Krebs on Security

Hay Maker Seeks Cyberheist Bale Out

April 11, 2013

An Oregon agricultural products company is suing its bank to recover nearly a quarter-million dollars stolen in a 2010 cyberheist. The lawsuit is the latest in a series of legal challenges seeking to hold financial institutions more accountable for costly corporate account takeovers tied to cybercrime.

On Sept. 1, 2010, unidentified computer crooks began making unauthorized wire transfers out of the bank accounts belonging to Oregon Hay Products Inc., a hay compressing facility in Boardman, Oregon. In all, the thieves stole $223,500 in three wire transfers of just under $75,000 over a three day period.

According to a complaint filed in Umatilla County Circuit Court, the transfers were sent from Oregon Hay’s checking account at Joseph, Ore. based Community Bank to JSC Astra Bank in Ukraine. Oregon Hay’s lawyers say the company had set a $75,000 daily limit on outgoing wires, so the thieves initiated transfers of $74,800, $74,500 and $74,200 on three consecutive days.

Unfortunately for both parties in this dispute, neither Oregon Hay nor Community Bank detected anything amiss until almost two weeks after the fraud began; on Sept. 14, the victim firm found it was unable to access its accounts online. But by that time, the money was long gone.

Both Oregon Hay and Community Bank declined to be interviewed for this story.

Businesses do not enjoy the same legal protections afforded to consumer banking customers hit by cyber thieves, and most organizations can be held responsible for any losses due to phishing or account takeovers. But as cyberheists have ramped up dramatically over the past several years, a number of victim companies have opted to sue their financial institutions in the hopes of recovering the losses.

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Critical Fixes for Windows, Flash & Shockwave

April 9, 2013

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The second Tuesday of the month is upon us, and that means it’s once again time to get your patches on, people (at least for readers running Windows or Adobe products). Microsoft today pushed out nine patch bundles to plug security holes in Windows and its other products. Separately, Adobe issued updates for its Flash and Shockwave media players that address four distinct security holes in each program.

Microsoft called special attention to a cumulative update for Internet Explorer that fixes two critical vulnerabilities present in virtually every version of IE ever produced, including IE 9, 10 and IE on Windows RT, the operating system for mobile devices and tablets.

The other critical patch in the bunch addresses a dangerous vulnerability in the Windows Remote Desktop Client, which allows systems to be managed remotely. For a rundown of the other updates released today, check out the Qualys blog, the Microsoft Security Bulletin Summary for April 2013 and the Microsoft Security Response Blog.

Adobe’s update brings Adobe Flash Player to v. 11.7.700.169 on Windows and Mac devices (the latest version numbers for other operating systems are listed in the chart below). Internet Explorer 10 and Google Chrome should automatically update to the latest version. Google has already pushed out the Flash update with Chrome v. 26.0.1410.63 for Mac and Linux, and v. 26.0.1410.64 for Windows; if your Chrome version isn’t at the latest (you can check which version by clicking the customize tab to the right of the address bar and then “About Google Chrome’), try closing and restarting the browser. Continue reading →

Phoenix Exploit Kit Author Arrested In Russia?

April 8, 2013

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The creator of a popular crimeware package known as the Phoenix Exploit Kit was arrested in his native Russia for distributing malicious software and for illegally possessing multiple firearms, according to underground forum posts from the malware author himself.

The last version of the Phoenix Exploit Kit. Source: Xylibox.com

The Phoenix Exploit Kit is a commercial crimeware tool that until fairly recently was sold by its maker in the underground for a base price of $2,200. It is designed to booby-trap hacked and malicious Web sites so that they foist drive-by downloads on visitors.

Like other exploit packs, Phoenix probes the visitor’s browser for the presence of outdated and insecure versions of browser plugins like Java, and Adobe Flash and Reader. If the visitor is unlucky enough to have fallen behind in applying updates, the exploit kit will silently install malware of the attacker’s choosing on the victim’s PC (Phoenix targets only Microsoft Windows computers).

