KrebsOnSecurity Threatened with Defamation Lawsuit Over Fake Radaris CEO

On March 8, 2024, KrebsOnSecurity published a deep dive on the consumer data broker Radaris, showing how the original owners are two men in Massachusetts who operated multiple Russian language dating services and affiliate programs, in addition to a dizzying array of people-search websites. The subjects of that piece are threatening to sue KrebsOnSecurity for defamation unless the story is retracted. Meanwhile, their attorney has admitted that the person Radaris named as the CEO from its inception is a fabricated identity.

Radaris is just one cog in a sprawling network of people-search properties online that sell highly detailed background reports on U.S. consumers and businesses. Those reports typically include the subject’s current and previous addresses, partial Social Security numbers, any known licenses, email addresses and phone numbers, as well as the same information for any of their immediate relatives.

Radaris has a less-than-stellar reputation when it comes to responding to consumers seeking to have their reports removed from its various people-search services. That poor reputation, combined with indications that the true founders of Radaris have gone to extraordinary lengths to conceal their stewardship of the company, was what prompted KrebsOnSecurity to investigate the origins of Radaris in the first place.

On April 18, KrebsOnSecurity received a certified letter (PDF) from Valentin “Val” Gurvits, an attorney with the Boston Law Group, stating that KrebsOnSecurity would face a withering defamation lawsuit unless the Radaris story was immediately retracted and an apology issued to the two brothers named in the story as co-founders.

That March story worked backwards from the email address used to register radaris.com, and charted an impressive array of data broker companies created over the past 15 years by Massachusetts residents Dmitry and Igor Lubarsky (also sometimes spelled Lybarsky or Lubarski). Dmitry goes by “Dan,” and Igor uses the name “Gary.”

Those businesses included numerous websites marketed to Russian-speaking people who are new to the United States, such as russianamerica.com, newyork.ru, russiancleveland.com, russianla.com, russianmiami.com, etc. Other domains connected to the Lubarskys included Russian-language dating and adult websites, as well as affiliate programs for their international calling card businesses.

The story on Radaris noted that the Lubarsky brothers registered most of their businesses using a made-up name — “Gary Norden,” sometimes called Gary Nord or Gary Nard.

Mr. Gurvits’ letter stated emphatically that my reporting was lazy, mean-spirited, and obviously intended to smear the reputation of his clients. By way of example, Mr. Gurvits said the Lubarskys were actually Ukrainian, and that the story painted his clients in a negative light by insinuating that they were somehow associated with Radaris and with vaguely nefarious elements in Russia.

But more to the point, Mr. Gurvits said, neither of his clients were Gary Norden, and neither had ever held any leadership positions at Radaris, nor were they financial beneficiaries of the company in any way.

“Neither of my clients is a founder of Radaris, and neither of my clients is the CEOs of Radaris,” Gurvits wrote. “Additionally, presently and going back at least the past 10 years, neither of my clients are (or were) officers or employees of Radaris. Indeed, neither of them even owns (or ever owned) any equity in Radaris. In intentional disregard of these facts, the Article implies that my clients are personally responsible for Radaris’ actions. Therefore, you intentionally caused all negative allegations in the Article made with respect to Radaris to be imputed against my clients personally.”

We took Mr. Gurvits’ word on the ethnicity of his clients, and adjusted the story to remove a single mention that they were Russian. We did so even though Dan Lubarsky’s own Facebook page said (until recently) that he was from Moscow, Russia.

KrebsOnSecurity asked Mr. Gurvits to explain precisely which other details in the story were incorrect, and replied that we would be happy to update the story with a correction if they could demonstrate any errors of fact or omission.

We also requested specifics about several aspects of the story, such as the identity of the current Radaris CEO — listed on the Radaris website as “Victor K.” Mr. Gurvits replied that Radaris is and always has been based in Ukraine, and that the company’s true founder “Eugene L” is based there.

While Radaris has claimed to have offices in Massachusetts, Cyprus and Latvia, its website has never mentioned Ukraine. Mr. Gurvits has not responded to requests for more information about the identities of “Eugene L” or “Victor K.”

Gurvits said he had no intention of doing anyone’s reporting for them, and that the Lubarskys were going to sue KrebsOnSecurity for defamation unless the story was retracted in full. KrebsOnSecurity replied that journalists often face challenges to things that they report, but it is more than rare for one who makes a challenge to take umbrage at being asked for supporting information.

On June 13, Mr. Gurvits sent another letter (PDF) that continued to claim KrebsOnSecurity was defaming his clients, only this time Gurvits said his clients would be satisfied if KrebsOnSecurity just removed their names from the story.

“Ultimately, my clients don’t care what you say about any of the websites or corporate entities in your Article, as long as you completely remove my clients’ names from the Article and cooperate with my clients to have copies of the Article where my clients’ names appear removed from the Internet,” Mr. Gurvits wrote.

MEET THE FAKE RADARIS CEO

The June 13 letter explained that the name Gary Norden was a pseudonym invented by the Radaris marketing division, but that neither of the Lubarsky brothers were Norden.

This was a startling admission, given that Radaris has quoted the fictitious Gary Norden in press releases published and paid for by Radaris, and in news media stories where the company is explicitly seeking money from investors. In other words, Radaris has been misrepresenting itself to investors from the beginning. Here’s a press release from Radaris that was published on PR Newswire in April 2011:

In April 2014, the Boston Business Journal published a story (PDF) about Radaris that extolled the company’s rapid growth and considerable customer base. The story noted that, “to date, the company has raised less than $1 million from Cyprus-based investment company Difive.”

“We live in a world where information becomes much more broad and much more available every single day,” the Boston Business Journal quoted Radaris’ fake CEO Gary Norden, who by then had somehow been demoted from CEO to vice president of business development.

“We decided there needs to be a service that allows for ease of monitoring of information about people,” the fake CEO said. The story went on to say Radaris was seeking to raise between $5 million and $7 million from investors in the ensuing months.

THE BIG LUBARSKY

In his most recent demand letter, Mr. Gurvits helpfully included resumes for both of the Lubarsky brothers.

Dmitry Lubarsky’s resume states he is the owner of Difive.com, a startup incubator for IT companies. Recall that Difive is the same company mentioned by the fake Radaris CEO in the 2014 Boston Business Journal story, which said Difive was the company’s initial and sole investor.

Difive’s website in 2016 said it had offices in Boston, New York, San Francisco, Riga (Latvia) and Moscow (nothing in Ukraine). Meanwhile, DomainTools.com reports difive.com was originally registered in 2007 to the fictitious Gary Norden from Massachusetts.

Archived copies of the Difive website from 2017 include a “Portfolio” page indexing all of the companies in which Difive has invested. That list, available here, includes virtually every “Gary Norden” domain name mentioned in my original report, plus a few that escaped notice earlier.

Dan Lubarsky’s resume says he was CEO of a people search company called HumanBook. The Wayback machine at archive.org shows the Humanbook domain (humanbook.com) came online around April 2008, when the company was still in “beta” mode.

By August 2008, however, humanbook.com had changed the name advertised on its homepage to Radaris Beta. Eventually, Humanbook simply redirected to radaris.com.

Astute readers may notice that the domain radaris.com is not among the companies listed as Difive investments. However, passive domain name system (DNS) records from DomainTools show that between October 2023 and March 2024 radaris.com was hosted alongside all of the other Gary Norden domains at the Internet address range 38.111.228.x.

That address range simultaneously hosted every domain mentioned in this story and in the original March 2024 report as connected to email addresses used by Gary Norden, including radaris.com, radaris.ru, radaris.de, difive.com, privet.ru, blog.ru, comfi.com, phoneowner.com, russianamerica.com, eprofit.com, rehold.com, homeflock.com, humanbook.com and dozens more. A spreadsheet of those historical DNS entries for radaris.com is available here (.csv).

The breach tracking service Constella Intelligence finds just two email addresses ending in difive.com have been exposed in data breaches over the years: dan@difive.com, and gn@difive.com. Presumably, “gn” stands for Gary Norden.

A search on the email address gn@difive.com via the breach tracking service osint.industries reveals this address was used to create an account at Airbnb under the name Gary, with the last four digits of the account’s phone number ending in “0001.”

Constella Intelligence finds gn@difive.com was associated with the Massachusetts number 617-794-0001, which was used to register accounts for “Igor Lybarsky” from Wellesley or Sherborn, Ma. at multiple online businesses, including audiusa.com and the designer eyewear store luxottica.com.

The phone number 617-794-0001 also appears for a “Gary Nard” user at russianamerica.com. Igor Lubarsky’s resume says he was the manager of russianamerica.com.

DomainTools finds 617-794-0001 is connected to registration records for three domains, including paytone.com, a domain that Dan Lubarsky’s resume says he managed. DomainTools also found that number on the registration records for trustoria.com, another major consumer data broker that has an atrocious reputation, according to the Better Business Bureau.

Dan Lubarsky’s resume says he was responsible for several international telecommunications services, including the website comfi.com. DomainTools says the phone number connected to that domain — 617-952-4234 — was also used on the registration records for humanbook.net/biz/info/mobi/us, as well as for radaris.me, radaris.in, and radaris.tel.

Two other key domains are connected to that phone number. The first is barsky.com, which is the website for Barsky Estate Realty Trust (PDF), a real estate holding company controlled by the Lubarskys. Naturally, DomainTools finds barsky.com also was registered to a Gary Norden from Massachusetts. But the organization listed in the barsky.com registration records is Comfi Inc., a VOIP communications firm that Dan Lubarsky’s resume says he managed.

The other domain of note is unipointtechnologies.com. Dan Lubarsky’s resume says he was the CEO of Wellesley Hills, Mass-based Unipoint Technology Inc. In 2012, Unipoint was fined $179,000 by the U.S. Federal Communications Commission, which said the company had failed to apply for a license to provide international telecommunications services.

A pandemic assistance loan granted in 2020 to Igor Lybarsky of Sherborn, Ma. shows he received the money to an entity called Norden Consulting.

PATENTLY REMARKABLE

The 2011 Radaris press release quoting their fake CEO Gary Norden said the company had four patents pending from a team of computer science PhDs. According to the resume shared by Mr. Gurvits, Dan Lubarsky has a PhD in computer science.

The U.S. Patent and Trademark Office (PTO) says Dan Lubarsky/Lubarski has at least nine technology patents to his name. The fake CEO press release from Radaris mentioning its four patents was published in April 2011. By that time, the PTO says Dan Lubarsky had applied for exactly four patents, including, “System and Method for a Web-Based People Directory.” The first of those patents, published in 2009, is tied to Humanbook.com, the company Dan Lubarsky founded that later changed its name to Radaris.

If the Lubarskys were never involved in Radaris, how do they or their attorney know the inside information that Gary Norden is a fiction of Radaris’ marketing department? KrebsOnSecurity has learned that Mr. Gurvits is the same attorney responding on behalf of Radaris in a lawsuit against the data broker filed earlier this year by Atlas Data Privacy.

Mr. Gurvits also stepped forward as Radaris’ attorney in a class action lawsuit the company lost in 2017 because it never contested the claim in court. When the plaintiffs told the judge they couldn’t collect on the $7.5 million default judgment, the judge ordered the domain registry Verisign to transfer the radaris.com domain name to the plaintiffs.

Mr. Gurvits appealed the verdict, arguing that the lawsuit hadn’t named the actual owners of the Radaris domain name — a Cyprus company called Bitseller Expert Limited — and thus taking the domain away would be a violation of their due process rights.

The judge ruled in Radaris’ favor — halting the domain transfer — and told the plaintiffs they could refile their complaint. Soon after, the operator of Radaris changed from Bitseller to Andtop Company, an entity formed (PDF) in the Marshall Islands in Oct. 2020. Andtop also operates the aforementioned people-search service Trustoria.

Mr. Gurvits’ most-publicized defamation case was a client named Aleksej Gubarev, a Russian technology executive whose name appeared in the Steele Dossier. That document included a collection of salacious, unverified information gathered by the former British intelligence officer Christopher Steele during the 2016 U.S. presidential campaign at the direction of former president Donald Trump’s political rivals.

Gubarev, the head of the IT services company XBT Holding and the Florida web hosting firm Webzilla, sued BuzzFeed for publishing the Steele dossier. One of the items in the dossier alleged that XBT/Webzilla and affiliated companies played a key role in the hack of Democratic Party computers in the spring of 2016. The memo alleged Gubarev had been coerced into providing services to Russia’s main domestic security agency, known as the FSB.

In December 2018, a federal judge in Miami ruled in favor of BuzzFeed, saying the publication was protected by the fair report privilege, which gives news organizations latitude in reporting on official government proceedings.

Radaris was originally operated by Bitseller Expert Limited. Who owns Bitseller Expert Limited? A report (PDF) obtained from the Cyprus business registry shows this company lists its director as Pavel Kaydash from Moscow. Mr. Kaydash could not be reached for comment.

Alleged Boss of ‘Scattered Spider’ Hacking Group Arrested

A 22-year-old man from the United Kingdom arrested this week in Spain is allegedly the ringleader of Scattered Spider, a cybercrime group suspected of hacking into Twilio, LastPass, DoorDash, Mailchimp, and nearly 130 other organizations over the past two years.

The Spanish daily Murcia Today reports the suspect was wanted by the FBI and arrested in Palma de Mallorca as he tried to board a flight to Italy.

“He stands accused of hacking into corporate accounts and stealing critical information, which allegedly enabled the group to access multi-million-dollar funds,” Murcia Today wrote. “According to Palma police, at one point he controlled Bitcoins worth $27 million.”

The cybercrime-focused Twitter/X account vx-underground said the U.K. man arrested was a SIM-swapper who went by the alias “Tyler.” In a SIM-swapping attack, crooks transfer the target’s phone number to a device they control and intercept any text messages or phone calls sent to the victim — including one-time passcodes for authentication, or password reset links sent via SMS.

“He is a known SIM-swapper and is allegedly involved with the infamous Scattered Spider group,” vx-underground wrote on June 15, referring to a prolific gang implicated in costly data ransom attacks at MGM and Caesars casinos in Las Vegas last year.

Sources familiar with the investigation told KrebsOnSecurity the accused is a 22-year-old from Dundee, Scotland named Tyler Buchanan, also allegedly known as “tylerb” on Telegram chat channels centered around SIM-swapping.

In January 2024, U.S. authorities arrested another alleged Scattered Spider member — 19-year-old Noah Michael Urban of Palm Coast, Fla. — and charged him with stealing at least $800,000 from five victims between August 2022 and March 2023. Urban allegedly went by the nicknames “Sosa” and “King Bob,” and is believed to be part of the same crew that hacked Twilio and a slew of other companies in 2022.

Investigators say Scattered Spider members are part of a more diffuse cybercriminal community online known as “The Com,” wherein hackers from different cliques boast loudly about high-profile cyber thefts that almost invariably begin with social engineering — tricking people over the phone, email or SMS into giving away credentials that allow remote access to corporate internal networks.

One of the more popular SIM-swapping channels on Telegram maintains a frequently updated leaderboard of the most accomplished SIM-swappers, indexed by their supposed conquests in stealing cryptocurrency. That leaderboard currently lists Sosa as #24 (out of 100), and Tylerb at #65.

0KTAPUS

In August 2022, KrebsOnSecurity wrote about peering inside the data harvested in a months-long cybercrime campaign by Scattered Spider involving countless SMS-based phishing attacks against employees at major corporations. The security firm Group-IB called the gang by a different name — 0ktapus, a nod to how the criminal group phished employees for credentials.

The missives asked users to click a link and log in at a phishing page that mimicked their employer’s Okta authentication page. Those who submitted credentials were then prompted to provide the one-time password needed for multi-factor authentication.

These phishing attacks used newly-registered domains that often included the name of the targeted company, and sent text messages urging employees to click on links to these domains to view information about a pending change in their work schedule. The phishing sites also featured a hidden Telegram instant message bot to forward any submitted credentials in real-time, allowing the attackers to use the phished username, password and one-time code to log in as that employee at the real employer website.

One of Scattered Spider’s first big victims in its 2022 SMS phishing spree was Twilio, a company that provides services for making and receiving text messages and phone calls. The group then pivoted, using their access to Twilio to attack at least 163 of its customers.

