Krebs on Security

Phishing for Apples, Bobbing for Links

January 13, 2020

Anyone searching for a primer on how to spot clever phishing links need look no further than those targeting customers of Apple, whose brand by many measures remains among the most-targeted. Past stories here have examined how scammers working with organized gangs try to phish iCloud credentials from Apple customers who have a mobile device that is lost or stolen. Today’s piece looks at the well-crafted links used in some of these lures.

KrebsOnSecurity heard from a reader in South Africa who recently received a text message stating his lost iPhone X had been found. The message addressed him by name and said he could view the location of his wayward device by visiting the link https://maps-icloud[.]com — which is most definitely not a legitimate Apple or iCloud link and is one of countless spoofing Apple’s “Find My” service for locating lost Apple devices.

While maps-icloud[.]com is not a particularly convincing phishing domain, a review of the Russian server where that domain is hosted reveals a slew of far more persuasive links spoofing Apple’s brand. Almost all of these include encryption certificates (start with “https://) and begin with the subdomains “apple.” or “icloud.” followed by a domain name starting with “com-“.

Here are just a few examples (the phishing links in this post have been hobbled with brackets to keep them from being clickable):

apple.com-support[.]id
apple.com-findlocation[.]id
apple.com-sign[.]in
apple.com-isupport[.]in
icloud.com-site-log[.]in

Savvy readers here no doubt already know this, but to find the true domain referenced in a link, look to the right of “http(s)://” until you encounter the first forward slash (/). The domain directly to the left of that first slash is the true destination; anything that precedes the second dot to the left of that first slash is a subdomain and should be ignored for the purposes of determining the true domain name.

For instance, in the case of the imaginary link below, example.com is the true destination, not apple.com:

https://www.apple.com.example.com/findmyphone/

Of course, any domain can be used as a redirect to any other domain. Case in point: Targets of the phishing domains above who are undecided on whether the link refers to a legitimate Apple site might seek to load the base domain into a Web browser (minus the customization in the remainder of the link after the first forward slash). To assuage such concerns, the phishers in this case will forward anyone visiting those base domains to Apple’s legitimate iCloud login page (icloud.com).

The best advice to sidestep phishing scams is to avoid clicking on links that arrive unbidden in emails, text messages and other mediums. Most phishing scams invoke a temporal element that warns of dire consequences should you fail to respond or act quickly. If you’re unsure whether the message is legitimate, take a deep breath and visit the site or service in question manually — ideally, using a browser bookmark so as to avoid potential typosquatting sites.

Alleged Member of Neo-Nazi Swatting Group Charged

January 10, 2020

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Federal investigators on Friday arrested a Virginia man accused of being part of a neo-Nazi group that targeted hundreds of people in “swatting” attacks, wherein fake bomb threats, hostage situations and other violent scenarios were phoned in to police as part of a scheme to trick them into visiting potentially deadly force on a target’s address.

In July 2019, KrebsOnSecurity published the story Neo-Nazi Swatters Target Dozens of Journalists, which detailed the activities of a loose-knit group of individuals who had targeted hundreds of individuals for swatting attacks, including federal judges, corporate executives and almost three-dozen journalists (myself included).

A portion of the Doxbin, as it existed in late 2019.

An FBI affidavit unsealed this week identifies one member of the group as John William Kirby Kelley. According to the affidavit, Kelley was instrumental in setting up and maintaining the Internet Relay Chat (IRC) channel called “Deadnet” that was used by he and other co-conspirators to plan, carry out and document their swatting attacks.

Prior to his recent expulsion on drug charges, Kelley was a student studying cybersecurity at Old Dominion University in Norfolk, Va. Interestingly, investigators allege it was Kelley’s decision to swat his own school in late November 2018 that got him caught. Using the handle “Carl,” Kelley allegedly explained to fellow Deadnet members he hoped the swatting would get him out of having to go to class.

The FBI says Kelley used virtual private networking (VPN) services to hide his true Internet location and various voice-over-IP (VoIP) services to conduct the swatting calls. In the ODU incident, investigators say Kelley told ODU police that someone was armed with an AR-15 rifle and had placed multiple pipe bombs within the campus buildings.

