A Stopgap Fix for the IE8 Zero-Day Flaw

May 8, 2013

Microsoft has released an stopgap solution to help Internet Explorer 8 users blunt the threat from attacks against a zero-day flaw in the browser that is actively being exploited in the wild.

IEwarningMicrosoft is working on an official fix for the IE8 bug. In the meantime affected users should take advantage of the interim fix that the company released today. It is a one-click fix-it tool that does not require a system restart to take effect.

To do that, visit this link with IE8 and click the fix-it icon under the “Enable” heading. If you need to remove this workaround for any reason, just head back to that page and click the fix-it image beneath the “Disable” heading.

Trade Sanctions Cited in Hundreds of Syrian Domain Seizures

May 8, 2013

In apparent observation of international trade sanctions against Syria, a U.S. firm that ranks as the world’s fourth-largest domain name registrar has seized hundreds of domains belonging to various Syrian entities, including a prominent Syrian hacker group and sites associated with the regime of Syrian President Bashar al-Assad.

The Syrian Electron Army complains about its domain seizures. Source: HP

The Syrian Electron Army complains about its domain seizures, saying Network Solutions cited trade sanctions against Syria. Source: HP

Network Solutions LLC. and its parent firm — Jacksonville, Fla. based Web.com — have assumed control over more than 700 domains that were being used mostly for sites hosted in Damascus. The seizures all occurred within a three- to four-day period in mid-April.

The apparently coordinated action ended with each of the site’s registration records being changed to include Web.com’s Florida address, as well as the notation “OFAC Holding.”

OFAC is short for the Office of Foreign Assets Control, an office of the U.S. Treasury Department‘s  Under Secretary of the Treasury for Terrorism and Financial Intelligence. OFAC administers and enforces U.S. economic trade sanctions against targeted foreign countries, including Syria.

Web.com declined to say whether it had coordinated the seizures or why it may have done so. “We do not comment publicly about specific accounts so we cannot provide details about the websites or domains mentioned in your inquiry,” the company said in an emailed statement.  “However, you should know that we cooperate with law enforcement and regulators in order to prevent illegal activity online and take the necessary steps to be in compliance with applicable laws and regulations.”

Under a series of executive orders, U.S. businesses are prohibited from selling goods and services into Syria. While there are a number of exceptions — referred to as “general licenses” in OFAC-speak — domain hosting and registration services are not among them. Although the general licenses permit services that are designed for personal communications, the provision of Web hosting and domain name registration is specifically called out in Treasury regulations (PDF) as not authorized under general licenses.

A spokesman for the Treasury Department said OFAC had not contacted either Web.com or Network Solutions regarding these Web sites.

“OFAC has offered a general license authorizing the  export of certain services for the exchange of personal communications over the Internet, such as instant messaging, chat and email, so that these sanctions don’t have the inadvertent effect of cutting the Syrian people off from the rest of the world,” said John Sullivan, spokesman for the Treasury Department’s Terrorism and Financial Intelligence division. “But the [general license] that allows for that does not authorize the exportation of Web hosting or registration services, so those could be subject to enforcement actions under our Syrian sanctions program.”

The domain seizures came to my attention after reading a report produced last month by HP‘s security and research team, which noted that individuals associated with a pro-Assad hacker group known as Syrian Electronic Army were complaining that NetworkSolutions had seized their domains, including syrian-es.comsyrian-es.net and syrian-es.org.

A reverse WHOIS report ordered from domaintools.com produced this list (PDF) of some 708 Syrian domains recently shuttered and assigned an “OFAC” designation by Web.com. According to historic Web hosting records also maintained by domaintools.com, the vast majority of the 700+ domains were hosted at Internet addresses assigned to the Syrian Computer Society (SCS). Interestingly, prior to assuming the presidency, Syria’s Assad was president of the SCS, a group now widely believed to have been a precursor to the Syrian Electronic Army.

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Zero-Day Exploit Published for IE8

May 6, 2013

Security experts are warning that a newly discovered vulnerability in Internet Explorer 8 is being actively exploited to break into Microsoft Windows systems. Complicating matters further, computer code that can be used to reliably exploit the flaw is now publicly available online.