Among those was the encrypted messaging app Signal, which said the breach could have let attackers re-register the phone number on another device for about 1,900 users.

Also in August 2022, several employees at email delivery firm Mailchimp provided their remote access credentials to this phishing group. According to Mailchimp, the attackers used their access to Mailchimp employee accounts to steal data from 214 customers involved in cryptocurrency and finance.

On August 25, 2022, the password manager service LastPass disclosed a breach in which attackers stole some source code and proprietary LastPass technical information, and weeks later LastPass said an investigation revealed no customer data or password vaults were accessed.

However, on November 30, 2022 LastPass disclosed a far more serious breach that the company said leveraged data stolen in the August breach. LastPass said criminal hackers had stolen encrypted copies of some password vaults, as well as other personal information.

In February 2023, LastPass disclosed that the intrusion involved a highly complex, targeted attack against an engineer who was one of only four LastPass employees with access to the corporate vault. In that incident, the attackers exploited a security vulnerability in a Plex media server that the employee was running on his home network, and succeeded in installing malicious software that stole passwords and other authentication credentials. The vulnerability exploited by the intruders was patched back in 2020, but the employee never updated his Plex software.

Plex announced its own data breach one day before LastPass disclosed its initial August intrusion. On August 24, 2022, Plex’s security team urged users to reset their passwords, saying an intruder had accessed customer emails, usernames and encrypted passwords.

TURF WARS

Sosa and Tylerb were both subjected to physical attacks from rival SIM-swapping gangs. These communities have been known to settle scores by turning to so-called “violence-as-a-service” offerings on cybercrime channels, wherein people can be hired to perform a variety geographically-specific “in real life” jobs, such as bricking windows, slashing car tires, or even home invasions.

In 2022, a video surfaced on a popular cybercrime channel purporting to show attackers hurling a brick through a window at an address that matches the spacious and upscale home of Urban’s parents in Sanford, Fl.

January’s story on Sosa noted that a junior member of his crew named “Foreshadow” was kidnapped, beaten and held for ransom in September 2022. Foreshadow’s captors held guns to his bloodied head while forcing him to record a video message pleading with his crew to fork over a $200,000 ransom in exchange for his life (Foreshadow escaped further harm in that incident).

According to several SIM-swapping channels on Telegram where Tylerb was known to frequent, rival SIM-swappers hired thugs to invade his home in February 2023. Those accounts state that the intruders assaulted Tylerb’s mother in the home invasion, and that they threatened to burn him with a blowtorch if he didn’t give up the keys to his cryptocurrency wallets. Tylerb was reputed to have fled the United Kingdom after that assault.

KrebsOnSecurity sought comment from Mr. Buchanan, and will update this story in the event he responds.

Stark Industries Solutions: An Iron Hammer in the Cloud

Two weeks before Russia invaded Ukraine in February 2022, a large, mysterious new Internet hosting firm called Stark Industries Solutions materialized and quickly became the epicenter of massive distributed denial-of-service (DDoS) attacks on government and commercial targets in Ukraine and Europe. An investigation into Stark Industries reveals it is being used as a global proxy network that conceals the true source of cyberattacks and disinformation campaigns against enemies of Russia.

At least a dozen patriotic Russian hacking groups have been launching DDoS attacks since the start of the war at a variety of targets seen as opposed to Moscow. But by all accounts, few attacks from those gangs have come close to the amount of firepower wielded by a pro-Russia group calling itself “NoName057(16).”

As detailed by researchers at Radware, NoName has effectively gamified DDoS attacks, recruiting hacktivists via its Telegram channel and offering to pay people who agree to install a piece of software called DDoSia. That program allows NoName to commandeer the host computers and their Internet connections in coordinated DDoS campaigns, and DDoSia users with the most attacks can win cash prizes.

A report from the security firm Team Cymru found the DDoS attack infrastructure used in NoName campaigns is assigned to two interlinked hosting providers: MIRhosting and Stark Industries. MIRhosting is a hosting provider founded in The Netherlands in 2004. But Stark Industries Solutions Ltd was incorporated on February 10, 2022, just two weeks before the Russian invasion of Ukraine.

PROXY WARS

Security experts say that not long after the war started, Stark began hosting dozens of proxy services and free virtual private networking (VPN) services, which are designed to help users shield their Internet usage and location from prying eyes.

Proxy providers allow users to route their Internet and Web browsing traffic through someone else’s computer. From a website’s perspective, the traffic from a proxy network user appears to originate from the rented IP address, not from the proxy service customer.

These services can be used in a legitimate manner for several business purposes — such as price comparisons or sales intelligence — but they are also massively abused for hiding cybercrime activity because they can make it difficult to trace malicious traffic to its original source.

What’s more, many proxy services do not disclose how they obtain access to the proxies they are renting out, and in many cases the access is obtained through the dissemination of malicious software that turns the infected system into a traffic relay — usually unbeknownst to the legitimate owner of the Internet connection. Other proxy services will allow users to make money by renting out their Internet connection to anyone.

Spur.us is a company that tracks VPNs and proxy services worldwide. Spur finds that Stark Industries (AS44477) currently is home to at least 74 VPN services, and 40 different proxy services. As we’ll see in the final section of this story, just one of those proxy networks has over a million Internet addresses available for rent across the globe.

Raymond Dijkxhoorn operates a hosting firm in The Netherlands called Prolocation. He also co-runs SURBL, an anti-abuse service that flags domains and Internet address ranges that are strongly associated with spam and cybercrime activity, including DDoS.

Dijkxhoorn said last year SURBL heard from multiple people who said they operated VPN services whose web resources were included in SURBL’s block lists.

“We had people doing delistings at SURBL for domain names that were suspended by the registrars,” Dijkhoorn told KrebsOnSecurity. “And at least two of them explained that Stark offered them free VPN services that they were reselling.”

Dijkxhoorn added that Stark Industries also sponsored activist groups from Ukraine.

“How valuable would it be for Russia to know the real IPs from Ukraine’s tech warriors?” he observed.

CLOUDY WITH A CHANCE OF BULLETS

Richard Hummel is threat intelligence lead at NETSCOUT. Hummel said when he considers the worst of all the hosting providers out there today, Stark Industries is consistently near or at the top of that list.

“The reason is we’ve had at least a dozen service providers come to us saying, ‘There’s this network out there inundating us with traffic,'” Hummel said. “And it wasn’t even DDoS attacks. [The systems] on Stark were just scanning these providers so fast it was crashing some of their services.”

Hummel said NoName will typically launch their attacks using a mix of resources rented from major, legitimate cloud services, and those from so-called “bulletproof” hosting providers like Stark. Bulletproof providers are so named when they earn or cultivate a reputation for ignoring any abuse complaints or police reports about activity on their networks.

Combining bulletproof providers with legitimate cloud hosting, Hummel said, likely makes NoName’s DDoS campaigns more resilient because many network operators will hesitate to be too aggressive in blocking Internet addresses associated with the major cloud services.

“What we typically see here is a distribution of cloud hosting providers and bulletproof hosting providers in DDoS attacks,” he said. “They’re using public cloud hosting providers because a lot of times that’s your first layer of network defense, and because [many companies are wary of] over-blocking access to legitimate cloud resources.”

But even if the cloud provider detects abuse coming from the customer, the provider is probably not going to shut the customer down immediately, Hummel said.

“There is usually a grace period, and even if that’s only an hour or two, you can still launch a large number of attacks in that time,” he said. “And then they just keep coming back and opening new cloud accounts.”

MERCENARIES TEAM

Stark Industries is incorporated at a mail drop address in the United Kingdom. UK business records list an Ivan Vladimirovich Neculiti as the company’s secretary. Mr. Neculiti also is named as the CEO and founder of PQ Hosting Plus S.R.L. (aka Perfect Quality Hosting), a Moldovan company formed in 2019 that lists the same UK mail drop address as Stark Industries.

Reached via LinkedIn, Mr. Neculiti said PQ Hosting established Stark Industries as a “white label” of its brand so that “resellers could distribute our services using our IP addresses and their clients would not have any affairs with PQ Hosting.”

“PQ Hosting is a company with over 1,000+ of [our] own physical servers in 38 countries and we have over 100,000 clients,” he said. “Though we are not as large as Hetzner, Amazon and OVH, nevertheless we are a fast growing company that provides services to tens of thousands of private customers and legal entities.”

Asked about the constant stream of DDoS attacks whose origins have traced back to Stark Industries over the past two years, Neculiti maintained Stark hasn’t received any official abuse reports about attacks coming from its networks.

“It was probably some kind of clever attack that we did not see, I do not rule out this fact, because we have a very large number of clients and our Internet channels are quite large,” he said. “But, in this situation, unfortunately, no one contacted us to report that there was an attack from our addresses; if someone had contacted us, we would have definitely blocked the network data.”

DomainTools.com finds Ivan V. Neculiti was the owner of war[.]md, a website launched in 2008 that chronicled the history of a 1990 armed conflict in Moldova known as the Transnistria War and the Moldo-Russian war.

Transnistria is a breakaway pro-Russian region that declared itself a state in 1990, although it is not internationally recognized. The copyright on that website credits the “MercenarieS TeaM,” which was at one time a Moldovan IT firm. Mr. Neculiti confirmed personally registering this domain.

DON CHICHO & DFYZ

The data breach tracking service Constella Intelligence reports that an Ivan V. Neculiti registered multiple online accounts under the email address dfyz_bk@bk.ru. Cyber intelligence firm Intel 471 shows this email address is tied to the username “dfyz” on more than a half-dozen Russian language cybercrime forums since 2008. The user dfyz on Searchengines[.]ru in 2008 asked other forum members to review war.md, and said they were part of the MercenarieS TeaM.

Back then, dfyz was selling “bulletproof servers for any purpose,” meaning the hosting company would willfully ignore abuse complaints or police inquiries about the activity of its customers.

DomainTools reports there are at least 33 domain names registered to dfyz_bk@bk.ru. Several of these domains have Ivan Neculiti in their registration records, including tracker-free[.]cn, which was registered to an Ivan Neculiti at dfyz_bk@bk.ru and referenced the MercenarieS TeaM in its original registration records.

Dfyz also used the nickname DonChicho, who likewise sold bulletproof hosting services and access to hacked Internet servers. In 2014, a prominent member of the Russian language cybercrime community Antichat filed a complaint against DonChicho, saying this user scammed them and had used the email address dfyz_bk@bk.ru.

The complaint said DonChicho registered on Antichat from the Transnistria Internet address 84.234.55[.]29. Searching this address in Constella reveals it has been used to register just five accounts online that have been created over the years, including one at ask.ru, where the user registered with the email address neculitzy1@yandex.ru. Constella also returns for that email address a user by the name “Ivan” at memoraleak.com and 000webhost.com.

Constella finds that the password most frequently used by the email address dfyz_bk@bk.ru was “filecast,” and that there are more than 90 email addresses associated with this password. Among them are roughly two dozen addresses with the name “Neculiti” in them, as well as the address support@donservers[.]ru.

Intel 471 says DonChicho posted to several Russian cybercrime forums that support@donservers[.]ru was his address, and that he logged into cybercrime forums almost exclusively from Internet addresses in Tiraspol, the capital of Transnistria. A review of DonChicho’s posts shows this person was banned from several forums in 2014 for scamming other users.

Cached copies of DonChicho’s vanity domain (donchicho[.]ru) show that in 2009 he was a spammer who peddled knockoff prescription drugs via Rx-Promotion, once one of the largest pharmacy spam moneymaking programs for Russian-speaking affiliates.

Mr. Neculiti told KrebsOnSecurity he has never used the nickname DonChicho.

“I may assure you that I have no relation to DonChicho nor to his bulletproof servers,” he said.

Below is a mind map that shows the connections between the accounts mentioned above.

Earlier this year, NoName began massively hitting government and industry websites in Moldova. A new report from Arbor Networks says the attacks began around March 6, when NoName alleged the government of Moldova was “craving for Russophobia.”

“Since early March, more than 50 websites have been targeted, according to posted ‘proof’ by the groups involved in attacking the country,” Arbor’s ASERT Team wrote. “While NoName seemingly initiated the ramp of attacks, a host of other DDoS hacktivists have joined the fray in claiming credit for attacks across more than 15 industries.”

CORRECTIV ACTION

The German independent news outlet Correctiv.org last week published a scathing investigative report on Stark Industries and MIRhosting, which notes that Ivan Neculiti operates his hosting companies with the help of his brother, Yuri.

The report points out that Stark Industries continues to host a Russian disinformation news outlet called “Recent Reliable News” (RRN) that was sanctioned by the European Union in 2023 for spreading links to propaganda blogs and fake European media and government websites.

“The website was not running on computers in Moscow or St. Petersburg until recently, but in the middle of the EU, in the Netherlands, on the computers of the Neculiti brothers,” Correctiv reporters wrote.

“After a request from this editorial team, a well-known service was installed that hides the actual web host,” the report continues. “Ivan Neculiti announced that he had blocked the associated access and server following internal investigations. “We very much regret that we are only now finding out that one of our customers is a sanctioned portal,” said the company boss. However, RRN is still accessible via its servers.”

Correctiv also points to a January 2023 report from the Ukrainian government, which found servers from Stark Industries Solutions were used as part of a cyber attack on the Ukrainian news agency “Ukrinform”. Correctiv notes the notorious hacker group Sandworm — an advanced persistent threat (APT) group operated by a cyberwarfare unit of Russia’s military intelligence service — was identified by Ukrainian government authorities as responsible for that attack.

PEACE HOSTING?

Public records indicate MIRhosting is based in The Netherlands and is operated by 37-year old Andrey Nesterenko, whose personal website says he is an accomplished concert pianist who began performing publicly at a young age.

DomainTools says mirhosting[.]com is registered to Mr. Nesterenko and to Innovation IT Solutions Corp, which lists addresses in London and in Nesterenko’s stated hometown of Nizhny Novgorod, Russia.

This is interesting because according to the book Inside Cyber Warfare by Jeffrey Carr, Innovation IT Solutions Corp. was responsible for hosting StopGeorgia[.]ru, a hacktivist website for organizing cyberattacks against Georgia that appeared at the same time Russian forces invaded the former Soviet nation in 2008. That conflict was thought to be the first war ever fought in which a notable cyberattack and an actual military engagement happened simultaneously.

Responding to questions from KrebsOnSecurity, Mr. Nesterenko said he couldn’t say whether his network had ever hosted the StopGeorgia website back in 2008 because his company didn’t keep records going back that far. But he said Stark Industries Solutions is indeed one of MIRhsoting’s colocation customers.

“Our relationship is purely provider-customer,” Nesterenko said. “They also utilize multiple providers and data centers globally, so connecting them directly to MIRhosting overlooks their broader network.”

“We take any report of malicious activity seriously and are always open to information that can help us identify and prevent misuse of our infrastructure, whether involving Stark Industries or any other customer,” Nesterenko continued. “In cases where our services are exploited for malicious purposes, we collaborate fully with Dutch cyber police and other relevant authorities to investigate and take appropriate measures. However, we have yet to receive any actionable information beyond the article itself, which has not provided us with sufficient detail to identify or block malicious actors.”

In December 2022, security firm Recorded Future profiled the phishing and credential harvesting infrastructure used for Russia-aligned espionage operations by a group dubbed Blue Charlie (aka TAG-53), which has targeted email accounts of nongovernmental organizations and think tanks, journalists, and government and defense officials.

Recorded Future found that virtually all the Blue Charlie domains existed in just ten different ISPs, with a significant concentration located in two networks, one of which was MIRhosting. Both Microsoft and the UK government assess that Blue Charlie is linked to the Russian threat activity groups variously known as Callisto Group, COLDRIVER, and SEABORGIUM.

Mr. Nesterenko took exception to a story on that report from The Record, which is owned by Recorded Future.

“We’ve discussed its contents with our customer, Stark Industries,” he said. “We understand that they have initiated legal proceedings against the website in question, as they firmly believe that the claims made are inaccurate.”

Recorded Future said they updated their story with comments from Mr. Neculiti, but that they stand by their reporting.