Later that day, Kelley allegedly called ODU police again but forgot to obscure his real phone number on campus, and quickly apologized for making an accidental phone call. When authorities determined that the voice on the second call matched that from the bomb threat earlier in the day, they visited and interviewed the young man.

Investigators say Kelley admitted to participating in swatting calls previously, and consented to a search of his dorm room, wherein they found two phones, a laptop and various electronic storage devices.

The affidavit says one of the thumb drives included multiple documents that logged statements made on the Deadnet IRC channel, which chronicled “countless examples of swatting activity over an extended period of time.” Those included videos Kelley allegedly recorded of his computer screen which showed live news footage of police responding to swatting attacks while he and other Deadnet members discussed the incidents in real-time on their IRC forum.

The FBI believes Kelley also was linked to a bomb threat in November 2018 at the predominantly African American Alfred Baptist Church in Old Town Alexandria, an incident that led to the church being evacuated during evening worship services while authorities swept the building for explosives.

The FBI affidavit was based in part on interviews with an unnamed co-conspirator, who told investigators that he and the others on Deadnet IRC are white supremacists and sympathetic to the neo-Nazi movement.

“The group’s neo-Nazi ideology is apparent in the racial tones throughout the conversation logs,” the affidavit reads. “Kelley and other co-conspirators are affiliated with or have expressed sympathy for Atomwafen Division,” an extremist group whose members are suspected of having committed multiple murders in the U.S. since 2017. Continue reading →

Lawmakers Prod FCC to Act on SIM Swapping

January 9, 2020

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Crooks have stolen tens of millions of dollars and other valuable commodities from thousands of consumers via “SIM swapping,” a particularly invasive form of fraud that involves tricking a target’s mobile carrier into transferring someone’s wireless service to a device they control. But the U.S. Federal Communications Commission (FCC), the entity responsible for overseeing wireless industry practices, has so far remained largely silent on the matter. Now, a cadre of lawmakers is demanding to know what, if anything, the agency might be doing to track and combat SIM swapping.

On Thursday, a half-dozen Democrats in the House and Senate sent a letter to FCC Chairman Ajit Pai, asking the agency to require the carriers to offer more protections for consumers against unauthorized SIM swaps.

“Consumers have no choice but to rely on phone companies to protect them against SIM swaps — and they need to be able to count on the FCC to hold mobile carriers accountable when they fail to secure their systems and thus harm consumers,” reads the letter, signed by Sens. Ron Wyden (OR), Sherrod Brown (OH) and Edward Markey (MA), and Reps. Ted Lieu (CA), Anna Eshoo (CA) and Yvette Clarke (NY).

SIM swapping is an insidious form of mobile phone fraud that is often used to steal large amounts of cryptocurrencies and other items of value from victims. All too frequently, the scam involves bribing or tricking employees at mobile phone stores into seizing control of the target’s phone number and diverting all texts and phone calls to the attacker’s mobile device.

Once in control of the stolen phone number, the attacker can then reset the password for any online account that allows password resets and/or two-factor verification requests via text messages or automated phone calls (i.e. most online services, including many of the mobile carrier Web sites).

From there, the scammers can pivot in a variety of directions, including: Plundering the victim’s financial accounts; hacking their identities on social media platforms; viewing the victim’s email and call history; and abusing that access to harass and scam their friends and family.

The lawmakers asked the FCC to divulge whether it tracks consumer complaints about fraudulent SIM swapping and number “port-outs,” which involve moving the victim’s phone number to another carrier. The legislators demanded to know whether the commission offers any guidance for consumers or carriers on this important issue, and if the FCC has initiated any investigations or taken enforcement actions against carriers that failed to secure customer accounts.

The letter also requires the FCC to respond as to whether there is anything in federal regulations that prevents mobile carriers from sharing with banks information about the most recent SIM swap date of a customer as a way to flag potentially suspicious login attempts — a method already used by financial institutions in other countries, including Australia, the United Kingdom and several nations in Africa.

