pair of ATM skimming devices that were found this month attached to a cash machine in Puerto Vallarta — a popular tourist destination on Mexico’s Pacific coast.

On Saturday, July 18, 2015, municipal police in Puerto Vallara arrested a man who had just replaced the battery in a pair of skimming devices he or an associate had installed at an ATM in a busy spot of the town. This skimming kit targeted certain models of cash machines made by Korean ATM manufacturer Hyosung, and included a card skimming device as well as a hidden camera to record the victim’s ATM card PIN.

Here’s a look at the hidden camera installed over the compromised card reader. Would you have noticed anything amiss here?

The tiny pinhole camera was hidden in a molded plastic fascia designed to fit over top of the area directly above the PIN pad. The only clue that something is wrong here is a gap of about one millimeter between the PIN capture device and the actual ATM. Check out the backside of the false front:

The backside of the false fascia shows the location of the hidden camera.

The left side of the false fascia (as seen from the front, installed) contains the battery units that power the video camera:

Swapping the batteries out got this skimmer scammer busted. No wonder they included so many!

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Experian Hit With Class Action Over ID Theft Service

July 21, 2015

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Big-three credit bureau Experian is the target of a class-action lawsuit just filed in California. The suit alleges that Experian negligently violated consumer protection laws when it failed to detect for nearly 10 months that a customer of its data broker subsidiary was a scammer who ran a criminal service that resold consumer data to identity thieves.

The lawsuit comes just days after a judge in New Hampshire handed down a 13-year jail sentence against Hieu Minh Ngo, a 25-year-old Vietnamese man who ran an ID theft service variously named Superget.info and findget.me.

Ngo admitted hacking into or otherwise illegally gaining access to databases belonging to some of the world’s largest data brokers, including a Court Ventures — a company that Experian acquired in 2012. He got access to some 200 million consumer records by posing as a private investigator based in the United States, and for nearly ten months after Experian acquired Court Ventures, Ngo continued paying for his customers’ data searches via cash wire transfers from a bank in Singapore.

Ngo’s service sold access to “fullz,” the slang term for packages of consumer data that could be used to commit identity theft in victims’ names. The government says Ngo made nearly $2 million from his scheme. According to the Justice Department, the IRS has confirmed that 13,673 U.S. citizens, whose stolen personal information was sold on Ngo’s websites, have been victimized through the filing of $65 million in fraudulent individual income tax returns.

The class action lawsuit, filed July 17, 2015 in the U.S. District Court for the Central District of California, seeks statutory damages for Experian’s alleged violations of, among other statutes, the Fair Credit Reporting Act (FCRA). The plaintiffs also want the court to force Experian to notify all consumers affected by Ngo’s service; to provide them free credit monitoring services; to disgorge all profits made from Ngo’s service; and to establish a fund (in an amount to be determined) to which victims can apply for reimbursement of the time and out-of-pocket expenses they incurred to remediate the identity theft and fraud caused by customers of Ngo’s ID theft service. Continue reading →

Online Cheating Site AshleyMadison Hacked

July 19, 2015

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Large caches of data stolen from online cheating site AshleyMadison.com have been posted online by an individual or group that claims to have completely compromised the company’s user databases, financial records and other proprietary information. The still-unfolding leak could be quite damaging to some 37 million users of the hookup service, whose slogan is “Life is short. Have an affair.”

The data released by the hacker or hackers — which self-identify as The Impact Team — includes sensitive internal data stolen from Avid Life Media (ALM), the Toronto-based firm that owns AshleyMadison as well as related hookup sites Cougar Life and Established Men.

Reached by KrebsOnSecurity late Sunday evening, ALM Chief Executive Noel Biderman confirmed the hack, and said the company was “working diligently and feverishly” to take down ALM’s intellectual property. Indeed, in the short span of 30 minutes between that brief interview and the publication of this story, several of the Impact Team’s Web links were no longer responding.

“We’re not denying this happened,” Biderman said. “Like us or not, this is still a criminal act.”

Besides snippets of account data apparently sampled at random from among some 40 million users across ALM’s trio of properties, the hackers leaked maps of internal company servers, employee network account information, company bank account data and salary information.

The compromise comes less than two months after intruders stole and leaked online user data on millions of accounts from hookup site AdultFriendFinder.

In a long manifesto posted alongside the stolen ALM data, The Impact Team said it decided to publish the information in response to alleged lies ALM told its customers about a service that allows members to completely erase their profile information for a $19 fee.

According to the hackers, although the “full delete” feature that Ashley Madison advertises promises “removal of site usage history and personally identifiable information from the site,” users’ purchase details — including real name and address — aren’t actually scrubbed. Continue reading →

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