IEwarningIn an advisory released May 3, Microsoft said it was investigating reports of a vulnerability in IE8, and that it was aware of attacks that attempt to exploit this bug. The company stresses that other versions of IE — including IE6, 7, 9 and 10 are not affected by the vulnerability. However, all versions of IE8 are vulnerable, including copies running on Windows XP, Vista and Windows 7.

Meanwhile, a new module that exploits this IE8 bug is now available for the Metasploit Framework, a free penetration testing tool. I would expect this exploit or some version of it will soon be rolled into commercial exploit kits that are sold in the cybercrime underground (assuming this has not already happened).

Update, May 9, 9:00 a.m. ET: Microsoft has released a fix-it tool to blunt attacks on this bug. See this story for more information.

Original post:

The security hole has already been leveraged in at least one high-profile attack. Over the weekend, several security vendors reported that the U.S. Department of Labor Web site had been hacked and seeded with code designed to exploit the flaw and download malicious software.

The attack on the Labor Department site is seen as a watering hole attack, which involves the targeted compromise of legitimate websites thought to be of interest to or frequented by end users who belong to organizations that attackers wish to infiltrate. Previous watering hole attacks have targeted the Web site for the Council on Foreign Relations, the Association of Southeast Asian Nations, and the National Democratic Institute.

According to CrowdStrike, the server used to control this latest attack on the Labor Department site was microsoftupdate.ns1.name. The company said analysis of the logs from the attacker’s infrastructure revealed that visitors from 37 different countries browsed the site during the time it was compromised with the malicious code. AlienVault, Invincea and Cisco Systems have published additional details on this attack. AlienVault also said it has since spotted the same exploit used on at least nine other hacked Web sites, including several non-profit groups and a large European company.

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Alleged SpyEye Seller ‘Bx1’ Extradited to U.S.

May 3, 2013

A 24-year-old Algerian man arrested in Thailand earlier this year on suspicion of co-developing and selling the infamous SpyEye banking trojan was extradited this week to the United States, where he faces criminal charges for allegedly hijacking bank accounts at more than 200 financial institutions.

Bx1's profile page on darkode.com

Bx1’s profile page on darkode.com

Hamza Bendelladj, who authorities say used the nickname “Bx1” online, is accused of operating a botnet powered by SpyEye, a complex banking trojan that he also allegedly sold and helped develop. Bendelladj was arraigned on May 2, 2013 in Atlanta, where he is accused of leasing a server from a local Internet company to help manage his SpyEye botnet.

A redacted copy of the indictment (PDF) against Bendelladj was unsealed this week; the document says Bendelladj developed and customized components of SpyEye that helped customers steal online banking credentials and funds from specific banks.

The government alleges that as Bx1, Bendelladj was an active member of darkode.com, an underground fraud forum that I’ve covered in numerous posts on this blog. Bx1’s core focus in the community was selling “web injects” — custom add-ons for SpyEye that can change the appearance and function of banking Web sites as displayed in a victim’s Web browser. More specifically, Bx1 sold a type of web inject called an automated transfer system or ATS; this type of malware component was used extensively with SpyEye — and with its close cousin the ZeuS Trojan — to silently and invisibly automate the execution of bank transfers just seconds after the owners of infected PCs logged into their bank accounts.

“Zeus/SpyEYE/Ice9 ATS for Sale,” Bx1 announced in a post on darkode.com thread dated Jan. 16, 2012:

“Hey all. I’m selling private ATS’s. Working and Tested.

We got  IT / DE / AT / UK / US / CO / NL / FR / AU

Contact me for bank.

can develop bank ATS from your choice.”

The government alleges that Bx1/Bendelladj made millions selling SpyEye, SpyEye components and harvesting financial data from victims in his own SpyEye botnet. But Bx1 customers and associates on darkode.com expressed strong doubts about this claim, noting that someone who was making that kind of money would not blab or be as open about his activities as Bx1 apparently was.

dk-symlinkarrested

Darkode discusses Symlink’s arrest

In my previous post on Bx1, I noted that he reached out to me on several occasions to brag about his botnet and to share information about his illicit activities. In one case, he even related a story about breaking into the networks of a rival ATS/web inject developer named Symlink. Bx1 said he told Symlink to expect a visit from the local cops if he didn’t pay Bx1 to keep his mouth shut. It’s not clear whether that story is true or if Symlink ever paid the money; in any case, Symlink was arrested on cybercrime charges in Oct. 2012 by authorities in Moldova.

