Krebs on Security

Silk Road Lawyers Poke Holes in FBI’s Story

October 2, 2014

New court documents released this week by the U.S. government in its case against the alleged ringleader of the Silk Road online black market and drug bazaar suggest that the feds may have some ‘splaining to do.

The login prompt and CAPTCHA from the Silk Road home page.

Prior to its disconnection last year, the Silk Road was reachable only via Tor, software that protects users’ anonymity by bouncing their traffic between different servers and encrypting the traffic at every step of the way. Tor also lets anyone run a Web server without revealing the server’s true Internet address to the site’s users, and this was the very technology that the Silk road used to obscure its location.

Last month, the U.S. government released court records claiming that FBI investigators were able to divine the location of the hidden Silk Road servers because the community’s login page employed an anti-abuse CAPTCHA service that pulled content from the open Internet — thus leaking the site’s true Internet address.

But lawyers for alleged Silk Road captain Ross W. Ulbricht (a.k.a. the “Dread Pirate Roberts”) asked the court to compel prosecutors to prove their version of events. And indeed, discovery documents reluctantly released by the government this week appear to poke serious holes in the FBI’s story.

Continue reading →

ID Theft Service Customer Gets 27 Months

October 1, 2014

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A Florida man was sentenced today to 27 months in prison for trying to purchase Social Security numbers and other data from an identity theft service that pulled consumer records from a subsidiary of credit bureau Experian.

Ngo’s ID theft service superget.info

Derric Theoc, 36, pleaded guilty to attempting to purchase Social Security and bank account records on more than 100 Americans with the intent to open credit card accounts and file fraudulent tax returns in the victims’ names. According to prosecutors, Theoc had purchased numerous records from Superget.info, a now-defunct online identity theft service that was run by Vietnamese individual named Hieu Minh Ngo.

Ngo was arrested in 2012 by U.S. Secret Service agents, after he was lured to Guam by an undercover investigator who’d proposed a business deal to expand Ngo’s personal consumer data stores. As part of a guilty plea, Ngo later admitted that he’d obtained personal information on consumers from a variety of data broker companies by posing as a private investigator based in the United States.

Among the biggest brokers that Ngo bought from was Court Ventures, a company that was acquired in March 2012 by Experian — one of the three major credit bureaus. Court records show that for almost ten months after Experian completed that acquisition, Ngo continued siphoning consumer data and paying for the information via cash wire transfers from a bank in Singapore.

After Ngo’s arrest, Secret Service investigators in early 2013 quietly assumed control over his identity theft service in the hopes of identifying and arresting at least some of his more than 1,000 paying customers.

Theoc is just the latest in a string of identity thieves to have been rounded up for attempting to purchase additional records after the service came under the government’s control. In May, I wrote about another big beneficiary of Ngo’s service: An identity theft ring of at least 32 people who were arrested last year for allegedly using the information to steal millions from more than 1,000 victims across the country. Continue reading →

Apple Releases Patches for Shellshock Bug

September 30, 2014

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Apple has released updates to insulate Mac OS X systems from the dangerous “Shellshock” bug, a pervasive vulnerability that is already being exploited in active attacks.

Patches are available ~~via Software Update, or~~ from the following links for OS X Mavericks, Mountain Lion, and Lion.

After installing the updates, Mac users can check to see whether the flaw has been truly fixed by taking the following steps:

* Open Terminal, which you can find in the Applications folder (under the Utilities subfolder on Mavericks) or via Spotlight search.

* Execute this command:
bash –version [author’s note: my WordPress install is combining these two dashes; it should read the word “bash” followed by a space, then two dashes, and the word “version”].

* The version after applying this update will be:

OS X Mavericks: GNU bash, version 3.2.53(1)-release (x86_64-apple-darwin13)
OS X Mountain Lion: GNU bash, version 3.2.53(1)-release (x86_64-apple-darwin12)
OS X Lion: GNU bash, version 3.2.53(1)-release (x86_64-apple-darwin11)

We Take Your Privacy and Security. Seriously.

September 29, 2014

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“Please note that [COMPANY NAME] takes the security of your personal data very seriously.” If you’ve been on the Internet for any length of time, chances are very good that you’ve received at least one breach notification email or letter that includes some version of this obligatory line. But as far as lines go, this one is about as convincing as the classic break-up line, “It’s not you, it’s me.”

