Teen Arrested for 30+ Swattings, Bomb Threats

May 12, 2014
141 Comments

A 16-year-old male from Ottawa, Canada has been arrested for allegedly making at least 30 fraudulent calls to emergency services across North America over the past few months. The false alarms — two of which targeted this reporter — involved calling in phony bomb threats and multiple attempts at “swatting” — a hoax in which the perpetrator spoofs a call about a hostage situation or other violent crime in progress in the hopes of tricking police into responding at a particular address with deadly force.

po2-swatbkOn March 9, a user on Twitter named @ProbablyOnion (possibly NSFW) started sending me rude and annoying messages. A month later (and several weeks after blocking him on Twitter), I received a phone call from the local police department. It was early in the morning on Apr. 10, and the cops wanted to know if everything was okay at our address.

Since this was not the first time someone had called in a fake hostage situation at my home, the call I received came from the police department’s non-emergency number, and they were unsurprised when I told them that the Krebs manor and all of its inhabitants were just fine.

Minutes after my local police department received that fake notification, @ProbablyOnion was bragging on Twitter about swatting me, including me on his public messages: “You have 5 hostages? And you will kill 1 hostage every 6 times and the police have 25 minutes to get you $100k in clear plastic.” Another message read: “Good morning! Just dispatched a swat team to your house, they didn’t even call you this time, hahaha.”

I told this user privately that targeting an investigative reporter maybe wasn’t the brightest idea, and that he was likely to wind up in jail soon. But @ProbablyOnion was on a roll: That same day, he hung out his for-hire sign on Twitter, with the following message: “want someone swatted? Tweet me  their name, address and I’ll make it happen.” Continue reading →

Antivirus is Dead: Long Live Antivirus!

May 7, 2014
161 Comments

An article in The Wall Street Journal this week quoted executives from antivirus pioneer Symantec uttering words that would have been industry heresy a few years ago, declaring antivirus software “dead” and stating that the company is focusing on developing technologies that attack online threats from a different angle.

Ads for various crypting services.

Ads for various crypting services.

This hardly comes as news for anyone in the security industry who’s been paying attention over the past few years, but I’m writing about it because this is a great example of how the cybercrime underground responds to — and in some cases surpasses — innovations put in place by the good guys.

About 15 years ago, when the antivirus industry was quite young, there were far fewer competitors in the anti-malware space. Most antivirus firms at the time had a couple of guys in the lab whose job it was to dissect, poke and prod at the new crimeware specimens. After that, they’d typically write reports about the new threats, and then ship “detection signatures” that would ostensibly protect customers that hadn’t already been compromised by the new nasties.

This seemed to work for while, until the smart guys in the industry started noticing that the volume of malicious software being released on the Internet each year was growing at fairly steady clip. Many of the industry’s leaders decided that if they didn’t invest heavily in technologies and approaches that could help automate the detection and classification of new malware threats, that they were going to lose this digital arms race.

So that’s exactly what these firms did: They went on a buying spree and purchased companies and technologies left and right, all in a bid to build this quasi-artificial intelligence they called “heuristic detection.” And for a while after that, the threat from the daily glut of malware seemed to be coming under control.

But the bad guys didn’t exactly take this innovation laying down; rather, they responded with their own innovations. What they came up with is known as the “crypting” service, a service that has spawned an entire industry that I would argue is one of the most bustling and lucrative in the cybercrime underground today.

Put simply, a crypting service takes a bad guy’s piece of malware and scans it against all of the available antivirus tools on the market today — to see how many of them detect the code as malicious. The service then runs some custom encryption routines to obfuscate the malware so that it hardly resembles the piece of code that was detected as bad by most of the tools out there. And it repeats this scanning and crypting process in an iterative fashion until the malware is found to be completely undetectable by all of the antivirus tools on the market. Continue reading →

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The Target Breach, By the Numbers

May 6, 2014
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News that Target’s CEO Gregg Steinhafle is stepping down has prompted a flurry of reports from media outlets trying to recap events since the company announced a data breach on Dec. 19, 2013. Sprinkled throughout those reports were lots of numbers, which got me to thinking about synthesizing them with some of the less-reported numbers associated with this epic breach.

numbers40 million – The number of credit and debit cards thieves stole from Target between Nov. 27 and Dec. 15, 2013.

70 million – The number of records stolen that included the name, address, email address and phone number of Target shoppers.

46 – The percentage drop in profits at Target in the fourth quarter of 2013, compared with the year before.