The redacted portions of the government indictment of Bendelladj are all references to Bx1’s partner — the author of the SpyEye Trojan and a malware developer known in the underground alternatively as “Gribodemon” and “Harderman.” In a conference call with reporters today, U.S. Attorney Sally Quillian Yates said the real name of the principal author of SpyEye was redacted from the indictment because he had not yet been arrested.

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DHS: ‘OpUSA’ May Be More Bark Than Bite

May 2, 2013

The U.S. Department of Homeland Security is warning that a group of mostly Middle East- and North Africa-based criminal hackers are preparing to launch a cyber attack campaign next week known as “OpUSA” against websites of high-profile US government agencies, financial institutions, and commercial entities. But security experts remain undecided on whether this latest round of promised attacks will amount to anything more than a public nuisance.

DHS-OpUSAA confidential alert, produced by DHS on May 1 and obtained by KrebsOnSecurity, predicts that the attacks “likely will result in limited disruptions and mostly consist of nuisance-level attacks against publicly accessible webpages and possibly data exploitation. Independent of the success of the attacks, the criminal hackers likely will leverage press coverage and social media to propagate an anti-US message.”

The DHS alert is in response to chest-thumping declarations from anonymous hackers who have promised to team up and launch a volley of online attacks against a range of U.S. targets beginning May 7. “Anonymous will make sure that’s this May 7th will be a day to remember,” reads a rambling, profane manifesto posted Apr. 21 to Pastebin by a group calling itself N4M3LE55 CR3W.

“On that day anonymous will start phase one of operation USA. America you have committed multiple war crimes in Iraq, Afghanistan, Pakistan, and recently you have committed war crimes in your own country,” the hackers wrote. “We will now wipe you off the cyber map. Do not take this as a warning. You can not stop the internet hate machine from doxes, DNS attacks, defaces, redirects, ddos attacks, database leaks, and admin take overs.”

Ronen Kenig, director of security solutions at Tel Aviv-based network security firm Radware, said the impact of the attack campaign will be entirely dependent on which hacking groups join the fray. He noted that a recent campaign called “OpIsrael” that similarly promised to wipe Israel off the cyber map fizzled spectacularly.

“There were some Web site defacements, but OpIsrael was not successful from the attackers point-of-view,” Kenig said. “The main reason was the fact that the groups that initiated the attack were not able to recruit a massive botnet. Lacking that, they depended on human supporters, and those attacks from individuals were not very massive.”

opusaBut Rodney Joffe, senior vice president at Sterling, Va. based security and intelligence firm Neustar, said all bets are off if the campaign is joined by the likes of the Izz ad-Din al-Qassam Cyber Fighters, a hacker group that has been disrupting consumer-facing Web sites for U.S. financial institutions since last fall. The hacker group has said its attacks will continue until copies of the controversial film Innocence of Muslims movie are removed from Youtube.

Joffe said it’s easy to dismiss a hacker manifesto full of swear words and leetspeak as the ramblings of script kiddies and impressionable, wannabe hackers who are just begging for attention. But when that talk is backed by real firepower, the attacks tend to speak for themselves.

“I think we learned our lesson with the al-Qassam Cyber Fighters,” Joffe said. “The damage they’re capable of doing may be out of proportion with their skills, but that’s been going on for seven months and it’s been brutally damaging.”

According to the DHS alert, 46 U.S. financial institutions have been targeted with DDoS attacks since September 2012 — with various degrees of  impact — in over 200 separate DDoS attacks.

“These attacks have utilized high bandwidth webservers with vulnerable content management systems,” the agency alert states. “Typically a customer account is compromised and attack scripts are  then uploaded to a hidden directory on the customer website. To date the botnets have been identified as  ‘Brobot’ and ‘Kamikaze/Toxin.’”

In an interview with Softpedia, representatives of Izz ad-Din al-Qassam said they do indeed plan to lend their firepower to the OpUSA attack campaign.