The author of Phoenix — a hacker who uses the nickname AlexUdakov on several forums — does not appear to have been overly concerned about covering his tracks or hiding his identity. And as we’ll see in a moment, his online persona has been all-too-willing to discuss his current legal situation with former clients and fellow underground denizens.

Exploit.in forum member AlexUdakov selling his Phoenix Exploit Kit.

For example, AlexUdakov was a member of Darkode.com, a fairly exclusive English-language cybercrime forum that I profiled last week. That post revealed that the administrator accounts for Darkode had been compromised in a recent break-in, and that the intruders were able to gain access to private communications of the administrators. That access included authority to view full profiles of Darkode members, as well as the private email addresses of Darkode members.

AlexUdakov registered at Darkode using the address “nrew89@gmail.com”. That email is tied to a profile at Vkontakte.ru (a Russian version of Facebook) for one Andrey Alexandrov, a 23-year-old male (born May 20, 1989) from Yoshkar-Ola, a historic city of about a quarter-million residents situated on the banks of the Malaya Kokshaga river in Russia, about 450 miles east of Moscow.

ASK-74u rifles. Source: Wikimedia Commons.

AKS-74u rifles. Source: Wikimedia Commons.

That nrew89@gmail.com address also is connected to accounts at several Russian-language forums and Web sites dedicated to discussing guns, including talk.guns.ru and popgun.ru. This is interesting because, as I was searching AlexUdakov’s Phoenix Exploit kit sales postings on various cybercrime forums, I came across him discussing guns on one of his sales threads at exploit.in, a semi-exclusive underground forum. There, a user with the nickname AlexUdakov had been selling Phoenix Exploit Kit for many months, until around July 2012, when customers on exploit.in began complaining that he was no longer responding to sales and support requests. Meanwhile, AlexUdakov account remained silent for many months.

Then, in February 2013, AlexUdakov began posting again, explaining his absence by detailing his arrest by the Federal Security Service (FSB), the Russian equivalent of the FBI. The Phoenix Exploit Kit author explained that he was arrested by FSB officers for distributing malware and the illegal possession of firearms, including two AKS-74U assault rifles, a Glock, a TT (Russian-made pistol), and a PM (also known as a Makarov).

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Who Wrote the Flashback OS X Worm?

April 3, 2013

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A year ago today, Apple released a software update to halt the spread of the Flashback worm, a malware strain that infected more than 650,000 Mac OS X systems using a vulnerability in Apple’s version of Java. This somewhat dismal anniversary is probably as good a time as any to publish some clues I’ve gathered over the past year that point to the real-life identity of the Flashback worm’s creator.

Before I delve into the gritty details, a little background on this insidious contagion is in order. A keenly detailed research paper (PDF) published last year by Finnish security firm F-Secure puts the impact and threat from Flashback in perspective, noting that the malware boasted a series of “firsts” for its kind. For starters, Flashback was the first OS X malware to be “VMware aware” — or to know when it was being run in a virtual environment (a trick designed to frustrate security researchers). It also was the first to disable XProtect, OS X’s built-in malware protection program. These features, combined with its ability to spread through a then-unpatched vulnerability in Java made Flashback roughly as common for Macs as the Conficker Worm was for Windows PCs.

“This means Flashback is not only the most advanced, but also the most successful OS X malware we’ve ever seen,” wrote F-Secure’s Broderick Ian Aquilino.

The F-Secure writeup answers an important question not found in other analyses: Namely, what was the apparent intended purpose of Flashback? Put simply: to redirect Google results to third-party advertisers, all for the author’s profit. It’s name was derived from the fact that it spread using a social engineering trick of presenting the OS X user with a bogus Flash Player installation prompt. F-Secure notes that this same behavior — both the Flash social engineering trick and the redirection to fake Google sites that served search results for third-party advertisers that benefited the author — was also found in the QHost malware, suggesting that Flashback may have been the next evolution of the Mac QHost malware.