Mr. Nesterenko’s LinkedIn profile says he was previously the foreign region sales manager at Serverius-as, a hosting company in The Netherlands that remains in the same data center as MIRhosting.

In February, the Dutch police took 13 servers offline that were used by the infamous LockBit ransomware group, which had originally bragged on its darknet website that its home base was in The Netherlands. Sources tell KrebsOnSecurity the servers seized by the Dutch police were located in Serverius’ data center in Dronten, which is also shared by MIRhosting.

Serverius-as did not respond to requests for comment. Nesterenko said MIRhosting does use one of Serverius’s data centers for its operations in the Netherlands, alongside two other data centers, but that the recent incident involving the seizure of servers has no connection to MIRhosting.

“We are legally prohibited by Dutch law and police regulations from sharing information with third parties regarding any communications we may have had,” he said.

A February 2024 report from security firm ESET found Serverius-as systems were involved in a series of targeted phishing attacks by Russia-aligned groups against Ukrainian entities throughout 2023. ESET observed that after the spearphishing domains were no longer active, they were converted to promoting rogue Internet pharmacy websites.

PEERING INTO THE VOID

A review of the Internet address ranges recently added to the network operated by Stark Industries Solutions offers some insight into its customer base, usage, and maybe even true origins. Here is a snapshot (PDF) of all Internet address ranges announced by Stark Industries so far in the month of May 2024 (this information was graciously collated by the network observability platform Kentik.com).

Those records indicate that the largest portion of the IP space used by Stark is in The Netherlands, followed by Germany and the United States. Stark says it is connected to roughly 4,600 Internet addresses that currently list their ownership as Comcast Cable Communications.

A review of those address ranges at spur.us shows all of them are connected to an entity called Proxyline, which is a sprawling proxy service based in Russia that currently says it has more than 1.6 million proxies globally that are available for rent.

Reached for comment, Comcast said the Internet address ranges never did belong to Comcast, so it is likely that Stark has been fudging the real location of its routing announcements in some cases.

Stark reports that it has more than 67,000 Internet addresses at Santa Clara, Calif.-based EGIhosting. Spur says the Stark addresses involving EGIhosting all map to Proxyline as well. EGIhosting did not respond to requests for comment.

EGIhosting manages Internet addresses for the Cyprus-based hosting firm ITHOSTLINE LTD (aka HOSTLINE-LTD), which is represented throughout Stark’s announced Internet ranges. Stark says it has more than 21,000 Internet addresses with HOSTLINE. Spur.us finds Proxyline addresses are especially concentrated in the Stark ranges labeled ITHOSTLINE LTD, HOSTLINE-LTD, and Proline IT.

Stark’s network list includes approximately 21,000 Internet addresses at Hockessin, De. based DediPath, which abruptly ceased operations without warning in August 2023. According to a phishing report released last year by Interisle Consulting, DediPath was the fourth most common source of phishing attacks in the year ending Oct. 2022. Spur.us likewise finds that virtually all of the Stark address ranges marked “DediPath LLC” are tied to Proxyline.

A large number of the Internet address ranges announced by Stark in May originate in India, and the names that are self-assigned to many of these networks indicate they were previously used to send large volumes of spam for herbal medicinal products, with names like HerbalFarm, AdsChrome, Nutravo, Herbzoot and Herbalve.

The anti-spam organization SpamHaus reports that many of the Indian IP address ranges are associated with known “snowshoe spam,” a form of abuse that involves mass email campaigns spread across several domains and IP addresses to weaken reputation metrics and avoid spam filters.

It’s not clear how much of Stark’s network address space traces its origins to Russia, but big chunks of it recently belonged to some of the oldest entities on the Russian Internet (a.k.a. “Runet”).

For example, many Stark address ranges were most recently assigned to a Russian government entity whose full name is the “Federal State Autonomous Educational Establishment of Additional Professional Education Center of Realization of State Educational Policy and Informational Technologies.”

A review of Internet address ranges adjacent to this entity reveals a long list of Russian government organizations that are part of the Federal Guard Service of the Russian Federation. Wikipedia says the Federal Guard Service is a Russian federal government agency concerned with tasks related to protection of several high-ranking state officials, including the President of Russia, as well as certain federal properties. The agency traces its origins to the USSR’s Ninth Directorate of the KGB, and later the presidential security service.

Stark recently announced the address range 213.159.64.0/20 from April 27 to May 1, and this range was previously assigned to an ancient ISP in St. Petersburg, RU called the Computer Technologies Institute Ltd.

According to a post on the Russian language webmaster forum searchengines[.]ru, the domain for Computer Technologies Institute — ctinet[.]ru — is the seventh-oldest domain in the entire history of the Runet.

Curiously, Stark also lists large tracts of Internet addresses (close to 48,000 in total) assigned to a small ISP in Kharkiv, Ukraine called NetAssist. Reached via email, the CEO of NetAssist Max Tulyev confirmed his company provides a number of services to PQ Hosting.

“We colocate their equipment in Warsaw, Madrid, Sofia and Thessaloniki, provide them IP transit and IPv4 addresses,” Tulyev said. “For their size, we receive relatively low number of complains to their networks. I never seen anything about their pro-Russian activity or support of Russian hackers. It is very interesting for me to see proofs of your accusations.”

Spur.us mapped the entire infrastructure of Proxyline, and found more than one million proxies across multiple providers, but by far the biggest concentration was at Stark Industries Solutions. The full list of Proxyline address ranges (.CSV) shows two other ISPs appear repeatedly throughout the list. One is Kharkiv, Ukraine based ITL LLC, also known as Information Technology Laboratories Group, and Integrated Technologies Laboratory.

The second is a related hosting company in Miami, called Green Floid LLC. Green Floid featured in a 2017 scoop by CNN, which profiled the company’s owner and quizzed him about Russian troll farms using proxy networks on Green Floid and its parent firm ITL to mask disinformation efforts tied to the Kremlin’s Internet Research Agency (IRA). At the time, the IRA was using Facebook and other social media networks to spread videos showing police brutality against African Americans in an effort to encourage protests across the United States.

Doug Madory, director of Internet analysis at Kentik, was able to see at a high level the top sources and destinations for traffic traversing Stark’s network.

“Based on our aggregate NetFlow, we see Iran as the top destination (35.1%) for traffic emanating from Stark (AS44477),” Madory said. “Specifically, the top destination is MTN Irancell, while the top source is Facebook. This data supports the theory that AS44477 houses proxy services as Facebook is blocked in Iran.”

On April 30, the security firm Malwarebytes explored an extensive malware operation that targets corporate Internet users with malicious ads. Among the sites used as lures in that campaign were fake Wall Street Journal and CNN websites that told visitors they were required to install a WSJ or CNN-branded browser extension (malware). Malwarebytes found a domain name central to that operation was hosted at Internet addresses owned by Stark Industries.

Patch Tuesday, May 2024 Edition

Microsoft today released updates to fix more than 60 security holes in Windows computers and supported software, including two “zero-day” vulnerabilities in Windows that are already being exploited in active attacks. There are also important security patches available for macOS and Adobe users, and for the Chrome Web browser, which just patched its own zero-day flaw.

First, the zero-days. CVE-2024-30051 is an “elevation of privilege” bug in a core Windows library. Satnam Narang at Tenable said this flaw is being used as part of post-compromise activity to elevate privileges as a local attacker.

“CVE-2024-30051 is used to gain initial access into a target environment and requires the use of social engineering tactics via email, social media or instant messaging to convince a target to open a specially crafted document file,” Narang said. “Once exploited, the attacker can bypass OLE mitigations in Microsoft 365 and Microsoft Office, which are security features designed to protect end users from malicious files.”

Kaspersky Lab, one of two companies credited with reporting exploitation of CVE-2024-30051 to Microsoft, has published a fascinating writeup on how they discovered the exploit in a file shared with Virustotal.com.

Kaspersky said it has since seen the exploit used together with QakBot and other malware. Emerging in 2007 as a banking trojan, QakBot (a.k.a. Qbot and Pinkslipbot) has morphed into an advanced malware strain now used by multiple cybercriminal groups to prepare newly compromised networks for ransomware infestations.

CVE-2024-30040 is a security feature bypass in MSHTML, a component that is deeply tied to the default Web browser on Windows systems. Microsoft’s advisory on this flaw is fairly sparse, but Kevin Breen from Immersive Labs said this vulnerability also affects Office 365 and Microsoft Office applications.

“Very little information is provided and the short description is painfully obtuse,” Breen said of Microsoft’s advisory on CVE-2024-30040.

The only vulnerability fixed this month that earned Microsoft’s most-dire “critical” rating is CVE-2024-30044, a flaw in Sharepoint that Microsoft said is likely to be exploited. Tenable’s Narang notes that exploitation of this bug requires an attacker to be authenticated to a vulnerable SharePoint Server with Site Owner permissions (or higher) first and to take additional steps in order to exploit this flaw, which makes this flaw less likely to be widely exploited as most attackers follow the path of least resistance.

Five days ago, Google released a security update for Chrome that fixes a zero-day in the popular browser. Chrome usually auto-downloads any available updates, but it still may require a complete restart of the browser to install them. If you use Chrome and see a “Relaunch to update” message in the upper right corner of the browser, it’s time to restart.

Apple has just shipped macOS Sonoma 14.5 update, which includes nearly two dozen security patches. To ensure your Mac is up-to-date, go to System Settings, General tab, then Software Update and follow any prompts.

Finally, Adobe has critical security patches available for a range of products, including Acrobat, Reader, Illustrator, Adobe Substance 3D Painter, Adobe Aero, Adobe Animate and Adobe Framemaker.

Regardless of whether you use a Mac or Windows system (or something else), it’s always a good idea to backup your data and or system before applying any security updates. For a closer look at the individual fixes released by Microsoft today, check out the complete list over at the SANS Internet Storm Center. Anyone in charge of maintaining Windows systems in an enterprise environment should keep an eye on askwoody.com, which usually has the scoop on any wonky Windows patches.

Update, May 15, 8:28 a.m.: Corrected misattribution of CVE-2024-30051.

FCC Fines Major U.S. Wireless Carriers for Selling Customer Location Data

The U.S. Federal Communications Commission (FCC) today levied fines totaling nearly $200 million against the four major carriers — including AT&T, Sprint, T-Mobile and Verizon — for illegally sharing access to customers’ location information without consent.

The fines mark the culmination of a more than four-year investigation into the actions of the major carriers. In February 2020, the FCC put all four wireless providers on notice that their practices of sharing access to customer location data were likely violating the law.

The FCC said it found the carriers each sold access to its customers’ location information to ‘aggregators,’ who then resold access to the information to third-party location-based service providers.

“In doing so, each carrier attempted to offload its obligations to obtain customer consent onto downstream recipients of location information, which in many instances meant that no valid customer consent was obtained,” an FCC statement on the action reads. “This initial failure was compounded when, after becoming aware that their safeguards were ineffective, the carriers continued to sell access to location information without taking reasonable measures to protect it from unauthorized access.”

The FCC’s findings against AT&T, for example, show that AT&T sold customer location data directly or indirectly to at least 88 third-party entities. The FCC found Verizon sold access to customer location data (indirectly or directly) to 67 third-party entities. Location data for Sprint customers found its way to 86 third-party entities, and to 75 third-parties in the case of T-Mobile customers.

The commission said it took action after Sen. Ron Wyden (D-Ore.) sent a letter to the FCC detailing how a company called Securus Technologies had been selling location data on customers of virtually any major mobile provider to law enforcement officials.

That same month, KrebsOnSecurity broke the news that LocationSmart — a data aggregation firm working with the major wireless carriers — had a free, unsecured demo of its service online that anyone could abuse to find the near-exact location of virtually any mobile phone in North America.

The carriers promised to “wind down” location data sharing agreements with third-party companies. But in 2019, reporting at Vice.com showed that little had changed, detailing how reporters were able to locate a test phone after paying $300 to a bounty hunter who simply bought the data through a little-known third-party service.

Sen. Wyden said no one who signed up for a cell plan thought they were giving permission for their phone company to sell a detailed record of their movements to anyone with a credit card.

“I applaud the FCC for following through on my investigation and holding these companies accountable for putting customers’ lives and privacy at risk,” Wyden said in a statement today.

The FCC fined Sprint and T-Mobile $12 million and $80 million respectively. AT&T was fined more than $57 million, while Verizon received a $47 million penalty. Still, these fines represent a tiny fraction of each carrier’s annual revenues. For example, $47 million is less than one percent of Verizon’s total wireless service revenue in 2023, which was nearly $77 billion.

The fine amounts vary because they were calculated based in part on the number of days that the carriers continued sharing customer location data after being notified that doing so was illegal (the agency also considered the number of active third-party location data sharing agreements). The FCC notes that AT&T and Verizon each took more than 320 days from the publication of the Times story to wind down their data sharing agreements; T-Mobile took 275 days; Sprint kept sharing customer location data for 386 days.

Update, 6:25 p.m. ET: Clarified that the FCC launched its investigation at the request of Sen. Wyden.

Fake Lawsuit Threat Exposes Privnote Phishing Sites

A cybercrook who has been setting up websites that mimic the self-destructing message service privnote.com accidentally exposed the breadth of their operations recently when they threatened to sue a software company. The disclosure revealed a profitable network of phishing sites that behave and look like the real Privnote, except that any messages containing cryptocurrency addresses will be automatically altered to include a different payment address controlled by the scammers.

Launched in 2008, privnote.com employs technology that encrypts each message so that even Privnote itself cannot read its contents. And it doesn’t send or receive messages. Creating a message merely generates a link. When that link is clicked or visited, the service warns that the message will be gone forever after it is read.

Privnote’s ease-of-use and popularity among cryptocurrency enthusiasts has made it a perennial target of phishers, who erect Privnote clones that function more or less as advertised but also quietly inject their own cryptocurrency payment addresses when a note is created that contains crypto wallets.

Last month, a new user on GitHub named fory66399 lodged a complaint on the “issues” page for MetaMask, a software cryptocurrency wallet used to interact with the Ethereum blockchain. Fory66399 insisted that their website — privnote[.]co — was being wrongly flagged by MetaMask’s “eth-phishing-detect” list as malicious.

“We filed a lawsuit with a lawyer for dishonestly adding a site to the block list, damaging reputation, as well as ignoring the moderation department and ignoring answers!” fory66399 threatened. “Provide evidence or I will demand compensation!”

MetaMask’s lead product manager Taylor Monahan replied by posting several screenshots of privnote[.]co showing the site did indeed swap out any cryptocurrency addresses.

After being told where they could send a copy of their lawsuit, Fory66399 appeared to become flustered, and proceeded to mention a number of other interesting domain names:

You sent me screenshots from some other site! It’s red!!!!
The tornote.io website has a different color altogether
The privatenote,io website also has a different color! What’s wrong?????

A search at DomainTools.com for privatenote[.]io shows it has been registered to two names over as many years, including Andrey Sokol from Moscow and Alexandr Ermakov from Kiev. There is no indication these are the real names of the phishers, but the names are useful in pointing to other sites targeting Privnote since 2020.

DomainTools says other domains registered to Alexandr Ermakov include pirvnota[.]com, privatemessage[.]net, privatenote[.]io, and tornote[.]io.

The registration records for pirvnota[.]com at one point were updated from Andrey Sokol to “BPW” as the registrant organization, and “Tambov district” in the registrant state/province field. Searching DomainTools for domains that include both of these terms reveals pirwnote[.]com.

Other Privnote phishing domains that also phoned home to the same Internet address as pirwnote[.]com include privnode[.]com, privnate[.]com, and prevnóte[.]com. Pirwnote[.]com is currently selling security cameras made by the Chinese manufacturer Hikvision, via an Internet address based in Hong Kong.

It appears someone has gone to great lengths to make tornote[.]io seem like a legitimate website. For example, this account at Medium has authored more than a dozen blog posts in the past year singing the praises of Tornote as a secure, self-destructing messaging service. However, testing shows tornote[.]io will also replace any cryptocurrency addresses in messages with their own payment address.