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Wash. Hospital Hit By $1.03 Million Cyberheist

April 30, 2013

Organized hackers in Ukraine and Russia stole more than $1 million from a public hospital in Washington state earlier this month. The costly cyberheist was carried out with the help of nearly 100 different accomplices in the United States who were hired through work-at-home job scams run by a crime gang that has been fleecing businesses for the past five years.

cascadeLast Friday, The Wenatchatee World broke the news of the heist, which struck Chelan County Public Hospital No. 1, one of several hospitals managed by the Cascade Medical Center in Leavenworth, Wash. The publication said the attack occurred on Apr. 19, and moved an estimated $1.03 million out of the hospital’s payroll account into 96 different bank accounts, mostly at banks in the Midwest and East Coast.

On Wednesday of last week, I began alerting the hospital that it had apparently been breached. Neither the hospital nor the staff at Cascade Medical returned repeated calls. I reached out to the two entities because I’d spoken with two unwitting accomplices who were used in the scam, and who reported helping to launder more than $14,000 siphoned from the hospital’s accounts.

Jesus Contreras, a 31-year-old from San Bernadino, Calif., had been out of work for more than two months when he received an email from a company calling itself Best Inc. and supposedly located in Melbourne, Australia. Best Inc. presented itself as a software development firm, and told Contreras it’d found his resume on Careerbuilders.com. Contreras said the firm told him that he’d qualified for a work-at-home job that involved forwarding payments to software developers who worked for the company’s overseas partners.

Could he start right away? All he needed was a home computer. He could keep eight percent of any transfers he made on behalf of the company. Contreras said he was desperate to find work since he got laid off in February from his previous job, which was doing inventory for an airplane parts company.

Best Inc.

Best Inc. Website

His boss at Best Inc., a woman with a European accent who went by the name Erin Foster, called Contreras and conducted a phone interview in which she asked about his prior experience and work-life balance expectations. In short order, he was hired. His first assignment: To produce a report on the commercial real estate market in Southern California. Contreras said Ms. Foster told him that their employer was thinking of opening up an office in the area.

On Monday, Apr. 22 — shortly after he turned in his research assignment — Contreras received his first (and last) task from his employer: Take the $9,180 just deposited into his account and send nearly equal parts via Western Union and Moneygram to four individuals, two who were located in Russia and the other pair in Ukraine. After the wire fees — which were to come out of his commission — Contreras said he had about $100 left over.

“I’m asking myself how I fell for this because the money seemed too good to be true,” Contreras said. “But we’ve got bills piling up, and my dad has hospital bills. I didn’t have much money in my account, so I figured what did I have to lose? I had no idea I would be a part of something like this.”

A small, but significant part, as it happens. Contreras never got to use any of his meager earnings: His financial institution, Bank of America, froze his account and seized what little funds he had in it.

Meanwhile, the Chelan County treasurer’s office is struggling to claw back the fraudulent transfers. According to press reports, roughly $133,000 of the lost funds have been recovered so far, and it may take at least 30 days to learn how much was actually lost.

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Dutchman Arrested in Spamhaus DDoS

April 26, 2013

A 35-year-old Dutchman thought to be responsible for launching what’s been called “the largest publicly announced online attack in the history of the Internet” was arrested in Barcelona on Thursday by Spanish authorities. The man, identified by Dutch prosecutors only as “SK,” was being held after a European warrant was issued for his arrest in connection with a series of massive online attacks last month against Spamhaus, an anti-spam organization.

Facebook profile picture of Sven Olaf Kamphuis

Facebook profile picture of Sven Olaf Kamphuis

According to a press release issued by the Public Prosecutor Service in The Netherlands, the National Prosecutor in Barcelona ordered SK’s arrest and the seizure of computers and mobile phones from the accused’s residence there. The arrest is being billed as a collaboration of a unit called Eurojust, the European Union’s Judicial Cooperation Unit.

The dispute began late last year, when Spamhaus added to its blacklist several Internet address ranges in the Netherlands. Those addresses belong to a Dutch company called “Cyberbunker,” so named because the organization is housed in a five-story NATO bunker, and has advertised its services as a bulletproof hosting provider.

“A year ago, we started seeing pharma and botnet controllers at Cyberbunker’s address ranges, so we started to list them,” said a Spamhaus member who asked to remain anonymous. “”We got a rude reply back, and he made claims about being his own independent country in the Republic of Cyberbunker, and said he was not bound by any laws and whatnot. He also would sign his emails ‘Prince of Cyberbunker Republic.” On Facebook, he even claimed that he had diplomatic immunity.”

