Who’s Behind the TDSS Botnet?

September 7, 2011
60 Comments

Yesterday I wrote about the public storefront where anyone can rent access to computers infected with TDSS, widely considered one of the largest and most complex botnets on the planet. Today, I’ll take a closer look at a Russian individual who appears to have close ties to the TDSS operation.

Tuesday’s story got picked up by news-for-nerds site Slashdot, and one of the comments on the piece observed that the storefront for TDSS — awmproxy.net — has a Google Analytics code embedded in the homepage. That code, UA-3816538, is embedded in six other Web sites, including awmproxy.com (a clone of awmproxy.net), according to a lookup at ReverseInternet.com.

Using domaintools.com, I was able to find the historical Web site registration records for awmproxy.com (the historical data for awmproxy.net is hidden). Those records show that the domain was registered on Feb. 27, 2008 to an individual in Russia who used the email address fizot@mail.ru. Another Web site with that same Google Analytics code, pornxplayer.com (hostile site), also includes that email address in its historical records. Awmproxy began offering proxies on March 16, 2008.

WHOIS records also indicate fizot@mail.ru was used to register fizot.com, a site which is no longer active. The name given by the person who registered fizot.com was Galdziev Chingiz in St. Petersburg, Russia. That same name is on the registration records for fizot.org, but fizot.org lists a different contact email address: xtexgroup@gmail.com.

Googling for the fizot@mail.ru address turns up a LiveJournal blog by a user named Fizot who provides a contact email address of xtexcounter@bk.ru. Fizot isn’t the most prolific blogger, but he has 27 journal entries on his page, and discusses everything from life in St. Petersburg to earning millions of dollars.

In one entry, Fizot discusses having bought a sports car with a license plate number that includes the Number of the Beast: “666.” It turns out that there is a Youtube.com channel belonging to a user named Fizot who designates the domain name fizot.com as his personal Web site. Fizot has uploaded just four videos since the account was created in July 2007. Among the videos is a short movie uploaded on Oct. 5, 2007, showing a Porsche car with the license plate H666XK [N666HK in the Cyrillic alphabet] zooming away from the camera in a shopping mall parking lot, before turning around and heading back to the filmmaker. A license plate cover beneath the tags indicates the car’s owner is or was a member of the Moscow Porsche Club.

Fizot’s plates

Fizot may only be tangentially connected to those responsible for building and maintaining the TDSS botnet, but it is likely that he and some of his pals in the SPB and RU Auto clubs know the responsible parties.

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Rent-a-Bot Networks Tied to TDSS Botnet

September 6, 2011
42 Comments

Criminals who operate large groupings of hacked PCs tend to be a secretive lot, and jealously guard their assets against hijacking by other crooks. But one of the world’s largest and most sophisticated botnets is openly renting its infected PCs to any and all comers, and has even created a Firefox add-on to assist customers.

The TDSS botnet is the most sophisticated threat today, according to experts at Russian security firm Kaspersky Lab. First launched in 2008, TDSS is now in its fourth major version (also known as TDL-4). The malware uses a “rootkit” to install itself deep within infected PCs, ensuring that it loads before the Microsoft Windows operating system starts. TDSS also removes approximately 20 malicious programs from host PCs, preventing systems from communicating with other bot families.

In an exhaustive analysis of TDSS published in June, Kaspersky researchers Sergey Golovanov and Igor Soumenkov wrote that among the many components installed by TDSS is a file called “socks.dll,” which allows infected PCs to be used by others to surf the Web anonymously.

Researchers say this Firefox add-on helps customers use Internet connections of TDSS-infected PCs.

“Having control over such a large number of computers with this function, the cybercriminals have started offering anonymous Internet access as a service, at a cost of roughly $100 per month,” the researchers wrote. “For the sake of convenience, the cybercriminals have also developed a Firefox add-on that makes it easy to toggle between proxy servers within the browser.”