BLACK SEO

A year ago, I published a series that sought to identify the real-life hackers behind the top spam botnets. Using much the same methodology, I was able to identify and locate a young man in Russia who appears (and privately claims) to be the author of Flashback. As it happens, this individual hangs out on many of the same forums as the world’s top spammers (but more on that at another time).

Given Flashback’s focus on gaming Google’s ad networks, I suspected that the worm’s author probably was a key member of forums that focus on so-called “black hat SEO,” (search engine optimization), or learned in illicit ways to game search engines and manipulate ad revenues. Sure enough, this individual happens to be a very active and founding member of BlackSEO.com, a closely guarded Russian language forum dedicated to this topic.

Below is a screen shot taken from a private message between a “VIP” user named “Mavook” and a top forum member on BlackSEO.com. The conversation took place on July 14, 2012. A rough translation of their conversation is superimposed on the redacted screen grab, but basically it shows Mavook asking the senior member for help in gaining access to Darkode.com, a fairly exclusive English-language cybercrime forum (and one that I profiled in a story earlier this week).

BlackSEO.com member “Mavook” claims responsibility for creating Flashback to a senior forum member.

Mavook asks the other member to get him an invitation to Darkode, and Mavook is instructed to come up with a brief bio stating his accomplishments, and to select a nickname to use on the forum if he’s invited. Mavook replies that the Darkode nick should be not be easily tied back to his BlackSEO persona, and suggests the nickname “Macbook.” He also states that he is the “Creator of Flashback botnet for Macs,” and that he specializes in “finding exploits and creating bots.”

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Fool Me Once…

April 2, 2013

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When you’re lurking in the computer crime underground, it pays to watch your back and to keep your BS meter set to ‘maximum.’ But when you’ve gained access to an elite black market section of a closely guarded crime forum to which very few have access, it’s easy to let your guard down. That’s what I did earlier this year, and it caused me to chase a false story. This blog post aims to set the record straight on that front, and to offer a cautionary (and possibly entertaining) tale to other would-be cybersleuths.

On Jan. 16, 2013, I published a post titled, “New Java Exploit Fetches $5,000 Per Buyer.” The details in that story came from a sales thread posted to an exclusive subforum of Darkode.com, a secretive underground community that has long served as a bazaar for all manner of cybercriminal wares, including exploit kits, spam services, ransomware programs, and stealthy botnets. I’ve maintained a presence on this forum off and on (mostly on) for the past three years, in large part because Darkode has been a reliable place to find information about zero-days, or highly valuable threats that exploit previously unknown vulnerabilities in software — threats that are shared or used by attackers before the developer of the target software knows about the vulnerability.

I had previously broken several other stories about zero-day exploits for sale on Darkode that later showed up “in-the-wild” and confirmed by the affected vendors, and this sales thread was posted by one of the forum’s most trusted members. The sales thread also was created during a time in which Java’s maker Oracle Corp. was struggling with multiple zero-days in Java.

What I didn’t know at the time was that this particular sales thread was little more than a carefully laid trap by the Darkode administrators to discover which accounts I was using to lurk on their forum. Ironically, I recently learned of this snare after white/grey hat hackers compromised virtually all of the administrator accounts and private messages on Darkode.

“Looks like Krebs swallowed the bait, and i got an idea how to catch him now for the next thread,” wrote Darkode administrator “Mafi” in a Jan. 16 private message to a co-admin who uses the nickname “sp3cial1st”.

Following this post, the administrators compared notes as to which users had viewed the fake Java zero-day sales thread during the brief, two-day period it was live on a restricted portion of Darkode. “I have taken a careful examination of the logs related to the java 0day thread,” sp3cial1st wrote to a Darkode administrator who used the nick “187”.

