U.K. Man Avoids Jail Time in vDOS Case

December 21, 2017
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A U.K. man who pleaded guilty to launching more than 2,000 cyberattacks against some of the world’s largest companies has avoided jail time for his role in the attacks. The judge in the case reportedly was moved by pleas for leniency that cited the man’s youth at the time of the attacks and a diagnosis of autism.

In early July 2017, the West Midlands Police in the U.K. arrested 19-year-old Stockport resident Jack Chappell and charged him with using a now-defunct attack-for-hire service called vDOS to launch attacks against the Web sites of Amazon, BBC, BT, Netflix, T-Mobile, Virgin Media, and Vodafone, between May 1, 2015 and April 30, 2016.

One of several taunting tweets Chappell sent to his DDoS victims.

Chappell also helped launder money for vDOS, which until its demise in September 2016 was by far the most popular and powerful attack-for-hire service — allowing even completely unskilled Internet users to launch crippling assaults capable of knocking most Web sites offline.

Using the Twitter handle @fractal_warrior, Chappell would taunt his victims while  launching attacks against them. The tweet below was among several sent to the Jisc Janet educational support network and Manchester College, where Chappell was a student. In total, Chappell attacked his school at least 21 times, prosecutors showed.

Another taunting Chappell tweet.

Chappell was arrested in April 2016 after investigators traced his Internet address to his home in the U.K. For more on the clues that likely led to his arrest, check out this story.

Nevertheless, the judge in the case was moved by pleas from Chappell’s lawyer, who argued that his client was just an impressionable youth at the time who has autism, a range of conditions characterized by challenges with social skills, repetitive behaviors, speech and nonverbal communication.

The defense called on an expert who reportedly testified that Chappell was “one of the most talented people with a computer he had ever seen.”

“He is in some ways as much of a victim, he has been exploited and used,” Chappell’s attorney Stuart Kaufman told the court, according to the Manchester Evening News. “He is not malicious, he is mischievous.”

The same publication quoted Judge Maurice Greene at Chappell’s sentencing this week, saying to the young man: “You were undoubtedly taken advantage of by those more criminally sophisticated than yourself. You would be extremely vulnerable in a custodial element.”

Judge Greene decided to suspend a sentence of 16 months at a young offenders institution; Chappell will instead “undertake 20 days rehabilitation activity,” although it’s unclear exactly what that will entail.

ANALYSIS/RANT

It’s remarkable when someone so willingly and gleefully involved in a crime spree such as this can emerge from it looking like the victim. “Autistic Hacker Had Been Exploited,” declared a headline about the sentence in the U.K. newspaper The Times.

After reading the coverage of this case in the press, I half expected to see another story saying someone had pinned a medal on Chappell or offered him a job. Continue reading →

Buyers Beware of Tampered Gift Cards

December 19, 2017
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Prepaid gift cards make popular presents and no-brainer stocking stuffers, but before you purchase one be on the lookout for signs that someone may have tampered with it. A perennial scam that picks up around the holidays involves thieves who pull back and then replace the decals that obscure the card’s redemption code, allowing them to redeem or transfer the card’s balance online after the card is purchased by an unwitting customer.

Last week KrebsOnSecurity heard from Colorado reader Flint Gatrell, who reached out after finding that a bunch of Sam’s Club gift cards he pulled off the display rack at Wal-Mart showed signs of compromise. The redemption code was obscured by a watermarked sticker that is supposed to make it obvious if it has been tampered with, and many of the cards he looked at clearly had stickers that had been peeled back and then replaced.

“I just identified five fraudulent gift cards on display at my local Wal-Mart,” Gatrell said. “They each had their stickers covering their codes peeled back and replaced. I can only guess that the thieves call the service number to monitor the balances, and try to consume them before the victims can.  I’m just glad I thought to check!”

In the picture below, Gatrell is holding up three of the Sam’s Club cards. The top two showed signs of tampering, but the one on the bottom appeared to be intact.

The top two gift cards show signs that someone previously peeled back the protective sticker covering the redemption code. Image: Flint Gatrell.

