Krebs on Security

Spam Nation Book Tour Highlights

November 24, 2014

Greetings from sunny Austin, Texas, where I’m getting ready to wrap up a week-long book tour that began in New York City, then blazed through Chicago, San Francisco, and Seattle. I’ve been trying to tweet links to various media interviews about Spam Nation over the past week, but wanted to offer a more comprehensive account and to share some highlights of the tour.

For three days starting last Sunday, I was in New York City — doing a series of back-to-back television and radio interviews. Prior to leaving for New York, I taped television interviews with Jeffrey Brown at the PBS NewsHour; the first segment delves into some of the points touched on in the book, and the second piece is titled “Why it’s harder than you think to go ‘off the grid’.”

On Monday, I was fortunate to once again be a guest on Terri Gross‘s show Fresh Air, which you can hear at this link. Tuesday morning began with a five-minute appearance on CBS This Morning, which included a sit-down with Charlie Rose, Gayle King and Norah O’Donnell. Later in the day, I was interviewed by the MarketPlace Tech Report, MSNBC’s The Cycle, as well as the Tavis Smiley show. Wednesday was a mercifully light day, with just two interviews: KGO-AM and the Jim Bohannon Radio Show. Continue reading →

Convicted ID Thief, Tax Fraudster Now Fugitive

November 21, 2014

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In April 2014, this blog featured a story about Lance Ealy, an Ohio man arrested last year for buying Social Security numbers and banking information from an underground identity theft service that relied in part on data obtained through a company owned by big-three credit bureau Experian. Earlier this week, Ealy was convicted of using the data to fraudulently claim tax refunds with the IRS in the names of more than 175 U.S. citizens, but not before he snipped his monitoring anklet and skipped town.

Lance Ealy, in self-portrait he uploaded to twitter before absconding.

Lance Ealy, in selfie he uploaded to Twitter before absconding.

On Nov. 18, a jury in Ohio convicted Ealy, 28, on all 46 charges, including aggravated identity theft, and wire and mail fraud. Government prosecutors presented evidence that Ealy had purchased Social Security numbers and financial data on hundreds of consumers, using an identity theft service called Superget.info (later renamed Findget.me). The jury found that Ealy used that information to fraudulently file at least 179 tax refund requests with the Internal Revenue Service, and to open up bank accounts in other victims’ names — accounts he set up to receive and withdraw tens of thousand of dollars in refund payments from the IRS.

The identity theft service that Ealy used was dismantled in 2013, after investigators with the U.S. Secret Service arrested its proprietor and began tracking and finding many of his customers. Investigators later discovered that the service’s owner had obtained much of the consumer data from data brokers by posing as a private investigator based in the United States.

In reality, the owner of Superget.info was a Vietnamese man paying for his accounts at data brokers using cash wire transfers from a bank in Singapore. Among the companies that Ngo signed up with was Court Ventures, a California company that was bought by credit bureau Experian nine months before the government shut down Superget.info.

Court records show that Ealy went to great lengths to delay his trial, and even reached out to this reporter hoping that I would write about his allegations that everyone from his lawyer to the judge in the case was somehow biased against him or unfit to participate in his trial. Early on, Ealy fired his attorney, and opted to represent himself. When the court appointed him a public defender, Ealy again choose to represent himself.

“Mr. Ealy’s motions were in a lot of respects common delay tactics that defendants use to try to avoid the inevitability of a trial,” said Alex Sistla, an assistant U.S. attorney in Ohio who helped prosecute the case.

Ealy also continued to steal peoples’ identities while he was on trial (although no longer buying from Superget.info), according to the government. His bail was revoked for several months, but in October the judge in the case ordered him released on a surety bond. Continue reading →

Microsoft Releases Emergency Security Update

November 18, 2014

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Microsoft today deviated from its regular pattern of releasing security updates on the second Tuesday of each month, pushing out an emergency patch to plug a security hole in all supported versions of Windows. The company urged Windows users to install the update as quickly as possible, noting that miscreants already are exploiting the weaknesses to launch targeted attacks.