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DHS Warns of ‘TDos’ Extortion Attacks on Public Emergency Networks

April 1, 2013

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As if emergency responders weren’t already overloaded: Increasingly, extortionists are launching debilitating attacks designed to overwhelm the telephone networks of emergency communications centers and personnel, according to a confidential alert jointly issued by the Department of Homeland Security and the FBI.

“TDos” warning

The alert, a copy of which was obtained by KrebsOnSecurity, warns public safety answering points (PSAPs) and emergency communications centers and personnel about a recent spike in so-called “telephony denial-of-service” (TDoS) attacks:

“Information received from multiple jurisdictions indicates the possibility of attacks targeting the telephone systems of public sector entities. Dozens of such attacks have targeted the administrative PSAP lines (not the 911 emergency line). The perpetrators of the attack have launched high volume of calls against the target network, tying up the system from receiving legitimate calls. This type of attack is referred to as a TDoS or Telephony Denial of Service attack. These attacks are ongoing. Many similar attacks have occurred targeting various businesses and public entities, including the financial sector and other public emergency operations interests, including air ambulance, ambulance and hospital communications.”

According to the alert, these recent TDoS attacks are part of a bizarre extortion scheme that apparently starts with a phone call to an organization from an individual claiming to represent a collections company for payday loans. The caller usually has a strong accent of some sort and asks to speak with a current or former employee concerning an outstanding debt. Failing to get payment from an individual or organization, the perpetrator launches a TDoS attack. The organization will be inundated with a continuous stream of calls for an unspecified, but lengthy period of time.

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Cash Claws, Fake Fascias & Tampered Tickets

March 28, 2013

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Credit and debit card skimmers aren’t just for ATMs anymore. According to European anti-fraud experts, innovative skimming devices are turning up on everything from train ticket kiosks to parking meters and a host of other unattended payment terminals.

Recently, at least five countries reported skimming attacks against railway or transport ticket machines, according to the European ATM Security Team (EAST), a not-for-profit organization that collects data on skimming attacks. Two countries reported skimming attacks at parking machines, and three countries had skimming incidents involving point-of-sale terminals. EAST notes that Bluetooth devices increasingly are being used to transit stolen card and PIN data wirelessly.

Skimming devices found at train ticket kiosks in Europe. Source: EAST

The organization also is tracking a skimming trend reported by three countries (mainly in Latin America) in which thieves are fabricating fake ATM fascias and placing them over genuine ATMs, like the one pictured below. After entering their PIN, cardholders see an ‘out-of-order’ message. EAST said the fake fascias include working screens so that this type of message can be displayed. The card details are compromised by a skimming device hidden inside the fake fascia, and the PINs are captured via the built-in keypad, which overlays the real keypad underneath.

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Missouri Court Rules Against $440,000 Cyberheist Victim

March 26, 2013

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A Missouri court last week handed a legal defeat to a local escrow firm that sued its financial institution to recover $440,000 stolen in a 2009 cyberheist. The court ruled that the company assumed greater responsibility for the incident because it declined to use a basic security precaution recommended by the bank: requiring two employees to sign off on all transfers.

Springfield, Mo. based Choice Escrow and Land Title LLC sued Tupelo, Miss. based BancorpSouth Inc., after hackers who had stolen the firm’s online banking ID and password used the information to make a single unauthorized wire transfer of $440,000 to a corporate bank account in Cyprus.

Choice Escrow alleged that BancorpSouth’s security procedures were not commercially reasonable. Choice pointed out that the bank’s most secure option for Internet-based authentication relied principally on so-called “dual controls,” or requiring business customers to have one user ID and password to approve a wire transfer and another user ID and password to release the same wire transfer.

Choice Escrow’s lawyers argued that because BancorpSouth allowed wire or funds transfers using two options which were both password-based, its commercial online banking security procedures fell short of 2005 guidance from the Federal Financial Institutions Examination Council (FFIEC), which warned that single-factor authentication as the only control mechanism is inadequate for high-risk transactions involving the movement of funds to other parties.