The storefront for this massive botnet is awmproxy.net, which advertises “the fastest anonymous proxies.” According to Golovanov, when socks.dll is installed on a TDSS-infected computer, it notifies awmproxy.net that a new proxy is available for rent. Soon after that notification is completed, the infected PC starts to accept approximately 10 proxy requests each minute, he said.

“For us it was enough to see that this additional proxy module for tdl4 was installed directly on encrypted partition and runs thru rootkit functionality,” Golovanov told KrebsOnSecurity. “So we believe that awmproxy has direct connection to tdl4 developer but how they are working together we don’t know.” The curators of AWMproxy did not respond to requests for comment.

AWMproxy.net, the storefront for renting access to TDSS-infected PCs

The service’s proxies are priced according to exclusivity and length of use. Regular browser proxies range from $3 per day to $25 monthly. Proxies that can be used to anonymize all of the Internet traffic on a customer’s PC cost between $65 and $500 a month. For $160 a week, customers can rent exclusive access to 100 TDSS-infected systems at once. Interestingly, AWMproxy says it accepts payment via PayPal, MasterCard, and Visa.

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Pharma Wars: Purchasing Protection

August 30, 2011
49 Comments

Leaked online chats between the co-owners of the world’s largest pharmacy spam operation reveal the extent to which illicit organizations in Russia purchase political protection, and bribe public officials into initiating or stalling law enforcement investigations.

Last month, there was a leak of more than four years of chat logs seized by Russian police who had arrested and interrogated Dmitry Stupin, allegedly the co-owner of GlavMed and the now-defunct SpamIt, organizations that paid spammers millions of dollars each month to promote fly-by-night online pharmacies.

In the the Jan. 9, 2010 chat between Stupin and Igor Gusev, the alleged other owner of GlavMed and SpamIt, Gusev has just learned that he and his operation are under investigation by Russian authorities (Gusev would be formally charged with illegal business activities in October 2010, forcing the closure of SpamIt). Gusev says he may be able to purchase shelter from the charges by funneling money to key Russian politicians who have influence over investigators.

Specifically, Gusev suggests purchasing a sponsorship of the Volleyball Federation of Russia. The price tag for this is an official sponsorship fee of 10 million rubles (about $350,000 USD), plus $150,000 in cash. The official head of the federation, Nikolai Patrushev, is a powerful man in Russian law enforcement. Patrushev was director of the Russian FSB, the successor organization to the KGB, from 1999 to 2008; he has been secretary of the Security Council of Russia since 2008.

Sources say it is typical for Russian sport leagues and charities to be used as vehicles for funneling money into the pockets of policymakers. One example comes from a book by Lennart Dahlgren, former head of the Russian division of Swedish furniture maker IKEA. In Despite Absurdity: How I Conquered Russia While It Conquered Me, Dahlgren writes of having to pay bribes of 30 million Rubles ($1 million USD) to Russian charities that helped funnel money to bureaucrats and top officials.

In this chat, translated from Russian into English, Gusev mentions that a close friend of his family is a director general of the Volleyball Federation;

Gusev: We have big problems. Register fake mailbox somewhere. I will send you something very important.

Gusev: Let’s move Jabber to a new server and encrypt it. We’ll have a trusted communication channel. Everything is very bad 🙁

Gusev: asdas12334@mail.ru / mgadjadtwa2009. check the e-mail.

Gusev: Are you reading?

Stupin: Yes. Do not know what to say.

Gusev: There is nothing to say. We have only two ways: find someone from law enforcement, pay up and be under protection [or] be placed in jail for 7-9 years and do self-analysis. I have one more way out, but I could not decide regarding it in December, because it was very expensive. It is about 10 million rubles officially and 150K under the table.

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Experienced Money Mule, Will Travel

August 29, 2011
18 Comments

I’ve written a great deal about “money mules,” people looking for part-time employment who unwittingly or willingly help organized cyber thieves launder stolen funds. The most common question I get about money mules is: “Do any of them ever get prosecuted?” The answer is generally “no” because it’s hard to prove that these mules weren’t scammed. But recently, I encountered a mule who made it abundantly clear that he understood exactly what he was doing.