Continue reading →

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The Market for Stolen Account Credentials

December 18, 2017
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Past stories here have explored the myriad criminal uses of a hacked computer, the various ways that your inbox can be spliced and diced to help cybercrooks ply their trade, and the value of a hacked company. Today’s post looks at the price of stolen credentials for just about any e-commerce, bank site or popular online service, and provides a glimpse into the fortunes that an enterprising credential thief can earn selling these accounts on consignment.

Not long ago in Internet time, your typical cybercriminal looking for access to a specific password-protected Web site would most likely visit an underground forum and ping one of several miscreants who routinely leased access to their “bot logs.”

These bot log sellers were essentially criminals who ran large botnets (collections of hacked PCs) powered by malware that can snarf any passwords stored in the victim’s Web browser or credentials submitted into a Web-based login form. For a few dollars in virtual currency, a ne’er-do-well could buy access to these logs, or else he and the botmaster would agree in advance upon a price for any specific account credentials sought by the buyer.

Back then, most of the stolen credentials that a botmaster might have in his possession typically went unused or unsold (aside from the occasional bank login that led to a juicy high-value account). Indeed, these plentiful commodities held by the botmaster for the most part were simply not a super profitable line of business and so went largely wasted, like bits of digital detritus left on the cutting room floor.

But oh, how times have changed! With dozens of sites in the underground now competing to purchase and resell credentials for a variety of online locations, it has never been easier for a botmaster to earn a handsome living based solely on the sale of stolen usernames and passwords alone.

If the old adage about a picture being worth a thousand words is true, the one directly below is priceless because it illustrates just how profitable the credential resale business has become.

This screen shot shows the earnings panel of a crook who sells stolen credentials for hundreds of Web sites to a dark web service that resells them. This botmaster only gets paid when someone buys one of his credentials. So far this year, customers of this service have purchased more than 35,000 credentials he’s sold to this service, earning him more than $288,000 in just a few months.

The image shown above is the wholesaler division of “Carder’s Paradise,” a bustling dark web service that sells credentials for hundreds of popular Web destinations. The screen shot above is an earnings panel akin to what you would see if you were a seller of stolen credentials to this service — hence the designation “Seller’s Paradise” in the upper left hand corner of the screen shot.

This screen shot was taken from the logged-in account belonging to one of the more successful vendors at Carder’s Paradise. We can see that in just the first seven months of 2017, this botmaster sold approximately 35,000 credential pairs via the Carder’s Paradise market, earning him more than $288,000. That’s an average of $8.19 for each credential sold through the service.

Bear in mind that this botmaster only makes money based on consignment: Regardless of how much he uploads to Seller’s Paradise, he doesn’t get paid for any of it unless a Carder’s Paradise customer chooses to buy what he’s selling.

Fortunately for this guy, almost 9,000 different customers of Carder’s Paradise chose to purchase one or more of his username and password pairs. It was not possible to tell from this seller’s account how many credential pairs total that he has contributed to this service which went unsold, but it’s a safe bet that it was far more than 35,000.

[A side note is in order here because there is some delicious irony in the backstory behind the screenshot above: The only reason a source of mine was able to share it with me was because this particular seller re-used the same email address and password across multiple unrelated cybercrime services]. Continue reading →

Former Botmaster, ‘Darkode’ Founder is CTO of Hacked Bitcoin Mining Firm ‘NiceHash’

December 15, 2017
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On Dec. 6, 2017, approximately USD $52 million worth of Bitcoin mysteriously disappeared from the coffers of NiceHash, a Slovenian company that lets users sell their computing power to help others mine virtual currencies. As the investigation into the heist nears the end of its second week, many Nice-Hash users have expressed surprise to learn that the company’s chief technology officer recently served several years in prison for operating and reselling a massive botnet, and for creating and running ‘Darkode,” until recently the world’s most bustling English-language cybercrime forum.

In December 2013, NiceHash CTO Matjaž Škorjanc was sentenced to four years, ten months in prison for creating the malware that powered the ‘Mariposa‘ botnet. Spanish for “Butterfly,” Mariposa was a potent crime machine first spotted in 2008. Very soon after, Mariposa was estimated to have infected more than 1 million hacked computers — making it one of the largest botnets ever created.

An advertisement for the ButterFly Flooder, a crimeware product based on the ButterFly Bot.