But in a decision handed down on March 18, 2013, a judge with the U.S. District Court for the Western District of Missouri focused on the fact that Choice Escrow was offered and explicitly declined in writing the use of dual controls, thereby allowing the thieves to move money directly out their account using nothing more than a stolen username and password. The court noted that Choice also declined to set a limit on the amount or number of wire transfers allowed each day (another precaution urged by the bank), and that the transfer amount initiated by the thieves was not unusual for Choice, a company that routinely moved large sums of money.

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Privacy 101: Skype Leaks Your Location

March 21, 2013

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The events of the past week reminded me of a privacy topic I’ve been meaning to revisit: That voice-over-IP telephony service Skype constantly exposes your Internet address to the entire world, and that there are now numerous free and commercial tools that can be used to link Skype user account names to numeric Internet addresses.

A Skype resolver service in action.

The fact that Skype betrays its users’ online location information is hardly news. For example, The Wall Street Journal and other news outlets warned last year about research showing that it was possible to coax Skype into revealing the IP addresses of individual Skype users. But I believe most Skype users still have no clue about this basic privacy weakness.

What’s changed is that over the past year, a number of services have emerged to help snoops and ne’er-do-wells exploit this vulnerability to track and harass others online. For example, an online search for “skype resolver” returns dozens of results that point to services (of variable reliability) that allow users to look up the Internet address of any Skype user, just by supplying the target’s Skype account name.

In the above screen shot, we can see one such service being used to display the IP address most recently used by the Skype account “mailen_support” (this particular account belongs to the tech support contact for Mailien, a Russian pharmacy spam affiliate program by the same name).

A Skype IP resolver service in action.

Typically, these Skype resolvers are offered in tandem with “booter” or “stresser” services, online attack tools-for-hire than can be rented to launch denial-of-service attacks (one of these services was used in an attack on this Web site, and on that of Ars Technica last week). The idea being that if you want to knock someone offline but you don’t know their Internet address, you can simply search on Skype to see if they have an account, and then use the resolvers to locate their IP. The resolvers work regardless of any privacy settings the target user may have selected within the Skype program’s configuration panel.

Many of these resolver services offer “blacklisting,” which for a fee will allow users to prevent other users from looking up the IP address attached to a specific Skype account, said Brandon Levene, an independent security researcher.

“It’s basically a protection scheme,” Levene said.

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The Obscurest Epoch is Today

March 18, 2013

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“History is much decried; it is a tissue of errors, we are told, no doubt correctly; and rival historians expose each other’s blunders with gratification. Yet the worst historian has a clearer view of the period he studies than the best of us can hope to form of that in which we live. The obscurest epoch is to-day; and that for a thousand reasons of incohate tendency, conflicting report, and sheer mass and multiplicity of experience; but chiefly, perhaps, by reason of an insidious shifting of landmarks.” – Robert Louis Stevenson

To say that there is a law enforcement manhunt on for the individuals responsible for posting credit report information on public figures and celebrities at the rogue site exposed.su would be a major understatement. I like to think that when that investigation is completed, some of the information I’ve helped to uncover about those affiliated with the site will come to light. For now, however, I’m content to retrace some of my footwork this past weekend that went into tracking individuals who may have been responsible for attacking my site and SWATing my home last Thursday.

I state upfront that the information in this piece is certainly not the whole story (most news reporting is, at best, a snapshot in time, a first rough draft of history). While the clues I’ve uncovered thus far point to the role of a single individual, this person is likely part of a larger group involved in hacking and SWATing activity.

In my story last week, I posted a copy of the internal database for booter.tw, one of several fee-for-service “booter” sites. Booter sites are perhaps most popular among online gaming enthusiasts, who like to use them to knock opponents offline; but they are frequently also used to launch debilitating attacks on Web sites. That leaked booter.tw database shows that the denial-of-service attack that hit my site last week was paid for by a booter.tw user with the account name “countonme,” and using the address “countonme@gmail.com.”