“Some carriers, both in the U.S. and abroad, have adopted policies that better protect consumers from SIM swaps, such as allowing customers to add optional security protections to their account that prevent SIM swaps unless the customer visits a store and shows ID,” the letter continues. “Unfortunately, implementation of these additional security measures by wireless carriers in the U.S. is still spotty and consumers are not likely to find out about the availability of these obscure, optional security features until it is too late.”

The FCC did not immediately respond to requests for comment. Continue reading →

Tricky Phish Angles for Persistence, Not Passwords

January 7, 2020

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Late last year saw the re-emergence of a nasty phishing tactic that allows the attacker to gain full access to a user’s data stored in the cloud without actually stealing the account password. The phishing lure starts with a link that leads to the real login page for a cloud email and/or file storage service. Anyone who takes the bait will inadvertently forward a digital token to the attackers that gives them indefinite access to the victim’s email, files and contacts — even after the victim has changed their password.

Before delving into the details, it’s important to note two things. First, while the most recent versions of this stealthy phish targeted corporate users of Microsoft’s Office 365 service, the same approach could be leveraged to ensnare users of many other cloud providers. Second, this attack is not exactly new: In 2017, for instance, phishers used a similar technique to plunder accounts at Google’s Gmail service.

Still, this phishing tactic is worth highlighting because recent examples of it received relatively little press coverage. Also, the resulting compromise is quite persistent and sidesteps two-factor authentication, and it seems likely we will see this approach exploited more frequently in the future.

In early December, security experts at PhishLabs detailed a sophisticated phishing scheme targeting Office 365 users that used a malicious link which took people who clicked to an official Office 365 login page — login.microsoftonline.com. Anyone suspicious about the link would have seen nothing immediately amiss in their browser’s address bar, and could quite easily verify that the link indeed took them to Microsoft’s real login page:

This phishing link asks users to log in at Microsoft’s real Office 365 portal (login.microsoftonline.com).

Only by copying and pasting the link or by scrolling far to the right in the URL bar can we detect that something isn’t quite right:

Notice this section of the URL (obscured off-page and visible only by scrolling to the right quite a bit) attempts to grant a malicious app hosted at officesuited.com full access to read the victim’s email and files stored at Microsoft’s Office 365 service.

As we can see from the URL in the image directly above, the link tells Microsoft to forward the authorization token produced by a successful login to the domain officesuited[.]com. From there, the user will be presented with a prompt that says an app is requesting permissions to read your email, contacts, OneNote notebooks, access your files, read/write to your mailbox settings, sign you in, read your profile, and maintain access to that data.

Image: PhishLabs

According to PhishLabs, the app that generates this request was created using information apparently stolen from a legitimate organization. The domain hosting the malicious app pictured above — officemtr[.]com — is different from the one I saw in late December, but it was hosted at the same Internet address as officesuited[.]com and likely signed using the same legitimate company’s credentials.

PhishLabs says the attackers are exploiting a feature of Outlook known as “add-ins,” which are applications built by third-party developers that can be installed either from a file or URL from the Office store.

“By default, any user can apply add-ins to their outlook application,” wrote PhishLabs’ Michael Tyler. “Additionally, Microsoft allows Office 365 add-ins and apps to be installed via side loading without going through the Office Store, and thereby avoiding any review process.”

In an interview with KrebsOnSecurity, Tyler said he views this attack method more like malware than traditional phishing, which tries to trick someone into giving their password to the scammers.

“The difference here is instead of handing off credentials to someone, they are allowing an outside application to start interacting with their Office 365 environment directly,” he said.

Many readers at this point may be thinking that they would hesitate before approving such powerful permissions as those requested by this malicious application. But Tyler said this assumes the user somehow understands that there is a malicious third-party involved in the transaction.

