Shady Reshipping Centers Exposed, Part I

October 12, 2011
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Last week, authorities in New York indicted more than 100 people suspected of being part of a crime ring that used forged credit cards to buy and resell an estimated $13 million worth of Apple products and other electronics overseas. In this post, I offer readers a behind-the-scenes look at a somewhat smaller but similar organized crime operation that uses stolen credit card numbers to purchase and launder high-end electronics.

One of the simplest ways to extract cash from stolen credit card accounts is to buy pricey consumer goods online and resell them on the black market. Most online retailers grew wise to these scams years ago and stopped shipping to regions of the world most frequently associated with credit card fraud, including Eastern Europe, North Africa, and Russia. But these restrictions have created a burgeoning underground market for reshipping scams, which rely on willing or unwitting residents in the United States and Europe to receive and relay high-dollar stolen goods to crooks living in the embargoed areas.

There are dozens of businesses in the criminal underground engaged in merchandise laundering, known as “Drops for stuff” on cybercrime forums. The “drops” are people who have responded to work-at-home package reshipping jobs advertised on craigslist.com and job search sites. Most reshipping scams promise employees a monthly salary and cash bonuses. But the crooks almost always sever communications with drops just before the first payday, usually about a month after the drop ships their first package.

Dropforrent.net account for manager Dick Martin.

A typical drop will receive and reship between two and four packages per day.  The packages arrive with prepaid shipping labels that are paid for with stolen credit card numbers, or with hijacked online accounts at FedEx and the US Postal Service. Drops are responsible for inspecting and verifying the contents of shipments, attaching the correct shipping label to each package, and sending them off via the appropriate shipping company.

One drops operation, dropforrent.net, allows “clients” to “rent” drops who have signed up for reshipping jobs. “Managers,” those who facilitate drop recruitment scams, can earn money by purchasing merchandise that the reshipping operation can quickly resell. Most reshipping operations seek consumer electronics that can be easily sold for cash, including laptop computers, cameras, smart phones and parts for sports cars. Dropforrent.com pays managers and clients 30 percent of the value of laptops from ACER, HP, Toshiba, Dell, Compaq and Samsung, for example, and more than 40 percent of the retail price for Apple, Sony, VAIO, Canon and Nikon products.

The phony storefront for a drops recruitment scheme.

Drops also can be used to reship virtually anything else that the client or manager would like to use or consume themselves, such as clothes, jewelry, and candy. For this service, clients and managers pay a flat rate of 50 percent of the value of the goods to have the items reshipped abroad.

The dropforrent.com managers recruit new hires by posing as legitimate businesses. One manager who uses the name Dick Martin operates a dummy business called applestore-direct.com, and actively recruits drops via ads on craigslist.com. Recruited drops are given a login to applestore-direct.com where they receive daily updates about pending shipments. Drops also are required to use this Web-based interface to notify their managers of received and reshipped items.

Kent Tribbett, a 24-year-old from West Berlin, New Jersey, has been reshipping for applestore-direct.com for almost three weeks. He was hired by Martin via an ad on craigslist.com and was given an account at applestore-direct, where he was instructed to log in daily to receive and transmit information about packages arriving at his home. A screen shot of his user account is below.

According to Dick Martin’s account at dropforrent, at least 10 clients were using Tribbett as a drop. Those same records show that Tribbett was one of 60 different drops recruited by Martin in the past 10 months.

I spoke with Tribbett briefly by phone; he denied receiving or reshipping packages for applestore-direct.com, and then hung up. But the numerous USPS tracking numbers and Express Mail bills attached to the past shipments in his account at the site suggest otherwise.

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Critical Security Updates from Microsoft, Apple

October 11, 2011
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Microsoft and Apple today released security updates to fix a slew of critical security problems in their software. Microsoft’s patch batch fixes at least 23 vulnerabilities in Windows and other Microsoft products. Apple’s update addresses more than 75 security flaws in the Windows versions of iTunes.

Nine of the 23 flaws Microsoft fixed with patches today are rated “critical,” meaning attackers could exploit them to break into vulnerable systems with little or no help from users. Eight of the nine critical bugs are in Internet Explorer. The remaining critical flaw is corrected in an update for the .NET Framework. Three of the vulnerabilities fixed with these updates were disclosed publicly prior to today, including a flaw in Windows Media Center that Microsoft believes crooks are likely to soon figure out how to reliably exploit.

The iTunes update brings the music player software to version 10.5, and is available for Microsoft systems running Windows 7, Vista, XP SP2 and later. Two new features of iTunes deserve mentioning: Apple says iPhone and iPad users who upgrade to iOS 5 when it is released later this week will be able to sync with iTunes wirelessly. More importantly from an update perspective, Apple has at long last untethered iTunes from QuickTime.