Cyberbunker's IP ranges. Its  WHOIS records put the organization in Antarctica.

Cyberbunker’s IP ranges. Its WHOIS records put the organization in Antarctica.

Spamhaus took its complaint to the upstream Internet providers that connected Cyberbunker to the larger Internet. According to Spamhaus, those providers one by one severed their connections with Cyberbunker’s Internet addresses. Just hours after the last ISP dropped Cyberbunker, Spamhaus found itself the target of an enormous amount of attack traffic designed to knock its operations offline.

It is not clear who SK is, but according to multiple sources, the man identified as SK is likely one Sven Olaf Kamphuis. The attack on Spamhaus was the subject of a New York Times article on Mar. 26, 2013, which quoted Mr. Kamphuis as a representative of Cyberbunker and saying, “We are aware that this is one of the largest DDoS attacks the world had publicly seen.” Kamphuis also reportedly told The Times that Cyberbunker was retaliating against Spamhaus for “abusing their influence.”

Also, a Facebook profile by that same name identifies its account holder as living in Barcelona and a native of Amsterdam, as well as affiliated with “Republic Cyberbunker.”

Mr. Kamphuis could not be immediately reached for comment.

How Not to Install an ATM Skimmer

April 24, 2013

Experts in the United States and Europe are tracking a marked increase in ATM skimmer scams. But let’s hope that at least some of that is the result of newbie crooks who fail as hard as the thief who tried to tamper with a Bank of America ATM earlier this week in Nashville.

Nashville police released a series of still photos (which I made into a slideshow, below) that show a man attaching a card skimming device to a local ATM, and then affixing a false panel above the PIN pad that includes a tiny video camera to record victims entering their PINs. According to Nashville NBC affiliate WSMV.com, this scammer’s scheme didn’t work as planned: The card skimmer overlay came off of the ATM in the hands of the first customer who tried to use it.

As you can see in the image montage, the first would-be victim arrives less than seven minutes after the thief installs the skimmer. The story doesn’t state this, but the customer who accidentally pulled the card skimmer off of the ATM actually drove off with the device. Interestingly, the fraudster returns a few minutes later to salvage what’s left of his kit (and perhaps his pride).

As lame as this ATM skimming attempt was, a few aspects of this crime are worth highlighting because they show up repeatedly in skimming attacks. One is that the vast majority of skimming devices are installed on Saturdays and Sundays, when the crooks know the banks will be closed for at least a day. As a result, you have a much higher chance of encountering a skimmer if you regularly use ATMs on a weekend.

Second, the thieves who install these fraud devices very often are lurking somewhere nearby — to better keep an eye on their investments. If you ever happen to discover a skimming device attached to an ATM, just remember that while walking or driving off with the thing might seem like a good idea at the time, the miscreant who put it there may be watching or following you as you depart the ATM area.

Once or twice a month I am interviewed by various news outlets about ATM skimming attacks, and I’m nearly always asked for recent figures on the incident and cost of these crimes. Those stats are hard to come by; I believe the last time the U.S. Secret Service released figures about the crime, it estimated that annual losses from ATM fraud totaled about $1 billion, but that was for 2008.

Source: Verizon

Source: Verizon

Today’s figures are almost certainly higher. On Tuesday, Verizon Enterprise Solutions released its annual data breach investigations report, a deep dive into more than 620 data breaches from the past year. Interestingly, this year’s report shows that of the Top 20 Threat Actions the company tracked across all of the breaches from 2012, physical tampering was the most frequent cause — present in more than 30 percent of all incidents detailed in the report.

“Physical tampering is our way of categorizing the installation of a skimming device, and that was the number one threat action out of everything we looked at,” said Wade Baker, managing principal of RISK intelligence at Verizon. “If you look at the last two [Verizon annual] reports, a large majority of the data set was the point-of-sale intrusions at small organizations such as retail establishments and restaurants, and those are actually a much smaller portion of our data set this time.”