These malicious note sites attract visitors by gaming search engine results to make the phishing domains appear prominently in search results for “privnote.” A search in Google for “privnote” currently returns tornote[.]io as the fifth result. Like other phishing sites tied to this network, Tornote will use the same cryptocurrency addresses for roughly 5 days, and then rotate in new payment addresses.

Throughout 2023, Tornote was hosted with the Russian provider DDoS-Guard, at the Internet address 186.2.163[.]216. A review of the passive DNS records tied to this address shows that apart from subdomains dedicated to tornote[.]io, the main other domain at this address was hkleaks[.]ml.

In August 2019, a slew of websites and social media channels dubbed “HKLEAKS” began doxing the identities and personal information of pro-democracy activists in Hong Kong. According to a report (PDF) from Citizen Lab, hkleaks[.]ml was the second domain that appeared as the perpetrators began to expand the list of those doxed.

DomainTools shows there are more than 1,000 other domains whose registration records include the organization name “BPW” and “Tambov District” as the location. Virtually all of those domains were registered through one of two registrars — Hong Kong-based Nicenic and Singapore-based WebCC — and almost all appear to be phishing or pill-spam related.

Among those is rustraitor[.]info, a website erected after Russia invaded Ukraine in early 2022 that doxed Russians perceived to have helped the Ukrainian cause.

In keeping with the overall theme, these phishing domains appear focused on stealing usernames and passwords to some of the cybercrime underground’s busiest shops, including Brian’s Club. What do all the phished sites have in common? They all accept payment via virtual currencies.

It appears MetaMask’s Monahan made the correct decision in forcing these phishers to tip their hand: Among the websites at that DDoS-Guard address are multiple MetaMask phishing domains, including metarrnask[.]com, meternask[.]com, and rnetamask[.]com.

How profitable are these private note phishing sites? Reviewing the four malicious cryptocurrency payment addresses that the attackers swapped into notes passed through privnote[.]co (as pictured in Monahan’s screenshot above) shows that between March 15 and March 19, 2024, those address raked in and transferred out nearly $18,000 in cryptocurrencies. And that’s just one of their phishing websites.

The Not-so-True People-Search Network from China

It’s not unusual for the data brokers behind people-search websites to use pseudonyms in their day-to-day lives (you would, too). Some of these personal data purveyors even try to reinvent their online identities in a bid to hide their conflicts of interest. But it’s not every day you run across a US-focused people-search network based in China whose principal owners all appear to be completely fabricated identities.

Responding to a reader inquiry concerning the trustworthiness of a site called TruePeopleSearch[.]net, KrebsOnSecurity began poking around. The site offers to sell reports containing photos, police records, background checks, civil judgments, contact information “and much more!” According to LinkedIn and numerous profiles on websites that accept paid article submissions, the founder of TruePeopleSearch is Marilyn Gaskell from Phoenix, Ariz.

Ms. Gaskell has been quoted in multiple “articles” about random subjects, such as this article at HRDailyAdvisor about the pros and cons of joining a company-led fantasy football team.

“Marilyn Gaskell, founder of TruePeopleSearch, agrees that not everyone in the office is likely to be a football fan and might feel intimidated by joining a company league or left out if they don’t join; however, her company looked for ways to make the activity more inclusive,” this paid story notes.

Also quoted in this article is Sally Stevens, who is cited as HR Manager at FastPeopleSearch[.]io.

“Fantasy football provides one way for employees to set aside work matters for some time and have fun,” Stevens contributed. “Employees can set a special league for themselves and regularly check and compare their scores against one another.”

Imagine that: Two different people-search companies mentioned in the same story about fantasy football. What are the odds?

Both TruePeopleSearch and FastPeopleSearch allow users to search for reports by first and last name, but proceeding to order a report prompts the visitor to purchase the file from one of several established people-finder services, including BeenVerified, Intelius, and Spokeo.

DomainTools.com shows that both TruePeopleSearch and FastPeopleSearch appeared around 2020 and were registered through Alibaba Cloud, in Beijing, China. No other information is available about these domains in their registration records, although both domains appear to use email servers based in China.

Sally Stevens’ LinkedIn profile photo is identical to a stock image titled “beautiful girl” from Adobe.com. Ms. Stevens is also quoted in a paid blog post at ecogreenequipment.com, as is Alina Clark, co-founder and marketing director of CocoDoc, an online service for editing and managing PDF documents.

Scouring multiple image search sites reveals Ms. Clark’s profile photo on LinkedIn is another stock image that is currently on more than 100 different websites, including Adobe.com. Cocodoc[.]com was registered in June 2020 via Alibaba Cloud Beijing in China.

The same Alina Clark and photo materialized in a paid article at the website Ceoblognation, which in 2021 included her at #11 in a piece called “30 Entrepreneurs Describe The Big Hairy Audacious Goals (BHAGs) for Their Business.” It’s also worth noting that Ms. Clark is currently listed as a “former Forbes Council member” at the media outlet Forbes.com.

Entrepreneur #6 is Stephen Curry, who is quoted as CEO of CocoSign[.]com, a website that claims to offer an “easier, quicker, safer eSignature solution for small and medium-sized businesses.” Incidentally, the same photo for Stephen Curry #6 is also used in this “article” for #22 Jake Smith, who is named as the owner of a different company.

Mr. Curry’s LinkedIn profile shows a young man seated at a table in front of a laptop, but an online image search shows this is another stock photo. Cocosign[.]com was registered in June 2020 via Alibaba Cloud Beijing. No ownership details are available in the domain registration records.

Listed at #13 in that 30 Entrepreneurs article is Eden Cheng, who is cited as co-founder of PeopleFinderFree[.]com. KrebsOnSecurity could not find a LinkedIn profile for Ms. Cheng, but a search on her profile image from that Entrepreneurs article shows the same photo for sale at Shutterstock and other stock photo sites.

DomainTools says PeopleFinderFree was registered through Alibaba Cloud, Beijing. Attempts to purchase reports through PeopleFinderFree produce a notice saying the full report is only available via Spokeo.com.

Lynda Fairly is Entrepreneur #24, and she is quoted as co-founder of Numlooker[.]com, a domain registered in April 2021 through Alibaba in China. Searches for people on Numlooker forward visitors to Spokeo.

The photo next to Ms. Fairly’s quote in Entrepreneurs matches that of a LinkedIn profile for Lynda Fairly. But a search on that photo shows this same portrait has been used by many other identities and names, including a woman from the United Kingdom who’s a cancer survivor and mother of five; a licensed marriage and family therapist in Canada; a software security engineer at Quora; a journalist on Twitter/X; and a marketing expert in Canada.

Cocofinder[.]com is a people-search service that launched in Sept. 2019, through Alibaba in China. Cocofinder lists its market officer as Harriet Chan, but Ms. Chan’s LinkedIn profile is just as sparse on work history as the other people-search owners mentioned already. An image search online shows that outside of LinkedIn, the profile photo for Ms. Chan has only ever appeared in articles at pay-to-play media sites, like this one from outbackteambuilding.com.

Perhaps because Cocodoc and Cocosign both sell software services, they are actually tied to a physical presence in the real world — in Singapore (15 Scotts Rd. #03-12 15, Singapore). But it’s difficult to discern much from this address alone.

Who’s behind all this people-search chicanery? A January 2024 review of various people-search services at the website techjury.com states that Cocofinder is a wholly-owned subsidiary of a Chinese company called Shenzhen Duiyun Technology Co.

“Though it only finds results from the United States, users can choose between four main search methods,” Techjury explains. Those include people search, phone, address and email lookup. This claim is supported by a Reddit post from three years ago, wherein the Reddit user “ProtectionAdvanced” named the same Chinese company.

Is Shenzhen Duiyun Technology Co. responsible for all these phony profiles? How many more fake companies and profiles are connected to this scheme? KrebsOnSecurity found other examples that didn’t appear directly tied to other fake executives listed here, but which nevertheless are registered through Alibaba and seek to drive traffic to Spokeo and other data brokers. For example, there’s the winsome Daniela Sawyer, founder of FindPeopleFast[.]net, whose profile is flogged in paid stories at entrepreneur.org.

Google currently turns up nothing else for in a search for Shenzhen Duiyun Technology Co. Please feel free to sound off in the comments if you have any more information about this entity, such as how to contact it. Or reach out directly at krebsonsecurity @ gmail.com.

ANALYSIS

It appears the purpose of this network is to conceal the location of people in China who are seeking to generate affiliate commissions when someone visits one of their sites and purchases a people-search report at Spokeo, for example. And it is clear that Spokeo and others have created incentives wherein anyone can effectively white-label their reports, and thereby make money brokering access to peoples’ personal information.

Spokeo’s Wikipedia page says the company was founded in 2006 by four graduates from Stanford University. Spokeo co-founder and current CEO Harrison Tang has not yet responded to requests for comment.

Intelius is owned by San Diego based PeopleConnect Inc., which also owns Classmates.com, USSearch, TruthFinder and Instant Checkmate. PeopleConnect Inc. in turn is owned by H.I.G. Capital, a $60 billion private equity firm. Requests for comment were sent to H.I.G. Capital. This story will be updated if they respond.

BeenVerified is owned by a New York City based holding company called The Lifetime Value Co., a marketing and advertising firm whose brands include PeopleLooker, NeighborWho, Ownerly, PeopleSmart, NumberGuru, and Bumper, a car history site.

Ross Cohen, chief operating officer at The Lifetime Value Co., said it’s likely the network of suspicious people-finder sites was set up by an affiliate. Cohen said Lifetime Value would investigate to determine if this particular affiliate was driving them any sign-ups.

All of the above people-search services operate similarly. When you find the person you’re looking for, you are put through a lengthy (often 10-20 minute) series of splash screens that require you to agree that these reports won’t be used for employment screening or in evaluating new tenant applications. Still more prompts ask if you are okay with seeing “potentially shocking” details about the subject of the report, including arrest histories and photos.

Only at the end of this process does the site disclose that viewing the report in question requires signing up for a monthly subscription, which is typically priced around $35. Exactly how and from where these major people-search websites are getting their consumer data — and customers — will be the subject of further reporting here.

The main reason these various people-search sites require you to affirm that you won’t use their reports for hiring or vetting potential tenants is that selling reports for those purposes would classify these firms as consumer reporting agencies (CRAs) and expose them to regulations under the Fair Credit Reporting Act (FCRA).

These data brokers do not want to be treated as CRAs, and for this reason their people search reports typically don’t include detailed credit histories, financial information, or full Social Security Numbers (Radaris reports include the first six digits of one’s SSN).

But in September 2023, the U.S. Federal Trade Commission found that TruthFinder and Instant Checkmate were trying to have it both ways. The FTC levied a $5.8 million penalty against the companies for allegedly acting as CRAs because they assembled and compiled information on consumers into background reports that were marketed and sold for employment and tenant screening purposes.

The FTC also found TruthFinder and Instant Checkmate deceived users about background report accuracy. The FTC alleges these companies made millions from their monthly subscriptions using push notifications and marketing emails that claimed that the subject of a background report had a criminal or arrest record, when the record was merely a traffic ticket.

The FTC said both companies deceived customers by providing “Remove” and “Flag as Inaccurate” buttons that did not work as advertised. Rather, the “Remove” button removed the disputed information only from the report as displayed to that customer; however, the same item of information remained visible to other customers who searched for the same person.

The FTC also said that when a customer flagged an item in the background report as inaccurate, the companies never took any steps to investigate those claims, to modify the reports, or to flag to other customers that the information had been disputed.

There are a growing number of online reputation management companies that offer to help customers remove their personal information from people-search sites and data broker databases. There are, no doubt, plenty of honest and well-meaning companies operating in this space, but it has been my experience that a great many people involved in that industry have a background in marketing or advertising — not privacy.

Also, some so-called data privacy companies may be wolves in sheep’s clothing. On March 14, KrebsOnSecurity published an abundance of evidence indicating that the CEO and founder of the data privacy company OneRep.com was responsible for launching dozens of people-search services over the years.

Finally, some of the more popular people-search websites are notorious for ignoring requests from consumers seeking to remove their information, regardless of which reputation or removal service you use. Some force you to create an account and provide more information before you can remove your data. Even then, the information you worked hard to remove may simply reappear a few months later.

This aptly describes countless complaints lodged against the data broker and people search giant Radaris. On March 8, KrebsOnSecurity profiled the co-founders of Radaris, two Russian brothers in Massachusetts who also operate multiple Russian-language dating services and affiliate programs.

The truth is that these people-search companies will continue to thrive unless and until Congress begins to realize it’s time for some consumer privacy and data protection laws that are relevant to life in the 21st century. Duke University adjunct professor Justin Sherman says virtually all state privacy laws exempt records that might be considered “public” or “government” documents, including voting registries, property filings, marriage certificates, motor vehicle records, criminal records, court documents, death records, professional licenses, bankruptcy filings, and more.

“Consumer privacy laws in California, Colorado, Connecticut, Delaware, Indiana, Iowa, Montana, Oregon, Tennessee, Texas, Utah, and Virginia all contain highly similar or completely identical carve-outs for ‘publicly available information’ or government records,” Sherman said.

A Close Up Look at the Consumer Data Broker Radaris

If you live in the United States, the data broker Radaris likely knows a great deal about you, and they are happy to sell what they know to anyone. But how much do we know about Radaris? Publicly available data indicates that in addition to running a dizzying array of people-search websites, the co-founders of Radaris operate multiple Russian-language dating services and affiliate programs. It also appears many of their businesses have ties to a California marketing firm that works with a Russian state-run media conglomerate currently sanctioned by the U.S. government.

Formed in 2009, Radaris is a vast people-search network for finding data on individuals, properties, phone numbers, businesses and addresses. Search for any American’s name in Google and the chances are excellent that a listing for them at Radaris.com will show up prominently in the results.

Radaris reports typically bundle a substantial amount of data scraped from public and court documents, including any current or previous addresses and phone numbers, known email addresses and registered domain names. The reports also list address and phone records for the target’s known relatives and associates. Such information could be useful if you were trying to determine the maiden name of someone’s mother, or successfully answer a range of other knowledge-based authentication questions.

Currently, consumer reports advertised for sale at Radaris.com are being fulfilled by a different people-search company called TruthFinder. But Radaris also operates a number of other people-search properties — like Centeda.com — that sell consumer reports directly and behave almost identically to TruthFinder: That is, reel the visitor in with promises of detailed background reports on people, and then charge a $34.99 monthly subscription fee just to view the results.

The Better Business Bureau (BBB) assigns Radaris a rating of “F” for consistently ignoring consumers seeking to have their information removed from Radaris’ various online properties. Of the 159 complaints detailed there in the last year, several were from people who had used third-party identity protection services to have their information removed from Radaris, only to receive a notice a few months later that their Radaris record had been restored.

What’s more, Radaris’ automated process for requesting the removal of your information requires signing up for an account, potentially providing more information about yourself that the company didn’t already have (see screenshot above).

Radaris has not responded to requests for comment.

Radaris, TruthFinder and others like them all force users to agree that their reports will not be used to evaluate someone’s eligibility for credit, or a new apartment or job. This language is so prominent in people-search reports because selling reports for those purposes would classify these firms as consumer reporting agencies (CRAs) and expose them to regulations under the Fair Credit Reporting Act (FCRA).

These data brokers do not want to be treated as CRAs, and for this reason their people search reports typically do not include detailed credit histories, financial information, or full Social Security Numbers (Radaris reports include the first six digits of one’s SSN).

But in September 2023, the U.S. Federal Trade Commission found that TruthFinder and another people-search service Instant Checkmate were trying to have it both ways. The FTC levied a $5.8 million penalty against the companies for allegedly acting as CRAs because they assembled and compiled information on consumers into background reports that were marketed and sold for employment and tenant screening purposes.

The FTC also found TruthFinder and Instant Checkmate deceived users about background report accuracy. The FTC alleges these companies made millions from their monthly subscriptions using push notifications and marketing emails that claimed that the subject of a background report had a criminal or arrest record, when the record was merely a traffic ticket.

“All the while, the companies touted the accuracy of their reports in online ads and other promotional materials, claiming that their reports contain “the MOST ACCURATE information available to the public,” the FTC noted. The FTC says, however, that all the information used in their background reports is obtained from third parties that expressly disclaim that the information is accurate, and that TruthFinder and Instant Checkmate take no steps to verify the accuracy of the information.