200 million – Estimated dollar cost to credit unions and community banks for reissuing 21.8 million cards — about half of the total stolen in the Target breach.

100 million – The number of dollars Target says it will spend upgrading their payment terminals to support Chip-and-PIN enabled cards.

0 – The number of customer cards that Chip-and-PIN-enabled terminals would have been able to stop the bad guys from stealing had Target put the technology in place prior to the breach (without end-to-end encryption of card data, the card numbers and expiration dates can still be stolen and used in online transactions).

0 – The number of people in Chief Information Security Officer (CISO) or Chief Security Officer (CSO) jobs at Target (according to the AP).

18.00 – 35.70 – The median price range (in dollars) per card stolen from Target and resold on the black market (range covers median card price on Feb. 19, 2014 vs. Dec. 19, 2013, respectively). Continue reading →

Microsoft Issues Fix for IE Zero-Day, Includes XP Users

May 1, 2014
117 Comments

Microsoft has issued an emergency security update to fix a zer0-day vulnerability that is present in all versions of its Internet Explorer Web browser and that is actively being exploited. In an unexpected twist, the company says Windows XP users also will get the update, even though Microsoft officially ceased supporting XP last month.

IEwarning

The rushed patch comes less than five days after the software giant warned users about active attacks that attempt to exploit a previously unknown security flaw in every supported version of IE. This flaw can be used to silently install malicious software without any help from users, save for perhaps browsing to a hacked or malicious site.

“We have made the decision to issue a security update for Windows XP users,” writes Dustin C. Childs, group manager, response communications at Microsoft. “Windows XP is no longer supported by Microsoft, and we continue to encourage customers to migrate to a modern operating system, such as Windows 7 or 8.1. Additionally, customers are encouraged to upgrade to the latest version of Internet Explorer, IE 11.”

Microsoft says the majority of customers have automatic updates enabled and will not need to take any action because protections will be downloaded and installed automatically. Windows users who don’t take advantage of the automatic updates feature of Windows (or who don’t wish to wait around for it to install the patch) can do so by visiting Windows Update.

Tax Fraud Gang Targeted Healthcare Firms

April 30, 2014
39 Comments

Earlier this month, I wrote about an organized cybercrime gang that has been hacking into HR departments at organizations across the country and filing fraudulent tax refund requests with the IRS on employees of those victim firms. Today, we’ll look a bit closer at the activities of this crime gang, which appears to have targeted a large number of healthcare and senior living organizations that were all using the same third-party payroll and HR services provider.

taxfraudAs I wrote in the previous story, KrebsOnSecurity encountered a Web-based control panel that an organized criminal gang has been using to track bogus tax returns filed on behalf of employees at hacked companies whose HR departments had been relieved of W-2 forms for all employees.

Among the organizations listed in that panel were Plaintree Inc. and Griffin Faculty Practice Plan. Both entities are subsidiaries of Derby, Conn.-based Griffin Health Services Corp.

Steve Mordecai, director of human resources at Griffin Hospital, confirmed that a security breach at his organization had exposed the personal and tax data on “a limited number of employees for Griffin Health Services Corp. and Griffin Hospital.” Mordecai said the attackers obtained the information after stealing the organization’s credentials at a third-party payroll and HR management provider called UltiPro.

Mordecai said that the bad guys only managed to steal data on roughly four percent of the organization’s employees, but he declined to say how many employees the healthcare system currently has. An annual report (PDF) from 2009 states that Griffin Hospital alone had more than 1,384 employees.

Griffin employee tax records, as recorded in the fraudsters' Web-based control panel.

Griffin employee tax records, as recorded in the fraudsters’ Web-based control panel.

“Fortunately for us it was a limited number of employees who may have had their information breached or stolen,” Mordecai said. “There is a criminal investigation with the FBI that is ongoing, so I can’t say much more.”

The FBI did not return calls seeking comment. But according Reuters, the FBI recently circulated a private notice to healthcare providers, warning that the “cybersecurity systems at many healthcare providers are lax compared to other sectors, making them vulnerable to attacks by hackers searching for Americans’ personal medical records and health insurance data.”

According to information in their Web-based control panel, the attackers responsible for hacking into Griffin also may have infiltrated an organization called Medical Career Center Inc., but that could not be independently confirmed.

This crime gang also appears to have targeted senior living facilities, including SL Bella Terra LLC, a subsidiary of Chicago-based Senior Lifestyle Corp, an assisted living firm that operates in seven states. Senior Living did not return calls seeking comment.

