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The U.S. Department of Justice (DOJ) today said they arrested the alleged operator of 911 S5, a ten-year-old online anonymity service that was powered by what the director of the FBI called “likely the world’s largest botnet ever.” The arrest coincided with the seizure of the 911 S5 website and supporting infrastructure, which the government says turned computers running various “free VPN” products into Internet traffic relays that facilitated billions of dollars in online fraud and cybercrime.
The Cloud Router homepage, which was seized by the FBI this past weekend. Cloud Router was previously called 911 S5.
On May 24, authorities in Singapore arrested the alleged creator and operator of 911 S5, a 35-year-old Chinese national named YunHe Wang. In a statement on his arrest today, the DOJ said 911 S5 enabled cybercriminals to bypass financial fraud detection systems and steal billions of dollars from financial institutions, credit card issuers, and federal lending programs.
For example, the government estimates that 560,000 fraudulent unemployment insurance claims originated from compromised Internet addresses, resulting in a confirmed fraudulent loss exceeding $5.9 billion.
“Additionally, in evaluating suspected fraud loss to the Economic Injury Disaster Loan (EIDL) program, the United States estimates that more than 47,000 EIDL applications originated from IP addresses compromised by 911 S5,” the DOJ wrote. “Millions of dollars more were similarly identified by financial institutions in the United States as loss originating from IP addresses compromised by 911 S5.”
From 2015 to July 2022, 911 S5 sold access to hundreds of thousands of Microsoft Windows computers daily, as “proxies” that allowed customers to route their Internet traffic through PCs in virtually any country or city around the globe — but predominantly in the United States.
911 S5 built its proxy network mainly by offering “free” virtual private networking (VPN) services. 911’s VPN performed largely as advertised for the user — allowing them to surf the web anonymously — but it also quietly turned the user’s computer into a traffic relay for paying 911 S5 customers.
911 S5’s reliability and extremely low prices quickly made it one of the most popular services among denizens of the cybercrime underground, and the service became almost shorthand for connecting to that “last mile” of cybercrime. Namely, the ability to route one’s malicious traffic through a computer that is geographically close to the consumer whose stolen credit card is about to be used, or whose bank account is about to be emptied.
The prices page for 911 S5, circa July 2022. $28 would let users cycle through 150 proxies on this popular service.
KrebsOnSecurity first identified Mr. Wang as the proprietor of the popular service in a deep dive on 911 S5 published in July 2022. That story showed that 911 S5 had a history of paying people to install its software by secretly bundling it with other software — including fake security updates for common programs like Flash Player, and “cracked” or pirated commercial software distributed on file-sharing networks.
Ten days later, 911 S5 closed up shop, claiming it had been hacked. But experts soon tracked the reemergence of the proxy network by another name: Cloud Router.
The announcement of Wang’s arrest came less than 24 hours after the U.S. Department of the Treasury sanctioned Wang and two associates, as well as several companies the men allegedly used to launder the nearly $100 million in proceeds from 911 S5 and Cloud Router customers.
Cloud Router’s homepage now features a notice saying the domain has been seized by the U.S. government. In addition, the DOJ says it worked with authorities in Singapore, Thailand and Germany to search residences tied to the defendant, and seized approximately $30 million in assets.
The Cloud Router homepage now features a seizure notice from the FBI in multiple languages.
Those assets included a 2022 Ferrari F8 Spider S-A, a BMW i8, a BMW X7 M50d, a Rolls Royce, more than a dozen domestic and international bank accounts, over two dozen cryptocurrency wallets, several luxury wristwatches, and 21 residential or investment properties.
The government says Wang is charged with conspiracy to commit computer fraud, substantive computer fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. If convicted on all counts, he faces a maximum penalty of 65 years in prison.
Brett Leatherman, deputy assistant director of the FBI’s Cyber Division, said the DOJ is working with the Singaporean government on extraditing Wang to face charges in the United States.
Leatherman encouraged Internet users to visit a new FBI webpage that can help people determine whether their computers may be part of the 911 S5 botnet, which the government says spanned more than 19 million individual computers in at least 190 countries.