The FTC said both companies deceived customers by providing “Remove” and “Flag as Inaccurate” buttons that did not work as advertised. Rather, the “Remove” button removed the disputed information only from the report as displayed to that customer; however, the same item of information remained visible to other customers who searched for the same person.

The FTC also said that when a customer flagged an item in the background report as inaccurate, the companies never took any steps to investigate those claims, to modify the reports, or to flag to other customers that the information had been disputed.

WHO IS RADARIS?

According to Radaris’ profile at the investor website Pitchbook.com, the company’s founder and “co-chief executive officer” is a Massachusetts resident named Gary Norden, also known as Gary Nard.

An analysis of email addresses known to have been used by Mr. Norden shows he is a native Russian man whose real name is Igor Lybarsky (also spelled Lubarsky). Igor’s brother Dmitry, who goes by “Dan,” appears to be the other co-CEO of Radaris. Dmitry Lybarsky’s Facebook/Meta account says he was born in March 1963.

Indirectly or directly, the Lybarskys own multiple properties in both Sherborn and Wellesley, Mass. However, the Radaris website is operated by an offshore entity called Bitseller Expert Ltd, which is incorporated in Cyprus. Neither Lybarsky brother responded to requests for comment.

A review of the domain names registered by Gary Norden shows that beginning in the early 2000s, he and Dan built an e-commerce empire by marketing prepaid calling cards and VOIP services to Russian expatriates who are living in the United States and seeking an affordable way to stay in touch with loved ones back home.

In 2012, the main company in charge of providing those calling services — Wellesley Hills, Mass-based Unipoint Technology Inc. — was fined $179,000 by the U.S. Federal Communications Commission, which said Unipoint never applied for a license to provide international telecommunications services.

DomainTools.com shows the email address gnard@unipointtech.com is tied to 137 domains, including radaris.com. DomainTools also shows that the email addresses used by Gary Norden for more than two decades — epop@comby.com, gary@barksy.com and gary1@eprofit.com, among others — appear in WHOIS registration records for an entire fleet of people-search websites, including: centeda.com, virtory.com, clubset.com, kworld.com, newenglandfacts.com, and pub360.com.

Still more people-search platforms tied to Gary Norden– like publicreports.com and arrestfacts.com — currently funnel interested customers to third-party search companies, such as TruthFinder and PersonTrust.com.

The email addresses used by Gary Nard/Gary Norden are also connected to a slew of data broker websites that sell reports on businesses, real estate holdings, and professionals, including bizstanding.com, homemetry.com, trustoria.com, homeflock.com, rehold.com, difive.com and projectlab.com.

AFFILIATE & ADULT

Domain records indicate that Gary and Dan for many years operated a now-defunct pay-per-click affiliate advertising network called affiliate.ru. That entity used domain name servers tied to the aforementioned domains comby.com and eprofit.com, as did radaris.ru.

Comby.com used to be a Russian language social media network that looked a great deal like Facebook. The domain now forwards visitors to Privet.ru (“hello” in Russian), a dating site that claims to have 5 million users. Privet.ru says it belongs to a company called Dating Factory, which lists offices in Switzerland. Privet.ru uses the Gary Norden domain eprofit.com for its domain name servers.

Dating Factory’s website says it sells “powerful dating technology” to help customers create unique or niche dating websites. A review of the sample images available on the Dating Factory homepage suggests the term “dating” in this context refers to adult websites. Dating Factory also operates a community called FacebookOfSex, as well as the domain analslappers.com.

RUSSIAN AMERICA

Email addresses for the Comby and Eprofit domains indicate Gary Norden operates an entity in Wellesley Hills, Mass. called RussianAmerican Holding Inc. (russianamerica.com). This organization is listed as the owner of the domain newyork.ru, which is a site dedicated to orienting newcomers from Russia to the Big Apple.

Newyork.ru’s terms of service refer to an international calling card company called ComFi Inc. (comfi.com) and list an address as PO Box 81362 Wellesley Hills, Ma. Other sites that include this address are russianamerica.com, russianboston.com, russianchicago.com, russianla.com, russiansanfran.com, russianmiami.com, russiancleveland.com and russianseattle.com (currently offline).

ComFi is tied to Comfibook.com, which was a search aggregator website that collected and published data from many online and offline sources, including phone directories, social networks, online photo albums, and public records.

AMERICAN RUSSIAN MEDIA

Many of the U.S. city-specific online properties apparently tied to Gary Norden include phone numbers on their contact pages for a pair of Russian media and advertising firms based in southern California. The phone number 323-874-8211 appears on the websites russianla.com, russiasanfran.com, and rosconcert.com, which sells tickets to theater events performed in Russian.

Historic domain registration records from DomainTools show rosconcert.com was registered in 2003 to Unipoint Technologies — the same company fined by the FCC for not having a license. Rosconcert.com also lists the phone number 818-377-2101.

A phone number just a few digits away — 323-874-8205 — appears as a point of contact on newyork.ru, russianmiami.com, russiancleveland.com, and russianchicago.com. A search in Google shows this 82xx number range — and the 818-377-2101 number — belong to two different entities at the same UPS Store mailbox in Tarzana, Calif: American Russian Media Inc. (armediacorp.com), and Lamedia.biz.

Armediacorp.com is the home of FACT Magazine, a glossy Russian-language publication put out jointly by the American-Russian Business Council, the Hollywood Chamber of Commerce, and the West Hollywood Chamber of Commerce.

Lamedia.biz says it is an international media organization with more than 25 years of experience within the Russian-speaking community on the West Coast. The site advertises FACT Magazine and the Russian state-owned media outlet Channel One. Clicking the Channel One link on the homepage shows Lamedia.biz offers to submit advertising spots that can be shown to Channel One viewers. The price for a basic ad is listed at $500.

In May 2022, the U.S. government levied financial sanctions against Channel One that bar US companies or citizens from doing business with the company.

LEGAL ACTIONS AGAINST RADARIS

In 2014, a group of people sued Radaris in a class-action lawsuit claiming the company’s practices violated the Fair Credit Reporting Act. Court records indicate the defendants never showed up in court to dispute the claims, and as a result the judge eventually awarded the plaintiffs a default judgement and ordered the company to pay $7.5 million.

But the plaintiffs in that civil case had a difficult time collecting on the court’s ruling. In response, the court ordered the radaris.com domain name (~9.4M monthly visitors) to be handed over to the plaintiffs.

However, in 2018 Radaris was able to reclaim their domain on a technicality. Attorneys for the company argued that their clients were never named as defendants in the original lawsuit, and so their domain could not legally be taken away from them in a civil judgment.

“Because our clients were never named as parties to the litigation, and were never served in the litigation, the taking of their property without due process is a violation of their rights,” Radaris’ attorneys argued.

In October 2023, an Illinois resident filed a class-action lawsuit against Radaris for allegedly using people’s names for commercial purposes, in violation of the Illinois Right of Publicity Act.

On Feb. 8, 2024, a company called Atlas Data Privacy Corp. sued Radaris LLC for allegedly violating “Daniel’s Law,” a statute that allows New Jersey law enforcement, government personnel, judges and their families to have their information completely removed from people-search services and commercial data brokers. Atlas has filed at least 140 similar Daniel’s Law complaints against data brokers recently.

Daniel’s Law was enacted in response to the death of 20-year-old Daniel Anderl, who was killed in a violent attack targeting a federal judge (his mother). In July 2020, a disgruntled attorney who had appeared before U.S. District Judge Esther Salas disguised himself as a Fedex driver, went to her home and shot and killed her son (the judge was unharmed and the assailant killed himself).

Earlier this month, The Record reported on Atlas Data Privacy’s lawsuit against LexisNexis Risk Data Management, in which the plaintiffs representing thousands of law enforcement personnel in New Jersey alleged that after they asked for their information to remain private, the data broker retaliated against them by freezing their credit and falsely reporting them as identity theft victims.

Another data broker sued by Atlas Data Privacy — pogodata.com — announced on Mar. 1 that it was likely shutting down because of the lawsuit.

“The matter is far from resolved but your response motivates us to try to bring back most of the names while preserving redaction of the 17,000 or so clients of the redaction company,” the company wrote. “While little consolation, we are not alone in the suit – the privacy company sued 140 property-data sites at the same time as PogoData.”

Atlas says their goal is convince more states to pass similar laws, and to extend those protections to other groups such as teachers, healthcare personnel and social workers. Meanwhile, media law experts say they’re concerned that enacting Daniel’s Law in other states would limit the ability of journalists to hold public officials accountable, and allow authorities to pursue criminals charges against media outlets that publish the same type of public and governments records that fuel the people-search industry.

PEOPLE-SEARCH CARVE-OUTS

There are some pending changes to the US legal and regulatory landscape that could soon reshape large swaths of the data broker industry. But experts say it is unlikely that any of these changes will affect people-search companies like Radaris.

On Feb. 28, 2024, the White House issued an executive order that directs the U.S. Department of Justice (DOJ) to create regulations that would prevent data brokers from selling or transferring abroad certain data types deemed too sensitive, including genomic and biometric data, geolocation and financial data, as well as other as-yet unspecified personal identifiers. The DOJ this week published a list of more than 100 questions it is seeking answers to regarding the data broker industry.

In August 2023, the Consumer Financial Protection Bureau (CFPB) announced it was undertaking new rulemaking related to data brokers.

Justin Sherman, an adjunct professor at Duke University, said neither the CFPB nor White House rulemaking will likely address people-search brokers because these companies typically get their information by scouring federal, state and local government records. Those government files include voting registries, property filings, marriage certificates, motor vehicle records, criminal records, court documents, death records, professional licenses, bankruptcy filings, and more.

“These dossiers contain everything from individuals’ names, addresses, and family information to data about finances, criminal justice system history, and home and vehicle purchases,” Sherman wrote in an October 2023 article for Lawfare. “People search websites’ business pitch boils down to the fact that they have done the work of compiling data, digitizing it, and linking it to specific people so that it can be searched online.”

Sherman said while there are ongoing debates about whether people search data brokers have legal responsibilities to the people about whom they gather and sell data, the sources of this information — public records — are completely carved out from every single state consumer privacy law.

“Consumer privacy laws in California, Colorado, Connecticut, Delaware, Indiana, Iowa, Montana, Oregon, Tennessee, Texas, Utah, and Virginia all contain highly similar or completely identical carve-outs for ‘publicly available information’ or government records,” Sherman wrote. “Tennessee’s consumer data privacy law, for example, stipulates that “personal information,” a cornerstone of the legislation, does not include ‘publicly available information,’ defined as:

“…information that is lawfully made available through federal, state, or local government records, or information that a business has a reasonable basis to believe is lawfully made available to the general public through widely distributed media, by the consumer, or by a person to whom the consumer has disclosed the information, unless the consumer has restricted the information to a specific audience.”

Sherman said this is the same language as the carve-out in the California privacy regime, which is often held up as the national leader in state privacy regulations. He said with a limited set of exceptions for survivors of stalking and domestic violence, even under California’s newly passed Delete Act — which creates a centralized mechanism for consumers to ask some third-party data brokers to delete their information — consumers across the board cannot exercise these rights when it comes to data scraped from property filings, marriage certificates, and public court documents, for example.

“With some very narrow exceptions, it’s either extremely difficult or impossible to compel these companies to remove your information from their sites,” Sherman told KrebsOnSecurity. “Even in states like California, every single consumer privacy law in the country completely exempts publicly available information.”

Below is a mind map that helped KrebsOnSecurity track relationships between and among the various organizations named in the story above:

Calendar Meeting Links Used to Spread Mac Malware

Malicious hackers are targeting people in the cryptocurrency space in attacks that start with a link added to the target’s calendar at Calendly, a popular application for scheduling appointments and meetings. The attackers impersonate established cryptocurrency investors and ask to schedule a video conference call. But clicking the meeting link provided by the scammers prompts the user to run a script that quietly installs malware on macOS systems.

KrebsOnSecurity recently heard from a reader who works at a startup that is seeking investment for building a new blockchain platform for the Web. The reader spoke on condition that their name not be used in this story, so for the sake of simplicity we’ll call him Doug.

Being in the cryptocurrency scene, Doug is also active on the instant messenger platform Telegram. Earlier this month, Doug was approached by someone on Telegram whose profile name, image and description said they were Ian Lee, from Signum Capital, a well-established investment firm based in Singapore. The profile also linked to Mr. Lee’s Twitter/X account, which features the same profile image.

The investor expressed interest in financially supporting Doug’s startup, and asked if Doug could find time for a video call to discuss investment prospects. Sure, Doug said, here’s my Calendly profile, book a time and we’ll do it then.

When the day and time of the scheduled meeting with Mr. Lee arrived, Doug clicked the meeting link in his calendar but nothing happened. Doug then messaged the Mr. Lee account on Telegram, who said there was some kind of technology issue with the video platform, and that their IT people suggested using a different meeting link.

Doug clicked the new link, but instead of opening up a videoconference app, a message appeared on his Mac saying the video service was experiencing technical difficulties.

“Some of our users are facing issues with our service,” the message read. “We are actively working on fixing these problems. Please refer to this script as a temporary solution.”

Doug said he ran the script, but nothing appeared to happen after that, and the videoconference application still wouldn’t start. Mr. Lee apologized for the inconvenience and said they would have to reschedule their meeting, but he never responded to any of Doug’s follow-up messages.

It didn’t dawn on Doug until days later that the missed meeting with Mr. Lee might have been a malware attack. Going back to his Telegram client to revisit the conversation, Doug discovered his potential investor had deleted the meeting link and other bits of conversation from their shared chat history.

In a post to its Twitter/X account last month, Signum Capital warned that a fake profile pretending to be their employee Mr. Lee was trying to scam people on Telegram.

The file that Doug ran is a simple Apple Script (file extension “.scpt”) that downloads and executes a malicious trojan made to run on macOS systems. Unfortunately for us, Doug freaked out after deciding he’d been tricked — backing up his important documents, changing his passwords, and then reinstalling macOS on his computer. While this a perfectly sane response, it means we don’t have the actual malware that was pushed to his Mac by the script.

But Doug does still have a copy of the malicious script that was downloaded from clicking the meeting link (the online host serving that link is now offline). A search in Google for a string of text from that script turns up a December 2023 blog post from cryptocurrency security firm SlowMist about phishing attacks on Telegram from North Korean state-sponsored hackers.

“When the project team clicks the link, they encounter a region access restriction,” SlowMist wrote. “At this point, the North Korean hackers coax the team into downloading and running a ‘location-modifying’ malicious script. Once the project team complies, their computer comes under the control of the hackers, leading to the theft of funds.”

SlowMist says the North Korean phishing scams used the “Add Custom Link” feature of the Calendly meeting scheduling system on event pages to insert malicious links and initiate phishing attacks.

“Since Calendly integrates well with the daily work routines of most project teams, these malicious links do not easily raise suspicion,” the blog post explains. “Consequently, the project teams may inadvertently click on these malicious links, download, and execute malicious code.”

SlowMist said the malware downloaded by the malicious link in their case comes from a North Korean hacking group dubbed “BlueNoroff, which Kaspersky Labs says is a subgroup of the Lazarus hacking group.

“A financially motivated threat actor closely connected with Lazarus that targets banks, casinos, fin-tech companies, POST software and cryptocurrency businesses, and ATMs,” Kaspersky wrote of BlueNoroff in Dec. 2023.

The North Korean regime is known to use stolen cryptocurrencies to fund its military and other state projects. A recent report from Recorded Future finds the Lazarus Group has stolen approximately $3 billion in cryptocurrency over the past six years.

While there is still far more malware out there today targeting Microsoft Windows PCs, the prevalence of information-stealing trojans aimed at macOS users is growing at a steady clip. MacOS computers include X-Protect, Apple’s built-in antivirus technology. But experts say attackers are constantly changing the appearance and behavior of their malware to evade X-Protect.

“Recent updates to macOS’s XProtect signature database indicate that Apple are aware of the problem, but early 2024 has already seen a number of stealer families evade known signatures,” security firm SentinelOne wrote in January.