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Identity Theft More Profitable Than Car Theft

October 10, 2011
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Buying a car or making any other expensive purchase can be a hassle. And when it’s necessary to finance a purchase, there’s one more hurdle. If you want merchant financing, you’ll often be required to fill out a credit application or, at the least, to provide information like a credit card or your Social Security number.

Recent hacker break-ins at a half-dozen car dealerships nationwide are a reminder of just how easily one’s personal and financial information can be jeopardized by poor security at any of of tens of thousands of organizations that have access to that data.

Earlier this month, Farmington Hills, Mich. based RouteOne LLC sent a letter to more than 20,000 dealerships around the country, warning of probable malware infections at six dealerships that use its service. Formed in 2002, RouteOne is a joint venture by GMAC (now called Ally Financial), Ford Motor Credit, Toyota Financial Services, and DaimlerChrysler Financial Services. Dealerships use RouteOne’s credit application software and Web portal to run credit checks and process financing for car buyers. The service also allows authorized users to pull credit reports from the three major credit reporting bureaus.

In September 2011, RouteOne issued a “security bulletin,” to its affiliates, stating in part:

A letter from RouteOne to partner dealerships.

“Over the recent past, RouteOne has received information regarding a small number of dealerships (6) that have experienced compromises in their system security environments (including misappropriation and misuse of their RouteOne log on credentials likely as a result of their dealership computers being infected with spyware). RouteOne is in contact and working with affected dealerships in an attempt to help them address their security issues.”

The bulletin states further than RouteOne “takes these matters very seriously and therefore has been in contact with the FBI and the U.S. Secret Service. Ryan Holmes, the Secret Service agent assigned to the investigation of the attacks on RouteOne’s customers, said he could not release any information on an active investigation.

Mass data collection, and the resulting potential for cybertheft, is a relatively recent problem. Ten years ago, data aggregation points like RouteOne didn’t exist. RouteOne was created to speed credit and financing processes at dealerships, which previously had to navigate to and authenticate at multiple finance vendors, lenders and credit bureaus. Today, dealerships can access all this information with a username and password at RouteOne.net, or via a RouteOne iPhone app.

Dan Doman, vice president and general counsel for RouteOne, said the company became aware of the unauthorized activity after it was notified by the affected dealers.

“It’s important to note that RouteOne has not been breached in this instance, or ever in the past,” Doman said. “What we do when we learn of these matters is we try to get it out to our dealers as quickly as possible so they can take appropriate steps to fix it.”

ID theft services for sale.

Technically, RouteOne is correct. It did not have a data breach: Some of the customers who use their service did. But that distinction is irrelevant to thieves who prize such access, and to consumers who find their identities hijacked and themselves saddled with unexpected debts from fraudulent new lines of credit opened in their names. The criminal underground is full of services that allow miscreants to look up Social Security numbers, dates of birth, maiden names, and other sensitive information. It’s not clear where that data comes from, but the most likely sources are compromised accounts at businesses and organizations that have easy and frequent access to consumer data.

This blog post isn’t intended to single out RouteOne; that is just a recent example of a vast problem for individuals who must share personal data. The same kind of data aggregation exists in many other businesses and tens of thousands of organizations that routinely access sensitive consumer data, including medical, dental and real estate services. Thieves can access a gold mine of consumer data just by compromising PCs at any of these places. Continue reading →

How Much is That Phished PayPal Account?

October 5, 2011
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Compromised PayPal accounts are a valuable commodity in the criminal underground, and crooks frequently trade them in shadowy online forums. But it wasn’t until recently that I finally encountered a proper Web site dedicated to selling hacked PayPal accounts.

Compromised PayPal accounts for sale at iProfit.su

Many of the PayPal accounts for sale at iProfit.su have a zero balance, but according to the proprietor of this shop these are all “verified.” PayPal “verifies” an account when a customer agrees to attach a bank account to it; PayPal then sends a micropayment the bank account, and asks the user the value of that mini deposit. A bonus feature: all the hacked PayPal profiles currently for sale at iProfit.su are advertised as having a credit card attached to them, which is another way PayPal accounts can be verified.

The creator of iProfit.su also advertises private, bulk sales of unverified PayPal accounts; currently he is selling these at $50 per 100 accounts – a bargain at only 50 cents apiece.

Accounts are sold with or without email access (indicated by the “email” heading in the screenshot above): Accounts that come with email access include the username and password of the victim’s email account that they used to register at PayPal, the site’s proprietor told me via instant message. The creator of iProfit.su told me the accounts for sale were stolen via phishing attacks, but the fact that accounts are being sold along with email access suggests that at least some of the accounts are being hijacked by password-stealing computer Trojans on account holders’ PCs.