ButterFly Bot, as it was more commonly known to users, was a plug-and-play malware strain that allowed even the most novice of would-be cybercriminals to set up a global operation capable of harvesting data from thousands of infected PCs, and using the enslaved systems for crippling attacks on Web sites. The ButterFly Bot kit sold for prices ranging from $500 to $2,000.

Prior to his initial arrest in Slovenia on cybercrime charges in 2010, Škorjanc was best known to his associates as “Iserdo,” the administrator and founder of the exclusive cybercrime forum Darkode.

A message from Iserdo warning Butterfly Bot subscribers not to try to reverse his code.

On Darkode, Iserdo sold his Butterfly Bot to dozens of other members, who used it for a variety of illicit purposes, from stealing passwords and credit card numbers from infected machines to blasting spam emails and hijacking victim search results. Microsoft Windows PCs infected with the bot would then try to spread the disease over MSN Instant Messenger and peer-to-peer file sharing networks.

In July 2015, authorities in the United States and elsewhere conducted a global takedown of the Darkode crime forum, arresting several of its top members in the process. The U.S. Justice Department at the time said that out of 800 or so crime forums worldwide, Darkode represented “one of the gravest threats to the integrity of data on computers in the United States and around the world and was the most sophisticated English-speaking forum for criminal computer hackers in the world.”

Following Škorjanc’s arrest, Slovenian media reported that his mother Zdenka Škorjanc was accused of money laundering; prosecutors found that several thousand euros were sent to her bank account by her son. That case was dismissed in May of this year after prosecutors conceded she probably didn’t know how her son had obtained the money.

Matjaž Škorjanc did not respond to requests for comment. But local media reports state that he has vehemently denied any involvement in the disappearance of the NiceHash stash of Bitcoins.

In an interview with Slovenian news outlet Delo.si, the NiceHash CTO described the theft “as if his kid was kidnapped and his extremities would be cut off in front of his eyes.” A roughly-translated English version of that interview has been posted to Reddit. Continue reading →

Mirai IoT Botnet Co-Authors Plead Guilty

December 13, 2017
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The U.S. Justice Department on Tuesday unsealed the guilty pleas of two men first identified in January 2017 by KrebsOnSecurity as the likely co-authors of Mirai, a malware strain that remotely enslaves so-called “Internet of Things” devices such as security cameras, routers, and digital video recorders for use in large scale attacks designed to knock Web sites and entire networks offline (including multiple major attacks against this site).

Entering guilty pleas for their roles in developing and using Mirai are 21-year-old Paras Jha from Fanwood, N.J. and Josiah White, 20, from Washington, Pennsylvania.

Jha and White were co-founders of Protraf Solutions LLC, a company that specialized in mitigating large-scale DDoS attacks. Like firemen getting paid to put out the fires they started, Jha and White would target organizations with DDoS attacks and then either extort them for money to call off the attacks, or try to sell those companies services they claimed could uniquely help fend off the attacks.

CLICK FRAUD BOTNET

In addition, the Mirai co-creators pleaded guilty to charges of using their botnet to conduct click fraud — a form of online advertising fraud that will cost Internet advertisers more than $16 billion this year, according to estimates from ad verification company Adloox. 

The plea agreements state that Jha, White and another person who also pleaded guilty to click fraud conspiracy charges — a 21-year-old from Metairie, Louisiana named Dalton Norman — leased access to their botnet for the purposes of earning fraudulent advertising revenue through click fraud activity and renting out their botnet to other cybercriminals.

As part of this scheme, victim devices were used to transmit high volumes of requests to view web addresses associated with affiliate advertising content. Because the victim activity resembled legitimate views of these websites, the activity generated fraudulent profits through the sites hosting the advertising content, at the expense of online advertising companies.

Jha and his co-conspirators admitted receiving as part of the click fraud scheme approximately two hundred bitcoin, valued on January 29, 2017 at over $180,000.

Prosecutors say Norman personally earned over 30 bitcoin, valued on January 29, 2017 at approximately $27,000. The documents show that Norman helped Jha and White discover new, previously unknown vulnerabilities in IoT devices that could be used to beef up their Mirai botnet, which at its height grew to more than 300,000 hacked devices.