“We can look at the reason phishing is still around, and it’s because people are making decisions they shouldn’t be making or shouldn’t be able to make,” he said. “Even employees who are trained on security are trained to make sure it’s a legitimate site before entering their credentials. Well, in this attack the site is legitimate, and at that point their guard is down. I look at this and think, would I be more likely to type my password into a box or more likely to click a button that says ‘okay’?” Continue reading →

The Hidden Cost of Ransomware: Wholesale Password Theft

January 6, 2020

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Organizations in the throes of cleaning up after a ransomware outbreak typically will change passwords for all user accounts that have access to any email systems, servers and desktop workstations within their network. But all too often, ransomware victims fail to grasp that the crooks behind these attacks can and frequently do siphon every single password stored on each infected endpoint. The result of this oversight may offer attackers a way back into the affected organization, access to financial and healthcare accounts, or — worse yet — key tools for attacking the victim’s various business partners and clients.

In mid-November 2019, Wisconsin-based Virtual Care Provider Inc. (VCPI) was hit by the Ryuk ransomware strain. VCPI manages the IT systems for some 110 clients that serve approximately 2,400 nursing homes in 45 U.S. states. VCPI declined to pay the multi-million dollar ransom demanded by their extortionists, and the attack cut off many of those elder care facilities from their patient records, email and telephone service for days or weeks while VCPI rebuilt its network.

Just hours after that story was published, VCPI chief executive and owner Karen Christianson reached out to say she hoped I would write a follow-up piece about how they recovered from the incident. My reply was that I’d consider doing so if there was something in their experience that I thought others could learn from their handling of the incident.

I had no inkling at the time of how much I would learn in the days ahead.

EERIE EMAILS

On December 3, I contacted Christianson to schedule a follow-up interview for the next day. On the morning of Dec. 4 (less than two hours before my scheduled call with VCPI and more than two weeks after the start of their ransomware attack) I heard via email from someone claiming to be part of the criminal group that launched the Ryuk ransomware inside VCPI.

That email was unsettling because its timing suggested that whoever sent it somehow knew I was going to speak with VCPI later that day. This person said they wanted me to reiterate a message they’d just sent to the owner of VCPI stating that their offer of a greatly reduced price for a digital key needed to unlock servers and workstations seized by the malware would expire soon if the company continued to ignore them.

“Maybe you chat to them lets see if that works,” the email suggested.

The anonymous individual behind that communication declined to provide proof that they were part of the group that held VPCI’s network for ransom, and after an increasingly combative and personally threatening exchange of messages soon stopped responding to requests for more information.

“We were bitten with releasing evidence before hence we have stopped this even in our ransoms,” the anonymous person wrote. “If you want proof we have hacked T-Systems as well. You may confirm this with them. We havent [sic] seen any Media articles on this and as such you should be the first to report it, we are sure they are just keeping it under wraps.” Security news site Bleeping Computer reported on the T-Systems Ryuk ransomware attack on Dec. 3.

In our Dec. 4 interview, VCPI’s acting chief information security officer — Mark Schafer, CISO at Wisconsin-based SVA Consulting — confirmed that the company received a nearly identical message that same morning, and that the wording seemed “very similar” to the original extortion demand the company received.

However, Schafer assured me that VCPI had indeed rebuilt its email network following the intrusion and strictly used a third-party service to discuss remediation efforts and other sensitive topics. Continue reading →

Happy 10th Birthday, KrebsOnSecurity.com

December 29, 2019

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Today marks the 10th anniversary of KrebsOnSecurity.com! Over the past decade, the site has featured more than 1,800 stories focusing mainly on cybercrime, computer security and user privacy concerns. And what a decade it has been.

Stories here have exposed countless scams, data breaches, cybercrooks and corporate stumbles. In the ten years since its inception, the site has attracted more than 37,000 newsletter subscribers, and nearly 100 million pageviews generated by roughly 40 million unique visitors.

Some of those 40 million visitors left more than 100,000 comments. The community that has sprung up around KrebsOnSecurity has been truly humbling and a joy to watch, and I’m eternally grateful for all your contributions.

One housekeeping note: A good chunk of the loyal readers here are understandably security- and privacy-conscious, and many block advertisements by default — including the ads displayed here.

Just a reminder that KrebsOnSecurity does not run third-party ads and has no plans to change that; all of the creatives you see on this site are hosted in-house, are purely image-based, and are vetted first by Yours Truly. Love them or hate ’em, these ads help keep the content at KrebsOnSecurity free to any and all readers. If you’re currently blocking ads here, please consider making an exception for this site.