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ZeuS Trojan Gang Faces Justice

October 4, 2011
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Authorities in the United Kingdom have convicted the 13th and final defendant from a group arrested last year and accused of running an international cybercrime syndicate that laundered millions of dollars stolen from consumers and businesses with the help of the help of the ZeuS banking Trojan. The news comes days after U.S. authorities announced the guilty plea of the 27th and final individual arrested last year in New York in a related international money-laundering scheme.

Yevhen Kulibaba

Yevhen Kulibaba

According to the Metropolitan Police, the U.K. courts have convicted 13 members of the gang, including four who were profiled last year by KrebsOnSecurity shortly after their initial arrest and charging. The gang is thought to have used the ZeuS Trojan to steal nearly £3 million (USD $4.6M) from banks in the U.K.. They are believed to be responsible for aiding in the theft of at least USD $3 million from U.S. banks and businesses in the past two years.

Karina Kostromina

Among those convicted were the husband-and-wife ringleaders of the gang, 33-year-old Ukrainian property developer Yevhen Kulibaba, and his wife, Karina Kostromina, 34. According to British prosecutors, the two lived a “jet set” lifestyle and spent money on holidays, cars and property. Kostromina was cleared of conspiracy charges but convicted of money laundering, and sentenced this week to two years in prison. Kulibaba is awaiting sentencing on charges of conspiracy to defraud.

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Monster Spam Campaigns Lead to Cyberheists

October 3, 2011
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Phishers and cyber thieves have been casting an unusually wide net lately, blasting out huge volumes of fraudulent email designed to spread password-stealing banking Trojans. Judging from the number of victims who reported costly cyber heists in the past two weeks, many small to medium sized organizations took the bait.

These fake NACHA lures were mailed the week of Sept. 19, even though the sent date on the message says Aug. 3. Source: Commtouch.

Security firm Symantec says it detected an unprecedented jump in spam blasts containing “polymorphic malware,” — malicious software that constantly changes its appearance to evade security software. One of the most tried-and-true lures used in these attacks is an email crafted to look like it was sent by NACHA, a not-for-profit group that develops operating rules for organizations that handle electronic payments, from payroll direct deposits to online bill pay services.

Using NACHA’s name as bait is doubly insulting because victims soon find new employees — money mules — added to their payroll. After adding the mules, the thieves use the victim’s online banking credentials to push through an unauthorized batch of payroll payments to the mules, who are instructed to pull the money out in cash and wire the funds (minus a commission) overseas.

On Sept. 13, computer crooks stole approximately $120,000 from Oncology Services of North Alabama, a component of the Center for Cancer Care, a large medical health organization in Alabama. John Ziak, director of information technology at the center, said he suspects the organization’s accounting firm was the apparent source of the compromise. That means other clients may also have been victimized. He declined to name the accounting firm.

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Inside a Modern Mac Trojan

September 28, 2011
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Mac malware is back in the  news again. Last week, security firm F-Secure warned that it had discovered a Trojan built for OS X that was disguised as a PDF document. It’s not clear whether this malware is a present threat — it was apparently created earlier this year — but the mechanics of how it works are worth a closer look because it challenges a widely-held belief among Mac users that malicious software cannot install without explicit user permission.

Image courtesy F-Secure.

F-Secure said the Mac malware, Trojan-Dropper: OSX/Revir.A, may be attempting to copy the technique implemented by Windows malware, which opens a PDF file containing a “.pdf.exe” extension and an accompanying PDF icon. F-Secure was careful to note that the payload installed by the dropper, Backdoor:OSX/Imuler.A, phones home to a placeholder page on the Web that does not appear to be capable of communicating back to the Trojan at the moment.

I wanted to understand a bit more about how this Trojan does its dirty work, so I contacted Broderick Aquilino, the F-Secure researcher who analyzed it. Aquilino said the sample is a plain Mach-O binary — which we’ll call “Binary 1”, that contains PDF file and another Mach-O binary (Binary2). Mach-O, short for Mach object, is a file format for executable files on OS X.

According to Aquilino, when you run Binary1, it will extract the PDF file from its body, drop it in the Mac’s temporary or “tmp” directory, and then open it. This is merely a decoy, as Binary1 continues to extract Binary2 from itself — also into the “tmp” directory — and then runs the file.

Upon execution, Binary2 downloads another binary from [omitted malware download site] and saves it as /tmp/updtdata. For the sake of continuity, we’ll call this latest file “Binary3.” Binary2 then executes and downloads the third binary, which opens up a backdoor on the OS X host designed to allow attackers to administer the machine from afar.