Leatherman said 911 S5 and Cloud Router used several “free VPN” brands to lure consumers into installing the proxy service, including MaskVPN, DewVPN, PaladinVPN, Proxygate, Shield VPN, and ShineVPN.
“American citizens who didn’t know that their IP space was being utilized to attack US businesses or defraud the U.S. government, they were unaware,” Leatherman said. “But these kind of operations breed that awareness.”
Thread hijacking attacks. They happen when someone you know has their email account compromised, and you are suddenly dropped into an existing conversation between the sender and someone else. These missives draw on the recipient’s natural curiosity about being copied on a private discussion, which is modified to include a malicious link or attachment. Here’s the story of a thread hijacking attack in which a journalist was copied on a phishing email from the unwilling subject of a recent scoop.
In Sept. 2023, the Pennsylvania news outlet LancasterOnline.com published a story about Adam Kidan, a wealthy businessman with a criminal past who is a major donor to Republican causes and candidates, including Rep. Lloyd Smucker (R-Pa).
The LancasterOnline story about Adam Kidan.
Several months after that piece ran, the story’s author Brett Sholtis received two emails from Kidan, both of which contained attachments. One of the messages appeared to be a lengthy conversation between Kidan and a colleague, with the subject line, “Re: Successfully sent data.” The second missive was a more brief email from Kidan with the subject, “Acknowledge New Work Order,” and a message that read simply, “Please find the attached.”
Sholtis said he clicked the attachment in one of the messages, which then launched a web page that looked exactly like a Microsoft Office 365 login page. An analysis of the webpage reveals it would check any submitted credentials at the real Microsoft website, and return an error if the user entered bogus account information. A successful login would record the submitted credentials and forward the victim to the real Microsoft website.
But Sholtis said he didn’t enter his Outlook username and password. Instead, he forwarded the messages to LancasterOneline’s IT team, which quickly flagged them as phishing attempts.
LancasterOnline Executive Editor Tom Murse said the two phishing messages from Mr. Kidan raised eyebrows in the newsroom because Kidan had threatened to sue the news outlet multiple times over Sholtis’s story.
“We were just perplexed,” Murse said. “It seemed to be a phishing attempt but we were confused why it would come from a prominent businessman we’ve written about. Our initial response was confusion, but we didn’t know what else to do with it other than to send it to the FBI.”
The phishing lure attached to the thread hijacking email from Mr. Kidan.
In 2006, Kidan was sentenced to 70 months in federal prison after pleading guilty to defrauding lenders along with Jack Abramoff, the disgraced lobbyist whose corruption became a symbol of the excesses of Washington influence peddling. He was paroled in 2009, and in 2014 moved his family to a home in Lancaster County, Pa.
The FBI hasn’t responded to LancasterOnline’s tip. Messages sent by KrebsOnSecurity to Kidan’s emails addresses were returned as blocked. Messages left with Mr. Kidan’s company, Empire Workforce Solutions, went unreturned.
No doubt the FBI saw the messages from Kidan for what they likely were: The result of Mr. Kidan having his Microsoft Outlook account compromised and used to send malicious email to people in his contacts list.
Thread hijacking attacks are hardly new, but that is mainly true because many Internet users still don’t know how to identify them. The email security firm Proofpoint says it has tracked north of 90 million malicious messages in the last five years that leverage this attack method.
One key reason thread hijacking is so successful is that these attacks generally do not include the tell that exposes most phishing scams: A fabricated sense of urgency. A majority of phishing threats warn of negative consequences should you fail to act quickly — such as an account suspension or an unauthorized high-dollar charge going through.
In contrast, thread hijacking campaigns tend to patiently prey on the natural curiosity of the recipient.
Ryan Kalember, chief strategy officer at Proofpoint, said probably the most ubiquitous examples of thread hijacking are “CEO fraud” or “business email compromise” scams, wherein employees are tricked by an email from a senior executive into wiring millions of dollars to fraudsters overseas.
But Kalember said these low-tech attacks can nevertheless be quite effective because they tend to catch people off-guard.
“It works because you feel like you’re suddenly included in an important conversation,” Kalember said. “It just registers a lot differently when people start reading, because you think you’re observing a private conversation between two different people.”