I was reminded of the sheer emptiness of this corporate breach-speak approximately two weeks ago, after receiving a snail mail letter from my Internet service provider — Cox Communications. In its letter, the company explained:

“On or about Aug. 13, 2014, “we learned that one of our customer service representatives had her account credentials compromised by an unknown individual. This incident allowed the unauthorized person to view personal information associated with a small number of Cox accounts. The information which could have been viewed included your name, address, email address, your Secret Question/Answer, PIN and in some cases, the last four digits only of your Social Security number or drivers’ license number.”

The letter ended with the textbook offer of free credit monitoring services (through Experian, no less), and the obligatory “Please note that Cox takes the security of your personal data very seriously.” But I wondered how seriously they really take it. So, I called the number on the back of the letter, and was directed to Stephen Boggs, director of public affairs at Cox.

Boggs said that the trouble started after a female customer account representative was “socially engineered” or tricked into giving away her account credentials to a caller posing as a Cox tech support staffer. Boggs informed me that I was one of just 52 customers whose information the attacker(s) looked up after hijacking the customer service rep’s account.

The nature of the attack described by Boggs suggested two things: 1) That the login page that Cox employees use to access customer information is available on the larger Internet (i.e., it is not an internal-only application); and that 2) the customer support representative was able to access that public portal with nothing more than a username and a password.

Boggs either did not want to answer or did not know the answer to my main question: Were Cox customer support employees required to use multi-factor or two-factor authentication to access their accounts? Boggs promised to call back with an definitive response. To Cox’s credit, he did call back a few hours later, and confirmed my suspicions. Continue reading →

Signature Systems Breach Expands

September 26, 2014

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Signature Systems Inc., the point-of-sale vendor blamed for a credit and debit card breach involving some 216 Jimmy John’s sandwich shop locations, now says the breach also may have jeopardized customer card numbers at nearly 100 other independent restaurants across the country that use its products.

Earlier this week, Champaign, Ill.-based Jimmy John’s confirmed suspicions first raised by this author on July 31, 2014: That hackers had installed card-stealing malware on cash registers at some of its store locations. Jimmy John’s said the intrusion — which lasted from June 16, 2014 to Sept. 5, 2014 — occurred when hackers compromised the username and password needed to remotely administer point-of-sale systems at 216 stores.

Those point-of-sale systems were produced by Newtown, Pa., based payment vendor Signature Systems. In a statement issued in the last 24 hours, Signature Systems released more information about the break-in, as well as a list of nearly 100 other stores — mostly small mom-and-pop eateries and pizza shops — that were compromised in the same attack.

“We have determined that an unauthorized person gained access to a user name and password that Signature Systems used to remotely access POS systems,” the company wrote. “The unauthorized person used that access to install malware designed to capture payment card data from cards that were swiped through terminals in certain restaurants. The malware was capable of capturing the cardholder’s name, card number, expiration date, and verification code from the magnetic stripe of the card.”

Meanwhile, there are questions about whether Signature’s core product — PDQ POS — met even the most basic security requirements set forth by the PCI Security Standards Council for point-of-sale payment systems. According to the council’s records, PDQ POS was not approved for new installations after Oct. 28, 2013. As a result, any Jimmy John’s stores and other affected restaurants that installed PDQ’s product after the Oct. 28, 2013 sunset date could be facing fines and other penalties.

This snapshot from the PCI Council shows that PDQ POS was not approved for new installations after Oct. 28, 2013.

Continue reading →

‘Shellshock’ Bug Spells Trouble for Web Security

September 25, 2014

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As if consumers weren’t already suffering from breach fatigue: Experts warn that attackers are exploiting a critical, newly-disclosed security vulnerability present in countless networks and Web sites that rely on Unix and Linux operating systems. Experts say the flaw, dubbed “Shellshock,” is so intertwined with the modern Internet that it could prove challenging to fix, and in the short run is likely to put millions of networks and countless consumer records at risk of compromise.

The bug is being compared to the recent Heartbleed vulnerability because of its ubiquity and sheer potential for causing havoc on Internet-connected systems — particularly Web sites. Worse yet, experts say the official patch for the security hole is incomplete and could still let attackers seize control over vulnerable systems.

The problem resides with a weakness in the GNU Bourne Again Shell (Bash), the text-based, command-line utility on multiple Linux and Unix operating systems. Researchers discovered that if Bash is set up to be the default command line utility on these systems, it opens those systems up to specially crafted remote attacks via a range of network tools that rely on it to execute scripts, from telnet and secure shell (SSH) sessions to Web requests.