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Sources: Tea Leaves Say Breach at Teavana

April 22, 2013

Multiple sources in law enforcement and the financial community are warning about a possible credit and debit card breach at Teavana, a nationwide tea products retailer. Seattle-based coffee giant Starbucks, which acquired Teavana late last year, declined to confirm a breach at Teavana, saying only that the company is currently responding to inquiries from card-issuing banks and credit card brands.

teabreachOver the weekend, KrebsOnSecurity received a tip from an anonymous reader who said Teavana had suffered a data breach that exposed credit and debit card information. A source at a major U.S. credit card issuer confirmed that the card brand has seen fraud rates indicative of a breach emanating from virtually the entire Teavana franchise, which spans more than 280 stores nationwide. Separately, a federal law enforcement official who asked not to be named said agents were indeed investigating a possible breach at Teavana.

On Sunday, I sent an inquiry to Teavana’s public relations folks.  Today, I heard back from Starbucks spokeswoman Jaime Riley, who said Starbucks “takes its obligation to protect customers’ financial information very seriously,” and that the company “has safeguards in place to constantly monitor for any suspicious activity.” But she said the company doesn’t comment on ongoing investigations.

“In the normal course of business, we are contacted by card brands and bank partners to participate in requests to ensure the integrity of all systems, and we participate fully in these requests,” Riley said. “If and when issues are ever substantiated, we will take action to notify and support customers in the most appropriate way possible.”

A source at yet another big debit and credit card issuer said his fraud team became aware of the problem in early March 2013, when the financial institution  began seeing a spike in fraudulent charges via counterfeit cards that were being used to buy high-dollar gift cards at Target retail locations.

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Bank Sues Cyberheist Victim to Recover Funds

April 19, 2013

A bank that gave a business customer a short term loan to cover $336,000 stolen in a 2012 cyberheist is now suing that customer to recover the fronted funds, after the victim company refused to repay or even acknowledge the loan.

robotrobkbOn May 9, 2012, cyber crooks hit Wallace & Pittman PLLC, a Charlotte, N.C. based law firm that specializes in handling escrow and other real-estate legal services. The firm had just finished a real estate closing that morning, initiating a wire of $386,600.61 to a bank in Virginia Beach, Virginia. Hours later, the thieves put through their own fraudulent wire transfer, for exactly $50,000 less.

At around 3 p.m. that day, the firm’s bank — Charlotte, N.C. based Park Sterling Bank (PSB)– received a wire transfer order from the law firm for $336,600.61. According to the bank, the request was sent using the firm’s legitimate user name, password, PIN code, and challenge/response questions. PSB processed the wire transfer, which was sent to an intermediary bank — JP Morgan Chase in New York City — before being forwarded on to a bank in Moscow.

Later that day, after the law firm received an electronic confirmation of the wire transfer, the firm called the bank to say the wire transfer was unauthorized, and that there had been an electronic intrusion into the  firm’s computers that resulted in the installation of an unspecified strain of keystroke-logging malware. The law firm believes the malware was embedded in a phishing email made to look like it was sent by the National Automated Clearing House Association (NACHA), a legitimate network for a wide variety of financial transactions in the United States.

As some banks do in such cases, Park Sterling provided a provisional credit to the firm for the amount of the fraudulent transfer so that it would avoid an overdraft of its trust account (money that it was holding for a real estate client)  and to allow a period of time for the possible return of the wire transfer funds. PSB said it informed Wallace & Pittman that the credit would need to be repaid by the end of that month.

But on May 30, 2012 — the day before the bank was set to debit the loan amount against the firm’s trust account — Wallace & Pittman filed a complaint against the bank in court, and obtained a temporary restraining order that prevented the bank from debiting any money from its accounts. The next month, the law firm drained all funds from all three of its accounts at the bank, and the complaint against the bank was dismissed.

Park Sterling Bank is now suing its former client, seeking repayment of the loan, plus interest. Wallace & Pittman declined to comment on the ongoing litigation, but in their response to PSB’s claims, the defendants claim that at no time prior to the return of the funds did the bank specify that it was providing a provisional credit in the amount of the fraudulent transfer. Wallace & Pittman said the bank didn’t start calling it a provisional credit until nearly 10 days after it credited the law firm’s account; to backstop its claim, the firm produced an online ledger transaction that purports to show that the return of $336,600.61 to the firm’s accounts was initially classified as a “reverse previous wire entry.”

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