MASSIVE ATTACKS

The Mirai malware is responsible for coordinating some of the largest and most disruptive online attacks the Internet has ever witnessed. The biggest and first to gain widespread media attention began on Sept. 20, 2016, when KrebsOnSecurity came under a sustained distributed denial-of-service attack from more than 175,000 IoT devices (the size estimates come from this Usenix paper (PDF) on the Mirai botnet evolution).

That September 2016 digital siege maxed out at 620 Gbps, almost twice the size of the next-largest attack that Akamai — my DDoS mitigation provider at the time — had ever seen.

Continue reading →

Patch Tuesday, December 2017 Edition

December 12, 2017
25 Comments

The final Patch Tuesday of the year is upon us, with Adobe and Microsoft each issuing security updates for their software once again. Redmond fixed problems with various flavors of Windows, Microsoft Edge, Office, Exchange and its Malware Protection Engine. And of course Adobe’s got another security update available for its Flash Player software.

The December patch batch addresses more than 30 vulnerabilities in Windows and related software. As per usual, a huge chunk of the updates from Microsoft tackle security problems with the Web browsers built into Windows.

Also in the batch today is an out-of-band update that Microsoft first issued last week to fix a critical issue in its Malware Protection Engine, the component that drives the Windows Defender/Microsoft Security Essentials embedded in most modern versions of Windows, as well as Microsoft Endpoint Protection, and the Windows Intune Endpoint Protection anti-malware system.

Microsoft was reportedly made aware of the malware protection engine bug by the U.K.’s National Cyber Security Centre (NCSC), a division of the Government Communications Headquarters — the United Kingdom’s main intelligence and security agency. As spooky as that sounds, Microsoft said it is not aware of active attacks exploiting this flaw. Continue reading →

Phishers Are Upping Their Game. So Should You.

December 7, 2017
82 Comments

Not long ago, phishing attacks were fairly easy for the average Internet user to spot: Full of grammatical and spelling errors, and linking to phony bank or email logins at unencrypted (http:// vs. https://) Web pages. Increasingly, however, phishers are upping their game, polishing their copy and hosting scam pages over https:// connections — complete with the green lock icon in the browser address bar to make the fake sites appear more legitimate.

A brand new (and live) PayPal phishing page that uses SSL (https://) to appear more legitimate.

According to stats released this week by anti-phishing firm PhishLabs, nearly 25 percent of all phishing sites in the third quarter of this year were hosted on HTTPS domains — almost double the percentage seen in the previous quarter.

“A year ago, less than three percent of phish were hosted on websites using SSL certificates,” wrote Crane Hassold, the company’s threat intelligence manager. “Two years ago, this figure was less than one percent.”

A currently live Facebook phishing page that uses https.

As shown in the examples above (which KrebsOnSecurity found in just a few minutes of searching via phish site reporting service Phishtank.com), the most successful phishing sites tend to include not only their own SSL certificates but also a portion of the phished domain in the fake address.

Why are phishers more aggressively adopting HTTPS Web sites? Traditionally, many phishing pages are hosted on hacked, legitimate Web sites, in which case the attackers can leverage both the site’s good reputation and its SSL certificate.

Yet this, too, is changing, says PhishLabs’ Hassold.

“An analysis of Q3 HTTPS phishing attacks against PayPal and Apple, the two primary targets of these attacks, indicates that nearly three-quarters of HTTPS phishing sites targeting them were hosted on maliciously-registered domains rather than compromised websites, which is substantially higher than the overall global rate,” he wrote. “Based on data from 2016, slightly less than half of all phishing sites were hosted on domains registered by a threat actor.”

Hassold posits that more phishers are moving to HTTPS because it helps increase the likelihood that users will trust that the site is legitimate. After all, your average Internet user has been taught for years to simply “look for the lock icon” in the browser address bar as assurance that a site is safe.

Perhaps this once was useful advice, but if so its reliability has waned over the years. In November, PhishLabs conducted a poll to see how many people actually knew the meaning of the green padlock that is associated with HTTPS websites.