The update (MS14-068) addresses a bug in a Windows component called Microsoft Windows Kerberos KDC, which handles authenticating Windows PCs on a local network. It is somewhat less of a problem for Windows home users (it is only rated critical for server versions of Windows) but it poses a serious threat to organizations. According to security vendor Shavlik, the flaw allows an attacker to elevate domain user account privileges to those of the domain administrator account.

“The attacker could forge a Kerberos Ticket and send that to the Kerberos KDC which claims the user is a domain administrator,” writes Chris Goettl, product manager with Shavlik. “From there the attacker can impersonate any domain accounts, add themselves to any group, install programs, view\change\delete date, or create any new accounts they wish. This could allow the attacker to then compromise any computer in the domain, including domain controllers. If there is a silver lining in this one it is in the fact that the attacker must have a valid domain user account to exploit the vulnerability, but once they have done so, they have the keys to the kingdom.”

The patch is one of two that Microsoft had expected to release on Patch Tuesday earlier this month, but unexpectedly pulled at the last moment. “This is pretty severe and definitely explains why Microsoft only delayed the release and did not pull it from the November Patch Tuesday release all together,” Goettl said. Continue reading →

Link Found in Staples, Michaels Breaches

November 17, 2014

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The breach at office supply chain Staples impacted roughly 100 stores and was powered by some of the same criminal infrastructure seen in the intrusion disclosed earlier this year at Michaels craft stores, according to sources close to the investigation.

Multiple banks interviewed by this author say they’ve received alerts from Visa and MasterCard about cards impacted in the breach at Staples, and that to date those alerts suggest that a subset of Staples stores were compromised between July and September 2014.

Sources briefed on the ongoing investigation say it involved card-stealing malicious software that the intruders installed on cash registers at approximately 100 Staples locations. Framingham, Mass.-based Staples has more than 1,800 stores nationwide.

In response to questions about these details, Staples spokesman Mark Cautela would say only that the company believes it has found and removed the malware responsible for the attack. Continue reading →

Amazon: Spam Nation one of “Best of Month”

November 17, 2014

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A quick update on my new book, Spam Nation, The Inside Story of Organized Cybercrime — From Global Epidemic to Your Front Door debuting on bookstore shelves Tuesday, Nov. 18: Amazon has selected Spam Nation as one of their “Best Books of the Month” picks for November, listed alongside such notable authors as Stephen King and Nora Roberts.

In addition, my publisher has graciously extended the freeZeusGard offer until Nov. 25 for the next 500 people who order more than one copy of the book.

In early October we launched a promotion in which the first 1,000 readers to preorder more than one copy of the book, audio recording and/or e-book version of Spam Nation would receive a free, KrebsOnSecurity-branded ZeusGard, a USB-based technology that’s designed to streamline the process of adopting the Live CD approach for online banking.

Approximately 500 readers took us up on this offer, but that means we still have about 500 left! Thankfully, my publisher (Sourcebooks) has agreed to extend this offer by one week (until Nov. 25, 2014).

Finally, if you live in Chicago, San Francisco, Seattle or Austin and would like a personalized copy of Spam Nation, please consider joining me this week as I drop by a local bookstore near you! See the tour schedule for dates, times and locations.

‘Microsoft Partner’ Claims Fuel Support Scams

November 14, 2014

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You can’t make this stuff up: A tech support company based in the United States that outsources its work to India says its brand is being unfairly maligned by — wait for it…..tech support scammers based in India. In an added twist, the U.S.-based tech support firm acknowledges that the trouble may be related to its admittedly false statements about being a Microsoft Certified Partner — the same false statements made by most telephone-based tech support scams.