Since the attack, I reached out to the proprietor of booter.tw, a hacker who uses the nickname “Askaa.” He informed me that the individual who launched the attack on my site was a hacker who used the screen name Phobia. “Phobia hacked into the countonme account to make it look like the according user attacked you,” Askaa said in a brief interview over Skype instant message. Askaa declined to say why he was so confident of this information.

RealTeamHype’s Youtube page before the videos were deleted on Sunday.

Separately, over the weekend I received an email from a person who claimed to have direct knowledge of the attacks (perhaps because he, too, was involved). This individual said those who attacked my site were a group of young online video game enthusiasts who were upset that earlier in the week I’d written about ssndob.ru, a site that sells access to peoples’ credit files, Social Security numbers and other sensitive information.

According to this source, the hackers in this case belong to a four-man Xbox live gamer team that calls itself “Team Hype,” which until this past weekend had posted a number of videos to their own youtube.com channel, RealTeamHype (more on what happened to these videos in a moment).

According to the anonymous source, Team Hype consists of hackers who use the nicknames “Trojan,” “Shadow,” Convict,” and “Phobia.” The source said the group used SSNs from ssndob.ru to hijack “gamertags,” online personas tied to Xbox Live game accounts. In this case, specifically from Microsoft employees who work on the Xbox Live gaming platform. Some of the group members then sell those accounts to other Xbox Live players.

“They hack/social engineer Gamertags off Microsoft employees by using SSNs,” the source wrote. “I didn’t DDoS your site and I didn’t SWAT you, Phobia has been telling everyone he did. The method he released he said he gets SSNs, then calls phone companies and redirects the number and than gets xbox phone support to call number and confirm. I heard he got pissed that you released the site he uses. Also Trojan told a buddie of mines ‘fear'(on AIM) something about a dead body in your closet about your swat.”

Snippet from @PhobiaTheGod’s now-closed Twitter account

The source said Phobia used the Twitter account @PhobiaTheGod (now closed, but partially available here and at this cache), and that Phobia’s personal information — including real name, address and phone number — had been “doxed” or released onto Pastebin-like sites some time ago. It didn’t take long to locate this profile at skidpaste.org (“skid” is a diminutive reference to the term “script kiddies,” referring to relatively unskilled young hackers who conduct most of their exploits using automated tools without understanding how those tools actually do the dirty work).

Having watched most of the videos at RealTeamHype’s youtube channel, it appeared that my source was telling the truth about the hijacked accounts: In fact, the videos at that channel documented such hijackings in progress using desktop screen-grabbing software. The videos even showed conversations with other team members in instant message windows in the background.

But I was reluctant to put much stock in the information until the source sent me a piece of information that only the attackers and my ISP would have known. On Friday, I received a call from Cox Communications, my Internet service provider. They wanted to know why I had paid $3,000 toward my account using several different credit card numbers. I assured them that I hadn’t made that payment. Then I heard from a member of Cox’s security team, who asked if I’d reset my password and if I’d indeed asked to cancel my Internet service. He was unsurprised to learn that I hadn’t. Apparently, hackers reset the password to my Cox email account by working out the answer to my secret question (this account is separate from my Cox user account, was set up over 10 years ago, and has never been used for anything remotely interesting or sensitive).

The source told me via email: “Hey brian, i just spoke to fear he told me phobia and his buddies were telling him that they hacked your cox email and paid your cox bill with hacked credit card, im not sure if this is true but im letting you know.”

I decided to give a call to the phone number included in the doxed records for Phobia, which rang at a home in Milford, Ct. A 20-year-old named Ryan Stevenson picked up the phone. After introducing myself, I asked Ryan if he knew anything about booter.tw, and he said he didn’t bother with booter sites because they were lame.

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