“More than 80% of the respondents believed the green lock indicated that a website was either legitimate and/or safe, neither of which is true,” he wrote. Continue reading →

Anti-Skimmer Detector for Skimmer Scammers

December 5, 2017
36 Comments

Crooks who make and deploy ATM skimmers are constantly engaged in a cat-and-mouse game with financial institutions, which deploy a variety of technological measures designed to defeat skimming devices. The latest innovation aimed at tipping the scales in favor of skimmer thieves is a small, battery powered device that provides crooks a digital readout indicating whether an ATM likely includes digital anti-skimming technology.

A well-known skimmer thief is marketing a product called “Smart Shield Detector” that claims to be able to detect a variety of electronic methods used by banks to foil ATM skimmers.

The device, which sells for $200, is called a “Smart Shield Detector,” and promises to detect “all kinds of noise shields, hidden shields, delayed shields and others!”

It appears to be a relatively simple machine that gives a digital numeric indicator of whether an ATM uses any of a variety of anti-skimming methods. One of the most common is known as “frequency jamming,” which uses electronic signals to scramble both the clock (timing) and the card data itself in a bid to confuse skimming devices.

“You will see current level within seconds!,” the seller enthuses in an online ad for the product, a snippet of which is shown above. “Available for sale after November 1st, market price 200usd. Preorders available at price 150usd/device. 2+ devices for your team – will give discounts.”

According to the individual selling the Smart Shield Detector, a readout of 15 or higher indicates the presence of some type of electronic shield or jamming technology — warning the skimmer thief to consider leaving that ATM alone and to find a less protected machine. In contrast, a score between 3-5 is meant to indicate “no shield,” i.e., that the ATM is ripe for compromise. Continue reading →

Hacked Password Service Leakbase Goes Dark

December 4, 2017
20 Comments

Leakbase, a Web site that indexed and sold access to billions of usernames and passwords stolen in some of the world largest data breaches, has closed up shop. A source close to the matter says the service was taken down in a law enforcement sting that may be tied to the Dutch police raid of the Hansa dark web market earlier this year.

Leakbase[dot]pw began selling memberships in September 2016, advertising more than two billion usernames and passwords that were stolen in high-profile breaches at sites like linkedin.com, myspace.com and dropbox.com.

But roughly two weeks ago KrebsOnSecurity began hearing from Leakbase users who were having trouble reaching the normally responsive and helpful support staff responsible for assisting customers with purchases and site issues.

Sometime this weekend, Leakbase began redirecting visitors to haveibeenpwned.com, a legitimate breach alerting service run by security researcher Troy Hunt (Hunt’s site lets visitors check if their email address has shown up in any public database leaks, but it does not store corresponding account passwords).

Leakbase reportedly came under new ownership after its hack in April. According to a source with knowledge of the matter but who asked to remain anonymous, the new owners of Leakbase dabbled in dealing illicit drugs at Hansa, a dark web marketplace that was dismantled in July by authorities in The Netherlands. Continue reading →

Former NSA Employee Pleads Guilty to Taking Classified Data

December 2, 2017
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A former employee for the National Security Agency pleaded guilty on Friday to taking classified data to his home computer in Maryland. According to published reports, U.S. intelligence officials believe the data was then stolen from his computer by hackers working for the Russian government.

Nghia Hoang Pho, 67, of Ellicott City, Maryland, pleaded guilty today to “willful retention of national defense information.” The U.S. Justice Department says that beginning in April 2006 Pho was employed as a developer for the NSA’s Tailored Access Operations (TAO) unit, which develops specialized hacking tools to gather intelligence data from foreign targets and information systems.

According to Pho’s plea agreement, between 2010 and March 2015 he removed and retained highly sensitive classified “documents and writings that contained national defense information, including information classified as Top Secret.”

Pho is the third NSA worker to be charged in the past two years with mishandling classified data. His plea is the latest — and perhaps final — chapter in the NSA’s hunt for those responsible for leaking NSA hacking tools that have been published online over the past year by a shadowy group calling itself The Shadow Brokers.

Neither the government’s press release about the plea nor the complaint against Pho mention what happened to the classified documents after he took them home. But a report in The New York Times cites government officials speaking on condition of anonymity saying that Pho had installed on his home computer antivirus software made by a Russian security firm Kaspersky Lab, and that Russian hackers are believed to have exploited the software to steal the classified documents. Continue reading →