According to Chris Ueland from the threat hunting platform Hunt.io, the Internet address of the fake meeting website Doug was tricked into visiting (104.168.163,149) hosts or very recently hosted about 75 different domain names, many of which invoke words associated with videoconferencing or cryptocurrency. Those domains indicate this North Korean hacking group is hiding behind a number of phony crypto firms, like the six-month-old website for Cryptowave Capital (cryptowave[.]capital).

In a statement shared with KrebsOnSecurity, Calendly said it was aware of these types of social engineering attacks by cryptocurrency hackers.

“To help prevent these kinds of attacks, our security team and partners have implemented a service to automatically detect fraud and impersonations that could lead to social engineering,” the company said. “We are also actively scanning content for all our customers to catch these types of malicious links and to prevent hackers earlier on. Additionally, we intend to add an interstitial page warning users before they’re redirected away from Calendly to other websites. Along with the steps we’ve taken, we recommend users stay vigilant by keeping their software secure with running the latest updates and verifying suspicious links through tools like VirusTotal to alert them of possible malware. We are continuously strengthening the cybersecurity of our platform to protect our customers.”

The increasing frequency of new Mac malware is a good reminder that Mac users should not depend on security software and tools to flag malicious files, which are frequently bundled with or disguised as legitimate software.

As KrebsOnSecurity has advised Windows users for years, a good rule of safety to live by is this: If you didn’t go looking for it, don’t install it. Following this mantra heads off a great deal of malware attacks, regardless of the platform used. When you do decide to install a piece of software, make sure you are downloading it from the original source, and then keep it updated with any new security fixes.

On that last front, I’ve found it’s a good idea not to wait until the last minute to configure my system before joining a scheduled videoconference call. Even if the call uses software that is already on my computer, it is often the case that software updates are required before the program can be used, and I’m one of those weird people who likes to review any changes to the software maker’s privacy policies or user agreements before choosing to install updates.

Most of all, verify new contacts from strangers before accepting anything from them. In this case, had Doug simply messaged Mr. Lee’s real account on Twitter/X or contacted Signum Capital directly, he would discovered that the real Mr. Lee never asked for a meeting.

If you’re approached in a similar scheme, the response from the would-be victim documented in the SlowMist blog post is probably the best.

Update: Added comment from Calendly.

New Leak Shows Business Side of China’s APT Menace

A new data leak that appears to have come from one of China’s top private cybersecurity firms provides a rare glimpse into the commercial side of China’s many state-sponsored hacking groups. Experts say the leak illustrates how Chinese government agencies increasingly are contracting out foreign espionage campaigns to the nation’s burgeoning and highly competitive cybersecurity industry.

A large cache of more than 500 documents published to GitHub last week indicate the records come from i-SOON, a technology company headquartered in Shanghai that is perhaps best known for providing cybersecurity training courses throughout China. But the leaked documents, which include candid employee chat conversations and images, show a less public side of i-SOON, one that frequently initiates and sustains cyberespionage campaigns commissioned by various Chinese government agencies.

The leaked documents suggest i-SOON employees were responsible for a raft of cyber intrusions over many years, infiltrating government systems in the United Kingdom and countries throughout Asia. Although the cache does not include raw data stolen from cyber espionage targets, it features numerous documents listing the level of access gained and the types of data exposed in each intrusion.

Security experts who reviewed the leaked data say they believe the information is legitimate, and that i-SOON works closely with China’s Ministry of Public Security and the military. In 2021, the Sichuan provincial government named i-SOON as one of “the top 30 information security companies.”

“The leak provides some of the most concrete details seen publicly to date, revealing the maturing nature of China’s cyber espionage ecosystem,” said Dakota Cary, a China-focused consultant at the security firm SentinelOne. “It shows explicitly how government targeting requirements drive a competitive marketplace of independent contractor hackers-for-hire.”

Mei Danowski is a former intelligence analyst and China expert who now writes about her research in a Substack publication called Natto Thoughts. Danowski said i-SOON has achieved the highest secrecy classification that a non-state-owned company can receive, which qualifies the company to conduct classified research and development related to state security.

i-SOON’s “business services” webpage states that the company’s offerings include public security, anti-fraud, blockchain forensics, enterprise security solutions, and training. Danowski said that in 2013, i-SOON established a department for research on developing new APT network penetration methods.

APT stands for Advanced Persistent Threat, a term that generally refers to state-sponsored hacking groups. Indeed, among the documents apparently leaked from i-SOON is a sales pitch slide boldly highlighting the hacking prowess of the company’s “APT research team” (see screenshot above).

The leaked documents included a lengthy chat conversation between the company’s founders, who repeatedly discuss flagging sales and the need to secure more employees and government contracts. Danowski said the CEO of i-SOON, Wu Haibo (“Shutdown” in the leaked chats) is a well-known first-generation red hacker or “Honker,” and an early member of Green Army — the very first Chinese hacktivist group founded in 1997. Mr. Haibo has not yet responded to a request for comment.

In October 2023, Danowski detailed how i-SOON became embroiled in a software development contract dispute when it was sued by a competing Chinese cybersecurity company called Chengdu 404. In September 2020, the U.S. Department of Justice unsealed indictments against multiple Chengdu 404 employees, charging that the company was a facade that hid more than a decade’s worth of cyber intrusions attributed to a threat actor group known as “APT 41.”

Danowski said the existence of this legal dispute suggests that Chengdu 404 and i-SOON have or at one time had a business relationship, and that one company likely served as a subcontractor to the other.

“From what they chat about we can see this is a very competitive industry, where companies in this space are constantly poaching each others’ employees and tools,” Danowski said. “The infosec industry is always trying to distinguish [the work] of one APT group from another. But that’s getting harder to do.”

It remains unclear if i-SOON’s work has earned it a unique APT designation. But Will Thomas, a cyber threat intelligence researcher at Equinix, found an Internet address in the leaked data that corresponds to a domain flagged in a 2019 Citizen Lab report about one-click mobile phone exploits that were being used to target groups in Tibet. The 2019 report referred to the threat actor behind those attacks as an APT group called Poison Carp.

Several images and chat records in the data leak suggest i-SOON’s clients periodically gave the company a list of targets they wanted to infiltrate, but sometimes employees confused the instructions. One screenshot shows a conversation in which an employee tells his boss they’ve just hacked one of the universities on their latest list, only to be told that the victim in question was not actually listed as a desired target.

The leaked chats show i-SOON continuously tried to recruit new talent by hosting a series of hacking competitions across China. It also performed charity work, and sought to engage employees and sustain morale with various team-building events.

However, the chats include multiple conversations between employees commiserating over long hours and low pay. The overall tone of the discussions indicates employee morale was quite low and that the workplace environment was fairly toxic. In several of the conversations, i-SOON employees openly discuss with their bosses how much money they just lost gambling online with their mobile phones while at work.

Danowski believes the i-SOON data was probably leaked by one of those disgruntled employees.

“This was released the first working day after the Chinese New Year,” Danowski said. “Definitely whoever did this planned it, because you can’t get all this information all at once.”

SentinelOne’s Cary said he came to the same conclusion, noting that the Protonmail account tied to the GitHub profile that published the records was registered a month before the leak, on January 15, 2024.

China’s much vaunted Great Firewall not only lets the government control and limit what citizens can access online, but this distributed spying apparatus allows authorities to block data on Chinese citizens and companies from ever leaving the country.

As a result, China enjoys a remarkable information asymmetry vis-a-vis virtually all other industrialized nations. Which is why this apparent data leak from i-SOON is such a rare find for Western security researchers.

“I was so excited to see this,” Cary said. “Every day I hope for data leaks coming out of China.”

That information asymmetry is at the heart of the Chinese government’s cyberwarfare goals, according to a 2023 analysis by Margin Research performed on behalf of the Defense Advanced Research Projects Agency (DARPA).

“In the area of cyberwarfare, the western governments see cyberspace as a ‘fifth domain’ of warfare,” the Margin study observed. “The Chinese, however, look at cyberspace in the broader context of information space. The ultimate objective is, not ‘control’ of cyberspace, but control of information, a vision that dominates China’s cyber operations.”

The National Cybersecurity Strategy issued by the White House last year singles out China as the biggest cyber threat to U.S. interests. While the United States government does contract certain aspects of its cyber operations to companies in the private sector, it does not follow China’s example in promoting the wholesale theft of state and corporate secrets for the commercial benefit of its own private industries.

Dave Aitel, a co-author of the Margin Research report and former computer scientist at the U.S. National Security Agency, said it’s nice to see that Chinese cybersecurity firms have to deal with all of the same contracting headaches facing U.S. companies seeking work with the federal government.

“This leak just shows there’s layers of contractors all the way down,” Aitel said. “It’s pretty fun to see the Chinese version of it.”

Feds Seize LockBit Ransomware Websites, Offer Decryption Tools, Troll Affiliates

U.S. and U.K. authorities have seized the darknet websites run by LockBit, a prolific and destructive ransomware group that has claimed more than 2,000 victims worldwide and extorted over $120 million in payments. Instead of listing data stolen from ransomware victims who didn’t pay, LockBit’s victim shaming website now offers free recovery tools, as well as news about arrests and criminal charges involving LockBit affiliates.

Dubbed “Operation Cronos,” the law enforcement action involved the seizure of nearly three-dozen servers; the arrest of two alleged LockBit members; the unsealing of two indictments; the release of a free LockBit decryption tool; and the freezing of more than 200 cryptocurrency accounts thought to be tied to the gang’s activities.

LockBit members have executed attacks against thousands of victims in the United States and around the world, according to the U.S. Department of Justice (DOJ). First surfacing in September 2019, the gang is estimated to have made hundreds of millions of U.S. dollars in ransom demands, and extorted over $120 million in ransom payments.

LockBit operated as a ransomware-as-a-service group, wherein the ransomware gang takes care of everything from the bulletproof hosting and domains to the development and maintenance of the malware. Meanwhile, affiliates are solely responsible for finding new victims, and can reap 60 to 80 percent of any ransom amount ultimately paid to the group.

A statement on Operation Cronos from the European police agency Europol said the months-long infiltration resulted in the compromise of LockBit’s primary platform and other critical infrastructure, including the takedown of 34 servers in the Netherlands, Germany, Finland, France, Switzerland, Australia, the United States and the United Kingdom. Europol said two suspected LockBit actors were arrested in Poland and Ukraine, but no further information has been released about those detained.

The DOJ today unsealed indictments against two Russian men alleged to be active members of LockBit. The government says Russian national Artur Sungatov used LockBit ransomware against victims in manufacturing, logistics, insurance and other companies throughout the United States.

Ivan Gennadievich Kondratyev, a.k.a. “Bassterlord,” allegedly deployed LockBit against targets in the United States, Singapore, Taiwan, and Lebanon. Kondratyev is also charged (PDF) with three criminal counts arising from his alleged use of the Sodinokibi (aka “REvil“) ransomware variant to encrypt data, exfiltrate victim information, and extort a ransom payment from a corporate victim based in Alameda County, California.

With the indictments of Sungatov and Kondratyev, a total of five LockBit affiliates now have been officially charged. In May 2023, U.S. authorities unsealed indictments against two alleged LockBit affiliates, Mikhail “Wazawaka” Matveev and Mikhail Vasiliev.

Vasiliev, 35, of Bradford, Ontario, Canada, is in custody in Canada awaiting extradition to the United States (the complaint against Vasiliev is at this PDF). Matveev remains at large, presumably still in Russia. In January 2022, KrebsOnSecurity published Who is the Network Access Broker ‘Wazawaka,’ which followed clues from Wazawaka’s many pseudonyms and contact details on the Russian-language cybercrime forums back to a 31-year-old Mikhail Matveev from Abaza, RU.

In June 2023, Russian national Ruslan Magomedovich Astamirov was charged in New Jersey for his participation in the LockBit conspiracy, including the deployment of LockBit against victims in Florida, Japan, France, and Kenya. Astamirov is currently in custody in the United States awaiting trial.

LockBit was known to have recruited affiliates that worked with multiple ransomware groups simultaneously, and it’s unclear what impact this takedown may have on competing ransomware affiliate operations. The security firm ProDaft said on Twitter/X that the infiltration of LockBit by investigators provided “in-depth visibility into each affiliate’s structures, including ties with other notorious groups such as FIN7, Wizard Spider, and EvilCorp.”

In a lengthy thread about the LockBit takedown on the Russian-language cybercrime forum XSS, one of the gang’s leaders said the FBI and the U.K.’s National Crime Agency (NCA) had infiltrated its servers using a known vulnerability in PHP, a scripting language that is widely used in Web development.

Several denizens of XSS wondered aloud why the PHP flaw was not flagged by LockBit’s vaunted “Bug Bounty” program, which promised a financial reward to affiliates who could find and quietly report any security vulnerabilities threatening to undermine LockBit’s online infrastructure.

This prompted several XSS members to start posting memes taunting the group about the security failure.

“Does it mean that the FBI provided a pentesting service to the affiliate program?,” one denizen quipped. “Or did they decide to take part in the bug bounty program? :):)”

Federal investigators also appear to be trolling LockBit members with their seizure notices. LockBit’s data leak site previously featured a countdown timer for each victim organization listed, indicating the time remaining for the victim to pay a ransom demand before their stolen files would be published online. Now, the top entry on the shaming site is a countdown timer until the public doxing of “LockBitSupp,” the unofficial spokesperson or figurehead for the LockBit gang.

“Who is LockbitSupp?” the teaser reads. “The $10m question.”

In January 2024, LockBitSupp told XSS forum members he was disappointed the FBI hadn’t offered a reward for his doxing and/or arrest, and that in response he was placing a bounty on his own head — offering $10 million to anyone who could discover his real name.

“My god, who needs me?,” LockBitSupp wrote on Jan. 22, 2024. “There is not even a reward out for me on the FBI website. By the way, I want to use this chance to increase the reward amount for a person who can tell me my full name from USD 1 million to USD 10 million. The person who will find out my name, tell it to me and explain how they were able to find it out will get USD 10 million. Please take note that when looking for criminals, the FBI uses unclear wording offering a reward of UP TO USD 10 million; this means that the FBI can pay you USD 100, because technically, it’s an amount UP TO 10 million. On the other hand, I am willing to pay USD 10 million, no more and no less.”

Mark Stockley, cybersecurity evangelist at the security firm Malwarebytes, said the NCA is obviously trolling the LockBit group and LockBitSupp.

“I don’t think this is an accident—this is how ransomware groups talk to each other,” Stockley said. “This is law enforcement taking the time to enjoy its moment, and humiliate LockBit in its own vernacular, presumably so it loses face.”

In a press conference today, the FBI said Operation Cronos included investigative assistance from the Gendarmerie-C3N in France; the State Criminal Police Office L-K-A and Federal Criminal Police Office in Germany; Fedpol and Zurich Cantonal Police in Switzerland; the National Police Agency in Japan; the Australian Federal Police; the Swedish Police Authority; the National Bureau of Investigation in Finland; the Royal Canadian Mounted Police; and the National Police in the Netherlands.

The Justice Department said victims targeted by LockBit should contact the FBI at https://lockbitvictims.ic3.gov/ to determine whether affected systems can be successfully decrypted. In addition, the Japanese Police, supported by Europol, have released a recovery tool designed to recover files encrypted by the LockBit 3.0 Black Ransomware.

From Cybercrime Saul Goodman to the Russian GRU

In 2021, the exclusive Russian cybercrime forum Mazafaka was hacked. The leaked user database shows one of the forum’s founders was an attorney who advised Russia’s top hackers on the legal risks of their work, and what to do if they got caught. A review of this user’s hacker identities shows that during his time on the forums he served as an officer in the special forces of the GRU, the foreign military intelligence agency of the Russian Federation.

Launched in 2001 under the tagline “Network terrorism,” Mazafaka would evolve into one of the most guarded Russian-language cybercrime communities. The forum’s member roster included a Who’s Who of top Russian cybercriminals, and it featured sub-forums for a wide range of cybercrime specialities, including malware, spam, coding and identity theft.