Tech support scams are, unfortunately, an extremely common scourge. Most such scams are the telephonic equivalent of rogue antivirus attacks, which try to frighten consumers into purchasing worthless security software and services. Both types of scams try to make the consumer believe that the caller is somehow associated with Microsoft or with a security company, and each caller tries to cajole or scare the consumer into giving up control over his or her PC.

Earlier this month, a reader shared a link to a lengthy Youtube video by freelance journalist Carey Holzman, in which Holzman turns the tables on the tech support scammers. During the video, Holzman plays along and gives the scammer remote control access to a test computer he’s set up specifically for this video. The scammer, who speaks with a strong Indian accent but calls himself “Steve Wilson” from the “Microsoft technical department,” tries to convince Holzman that he works for a company that is a legitimate Microsoft support partner.

“Let me show you who we are,” the scammer says, opening up Google.com and typing SB3 Inc. Clicking on the first result brings up sb3inc[dot]com, which proudly displays an icon in the upper right corner of its home page stating that it is a Microsoft Certified Partner. “This is our mother company. Can you see that we are a Microsoft certified partner?”

When Holzman replies that this means nothing and that anyone can just put a logo on their site saying they’re associated with Microsoft, the scammer runs a search on Microsoft.com for SB3. The scammer shows true chutzpah when he points to the first result, which — if clicked — leads to a page on Microsoft’s community site where members try to warn the poster away from SB3 as a scam.

When Holzman tries to get the scammer to let him load the actual search result link about SB3 on Microsoft.com, the caller closes the browser window and proceeds to enable the SysKey utility on Windows, which allows the scammer to set a secret master password that must be entered before the computer will boot into Windows (effectively an attempt at locking Holzman out of his test computer if he tries to reboot).

The video goes on for some time more, but I decided to look more closely at SB3. The Web site registration records for the company state that it is based in New Jersey, and it took less than a minute to find the Facebook page of the company’s owner — a Suvajit “Steve” Basu in Ridgewood, NJ. Basu’s Facebook feed has him traveling the world, visiting the World Cup in Brazil in 2014, the Ryder Cup in 2012, and more recently taking delivery on a brand new Porsche. Continue reading →

Network Hijackers Exploit Technical Loophole

November 13, 2014

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Spammers have been working methodically to hijack large chunks of Internet real estate by exploiting a technical and bureaucratic loophole in the way that various regions of the globe keep track of the world’s Internet address ranges.

Last week, KrebsOnSecurity featured an in-depth piece about a well-known junk email artist who acknowledged sending from two Bulgarian hosting providers. These two providers had commandeered tens of thousands of Internet addresses from ISPs around the globe, including Brazil, China, India, Japan, Mexico, South Africa, Taiwan and Vietnam.

For example, a closer look at the Internet addresses hijacked by one of the Bulgarian providers — aptly named “Mega-Spred” with an email contact of “abuse@grimhosting” — shows that this provider has been slowly gobbling up far-flung IP address ranges since late August 2014.

This table, with data from the RIPE NCC — of the regional Internet Registries, shows IP address hijacking activity by Bulgarian host Mega-Spred.

According to several security and anti-spam experts who’ve been following this activity, Mega-Spred and the other hosting provider in question (known as Kandi EOOD) have been taking advantage of an administrative weakness in the way that some countries and regions of the world keep tabs on the IP address ranges assigned to various hosting providers and ISPs. Neither Kandi nor Mega-Spred responded to requests for comment.

IP address hijacking is hardly a new phenomenon. Spammers sometimes hijack Internet address ranges that go unused for periods of time. Dormant or “unannounced” address ranges are ripe for abuse partly because of the way the global routing system works: Miscreants can “announce” to the rest of the Internet that their hosting facilities are the authorized location for given Internet addresses. If nothing or nobody objects to the change, the Internet address ranges fall into the hands of the hijacker.