“All of this happens without the user needing to input their password,” Aquilino said.

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MySQL.com Sold for $3k, Serves Malware

September 26, 2011
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A security firm revealed today that mysql.com, the central repository for widely-used Web database software, was hacked and booby-trapped to serve visitors with malicious software. The disclosure caught my eye because just a few days ago I saw evidence that administrative access to mysql.com was being sold in the hacker underground for just $3,000.

Web security firm Armorize stated in its blog that mysql.com was poisoned with a script that invisibly redirects visitors to a Web site that uses the BlackHole exploit pack, an automated exploit toolkit that probes visiting browsers for a variety of known security holes.

“It exploits the visitor’s browsing platform (the browser, the browser plugins like Adobe Flash, Adobe PDF, etc, Java, …), and upon successful exploitation, permanently installs a piece of malware into the visitor’s machine, without the visitor’s knowledge,” say the researchers. “The visitor doesn’t need to click or agree to anything; simply visiting mysql.com with a vulnerable browsing platform will result in an infection.”

A screenshot of hacker on an exclusive Russian cybercrime forum selling root access to mysql.com for $3,000

Late last week, I was lurking on a fairly exclusive Russian hacker forum and stumbled upon a member selling root access to mysql.com. As part of his pitch, which was published on the criminal forum Sept. 21, the seller called attention to the site’s daily and monthly stats, and posted screen shots of a root login prompt in a bid to prove his wares.

The seller, ominously using the nickname “sourcec0de,” points out that mysql.com is a prime piece of real estate for anyone looking to plant an exploit kit: It boasts nearly 12 million visitors per month — almost 400,000 per day — and is ranked the 649th most-visited site by Alexa (Alexa currently rates it at 637).

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‘Right-to-Left Override’ Aids Email Attacks

September 26, 2011
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Computer crooks and spammers are abusing a little-known encoding method that makes it easy to disguise malicious executable files (.exe) as relatively harmless documents, such as text or Microsoft Word files.

The “right to left override” (RLO) character is a special character within unicode, an encoding system that allows computers to exchange information regardless of the language used. Unicode covers all the characters for all writing systems of the world, modern and ancient. It also includes technical symbols, punctuations, and many other characters used in writing text. For example, a blank space between two letters, numbers or symbols is expressed in unicode as “U+0020”.

The RLO character (U+202e in unicode) is designed to support languages that are written right to left, such as Arabic and Hebrew. The problem is that this override character also can be used to make a malicious file look innocuous.

This threat is not new, and has been known for some time. But an increasing number of email based attacks are taking advantage of the RLO character to trick users who have been trained to be wary of clicking on random .exe files, according to Internet security firm Commtouch.

Take the following file, for example, which is encoded with the RLO character:

“CORP_INVOICE_08.14.2011_Pr.phylexe.doc”

Looks like a Microsoft Word document, right? This was the lure used in a recent attack that downloaded Bredolab malware. The malicious file, CORP_INVOICE_08.14.2011_Pr.phyldoc.exe, was made to display as CORP_INVOICE_08.14.2011_Pr.phylexe.doc by placing the unicode command for right to left override just before the “d” in “doc”.

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Arrested LulzSec Suspect Pined for Job at DoD

September 23, 2011
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A 23-year-old Arizona man arrested on Thursday in connection with the hack of Sony Pictures Entertainment last May was a model student who saw himself one day defending networks at the Department of Defense and the National Security Agency.

Wired.com’s Threat Level, the Associated Press, and other news outlets are reporting that Tempe, Ariz. based Cody Andrew Kretsinger is believed to be a member of the LulzSec group, an offshoot of the griefer collective Anonymous. According to the indictment against Kretsinger, he was involved in executing and later promoting the high-profile and costly attack on Sony’s networks. Sony estimates that the breaches would cost it more than $170 million this year.

UAT interview with Kretsinger

Kretsinger is a network security student at Tempe, Ariz. based University of Advancing Technology, according to Robert Wright, director of finance for UAT.  A cached page from UAT’s Web site shows that Kretsinger was named student of the month earlier this year. That page, which indicates Kretsinger was to graduate from the institution in the Fall semester of 2011, includes an interview with the suspected LulzSec member. In it, Kretsinger says he would like to work at the DoD after graduating.

Where do you want to work after graduation?

“I hope that I’ll be able to work for the Department of Defense. From what I hear, they’re pretty good at what I want to do.“

Where do you see yourself in 5 years?

“Traveling, doing Network Security as a profession with the Department of Defense. While I wouldn’t mind being a penetration tester, I think it’s a lot more fun to try to build and secure a network and its devices from the ground up. I suppose I wouldn’t mind being in management, either.”

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