In addition, the attackers hit  Swan Home Health LLC  in Menomonee Falls, Wisc., a company that recently changed its named to Enlivant. Monica Lang, vice president of communications for Enlivant, said Swan Home Health is a subsidiary of Chicago-based Assisted Living Concepts Inc., an organization that owns and operates roughly 200 assisted living facilities in 20 states.

Swan Home Health employee's tax info, as recorded by the fraudsters.

Swan Home Health employee’s tax info, as recorded by the fraudsters.

ALC disclosed in March 2014 that a data breach in December 2013 had exposed the personal information on approximately 43,600 current and former employees. In its March disclosure, ALC said that its internal employee records were compromised after attackers stole login credentials to the company’s third-party payroll provider.

That disclosure didn’t name the third-party provider, but every victim organization I’ve spoken with that’s been targeted by this crime gang had outsourced their payroll and/or human resources operations to UltiPro.

Enlivant’s Lang confirmed that the company also relied on UltiPro, and that some employees have come forward to report attempts to file fraudulent tax refunds on their behalf with the IRS.

“We believe that [the attackers] accessed employee names, addresses, birthdays, Social Security numbers and pay information, which is plenty to get someone going from a tax fraud perspective,” Lang said in a telephone interview. Continue reading →

Adobe Update Nixes Flash Player Zero Day

April 28, 2014
88 Comments

Adobe Systems Inc. has shipped an emergency security update to fix a critical flaw in its Flash Player software that is currently being exploited in active attacks. The exploits so far appear to target Microsoft Windows users, but updates also are available for Mac and Linux versions of Flash.

brokenflash-aThe Flash update brings the media player to v. 13.0.0.206 on Windows and Mac systems, and v. 11.2.202.356 for Linux users. To see which version of Flash you have installed, check this link.

IE10/IE11 and Chrome should auto-update their versions of Flash. If your version of Flash on Chrome (on either Windows, Mac or Linux) is not yet updated, you may just need to close and restart the browser.

The most recent versions of Flash are available from the Adobe download center, but beware potentially unwanted add-ons, like McAfee Security Scan). To avoid this, uncheck the pre-checked box before downloading, or grab your OS-specific Flash download from here. Windows users who browse the Web with anything other than Internet Explorer will need to apply this patch twice, once with IE and again using the alternative browser (Firefox, Opera, e.g.).

In its advisory about this vulnerability, Adobe said it is aware of reports that an exploit for the flaw (CVE-2014-0515) exists in the wild, and is being used to target Flash Player users on the Windows platform. Continue reading →

Microsoft Warns of Attacks on IE Zero-Day

April 27, 2014
100 Comments

Microsoft is warning Internet Explorer users about active attacks that attempt to exploit a previously unknown security flaw in every supported version of IE. The vulnerability could be used to silently install malicious software without any help from users, save for perhaps merely browsing to a hacked or malicious site.

In an alert posted on Saturday, Microsoft said it is aware of  “limited, targeted attacks” against the vulnerability (CVE-2014-1776) so far.

Microsoft’s security advisory credits security firm FireEye with discovering the attack. In its own advisory, FireEye says the exploit currently is targeting IE9 through IE11 (although the weakness also is present in all earlier versions of IE going back to IE6), and that it leverages a well-known Flash exploitation technique to bypass security protections on Windows.

ie0daymitigationMicrosoft has not yet issued a stopgap “Fix-It” solution for this vulnerability. For now, it is urging IE users to download and install its Enhanced Mitigation Experience Toolkit (EMET), a free tool that can help beef up security on Windows. Microsoft notes that EMET 3.0 doesn’t mitigate this attack, and that affected users should instead rely on EMET 4.1. I’ve reviewed the basics of EMET here. The latest versions of EMET are available here.

According to information shared by FireEye, the exploit also can be blocked by running Internet Explorer in “Enhanced Protected Mode” configuration and 64-bit process mode, which is available for IE10 and IE11 in the Internet Options settings as shown in the graphic above.

This is the first of many zero-day attacks and vulnerabilities that will never be fixed for Windows XP users. Microsoft last month shipped its final set of updates for XP. Unfortunately, many of the exploit mitigation techniques that EMET brings do not work in XP.