A complicit mule negotiating a new deal.

In June 2011, I was investigating an online banking heist against a company called Jackson Properties. Thieves had broken into Jackson’s computers and stolen the firm’s online banking credentials. They added a half dozen money mules to the company’s payroll account, using mules they’d acquired from a gang I call the Back Office group. This mule gang uses multiple bogus corporate names, and the Back Office front company that supplied the mules in this attack was called AMR Company.

Reginald, a 45-year-0ld Texas resident, was among the mules hired by AMR Company. Reggie communicated with the mule recruiters by logging into a Web site set up by the fake company, and checking for new messages. A source who had figured out how to view the administrator’s account (and hence, all messages on the server) sent me some choice screenshots from several mule communications.

On June 7, the mule recruiters sent Reginald a transfer of $4,910, claiming that Jackson Properties was its client. Reginald was to withdraw the money in cash and wire it overseas, minus a small commission. The payment never landed in his account; it was blocked when Jackson detected the fraudulent transactions and worked with its bank to get them reversed.

But that apparently did not deter our Reginald, who told his recruiter and manager at AMR Company that he understood the whole thing was a scam, and that he had done this sort of thing before. He said he was ready and willing to open additional bank accounts to help with future fraud schemes.

On June 8, Reggie signed into his account at AMR Company and wrote the following to Sarah, his erstwhile boss:

“Let me say from the start. I knew what this was about. I’ve had success working with others like yourself in the past, especially comrades from Russia. I know this game well. If you want to have an ally in the US, I’m your guy. I have more accounts. I’d like us to try again, with another account…Listen Sarah, I am all for making some money. I couldn’t care less about our banking system, anything we can get out [sic] it. Lets [sic] do it. I cant do this without you. I can open up accounts in different names, that’s easy for me. But I have no way of funding them like you do. Think it over and see if there’s a way we can make some money. Even if we only succeed one time…we will still succeeded. I have another account ready to go. Respond to me and I will send you the name, routing, account num, etc.”

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Coordinated ATM Heist Nets Thieves $13M

August 26, 2011
37 Comments

An international cybercrime gang stole $13 million from a Florida-based financial institution earlier this year, by executing a highly-coordinated heist in which thieves used ATMs around the globe to cash out stolen prepaid debit cards, KrebsOnSecurity has learned.

Jacksonville based Fidelity National Information Services Inc. (FIS) bills itself as the world’s largest processor of prepaid debit cards; FIS claims to process more than 775 million transactions annually. The company disclosed the breach in its first quarter earnings statement issued May 3, 2011. But details of the attack remained shrouded in secrecy as the FBI and forensic investigators probed one of the biggest and most complex banking heists of its kind.

FIS said it had incurred a loss of approximately $13 million related to unauthorized activities involving one client and 22 prepaid cards on its Sunrise, Fla. based eFunds Prepaid Solutions, formerly WildCard Systems Inc., which was acquired by FIS in 2007.

FIS stated: “The Company has identified that 7,170 prepaid accounts may have been at risk and that three individual cardholders’ non-public information may have been disclosed as a result of the unauthorized activities. FIS worked with the impacted clients to take appropriate action, including blocking and reissuing cards for the affected accounts. The Company has taken steps to further enhance security and continues to work with Federal law enforcement officials on this matter.” The disclosure was scarcely noted by news media.

KrebsOnSecurity recently discovered previously undisclosed details of the successful escapade. According to sources close to the investigation, cyber thieves broke into the FIS network and targeted the Sunrise platform’s “open-loop” prepaid debit cards. The balances on these prepaid cards aren’t stored on the cards themselves; rather, the card numbers correspond to records in a central database, where the balances are recorded. Some prepaid cards cannot be used once their balance has been exhausted, but the prepaid cards used in this attack can be replenished by adding funds. Prepaid cards usually limit the amounts that cardholders can withdraw from a cash machine within a 24 hour period.