Some thread hijacking attacks actually involve multiple threat actors who are actively conversing while copying — but not addressing — the recipient.
“We call these multi-persona phishing scams, and they’re often paired with thread hijacking,” Kalember said. “It’s basically a way to build a little more affinity than just copying people on an email. And the longer the conversation goes on, the higher their success rate seems to be because some people start replying to the thread [and participating] psycho-socially.”
The best advice to sidestep phishing scams is to avoid clicking on links or attachments that arrive unbidden in emails, text messages and other mediums. 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.
Borrowing from the playbook of ransomware purveyors, the darknet narcotics bazaar Incognito Market has begun extorting all of its vendors and buyers, threatening to publish cryptocurrency transaction and chat records of users who refuse to pay a fee ranging from $100 to $20,000. The bold mass extortion attempt comes just days after Incognito Market administrators reportedly pulled an “exit scam” that left users unable to withdraw millions of dollars worth of funds from the platform.
An extortion message currently on the Incognito Market homepage.
In the past 24 hours, the homepage for the Incognito Market was updated to include a blackmail message from its owners, saying they will soon release purchase records of vendors who refuse to pay to keep the records confidential.
“We got one final little nasty surprise for y’all,” reads the message to Incognito Market users. “We have accumulated a list of private messages, transaction info and order details over the years. You’ll be surprised at the number of people that relied on our ‘auto-encrypt’ functionality. And by the way, your messages and transaction IDs were never actually deleted after the ‘expiry’….SURPRISE SURPRISE!!! Anyway, if anything were to leak to law enforcement, I guess nobody never slipped up.”
Incognito Market says it plans to publish the entire dump of 557,000 orders and 862,000 cryptocurrency transaction IDs at the end of May.
“Whether or not you and your customers’ info is on that list is totally up to you,” the Incognito administrators advised. “And yes, this is an extortion!!!!”
The extortion message includes a “Payment Status” page that lists the darknet market’s top vendors by their handles, saying at the top that “you can see which vendors care about their customers below.” The names in green supposedly correspond to users who have already opted to pay.
The “Payment Status” page set up by the Incognito Market extortionists.
We’ll be publishing the entire dump of 557k orders and 862k crypto transaction IDs at the end of May, whether or not you and your customers’ info is on that list is totally up to you. And yes, this is an extortion!!!!
Incognito Market said it plans to open up a “whitelist portal” for buyers to remove their transaction records “in a few weeks.”
The mass-extortion of Incognito Market users comes just days after a large number of users reported they were no longer able to withdraw funds from their buyer or seller accounts. The cryptocurrency-focused publication Cointelegraph.com reported Mar. 6 that Incognito was exit-scamming its users out of their bitcoins and Monero deposits.
CoinTelegraph notes that Incognito Market administrators initially lied about the situation, and blamed users’ difficulties in withdrawing funds on recent changes to Incognito’s withdrawal systems.
Incognito Market deals primarily in narcotics, so it’s likely many users are now worried about being outed as drug dealers. Creating a new account on Incognito Market presents one with an ad for 5 grams of heroin selling for $450.
New Incognito Market users are treated to an ad for $450 worth of heroin.
The double whammy now hitting Incognito Market users is somewhat akin to the double extortion techniques employed by many modern ransomware groups, wherein victim organizations are hacked, relieved of sensitive information and then presented with two separate ransom demands: One in exchange for a digital key needed to unlock infected systems, and another to secure a promise that any stolen data will not be published or sold, and will be destroyed.
Incognito Market has priced its extortion for vendors based on their status or “level” within the marketplace. Level 1 vendors can supposedly have their information removed by paying a $100 fee. However, larger “Level 5” vendors are asked to cough up $20,000 payments.
The past is replete with examples of similar darknet market exit scams, which tend to happen eventually to all darknet markets that aren’t seized and shut down by federal investigators, said Brett Johnson, a convicted and reformed cybercriminal who built the organized cybercrime community Shadowcrew many years ago.
“Shadowcrew was the precursor to today’s Darknet Markets and laid the foundation for the way modern cybercrime channels still operate today,” Johnson said. “The Truth of Darknet Markets? ALL of them are Exit Scams. The only question is whether law enforcement can shut down the market and arrest its operators before the exit scam takes place.”