States: Spike in Tax Fraud Against Doctors

April 22, 2014
66 Comments

An unusual number of physicians in several U.S. states are just finding out that they’ve been victimized by tax return fraud this year, KrebsOnSecurity has learned. An apparent spike in tax fraud cases against medical professionals is fueling speculation that the crimes may have been prompted by a data breach at some type of national organization that certifies or provides credentials for physicians.

taxfraudScott Colby, executive vice president of the New Hampshire Medical Society, said he started hearing from physicians in his state about a week ago, when doctors who were just filing their tax returns began receiving notices from the Internal Revenue Service that someone had already filed their taxes and claimed a large refund.

So far, Colby has heard from 111 doctors, physician assistants and nurse practitioners in New Hampshire who have been victims of tax fraud this year.

“I’ve been here four years and this is the first time this issue has come across my desk,” Colby said.

In this increasingly common crime, thieves steal or purchase Social Security numbers and other data on consumers, and then electronically file fraudulent tax returns claiming a large refund. The thieves instruct the IRS to send the refund to a bank account that is tied to a prepaid debit card, which the fraudster can then use to withdraw cash at an ATM (for more on how this works, see last week’s story, Crimeware Helps File Fraudulent Tax Returns).

Unlike the scam I wrote about last week — which involved the theft of credentials to third-party payroll and HR providers that are then used to pull W2 records and file bogus tax returns on all company employees — the tax fraud being perpetrated against the physicians Colby is tracking is more selective.

“We’ve done a broadcast to all of the hospital systems in the state, and I have yet to receive one [victim] name from a non-clinician,” Colby said. “And you would think if it was an HR or payroll issue that at least a couple of administrative, non-clinical folks would have been in the mix, but that is not the case.”

AN EPIDEMIC OF TAX FRAUD?

Colby said he’s heard similar reports from other states, including Arizona, Connecticut, Indiana, Maine, Michigan, North Carolina and Vermont.

Elaine Ellis Stone, director of communications at the North Carolina Medical Society, said her organization has been contacted by more than 100 individual doctors and medical practice managers complaining about tax fraud committed in the names of their doctors and other medical staff. Continue reading →

An Allegation of Harm

April 21, 2014
97 Comments

In December 2013, an executive from big-three credit reporting bureau Experian told Congress that the company was not aware of any consumers who had been harmed by an incident in which a business unit of Experian sold consumer records directly to an online identity theft service for nearly 10 months. This blog post examines the harm allegedly caused to consumers by just one of the 1,300 customers of that ID theft service — an Ohio man the government claims used the data to file fraudulent tax returns on dozens of Americans last year.

Defendant Lance Ealy.

Defendant Lance Ealy.

In February, I was contacted via Facebook by 28-year-old Lance Ealy from Dayton, Ohio. Mr. Ealy said he needed to speak with me about the article I wrote in October 2013 — Experian Sold Consumer Data to ID Theft Service. Ealy told me he’d been arrested by the U.S. Secret Service on Nov. 25, 2013 for allegedly using his email account to purchase Social Security numbers and other personal information from an online identity theft service run by guy named Hieu Minh Ngo.

“I really need to speak with u about this case because the US attorney assigned to this case and the Secret Service agent are trying to cover up Experian involvement in this case,” Ealy said, without elaborating on his theory about the alleged cover-up.

Ngo is a Vietnamese national who for several years ran an online identity theft service called Superget.info. Shortly after my 2011 initial story about his service, Ngo tauntingly renamed his site to findget.me. The Secret Service took him up on that challenge, and succeeded in luring him out of Vietnam into Guam, where he was arrested and brought to New Hampshire for trial. He pleaded guilty earlier this year to running the ID theft service, and the government has been working on rounding up his customers ever since.

Mr. Ealy appears to be one of several individuals currently battling charges of identity theft after allegedly buying data from Ngo’s service, which relied in part on data obtained through a company owned by Experian.

According to the complaint (PDF) against Ealy, government investigators obtained a search warrant for Ngo’s email account in March 2013. Going through that email, investigators found that a customer of Ngo’s who used the address lanceealy123@yahoo.com had already purchased from Ngo some 363 “fullz” — a term used in the underground to describe a package of everything one would need to steal someone’s identity, including their Social Security number, mother’s maiden name, birth date, address, phone number, email address, bank account information and passwords.

The Justice Department alleges that between Jan. 28, 2013 and Oct. 17, 2013, Ealy filed at least 150 fraudulent tax returns on Americans, instructing the IRS to send the refund money to prepaid credit card accounts he controlled. The government claims that about 50 of those bogus claims were made with Social Security numbers and other data obtained from Ngo’s ID theft service. Continue reading →