Apparently, the crooks were able to drastically increase or eliminate the withdrawal limits for 22 prepaid cards that they had obtained. The fraudsters then cloned the prepaid cards, and distributed them to co-conspirators in several major cities across Europe, Russia and Ukraine.

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Hybrid Hydras and Green Stealing Machines

August 24, 2011
8 Comments

Hybrids seem to be all the rage in the automobile industry, so it’s unsurprising that hybrid threats are the new thing in another industry that reliably ships updated product lines: The computer crime world. The public release of the source code for the infamous ZeuS Trojan earlier this year is spawning novel attack tools. And just as hybrid cars hold the promise of greater fuel efficiency, these nascent threats show the potential of the ZeuS source code leak for morphing ordinary, run-of-the-mill malware into far more efficient data-stealing machines.

Researchers at Trusteer have unearthed evidence that portions of the leaked ZeuS source code have been fused with recent versions of Ramnit, a computer worm first spotted in January 2010. Amid thousands of other password-stealing, file-infecting worms  capable of spreading via networked drives, Ramnit is unremarkable except in one respect: It is hugely prolific. According to a report (PDF) from Symantec, Ramnit accounted for 17.3 percent of all malicious software that the company detected in July 2011.

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Flashy Cars Got Spam Kingpin Mugged

August 22, 2011
18 Comments

A Russian spammer suspected of maintaining the infamous Rustock spam botnet earned millions of dollars blasting junk email for counterfeit Internet pharmacies. Those ill-gotten riches let him buy flashy sports cars, but new information suggests that this attracted the attention of common street thugs who targeted and ultimately mugged the spammer, stealing two of his prized rides.

BMW 530xi

In March, I published a story linking the Rustock botnet to a spammer who used the nickname Cosma2k. This individual was consistently one of the top five moneymakers for SpamIt, which, until its closure last fall, paid spammers millions of dollars a year and was the world’s largest distributor of junk mail.

Earlier this month, someone leaked thousands of online chat logs taken from Dmitry “SaintD” Stupin, a Russian who allegedly ran the day-to-day operations of SpamIt. Those records include numerous chat conversations allegedly between Stupin and a SpamIt affiliate named Cosma.

In several chats, Cosma muses on what he should do with tens of thousands of compromised but otherwise idle PCs under his control. Throughout the discussions between Stupin and Cosma, it is clear Cosma had access to internal SpamIt resources that other spammers did not, and that he had at least some say in the direction of the business.

Porsche Cayenne

In one conversation, dated Oct. 14, 2008, Cosma allegedly tells Stupin that he’s dialed back his public image a few notches, after attracting unwanted attention from other crooks. The conversation below, translated from Russian into English, begins with a request from Cosma to withdraw funds from a SpamIt operating account.

Cosma: Hey. May I withdraw some money from the account?

Stupin: Surely you may.

Stupin: Sorry, I was picking up my car from the service shop.

Cosma: What got broken?

Stupin: Someone threw a stone, when the car was parked near home.

Cosma: Damn. What kind of car?

Stupin: Volvo.

Cosma: Fond of safety?

Stupin: Yes, and I am at ease when I am driving it. It’s a huge difference after Honda 🙂

Cosma: I also had enough of expensive rigs. =) They are getting stolen all the time and everyone is looking at you, estimating the score, and then rob you =) I have had such experience =)

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Pharma Wars, Part II

August 19, 2011
25 Comments

Earlier this year, Russian police arrested Dmitry Stupin, a man known in hacker circles as “SaintD.” Stupin was long rumored to be the right-hand man of Igor Gusev, the alleged proprietor of GlavMed and SpamIt, two shadowy sister organizations that until this time last year were the largest sources of spam touting rogue Internet pharmacies.

According to several sources who are familiar with the matter, Russian police pulled Stupin off of a plane before it left Moscow. The police also reportedly took Stupin’s MacBook and copied its contents. The police detained Stupin as part of an investigation into Gusev launched nearly a year ago. Gusev fled his native Moscow last year and has not returned.