Last but certainly not least, thank you for your readership. I couldn’t have done this without your encouragement, wisdom, tips and support. Here’s wishing you all a happy, healthy and wealthy 2020, and for another decade of stories to come.

Ransomware at IT Services Provider Synoptek

December 27, 2019

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Synoptek, a California business that provides cloud hosting and IT management services to more than a thousand customers nationwide, suffered a ransomware attack this week that has disrupted operations for many of its clients, according to sources. The company has reportedly paid a ransom demand in a bid to restore operations as quickly as possible.

Irvine, Calif.-based Synoptek is a managed service provider that maintains a variety of cloud-based services for more than 1,100 customers across a broad spectrum of industries, including state and local governments, financial services, healthcare, manufacturing, media, retail and software. The company has nearly a thousand employees and brought in more than $100 million in revenue in the past year, according to their Web site.

A now-deleted Tweet from Synoptek on Dec. 20 warned against the dangers of phishing-based cyberattacks, less than three days prior to their (apparently phishing-based) Sodinokibi ransomware infestation.

News of the incident first surfaced on Reddit, which lit up on Christmas Eve with posts from people working at companies affected by the outage. The only official statement about any kind of incident came late Friday evening from the company’s Twitter page, which said that on Dec. 23 it experienced a “credential compromise which has been contained,” and that Synoptek “took immediate action and have been working diligently with customers to remediate the situation.”

Synoptek has not yet responded to multiple requests for comment. But two sources who work at the company have now confirmed their employer was hit by Sodinokibi, a potent ransomware strain also known as “rEvil” that encrypts data and demands a cryptocurrency payment in return for a digital key that unlocks access to infected systems. Those sources also say the company paid their extortionists an unverified sum in exchange for decryption keys.

Sources also confirm that both the State of California and the U.S. Department of Homeland Security have been reaching out to state and local entities potentially affected by the attack. One Synoptek customer briefed on the attack who asked to remain anonymous said that once inside Synoptek’s systems, the intruders used a remote management tool to install the ransomware on client systems. Continue reading →

Nuclear Bot Author Arrested in Sextortion Case

December 17, 2019

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Last summer, a wave of sextortion emails began flooding inboxes around the world. The spammers behind this scheme claimed they’d hacked your computer and recorded videos of you watching porn, and promised to release the embarrassing footage to all your contacts unless a bitcoin demand was paid. Now, French authorities say they’ve charged two men they believe are responsible for masterminding this scam. One of them is a 21-year-old hacker interviewed by KrebsOnSecurity in 2017 who openly admitted to authoring a banking trojan called “Nuclear Bot.”

On Dec. 15, the French news daily Le Parisien published a report stating that French authorities had arrested and charged two men in the sextortion scheme. The story doesn’t name either individual, but rather refers to one of the accused only by the pseudonym “Antoine I.,” noting that his first had been changed (presumably to protect his identity because he hasn’t yet been convicted of a crime).

“According to sources close to the investigation, Antoine I. surrendered to the French authorities at the beginning of the month, after being hunted down all over Europe,” the story notes. “The young Frenchman, who lived between Ukraine, Poland and the Baltic countries, was indicted on 6 December for ‘extortion by organized gang, fraudulent access to a data processing system and money laundering.’ He was placed in pre-trial detention.”

According to Le Parisien, Antoine I. admitted to being the inventor of the initial 2018 sextortion scam, which was subsequently imitated by countless other ne’er-do-wells. The story says the two men deployed malware to compromise at least 2,000 computers that were used to blast out the sextortion emails.

While that story is light on details about the identities of the accused, an earlier version of it published Dec. 14 includes more helpful clues. The Dec. 14 piece said Antoine I. had been interviewed by KrebsOnSecurity in April 2017, where he boasted about having created Nuclear Bot, a malware strain designed to steal banking credentials from victims.