According to several security firms, attackers are already probing systems for the weakness, and that at least two computer worms are actively exploiting the flaw to install malware. Jaime Blasco, labs director at AlienVault, has been running a honeypot on the vulnerability since yesterday to emulate a vulnerable system.

“With the honeypot, we found several machines trying to exploit the Bash vulnerability,” Blasco said. “The majority of them are only probing to check if systems are vulnerable. On the other hand, we found two worms that are actively exploiting the vulnerability and installing a piece of malware on the system. This malware turns the systems into bots that connect to a C&C server where the attackers can send commands, and we have seen the main purpose of the bots is to perform distributed denial of service attacks.”

The vulnerability does not impact Microsoft Windows users, but there are patches available for Linux and Unix systems. In addition, Mac users are likely vulnerable, although there is no official patch for this flaw from Apple yet. I’ll update this post if we see any patches from Apple.

Update, Sept. 29 9:06 p.m. ET: Apple has released an update for this bug, available for OS X Mavericks, Mountain Lion, and Lion.

The U.S.-CERT’s advisory includes a simple command line script that Mac users can run to test for the vulnerability. To check your system from a command line, type or cut and paste this text:

env x='() { :;}; echo vulnerable' bash -c "echo this is a test"

If the system is vulnerable, the output will be:

vulnerable
 this is a test

An unaffected (or patched) system will output:

 bash: warning: x: ignoring function definition attempt
 bash: error importing function definition for `x'
 this is a test

US-CERT has a list of operating systems that are vulnerable. Red Hat and several other Linux distributions have released fixes for the bug, but according to US-CERT the patch has an issue that prevents it from fully addressing the problem. Continue reading →

$1.66M in Limbo After FBI Seizes Funds from Cyberheist

September 25, 2014

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A Texas bank that’s suing a customer to recover $1.66 million spirited out of the country in a 2012 cyberheist says it now believes the missing funds are still here in the United States — in a bank account that’s been frozen by the federal government as part of an FBI cybercrime investigation.

In late June 2012, unknown hackers broke into the computer systems of Luna & Luna, LLP, a real estate escrow firm based in Garland, Texas. Unbeknownst to Luna, hackers had stolen the username and password that the company used to managed its account at Texas Brand Bank (TBB), a financial institution also based in Garland.

Between June 21, 2012 and July 2, 2012, fraudsters stole approximately $1.75 million in three separate wire transfers. Two of those transfers went to an account at the Industrial and Commercial Bank of China. That account was tied to the Jixi City Tianfeng Trade Limited Company in China. The third wire, in the amount of $89,651, was sent to a company in the United States, and was recovered by the bank.

Jixi is in the Heilongjiang province of China on the border with Russia, a region apparently replete with companies willing to accept huge international wire transfers without asking too many questions. A year before this cyberheist took place, the FBI issued a warning that cyberthieves operating out of the region had been the recipients of approximately $20 million in the year prior — all funds stolen from small to mid-sized businesses through a series of fraudulent wire transfers sent to Chinese economic and trade companies (PDF) on the border with Russia.

Luna became aware of the fraudulent transfers on July 2, 2012, when the bank notified the company that it was about to overdraw its accounts. The theft put Luna & Luna in a tough spot: The money the thieves stole was being held in escrow for the U.S. Department of Housing and Urban Development (HUD). In essence, the crooks had robbed Uncle Sam, and this was exactly the argument that Luna used to talk its bank into replacing the missing funds as quickly as possible.

“Luna argued that unless TBB restored the funds, Luna and HUD would be severely damaged with consequences to TBB far greater than the sum of the swindled funds,” TBB wrote in its original complaint (PDF). TBB notes that it agreed to reimburse the stolen funds, but that it also reserved its right to legal claims against Luna to recover the money.

When TBB later demanded repayment, Luna refused. The bank filed suit on July 1, 2013, in state court, suing to recover the approximately $1.66 million that it could not claw back, plus interest and attorney’s fees. Continue reading →

Jimmy John’s Confirms Breach at 216 Stores

September 24, 2014

94 Comments

More than seven weeks after this publication broke the news of a possible credit card breach at nationwide sandwich chain Jimmy John’s, the company now confirms that a break-in at one of its payment vendors jeopardized customer credit and debit card information at 216 stores.

On July 31, KrebsOnSecurity reported that multiple banks were seeing a pattern of fraud on cards that were all recently used at Jimmy John’s locations around the country. That story noted that the company was working with authorities on an investigation, and that multiple Jimmy John’s stores contacted by this author said they ran point-of-sale systems made by Newtown, Pa.-based Signature Systems.