Sometime in the past few days, more than four years’ worth of chat conversations — apparently between Stupin, Gusev and dozens of other GlavMed employees — were leaked. Those conversations offer a fascinating glimpse into the day-to-day operations one of the world’s largest cyber criminal organizations.

The chat logs also catalog the long-running turf battle between Gusev and his former business partner, Pavel Vrublevsky. The two men were co-founders of ChronoPay, one of Russia’s largest online payments processor. Vrublevsky is now in jail awaiting trial on charges of hiring a hacker to attack his company’s rivals. He also has been identified as a co-owner of a competing rogue pharmacy program, the now-defunct Rx-Promotion.

I have had numerous interviews with both Gusev and Vrublevsky, both of whom accuse one another of bribing Russian law enforcement officials and politicians to initiate criminal proceedings against each other.

While there is no direct evidence Vrublevsky paid for a prosecution of Gusev, documents stolen from ChronoPay last year by hackers indicate that the company arranged to pay the salaries of several people on the Russian Association of Electronic Communications (RAEC). Those same documents show that Vrublevsky and RAEC members were closely involved in the investigation into Gusev the months and weeks leading up to the official charges against him.

The chat records between Stupin and Gusev, a tiny sliver of which is translated here from Russian into English, suggest that the two men paid authorities for protection. Contacted via email, Gusev declined to say whether the chats logs were legitimate or comment further, explaining that he was still reviewing the documents.

“If at least some of these logs are legit, then it means that I was telling the truth about paid criminal case against me initiated by Pavel and his constant connection with investigators,” Gusev said. “I know for sure that Pavel had access to evidences which were gathered by the investigators while he shouldn’t have such access. Before I just didn’t have any proof for this. Now I have.”

The latest leaked archive contains more than 166 megabytes of chat logs, allegedly between Stupin, Gusev and others. The following chat log is dated Aug. 28, 2010, just days after Vrublevsky leaked the SpamIt and GlavMed affiliate and customer data to U.S. law enforcement agencies. In this conversation, Stupin and Gusev allegedly discuss whether to close SpamIt (SpamIt would be closed a month later). “Red” in the first sentence is a reference to Vrublevsky, well known to use the hacker alias “RedEye.”

Gusev: It looks like I am in deep shit.  Red gave our database to Americans.

Dmitriy Stupin

Stupin: To which Americans?

Gusev: I can’t tell exactly, yet. Probably to FBI or Secret Service. Have you read on Krebs’ blog about meeting at White House regarding illegal pharmacy problems on the Internet?

Stupin: No.

Gusev: http://krebsonsecurity.com/2010/08/white-house-calls-meeting-on-rogue-online-pharmacies

Stupin: Maybe you return back to Russia?

Gusev: I am planning to do that. I am really worried now 🙁

Stupin: What about Red? For that money. May be let’s close down everything?

Gusev: In any case, he will be squished to the end. Everything is done pretty properly. Chronology: – He got thrown out from major banks (Masterbank, Bank Standard and almost from UCS. Too many clients left him. Investigations have been made on data regarding processing. Major issue now – close down the channel via Azerbaijan  (the only place where he can do his own processing and processing for his clients). We need him have an acute issue with money, otherwise he is going to slow down the investigation as much as he can.

Gusev: Do you think “closing down” will help? Just realize: they have our ENTIRE database… there are 900,000 records. What are we going to do with those? For conviction and 5-year jail time it is only necessary to prove 1 transaction! What is the worst? They combine the sentences and it is possible to get 5 life sentences.

Stupin: I think yes, we will receive lower priority.

Gusev: And who is considered a high priority? I am trying to figure out how he gave us up, and do the same for him. There will be 2 cases instead of one.

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Beware of Juice-Jacking

August 17, 2011
53 Comments

You’re out and about, and your smartphone’s battery is about to die. Maybe you’re at an airport, hotel, or shopping mall. You don’t have the power cable needed to charge the device, but you do have a USB cord that can supply the needed juice. Then you spot an oasis: A free charging kiosk. Do you hesitate before connecting your phone to this unknown device that could be configured to read most of the data on your phone, and perhaps even upload malware?