My April 2017 exposé featured an interview with Augustin Inzirillo, a young man who came across as deeply conflicted about his chosen career path. That path became traceable after he released the computer code for Nuclear Bot on GitHub. Inzirillo outed himself by defending the sophistication of his malware after it was ridiculed by both security researchers and denizens of the cybercrime underground, where copies of the code wound up for sale. From that story:

“It was a big mistake, because now I know people will reuse my code to steal money from other people,” Inzirillo told KrebsOnSecurity in an online chat.

Inzirillo released the code on GitHub with a short note explaining his motivations, and included a contact email address at a domain (inzirillo.com) set up long ago by his father, Daniel Inzirillo.

KrebsOnSecurity also reached out to Daniel, and heard back from him roughly an hour before Augustin replied to requests for an interview. Inzirillo the elder said his son used the family domain name in his source code release as part of a misguided attempt to impress him.

“He didn’t do it for money,” said Daniel Inzirillo, whose CV shows he has built an impressive career in computer programming and working for various financial institutions. “He did it to spite all the cyber shitheads. The idea was that they wouldn’t be able to sell his software anymore because it was now free for grabs.”

If Augustin Inzirillo ever did truly desire to change his ways, it wasn’t clear from his apparent actions last summer: The Le Parisien story says the sextortion scams netted the Frenchman and his co-conspirator at least a million Euros.

In August 2018, KrebsOnSecurity was contacted by a researcher working with French authorities on the investigation who said he suspected the young man was bragging on Twitter that he used a custom version of Nuclear Bot dubbed “TinyNuke” to steal funds from customers of French and Polish banks.

The source said this individual used the now-defunct Twitter account @tiny_gang1 to taunt French authorities, while showing off a fan of 100-Euro notes allegedly gained from his illicit activities (see image above). It seemed to the source that Inzirillo wanted to get caught, because at one point @tiny_gang1 even privately shared a copy of Inzirillo’s French passport to prove his identity and accomplishments to the researcher. Continue reading →

Ransomware Gangs Now Outing Victim Businesses That Don’t Pay Up

December 16, 2019

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As if the scourge of ransomware wasn’t bad enough already: Several prominent purveyors of ransomware have signaled they plan to start publishing data stolen from victims who refuse to pay up. To make matters worse, one ransomware gang has now created a public Web site identifying recent victim companies that have chosen to rebuild their operations instead of quietly acquiescing to their tormentors.

The message displayed at the top of the Maze Ransomware public shaming site.

Less than 48 hours ago, the cybercriminals behind the Maze Ransomware strain erected a Web site on the public Internet, and it currently lists the company names and corresponding Web sites for eight victims of their malware that have declined to pay a ransom demand.

“Represented here companies dont wish to cooperate with us, and trying to hide our successful attack on their resources,” the site explains in broken English. “Wait for their databases and private papers here. Follow the news!”

KrebsOnSecurity was able to verify that at least one of the companies listed on the site indeed recently suffered from a Maze ransomware infestation that has not yet been reported in the news media.

The information disclosed for each Maze victim includes the initial date of infection, several stolen Microsoft Office, text and PDF files, the total volume of files allegedly exfiltrated from victims (measured in Gigabytes), as well as the IP addresses and machine names of the servers infected by Maze. Continue reading →

Inside ‘Evil Corp,’ a $100M Cybercrime Menace

December 16, 2019

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The U.S. Justice Department this month offered a $5 million bounty for information leading to the arrest and conviction of a Russian man indicted for allegedly orchestrating a vast, international cybercrime network that called itself “Evil Corp” and stole roughly $100 million from businesses and consumers. As it happens, for several years KrebsOnSecurity closely monitored the day-to-day communications and activities of the accused and his accomplices. What follows is an insider’s look at the back-end operations of this gang.

Image: FBI

The $5 million reward is being offered for 32 year-old Maksim V. Yakubets, who the government says went by the nicknames “aqua,” and “aquamo,” among others. The feds allege Aqua led an elite cybercrime ring with at least 16 others who used advanced, custom-made strains of malware known as “JabberZeus” and “Bugat” (a.k.a. “Dridex“) to steal banking credentials from employees at hundreds of small- to mid-sized companies in the United States and Europe.