In a statement issued today, Champaign, Ill. based Jimmy John’s said customers’ credit and debit card data was compromised after an intruder stole login credentials from the company’s point-of-sale vendor and used these credentials to remotely access the point-of-sale systems at some corporate and franchised locations between June 16, 2014 and Sept. 5, 2014.

“Approximately 216 stores appear to have been affected by this event,” Jimmy John’s said in the statement. “Cards impacted by this event appear to be those swiped at the stores, and did not include those cards entered manually or online. The credit and debit card information at issue may include the card number and in some cases the cardholder’s name, verification code, and/or the card’s expiration date. Information entered online, such as customer address, email, and password, remains secure.”

The company has posted a listing on its Web site — jimmyjohns.com — of the restaurant locations affected by the intrusion. There are more than 1,900 franchised Jimmy John’s locations across the United States, meaning this breach impacted roughly 11 percent of all stores. Continue reading →

Who’s Behind the Bogus $49.95 Charges?

September 22, 2014

50 Comments

Hardly a week goes by when I don’t hear from a reader wondering about the origins of a bogus credit card charge for $49.95 or some similar amount for a product they never ordered. As this post will explain, such charges appear to be the result of crooks trying to game various online affiliate programs by using stolen credit cards.

Bogus $49.95 charges for herbal weight loss products like these are showing up on countless consumer credit statements.

Most of these charges are associated with companies marketing products of dubious value and quality, typically by knitting a complex web of front companies, customer support centers and card processing networks. Whether we’re talking about a $49.95 payment for a bottle of overpriced vitamins, $12.96 for some no-name software title, or $9.84 for a dodgy Internet marketing program, the unauthorized charge usually is for a good or service that is intended to be marketed by an online affiliate program.

Affiliate programs are marketing machines built to sell a huge variety of products or services that are often of questionable quality and unknown provenance. Very often, affiliate programs are promoted using spam, and the stuff pimped by them includes generic prescription drugs, vitamins and “nutriceuticals,” and knockoff designer purses, watches, handbags, shoes and sports jerseys.

At the core of the affiliate program is a partnership of convenience: The affiliate managers handle the boring backoffice stuff, including the customer service, product procurement (suppliers) and order fulfillment (shipping). The sole job of the “affiliates” — the commission-based freelance marketers who sign up to promote whatever is being sold by the affiliate program — is to drive traffic and sales to the program.

THE NEW FACE OF SPAM

It is no surprise, then, that online affiliate programs like these often are overrun with scammers, spammers and others easily snagged by the lure of get-rich-quick schemes. In June, I began hearing from dozens of readers about unauthorized charges on their credit card statements for $49.95. The charges all showed up alongside various toll-free 888- numbers or names of customer support Web sites, such as supportacr[dot]com and acrsupport[dot]com. Readers who called these numbers or took advantage of the chat interfaces at these support sites were all told they’d ordered some kind of fat-burning pill or vitamin from some random site, such as greenteahealthdiet[dot]com or naturalfatburngarcinia[dot]com.

Those sites were among tens of thousands that are being promoted via spam, according to Gary Warner, chief technologist at Malcovery, an email security firm. The Web site names themselves are not included in the spam; rather, the spammers include a clickable URL for a hacked Web site that, when visited, redirects the user to the pill shop’s page. This redirection is done to avoid having the pill shop pages indexed by anti-spam filters and other types of blacklists used by security firms, Warner said. Continue reading →

Home Depot: 56M Cards Impacted, Malware Contained

September 18, 2014

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Home Depot said today that cyber criminals armed with custom-built malware stole an estimated 56 million debit and credit card numbers from its customers between April and September 2014. That disclosure officially makes the incident the largest retail card breach on record.

The disclosure, the first real information about the damage from a data breach that was initially disclosed on this site Sept. 2, also sought to assure customers that the malware used in the breach has been eliminated from its U.S. and Canadian store networks.

“To protect customer data until the malware was eliminated, any terminals identified with malware were taken out of service, and the company quickly put in place other security enhancements,” the company said via press release (PDF). “The hackers’ method of entry has been closed off, the malware has been eliminated from the company’s systems, and the company has rolled out enhanced encryption of payment data to all U.S. stores.”

That “enhanced payment protection,” the company said, involves new payment security protection “that locks down payment data through enhanced encryption, which takes raw payment card information and scrambles it to make it unreadable and virtually useless to hackers.” Continue reading →

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