The ransomware group LockBit told officials with Fulton County, Ga. they could expect to see their internal documents published online this morning unless the county paid a ransom demand. LockBit removed Fulton County’s listing from its victim shaming website this morning, claiming the county had paid. But county officials said they did not pay, nor did anyone make payment on their behalf. Security experts say LockBit was likely bluffing and probably lost most of the data when the gang’s servers were seized this month by U.S. and U.K. law enforcement.
The LockBit website included a countdown timer until the promised release of data stolen from Fulton County, Ga. LockBit would later move this deadline up to Feb. 29, 2024.
LockBit listed Fulton County as a victim on Feb. 13, saying that unless it was paid a ransom the group would publish files stolen in a breach at the county last month. That attack disrupted county phones, Internet access and even their court system. LockBit leaked a small number of the county’s files as a teaser, which appeared to include sensitive and sealed court records in current and past criminal trials.
On Feb. 16, Fulton County’s entry — along with a countdown timer until the data would be published — was removed from the LockBit website without explanation. The leader of LockBit told KrebsOnSecurity this was because Fulton County officials had engaged in last-minute negotiations with the group.
But on Feb. 19, investigators with the FBI and the U.K.’s National Crime Agency (NCA) took over LockBit’s online infrastructure, replacing the group’s homepage with a seizure notice and links to LockBit ransomware decryption tools.
In a press briefing on Feb. 20, Fulton County Commission Chairman Robb Pitts told reporters the county did not pay a ransom demand, noting that the board “could not in good conscience use Fulton County taxpayer funds to make a payment.”
Three days later, LockBit reemerged with new domains on the dark web, and with Fulton County listed among a half-dozen other victims whose data was about to be leaked if they refused to pay. As it does with all victims, LockBit assigned Fulton County a countdown timer, saying officials had until late in the evening on March 1 until their data was published.
LockBit revised its deadline for Fulton County to Feb. 29.
LockBit soon moved up the deadline to the morning of Feb. 29. As Fulton County’s LockBit timer was counting down to zero this morning, its listing disappeared from LockBit’s site. LockBit’s leader and spokesperson, who goes by the handle “LockBitSupp,” told KrebsOnSecurity today that Fulton County’s data disappeared from their site because county officials paid a ransom.
“Fulton paid,” LockBitSupp said. When asked for evidence of payment, LockBitSupp claimed. “The proof is that we deleted their data and did not publish it.”
But at a press conference today, Fulton County Chairman Robb Pitts said the county does not know why its data was removed from LockBit’s site.
“As I stand here at 4:08 p.m., we are not aware of any data being released today so far,” Pitts said. “That does not mean the threat is over. They could release whatever data they have at any time. We have no control over that. We have not paid any ransom. Nor has any ransom been paid on our behalf.”
Brett Callow, a threat analyst with the security firm Emsisoft, said LockBit likely lost all of the victim data it stole before the FBI/NCA seizure, and that it has been trying madly since then to save face within the cybercrime community.
“I think it was a case of them trying to convince their affiliates that they were still in good shape,” Callow said of LockBit’s recent activities. “I strongly suspect this will be the end of the LockBit brand.”
Others have come to a similar conclusion. The security firm RedSense posted an analysis to Twitter/X that after the takedown, LockBit published several “new” victim profiles for companies that it had listed weeks earlier on its victim shaming site. Those victim firms — a healthcare provider and major securities lending platform — also were unceremoniously removed from LockBit’s new shaming website, despite LockBit claiming their data would be leaked.
“We are 99% sure the rest of their ‘new victims’ are also fake claims (old data for new breaches),” RedSense posted. “So the best thing for them to do would be to delete all other entries from their blog and stop defrauding honest people.”
Callow said there certainly have been plenty of cases in the past where ransomware gangs exaggerated their plunder from a victim organization. But this time feels different, he said.
“It is a bit unusual,” Callow said. “This is about trying to still affiliates’ nerves, and saying, ‘All is well, we weren’t as badly compromised as law enforcement suggested.’ But I think you’d have to be a fool to work with an organization that has been so thoroughly hacked as LockBit has.”
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