A DefCon attendee using the charging kiosk.

The answer, for most folks, is probably not. The few people I’ve asked while researching this story said they use these charging kiosks all the time (usually while on travel), but then said they’d think twice next time after I mentioned the possible security ramifications of doing so. Everyone I asked was a security professional.

Granted, a charging kiosk at an airport may be less suspect than, say, a slightly sketchy-looking tower of power stationed at DefCon, a massive hacker conference held each year in Las Vegas. At a conference where attendees are warned to stay off the wireless networks and avoid using the local ATMs, one might expect that security experts and enthusiasts would avoid using random power stations.

But some people will brave nearly any risk to power up their mobiles. In the three and a half days of this year’s DefCon, at least 360 attendees plugged their smartphones into the charging kiosk built by the same guys who run the infamous Wall of Sheep, a public shaming exercise at DefCon aimed at educating people about the dangers of sending email and other online communications over open wireless networks.

Brian Markus, president of Aires Security, said he and fellow researchers Joseph Mlodzianowski and Robert Rowley built the charging kiosk to educate attendees about the potential perils of juicing up at random power stations. Markus explains the motivation behind the experiment:

“We’d been talking about how dangerous these charging stations could be. Most smartphones are configured to just connect and dump off data,” Markus said. “Anyone who had an inclination to could put a system inside of one of these kiosks that when someone connects their phone can suck down all of the photos and data, or write malware to the device.”

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eThieves Steal $217k from Arena Firm

August 16, 2011
40 Comments

Cyber thieves stole $217,000 last month from the Metropolitan Entertainment & Convention Authority (MECA), a nonprofit organization responsible for operating the Qwest Center and other gathering places in Omaha, Nebraska.

Lea French, MECA’s chief financial officer, said the trouble began when an employee with access to the organization’s online accounts opened a booby-trapped email attachment containing password-stealing malware.

The attackers used MECA’s online banking credentials to add at least six people to the payroll who had no prior business with the organization. Those individuals, known as “money mules,” received fraudulent transfers from MECA’s bank account and willingly or unwittingly helped the fraudsters launder the money.

French said the attackers appeared to be familiar with the payroll system, and wasted no time setting up a batch of fraudulent transfers.

“They knew exactly what they were doing, knew how to create a batch, enter it in, release it,” she said. “They appear to be very good at what they do.”

Prior to the heist, MECA refused many of the security options offered by its financial institution, First National Bank of Omaha, including a requirement that two employees sign off on every transfer.

“We had declined some of the security measures offered to us, [but if] we had those in place this wouldn’t have happened to us,” French said. “We thought that would be administratively burdensome, and I was more worried about internal stuff, not somebody hacking into our systems.”

MECA was able to reverse an unauthorized wire transfer for $147,000 that was destined for a company called Utopia Funding U.S.A. The organization was not as lucky with the remaining transfers.

The funds stolen from MECA were sent to money mules recruited through fraudulent work-at-home job offers from a mule recruitment gang that I call the “Back Office Group.” This gang is one of several money mule recruitment outfits, and they appear to be among the most active. Like many other mule gangs, they tend to re-use the same format and content for their Web sites, but change their company names whenever the major search engines start to index them with enough negative comments to make mule recruitment difficult.

The mules used in the MECA heist were recruited through a Back Office Group front company named AV Company. Mules were told they were helping the company’s overseas software engineers get paid for the work they were doing for American companies. In reality, the mules were being sent payments to transfer that were drawn on hacked accounts from victims like MECA.

More than $9,000 of MECA’s money was sent to Erik Rhoden, a resident of Fleming Island, Fla. Rhoden was recruited in June by the Back Office Group. Rhoden successfully transferred the funds to three individuals in Eastern Europe, but says he didn’t profit from the work. His story matches that of other mules recently recruited by Back Office, and indicates a devious shift in tactics which ensures that mules never receive a payment for their work.

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