From 2009 to the present, Aqua’s primary role in the conspiracy was recruiting and managing a continuous supply of unwitting or complicit accomplices to help Evil Corp. launder money stolen from their victims and transfer funds to members of the conspiracy based in Russia, Ukraine and other parts of Eastern Europe. These accomplices, known as “money mules,” are typically recruited via work-at-home job solicitations sent out by email and to people who have submitted their resumes to job search Web sites.

Money mule recruiters tend to target people looking for part-time, remote employment, and the jobs usually involve little work other than receiving and forwarding bank transfers. People who bite on these offers sometimes receive small commissions for each successful transfer, but just as often end up getting stiffed out of a promised payday, and/or receiving a visit or threatening letter from law enforcement agencies that track such crime (more on that in a moment).

HITCHED TO A MULE

KrebsOnSecurity first encountered Aqua’s work in 2008 as a reporter for The Washington Post. A source said they’d stumbled upon a way to intercept and read the daily online chats between Aqua and several other mule recruiters and malware purveyors who were stealing hundreds of thousands of dollars weekly from hacked businesses.

The source also discovered a pattern in the naming convention and appearance of several money mule recruitment Web sites being operated by Aqua. People who responded to recruitment messages were invited to create an account at one of these sites, enter personal and bank account data (mules were told they would be processing payments for their employer’s “programmers” based in Eastern Europe) and then log in each day to check for new messages.

Each mule was given busy work or menial tasks for a few days or weeks prior to being asked to handle money transfers. I believe this was an effort to weed out unreliable money mules. After all, those who showed up late for work tended to cost the crooks a lot of money, as the victim’s bank would usually try to reverse any transfers that hadn’t already been withdrawn by the mules.

One of several sites set up by Aqua and others to recruit and manage money mules.

When it came time to transfer stolen funds, the recruiters would send a message through the mule site saying something like: “Good morning [mule name here]. Our client — XYZ Corp. — is sending you some money today. Please visit your bank now and withdraw this payment in cash, and then wire the funds in equal payments — minus your commission — to these three individuals in Eastern Europe.”

Only, in every case the company mentioned as the “client” was in fact a small business whose payroll accounts they’d already hacked into.

Here’s where it got interesting. Each of these mule recruitment sites had the same security weakness: Anyone could register, and after logging in any user could view messages sent to and from all other users simply by changing a number in the browser’s address bar. As a result, it was trivial to automate the retrieval of messages sent to every money mule registered across dozens of these fake company sites.

So, each day for several years my morning routine went as follows: Make a pot of coffee; shuffle over to the computer and view the messages Aqua and his co-conspirators had sent to their money mules over the previous 12-24 hours; look up the victim company names in Google; pick up the phone to warn each that they were in the process of being robbed by the Russian Cyber Mob.

My spiel on all of these calls was more or less the same: “You probably have no idea who I am, but here’s all my contact info and what I do. Your payroll accounts have been hacked, and you’re about to lose a great deal of money. You should contact your bank immediately and have them put a hold on any pending transfers before it’s too late. Feel free to call me back afterwards if you want more information about how I know all this, but for now please just call or visit your bank.”

Messages to and from a money mule working for Aqua’s crew, circa May 2011.

In many instances, my call would come in just minutes or hours before an unauthorized payroll batch was processed by the victim company’s bank, and some of those notifications prevented what otherwise would have been enormous losses — often several times the amount of the organization’s normal weekly payroll. At some point I stopped counting how many tens of thousands of dollars those calls saved victims, but over several years it was probably in the millions.

Just as often, the victim company would suspect that I was somehow involved in the robbery, and soon after alerting them I would receive a call from an FBI agent or from a police officer in the victim’s hometown. Those were always interesting conversations. Needless to say, the victims that spun their wheels chasing after me usually suffered far more substantial financial losses (mainly because they delayed calling their financial institution until it was too late).

Collectively, these notifications to Evil Corp.’s victims led to dozens of stories over several years about small businesses battling their financial institutions to recover their losses. I don’t believe I ever wrote about a single victim that wasn’t okay with my calling attention to their plight and to the sophistication of the threat facing other companies. Continue reading →

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