In almost any database leak, the first accounts listed are usually the administrators and early core members. But the Mazafaka user information posted online was not a database file per se, and it was clearly edited, redacted and restructured by whoever released it. As a result, it can be difficult to tell which members are the earliest users.

The original Mazafaka is known to have been launched by a hacker using the nickname “Stalker.” However, the lowest numbered (non-admin) user ID in the Mazafaka database belongs to another individual who used the handle “Djamix,” and the email address djamix@mazafaka[.]ru.

From the forum’s inception until around 2008, Djamix was one of its most active and eloquent contributors. Djamix told forum members he was a lawyer, and nearly all of his posts included legal analyses of various public cases involving hackers arrested and charged with cybercrimes in Russia and abroad.

“Hiding with purely technical parameters will not help in a serious matter,” Djamix advised Maza members in September 2007. “In order to ESCAPE the law, you need to KNOW the law. This is the most important thing. Technical capabilities cannot overcome intelligence and cunning.”

Stalker himself credited Djamix with keeping Mazafaka online for so many years. In a retrospective post published to Livejournal in 2014 titled, “Mazafaka, from conception to the present day,” Stalker said Djamix had become a core member of the community.

“This guy is everywhere,” Stalker said of Djamix. “There’s not a thing on [Mazafaka] that he doesn’t take part in. For me, he is a stimulus-irritant and thanks to him, Maza is still alive. Our rallying force!”

Djamix told other forum denizens he was a licensed attorney who could be hired for remote or in-person consultations, and his posts on Mazafaka and other Russian boards show several hackers facing legal jeopardy likely took him up on this offer.

“I have the right to represent your interests in court,” Djamix said on the Russian-language cybercrime forum Verified in Jan. 2011. “Remotely (in the form of constant support and consultations), or in person – this is discussed separately. As well as the cost of my services.”

WHO IS DJAMIX?

A search on djamix@mazafaka[.]ru at DomainTools.com reveals this address has been used to register at least 10 domain names since 2008. Those include several websites about life in and around Sochi, Russia, the site of the 2014 Winter Olympics, as well as a nearby coastal town called Adler. All of those sites say they were registered to an Aleksei Safronov from Sochi who also lists Adler as a hometown.

The breach tracking service Constella Intelligence finds that the phone number associated with those domains — +7.9676442212 — is tied to a Facebook account for an Aleksei Valerievich Safronov from Sochi. Mr. Safronov’s Facebook profile, which was last updated in October 2022, says his ICQ instant messenger number is 53765. This is the same ICQ number assigned to Djamix in the Mazafaka user database.

A “Djamix” account on the forum privetsochi[.]ru (“Hello Sochi”) says this user was born Oct. 2, 1970, and that his website is uposter[.]ru. This Russian language news site’s tagline is, “We Create Communication,” and it focuses heavily on news about Sochi, Adler, Russia and the war in Ukraine, with a strong pro-Kremlin bent.

Safronov’s Facebook profile also gives his Skype username as “Djamixadler,” and it includes dozens of photos of him dressed in military fatigues along with a regiment of soldiers deploying in fairly remote areas of Russia. Some of those photos date back to 2008.

In several of the images, we can see a patch on the arm of Safronov’s jacket that bears the logo of the Spetsnaz GRU, a special forces unit of the Russian military. According to a 2020 report from the Congressional Research Service, the GRU operates both as an intelligence agency — collecting human, cyber, and signals intelligence — and as a military organization responsible for battlefield reconnaissance and the operation of Russia’s Spetsnaz military commando units.

“In recent years, reports have linked the GRU to some of Russia’s most aggressive and public intelligence operations,” the CRS report explains. “Reportedly, the GRU played a key role in Russia’s occupation of Ukraine’s Crimea region and invasion of eastern Ukraine, the attempted assassination of former Russian intelligence officer Sergei Skripal in the United Kingdom, interference in the 2016 U.S. presidential elections, disinformation and propaganda operations, and some of the world’s most damaging cyberattacks.”

According to the Russia-focused investigative news outlet Meduza, in 2014 the Russian Defense Ministry created its “information-operation troops” for action in “cyber-confrontations with potential adversaries.”

“Later, sources in the Defense Ministry explained that these new troops were meant to ‘disrupt the potential adversary’s information networks,'” Meduza reported in 2018. “Recruiters reportedly went looking for ‘hackers who have had problems with the law.'”

Mr. Safronov did not respond to multiple requests for comment. A 2018 treatise written by Aleksei Valerievich Safronov titled “One Hundred Years of GRU Military Intelligence” explains the significance of the bat in the seal of the GRU.

“One way or another, the bat is an emblem that unites all active and retired intelligence officers; it is a symbol of unity and exclusivity,” Safronov wrote. “And, in general, it doesn’t matter who we’re talking about – a secret GRU agent somewhere in the army or a sniper in any of the special forces brigades. They all did and are doing one very important and responsible thing.”

It’s unclear what role Mr. Safronov plays or played in the GRU, but it seems likely the military intelligence agency would have exploited his considerable technical skills, knowledge and connections on the Russian cybercrime forums.

Searching on Safronov’s domain uposter[.]ru in Constella Intelligence reveals that this domain was used in 2022 to register an account at a popular Spanish-language discussion forum dedicated to helping applicants prepare for a career in the Guardia Civil, one of Spain’s two national police forces. Pivoting on that Russian IP in Constella shows three other accounts were created at the same Spanish user forum around the same date.

Mark Rasch is a former cybercrime prosecutor for the U.S. Department of Justice who now serves as chief legal officer for the New York cybersecurity firm Unit 221B. Rasch said there has always been a close relationship between the GRU and the Russian hacker community, noting that in the early 2000s the GRU was soliciting hackers with the skills necessary to hack US banks in order to procure funds to help finance Russia’s war in Chechnya.

“The guy is heavily hooked into the Russian cyber community, and that’s useful for intelligence services,” Rasch said. “He could have been infiltrating the community to monitor it for the GRU. Or he could just be a guy wearing a military uniform.”

Fla. Man Charged in SIM-Swapping Spree is Key Suspect in Hacker Groups Oktapus, Scattered Spider

On Jan. 9, 2024, U.S. authorities arrested a 19-year-old Florida man charged with wire fraud, aggravated identity theft, and conspiring with others to use SIM-swapping to steal cryptocurrency. Sources close to the investigation tell KrebsOnSecurity the accused was a key member of a criminal hacking group blamed for a string of cyber intrusions at major U.S. technology companies during the summer of 2022.

Prosecutors say Noah Michael Urban of Palm Coast, Fla., stole at least $800,000 from at least five victims between August 2022 and March 2023. In each attack, the victims saw their email and financial accounts compromised after suffering an unauthorized SIM-swap, wherein attackers transferred each victim’s mobile phone number to a new device that they controlled.

The government says Urban went by the aliases “Sosa” and “King Bob,” among others. Multiple trusted sources told KrebsOnSecurity that Sosa/King Bob was a core member of a hacking group behind the 2022 breach at Twilio, a company that provides services for making and receiving text messages and phone calls. Twilio disclosed in Aug. 2022 that an intrusion had exposed a “limited number” of Twilio customer accounts through a sophisticated social engineering attack designed to steal employee credentials.

Shortly after that disclosure, the security firm Group-IB published a report linking the attackers behind the Twilio intrusion to separate breaches at more than 130 organizations, including LastPass, DoorDash, Mailchimp, and Plex. Multiple security firms soon assigned the hacking group the nickname “Scattered Spider.”

Group-IB dubbed the gang by a different name — 0ktapus — which was a nod to how the criminal group phished employees for credentials. The missives asked users to click a link and log in at a phishing page that mimicked their employer’s Okta authentication page. Those who submitted credentials were then prompted to provide the one-time password needed for multi-factor authentication.

0ktapus used newly-registered domains that often included the name of the targeted company, and sent text messages urging employees to click on links to these domains to view information about a pending change in their work schedule. The phishing sites used a Telegram instant message bot to forward any submitted credentials in real-time, allowing the attackers to use the phished username, password and one-time code to log in as that employee at the real employer website.

0ktapus often leveraged information or access gained in one breach to perpetrate another. As documented by Group-IB, the group pivoted from its access to Twilio to attack at least 163 of its customers. Among those was the encrypted messaging app Signal, which said the breach could have let attackers re-register the phone number on another device for about 1,900 users.

Also in August 2022, several employees at email delivery firm Mailchimp provided their remote access credentials to this phishing group. According to an Aug. 12 blog post, the attackers used their access to Mailchimp employee accounts to steal data from 214 customers involved in cryptocurrency and finance.

On August 25, 2022, the password manager service LastPass disclosed a breach in which attackers stole some source code and proprietary LastPass technical information, and weeks later LastPass said an investigation revealed no customer data or password vaults were accessed.

However, on November 30, 2022 LastPass disclosed a far more serious breach that the company said leveraged data stolen in the August breach. LastPass said criminal hackers had stolen encrypted copies of some password vaults, as well as other personal information.

In February 2023, LastPass disclosed that the intrusion involved a highly complex, targeted attack against a DevOps engineer who was one of only four LastPass employees with access to the corporate vault. In that incident, the attackers exploited a security vulnerability in a Plex media server that the employee was running on his home network, and succeeded in installing malicious software that stole passwords and other authentication credentials. The vulnerability exploited by the intruders was patched back in 2020, but the employee never updated his Plex software.

As it happens, Plex announced its own data breach one day before LastPass disclosed its initial August intrusion. On August 24, 2022, Plex’s security team urged users to reset their passwords, saying an intruder had accessed customer emails, usernames and encrypted passwords.

KING BOB’S GRAILS

A review of thousands of messages that Sosa and King Bob posted to several public forums and Discord servers over the past two years shows that the person behind these identities was mainly focused on two things: Sim-swapping, and trading in stolen, unreleased rap music recordings from popular artists.

Indeed, those messages show Sosa/King Bob was obsessed with finding new “grails,” the slang term used in some cybercrime discussion channels to describe recordings from popular artists that have never been officially released. It stands to reason that King Bob was SIM-swapping important people in the music industry to obtain these files, although there is little to support this conclusion from the public chat records available.

“I got the most music in the com,” King Bob bragged in a Discord server in November 2022. “I got thousands of grails.”

King Bob’s chats show he was particularly enamored of stealing the unreleased works of his favorite artists — Lil Uzi Vert, Playboi Carti, and Juice Wrld. When another Discord user asked if he has Eminem grails, King Bob said he was unsure.

“I have two folders,” King Bob explained. “One with Uzi, Carti, Juicewrld. And then I have ‘every other artist.’ Every other artist is unorganized as fuck and has thousands of random shit.”

King Bob’s posts on Discord show he quickly became a celebrity on Leaked[.]cx, one of most active forums for trading, buying and selling unreleased music from popular artists. The more grails that users share with the Leaked[.]cx community, the more their status and access on the forum grows.

And King Bob shared a large number of his purloined tunes with this community. Still others he tried to sell. It’s unclear how many of those sales were ever consummated, but it is not unusual for a prized grail to sell for anywhere from $5,000 to $20,000.

In mid-January 2024, several Leaked[.]cx regulars began complaining that they hadn’t seen King Bob in a while and were really missing his grails. On or around Jan. 11, the same day the Justice Department unsealed the indictment against Urban, Leaked[.]cx started blocking people who were trying to visit the site from the United States.

Days later, frustrated Leaked[.]cx users speculated about what could be the cause of the blockage.

“Probs blocked as part of king bob investigation i think?,” wrote the user “Plsdontarrest.” “Doubt he only hacked US artists/ppl which is why it’s happening in multiple countries.”

FORESHADOWING

On Sept. 21, 2022, KrebsOnSecurity told the story of a “Foreshadow,” the nickname chosen by a Florida teenager who was working for a SIM-swapping crew when he was abducted, beaten and held for a $200,000 ransom. A rival SIM-swapping group claimed that Foreshadow and his associates had robbed them of their fair share of the profits from a recent SIM-swap.

In a video released by his abductors on Telegram, a bloodied, battered Foreshadow was made to say they would kill him unless the ransom was paid.

As I wrote in that story, Foreshadow appears to have served as a “holder” — a term used to describe a low-level member of any SIM-swapping group who agrees to carry out the riskiest and least rewarding role of the crime: Physically keeping and managing the various mobile devices and SIM cards that are used in SIM-swapping scams.

KrebsOnSecurity has since learned that Foreshadow was a holder for a particularly active SIM-swapper who went by “Elijah,” which was another nickname that prosecutors say Urban used.

Shortly after Foreshadow’s hostage video began circulating on Telegram and Discord, multiple known actors in the SIM-swapping space told everyone in the channels to delete any previous messages with Foreshadow, claiming he was fully cooperating with the FBI.

This was not the first time Sosa and his crew were hit with violent attacks from rival SIM-swapping groups. In early 2022, a video surfaced on a popular cybercrime channel purporting to show attackers hurling a brick through a window at an address that matches the spacious and upscale home of Urban’s parents in Sanford, Fl.

“Brickings” are among the “violence-as-a-service” offerings broadly available on many cybercrime channels. SIM-swapping and adjacent cybercrime channels are replete with job offers for in-person assignments and tasks that can be found if one searches for posts titled, “If you live near,” or “IRL job” — short for “in real life” job.

A number of these classified ads are in service of performing brickings, where someone is hired to visit a specific address and toss a brick through the target’s window. Other typical IRL job offers involve tire slashings and even drive-by shootings.

THE COM

Sosa was known to be a top member of the broader cybercriminal community online known as “The Com,” wherein hackers boast loudly about high-profile exploits and hacks that almost invariably begin with social engineering — tricking people over the phone, email or SMS into giving away credentials that allow remote access to corporate internal networks.

Sosa also was active in a particularly destructive group of accomplished criminal SIM-swappers known as “Star Fraud.” Cyberscoop’s AJ Vicens reported last year that individuals within Star Fraud were likely involved in the high-profile Caesars Entertainment an MGM Resorts extortion attacks.

“ALPHV, an established ransomware-as-a-service operation thought to be based in Russia and linked to attacks on dozens of entities, claimed responsibility for Caesars and MGM attacks in a note posted to its website earlier this month,” Vicens wrote. “Experts had said the attacks were the work of a group tracked variously as UNC 3944 or Scattered Spider, which has been described as an affiliate working with ALPHV made up of people in the United States and Britain who excel at social engineering.”

In February 2023, KrebsOnSecurity published data taken from the Telegram channels for Star Fraud and two other SIM-swapping groups showing these crooks focused on SIM-swapping T-Mobile customers, and that they collectively claimed access to T-Mobile on 100 separate occasions over a 7-month period in 2022.

The SIM-swapping groups were able to switch targeted phone numbers to another device on demand because they constantly phished T-Mobile employees into giving up credentials to employee-only tools. In each of those cases the goal was the same: Phish T-Mobile employees for access to internal company tools, and then convert that access into a cybercrime service that could be hired to divert any T-Mobile user’s text messages and phone calls to another device.

Allison Nixon, chief research officer at the New York cybersecurity consultancy Unit 221B, said the increasing brazenness of many Com members is a function of how long it has taken federal authorities to go after guys like Sosa.

“These incidents show what happens when it takes too long for cybercriminals to get arrested,” Nixon said. “If governments fail to prioritize this source of threat, violence originating from the Internet will affect regular people.”

NO FIXED ADDRESS

The Daytona Beach News-Journal reports that Urban was arrested Jan. 9 and his trial is scheduled to begin in the trial term starting March 4 in Jacksonville. The publication said the judge overseeing Urban’s case denied bail because the defendant was a strong flight risk.

At Urban’s arraignment, it emerged that he had no fixed address and had been using an alias to stay at an Airbnb. The judge reportedly said that when a search warrant was executed at Urban’s residence, the defendant was downloading programs to delete computer files.

What’s more, the judge explained, despite telling authorities in May that he would not have any more contact with his co-conspirators and would not engage in cryptocurrency transactions, he did so anyway.

Urban entered a plea of not guilty. Urban’s court-appointed attorney said her client would have no comment at this time.