Experts say the hijackers also are exploiting a fundamental problem with record-keeping activities of RIPE NCC, the regional Internet registry (RIR) that oversees the allocation and registration of IP addresses for Europe, the Middle East and parts of Central Asia. RIPE is one of several RIRs, including ARIN (which handles mostly North American IP space) and APNIC (Asia Pacific), LACNIC (Latin America) and AFRINIC (Africa). Continue reading →

Adobe, Microsoft Issue Critical Security Fixes

November 11, 2014

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Adobe and Microsoft today each issued security updates to fix critical vulnerabilities in their software. Microsoft pushed 14 patches to address problems in Windows, Office, Internet Explorer and .NET, among other products. Separately, Adobe issued an update for its Flash Player software that corrects at least 18 security issues.

Microsoft announced 16 bulletins, but curiously two of those are listed as pending. Topping the list of critical updates from Microsoft is a fix for a zero-day vulnerability disclosed last month that hackers have been using in targeted cyber espionage attacks. Another critical patch targets 17 weaknesses in Internet Explorer, including a remotely exploitable vulnerability in all supported versions of Windows that earned a CVSS score of 9.3 (meaning it is highly likely to be exploited in drive-by attacks, and probably soon).

That flaw is a rare “unicorn-like” bug according to IBM X-Force, which discovered and reported the issue privately to Microsoft. In a blog post published today, IBM researchers described how the vulnerability can be used to sidestep the Enhanced Protected Mode sandbox in IE11, as well as Microsoft’s EMET anti-exploitation tool that Microsoft offers for free.

“In this case, the buggy code is at least 19 years old, and has been remotely exploitable for the past 18 years,” writes IBM researcher Robert Freeman. “Looking at the original release code of Windows 95, the problem is present. In some respects this vulnerability has been sitting in plain sight for a long time, despite many other bugs being discovered and patched in the same Windows library (OleAut32).”

Freeman said while unpatched Internet Explorer users are most at risk from this bug, the vulnerability also could be exploited through Microsoft Office files. “The other attack vectors this vulnerability could work with are Microsoft Office with script macros, for example in Excel documents,” Freeman told KrebsOnSecurity. “Most versions of Office (since about 2003) have macros disabled by default so the user would have to enable them (which can be a fairly mindless YES click at the top of the screen). Or if a user is using an old enough version of Office, the macros will be enabled by default.”

Continue reading →

Home Depot: Hackers Stole 53M Email Addresses

November 7, 2014

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As if the credit card breach at Home Depot didn’t already look enough like the Target breach: Home Depot said yesterday that the hackers who stole 56 million customer credit and debit card accounts also made off with 53 million customer email addresses.

In an update (PDF) released to its site on Thursday, Home Depot warned customers about the potential for thieves to use the email addresses in phishing attacks (think a Home Depot “survey” that offers a gift card for the first 10,000 people who open the booby-trapped attachment, for example). Home Depot stressed that the files containing the stolen email addresses did not contain passwords, payment card information or other sensitive personal information.

Home Depot said the crooks initially broke in using credentials stolen from a third-party vendor. The company said thieves used the vendor’s user name and password to enter the perimeter of Home Depot’s network, but that these stolen credentials alone did not provide direct access to the company’s point-of-sale devices. For that, they had to turn to a vulnerability in Microsoft Windows that was patched only after the breach occurred, according to a story in Thursday’s Wall Street Journal.

Recall that the Target breach also started with a hacked vendor — a heating and air conditioning company in Pennsylvania that was relieved of remote-access credentials after someone inside the company opened a virus-laden email attachment. Target also came out in the days after the breach became public and revealed that the attackers had stolen more than 70 million customer email addresses. Continue reading →

Feds Arrest Alleged ‘Silk Road 2’ Admin, Seize Servers

November 6, 2014

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Federal prosecutors in New York today announced the arrest and charging of a San Francisco man they say ran the online drug bazaar and black market known as Silk Road 2.0. In conjunction with the arrest, U.S. and European authorities have jointly seized control over the servers that hosted Silk Road 2.0 marketplace.

The home page of the Silk Road 2.0 market has been replaced with this message indicating the community’s Web servers were seized by authorities.

On Wednesday, agents with the FBI and the Department of Homeland Security arrested 26-year-old Blake Benthall, a.k.a. “Defcon,” in San Francisco, charging him with drug trafficking, conspiracy to commit computer hacking, and money laundering, among other alleged crimes.

Benthall’s LinkedIn profile says he is a native of Houston, Texas and was a programmer and “construction worker” at Codespike, a company he apparently founded using another company, Benthall Group, Inc. Benthall’s LinkedIn and Facebook profiles both state that he was a software engineer at Space Exploration Technologies Corp. (SpaceX), although this could not be immediately confirmed. Benthall describes himself on Twitter as a “rocket scientist” and a “bitcoin dreamer.”

Blake Benthall’s public profile page at LinkedIn.com

Benthall’s arrest comes approximately a year after the launch of Silk Road 2.0, which came online less than a month after federal agents shut down the original Silk Road community and arrested its alleged proprietor — Ross William Ulbricht, a/k/a “Dread Pirate Roberts.” Ulbricht is currently fighting similar charges, and made a final pre-trial appearance in a New York court earlier this week.

According to federal prosecutors, since about December 2013, Benthall has secretly owned and operated Silk Road 2.0, which the government describes as “one of the most extensive, sophisticated, and widely used criminal marketplaces on the Internet today.” Like its predecessor, Silk Road 2.0 operated on the “Tor” network, a special network of computers on the Internet, distributed around the world, designed to conceal the true IP addresses of the computers on the network and thereby the identities of the network’s users.

“Since its launch in November 2013, Silk Road 2.0 has been used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to buyers throughout the world, as well as to launder millions of dollars generated by these unlawful transactions,”reads a statement released today by Preet Bharara, the United States Attorney for the Southern District of New York. “As of September 2014, Silk Road 2.0 was generating sales of at least approximately $8 million per month and had approximately 150,000 active users.”

Benthall’s profile on Github.

The complaint against Benthall claims that by October 17, 2014, Silk Road 2.0 had over 13,000 listings for controlled substances, including, among others, 1,783 listings for “Psychedelics,” 1,697 listings for “Ecstasy,” 1,707 listings for “Cannabis,” and 379 listings for “Opioids.” Apart from the drugs, Silk Road 2.0 also openly advertised fraudulent identification documents and computer-hacking tools and services. The government alleges that in October 2014, the Silk Road 2.0 was generating at least approximately $8 million in monthly sales and at least $400,000 in monthly commissions.

The complaint describes how federal agents infiltrated Silk Road 2.0 from the very start, after an undercover agent working for Homeland Security investigators managed to infiltrate the support staff involved in the administration of the Silk Road 2.0 website.

“On or about October 7, 2013, the HSI-UC [the Homeland Security Investigations undercover agent] was invited to join a newly created discussion forum on the Tor network, concerning the potential creation of a replacement for the Silk Road 1.0 website,” the complaint recounts. “The next day, on or about October 8, 2013, the persons operating the forum gave the HSI‐UC moderator privileges, enabling the HSI‐UC to access areas of the forum available only to forum staff. The forum would later become the discussion forum associated with the Silk Road 2.0 website.”

The complaint also explains how the feds located and copied data from the Silk Road 2.0 servers. “In May 2014, the FBI identified a server located in a foreign country that was believed to be hosting the Silk Road 2.0 website at the time. On or about May 30, 2014, law enforcement personnel from that country imaged the Silk Road 2.0 Server and conducted a forensic analysis of it. Based on posts made to the SR2 Forum, complaining of service outages at the time the imaging was conducted, I know that once the Silk Road 2.0 server was taken offline for imaging, the Silk Road 2.0 website went offline as well, thus confirming that the server was used to host the Silk Road 2.0 website.” Continue reading →

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