Prosecutors charged Urban with eight counts of wire fraud, one count of conspiracy to commit wire fraud, and five counts of aggravated identity theft. According to the government, if convicted Urban faces up to 20 years in federal prison on each wire fraud charge. He also faces a minimum mandatory penalty of two years in prison for the aggravated identity offenses, which will run consecutive to any other prison sentence imposed.

Ten Years Later, New Clues in the Target Breach

On Dec. 18, 2013, KrebsOnSecurity broke the news that U.S. retail giant Target was battling a wide-ranging computer intrusion that compromised more than 40 million customer payment cards over the previous month. The malware used in the Target breach included the text string “Rescator,” which also was the handle chosen by the cybercriminal who was selling all of the cards stolen from Target customers. Ten years later, KrebsOnSecurity has uncovered new clues about the real-life identity of Rescator.

Shortly after breaking the Target story, KrebsOnSecurity reported that Rescator appeared to be a hacker from Ukraine. Efforts to confirm my reporting with that individual ended when they declined to answer questions, and after I declined to accept a bribe of $10,000 not to run my story.

That reporting was based on clues from an early Russian cybercrime forum in which a hacker named Rescator — using the same profile image that Rescator was known to use on other forums — claimed to have originally been known as “Helkern,” the nickname chosen by the administrator of a cybercrime forum called Darklife.

KrebsOnSecurity began revisiting the research into Rescator’s real-life identity in 2018, after the U.S. Department of Justice unsealed an indictment that named a different Ukrainian man as Helkern.

It may be helpful to first recap why Rescator is thought to be so closely tied to the Target breach. For starters, the text string “Rescator” was found in some of the malware used in the Target breach. Investigators would later determine that a variant of the malware used in the Target breach was used in 2014 to steal 56 million payment cards from Home Depot customers. And once again, cards stolen in the Home Depot breach were sold exclusively at Rescator’s shops.

On Nov. 25, 2013, two days before Target said the breach officially began, Rescator could be seen in instant messages hiring another forum member to verify 400,000 payment cards that Rescator claimed were freshly stolen.

By the first week of December 2013, Rescator’s online store — rescator[.]la — was selling more than six million payment card records stolen from Target customers. Prior to the Target breach, Rescator had mostly sold much smaller batches of stolen card and identity data, and the website allowed cybercriminals to automate the sending of fraudulent wire transfers to money mules based in Lviv, Ukraine.

Finally, there is some honor among thieves, and in the marketplace for stolen payment card data it is considered poor form to advertise a batch of cards as “yours” if you are merely reselling cards sold to you by a third-party card vendor or thief. When serious stolen payment card shop vendors wish to communicate that a batch of cards is uniquely their handiwork or that of their immediate crew, they refer to it as “our base.” And Rescator was quite clear in his advertisements that these millions of cards were obtained firsthand.

FLASHBACK

The new clues about Rescator’s identity came into focus when I revisited the reporting around an April 2013 story here that identified the author of the OSX Flashback Trojan, an early Mac malware strain that quickly spread to more than 650,000 Mac computers worldwide in 2012.

That story about the Flashback author was possible because a source had obtained a Web browser authentication cookie for a founding member of a Russian cybercrime forum called BlackSEO. Anyone in possession of that cookie could then browse the invite-only BlackSEO forum and read the user’s private messages without having to log in.

The legitimate owner of that BlackSEO user cookie went by the nickname Ika, and Ika’s private messages on the forum showed he was close friends with the Flashback author. At the time, Ika also was the administrator of Pustota[.]pw — a closely-guarded Russian forum that counted among its members some of the world’s most successful and established spammers and malware writers.

For many years, Ika held a key position at one of Russia’s largest Internet service providers, and his (mostly glowing) reputation as a reliable provider of web hosting to the Russian cybercrime community gave him an encyclopedic knowledge about nearly every major player in that scene at the time.

The story on the Flashback author featured redacted screenshots that were taken from Ika’s BlackSEO account (see image above). The day after that story ran, Ika posted a farewell address to his mates, expressing shock and bewilderment over the apparent compromise of his BlackSEO account.

In a lengthy post on April 4, 2013 titled “I DON’T UNDERSTAND ANYTHING,” Ika told Pustota forum members he was so spooked by recent events that he was closing the forum and quitting the cybercrime business entirely. Ika recounted how the Flashback story had come the same week that rival cybercriminals tried to “dox” him (their dox named the wrong individual, but included some of Ika’s more guarded identities).

“It’s no secret that karma farted in my direction,” Ika said at the beginning of his post. Unbeknownst to Ika at the time, his Pustota forum also had been completely hacked that week, and a copy of its database shared with this author.

Ika said the two individuals who tried to dox him did so on an even more guarded Russian language forum — DirectConnection[.]ws, perhaps the most exclusive Russian cybercrime community ever created. New applicants of this forum had to pay a non-refundable deposit, and receive vouches by three established cybercriminals already on the forum. Even if one managed to steal (or guess) a user’s DirectConnection password, the login page could not be reached unless the visitor also possessed a special browser certificate that the forum administrator gave only to approved members.

In no uncertain terms, Ika declared that Rescator went by the nickname MikeMike on DirectConnection:

“I did not want to bring any of this to real life. Especially since I knew the patron of the clowns – specifically Pavel Vrublevsky. Yes, I do state with confidence that the man with the nickname Rescator a.k.a. MikeMike with his partner Pipol have been Pavel Vrublevsky’s puppets for a long time.”

Pavel Vrublevsky is a convicted cybercriminal who became famous as the CEO of the Russian e-payments company ChronoPay, which specialized in facilitating online payments for a variety of “high-risk” businesses, including gambling, pirated Mp3 files, rogue antivirus software and “male enhancement” pills.

As detailed in my 2014 book Spam Nation, Vrublevsky not-so-secretly ran a pharmacy affiliate spam program called Rx-Promotion, which paid spammers and virus writers to blast out tens of billions of junk emails advertising generic Viagra and controlled pharmaceuticals like pain relief medications. Much of my reporting on Vrublevsky’s cybercrime empire came from several years worth of internal ChronoPay emails and documents that were leaked online in 2010 and 2011.

ZAXVATMIRA

In 2014, KrebsOnSecurity learned from a trusted source close to the Target breach investigation that the user MikeMike on DirectConnection — the same account that Ika said belonged to Rescator — used the email address “zaxvatmira@gmail.com.”

At the time, KrebsOnSecurity could not connect that email address to anything or anyone. However, a recent search on zaxvatmira@gmail.com at the breach tracking service Constella Intelligence returns just one result: An account created in November 2010 at the site searchengines[.]ru under the handle  “r-fac1.”

A search on “r-fac1” at cyber intelligence firm Intel 471 revealed that this user’s introductory post on searchengines[.]ru advertised musictransferonline[.]com, an affiliate program that paid people to drive traffic to sites that sold pirated music files for pennies apiece.

According to leaked ChronoPay emails from 2010, this domain was registered and paid for by ChronoPay. Those missives also show that in August 2010 Vrublevsky authorized a payment of ~$1,200 for a multi-user license of an Intranet service called MegaPlan.

ChronoPay used the MegaPlan service to help manage the sprawling projects that Vrublevsky referred to internally as their “black” payment processing operations, including pirated pills, porn, Mp3s, and fake antivirus products. ChronoPay employees used their MegaPlan accounts to track payment disputes, order volumes, and advertising partnerships for these high-risk programs.

Borrowing a page from the Quentin Tarantino movie Reservoir Dogs, the employees adopted nicknames like “Mr. Kink,” “Mr. Heppner,” and “Ms. Nati.” However, in a classic failure of operational security, many of these employees had their MegaPlan account messages automatically forwarded to their real ChronoPay email accounts.

When ChronoPay’s internal emails were leaked in 2010, the username and password for its MegaPlan subscription were still working and valid. An internal user directory for that subscription included the personal (non-ChronoPay) email address tied to each employee Megaplan nickname. That directory listing said the email address zaxvatmira@gmail.com was assigned to the head of the Media/Mp3 division for ChronoPay, pictured at the top left of the organizational chart above as “Babushka Vani and Koli.”

[Author’s note: I initially overlooked the presence of the email address zaxvatmira@gmail.com in my notes because it did not show up in text searches of my saved emails, files or messages. I rediscovered it recently when a text search for zaxvatmira@gmail.com on my Mac found the address in a screenshot of the ChronoPay MegaPlan interface.]

The nickname two rungs down from “Babushka” in the ChronoPay org chart is “Lev Tolstoy,” which the MegaPlan service showed was picked by someone who used the email address v.zhabukin@freefrog-co-ru.

ChronoPay’s emails show that this Freefrog email address belongs to a Vasily Borisovich Zhabykin from Moscow. The Russian business tracking website rusprofile[.]ru reports that Zhabykin is or was the supervisor or owner of three Russian organizations, including one called JSC Hot Spot.

[Author’s note: The word “babushka” means “grandma” in Russian, and it could be that this nickname is a nod to the ChronoPay CEO’s wife, Vera. The leaked ChronoPay emails show that Vera Vrublevsky managed a group of hackers working with their media division, and was at least nominally in charge of MP3 projects for ChronoPay. Indeed, in messages exposed by the leaked ChronoPay email cache, Zhabykin stated that he was “directly subordinate” to Mrs. Vrublevsky].

CYBERCRIME HOTSPOT

JSC Hot Spot is interesting because its co-founder is another ChronoPay employee: 37-year-old Mikhail “Mike” Shefel. A Facebook profile for Mr. Shefel says he is or was vice president of payment systems at ChronoPay. However, the last update on that profile is from 2018, when Shefel appears to have legally changed his last name.

Archive.org shows that Hot Spot’s website — myhotspot[.]ru — sold a variety of consulting services, including IT security assessments, code and system audits, and email marketing. The earliest recorded archive of the Hot Spot website listed three clients on its homepage, including ChronoPay and Freefrog.

ChronoPay internal emails show that Freefrog was one of its investment projects that facilitated the sale of pirated Mp3 files. Rusprofile[.]ru reports that Freefrog’s official company name — JSC Freefrog — is incorporated by a thinly-documented entity based in the Seychelles called Impex Consulting Ltd., and it is unclear who its true owners are.

However, a search at DomainTools.com on the phone number listed on the homepage of myhotspot[.]ru (74957809554) reveals that number is associated with eight domain names.

Six of those domains are some variation of FreeFrog. Another domain registered to that phone number is bothunter[.]me, which included a copyright credit to “Hot Spot 2011.” At the annual Russian Internet Week IT convention in Moscow in 2012, Mr. Shefel gave a short presentation about bothunter, which he described as a service he designed to identify inauthentic (bot) accounts on Russian social media networks.

Interestingly, one of r-fac1’s first posts to Searchengines[.]ru a year earlier saw this user requesting help from other members who had access to large numbers of hacked social media accounts. R-fac1 told forum members that he was only looking to use those accounts to post harmless links and comments to the followers of the hacked profiles, and his post suggested he was testing something.

“Good afternoon,” r-fac1 wrote on Dec. 20, 2010. “I’m looking for people with their own not-recently-registered accounts on forums, (except for search) Social networks, Twitter, blogs, their websites. Tasks, depending on your accounts, post text and a link, sometimes just a link. Most often the topic is chatter, relaxation, discussion. Posting my links in your profiles, on your walls. A separate offer for people with a large set of contacts in instant messengers to try to use viral marketing.”

Neither Mr. Shefel nor Mr. Zhabykin responded to requests for comment.

WHERE ARE THEY NOW?

Mr. Zhabykin soon moved on to bigger ventures, co-founding a cryptocurrency exchange based in Moscow’s financial center called Suex. In September 2021, Suex earned the distinction of becoming the first crypto firm to be sanctioned by the U.S. Department of the Treasury, which effectively blocked Suex from the global financial system. The Treasury alleged Suex helped to process millions in criminal transactions, including the proceeds of numerous ransomware attacks.

“I don’t understand how I got mixed up in this,” Zhabykin told The New York Times in 2021. Zhabykin said Suex, which is registered in the Czech Republic, was mostly a failure and had conducted only a half dozen or so transactions since 2019.

The Russian business tracking service Rusprofile says Zhabykin also is the owner of a company based in the United Kingdom called RideWithLocal; the company’s website says it specializes in arranging excursions for extreme sports, including snowboarding, skiing, surfing and parasailing. Images from the RideWithLocal Facebook page show helicopters dropping snowboarders and skiers atop some fairly steep mountains.

Constella Intelligence found a cached copy of a now-deleted LinkedIn profile for Mr. Zhabykin, who described himself as a “sporttech/fintech specialist and mentor.”

“I create products and services worldwide, focusing on innovation and global challenges,” his LinkedIn profile said. “I’ve started my career in 2002 and since then I worked in Moscow, different regions of Russia, including Siberia and in Finland, Brazil, United Kingdom, Sri Lanka. Over the last 15 years I contributed to many amazing products in the following industries: sports, ecology, sport tech, fin tech, electronic payments, big data, telecommunications, pulp and paper industry, wood processing and travel. My specialities are Product development, Mentorship, Strategy and Business development.”

Rusprofile reports that Mikhail Borisovich Shefel is associated with at least eight current or now-defunct companies in Russia, including Dengi IM (Money IM), Internet Capital, Internet Lawyer, Internet 2, Zao Hot Spot, and (my personal favorite) an entity incorporated in 2021 called “All the Money in the World.”

Constella Intelligence found several official documents for Mr. Shefel that came from hacked Russian phone, automobile and residence records. They indicate Mr. Shefel is the registrant of a black Porsche Cayenne (Plate:X537SR197) and a Mercedes (Plate:P003PX90). Those vehicle records show Mr. Shefel was born on May 28, 1986.

Rusprofile reveals that at some point near the end of 2018, Shefel changed his last name to Lenin. DomainTools reports that in 2018, Mr. Shefel’s company Internet 2 LLC registered the domain name Lenin[.]me. This now-defunct service sold physical USSR-era Ruble notes that bear the image of Vladimir Lenin, the founding father of the Soviet Union.

Meanwhile, Pavel Vrublevsky remains imprisoned in Russia, awaiting trial on fraud charges levied against the payment company CEO in March 2022. Authorities allege Vrublevsky operated several fraudulent SMS-based payment schemes. They also accused Vrublevsky of facilitating money laundering for Hydra, the largest Russian darknet market. Hydra trafficked in illegal drugs and financial services, including cryptocurrency tumbling for money laundering, exchange services between cryptocurrency and Russian rubles, and the sale of falsified documents and hacking services.

In 2013, Vrublevsky was sentenced to 2.5 years in a Russian penal colony for convincing one of his top spammers and botmasters to launch a distributed denial-of-service (DDoS) attack against a ChronoPay competitor that shut down the ticketing system for the state-owned Aeroflot airline.

Following his release, Vrublevsky began working on a new digital payments platform based in Hong Kong called HPay Ltd (a.k.a. Hong Kong Processing Corporation). HPay appears to have had a great number of clients that were running schemes which bamboozled people with fake lotteries and prize contests.

KrebsOnSecurity sought comment on this research from the Federal Bureau of Investigation (FBI) and the U.S. Secret Service, both of which have been involved in the Target breach investigation over the years. The FBI declined to comment. The Secret Service declined to confirm or dispute any of the findings, but said it is still interested in hearing from anyone who might have more information.

“The U.S. Secret Service does not comment on any open investigation and won’t confirm or deny the accuracy in any reporting related to a criminal manner,” the agency said in a written statement. “However, If you have any information relating to the subjects referenced in this article, please contact the U.S. Secret Service at mostwanted@usss.dhs.gov. The Secret Service pays a reward for information leading to the arrest of cybercriminals.”

Microsoft Patch Tuesday, November 2023 Edition

Microsoft today released updates to fix more than five dozen security holes in its Windows operating systems and related software, including three “zero day” vulnerabilities that Microsoft warns are already being exploited in active attacks.

The zero-day threats targeting Microsoft this month include CVE-2023-36025, a weakness that allows malicious content to bypass the Windows SmartScreen Security feature. SmartScreen is a built-in Windows component that tries to detect and block malicious websites and files. Microsoft’s security advisory for this flaw says attackers could exploit it by getting a Windows user to click on a booby-trapped link to a shortcut file.

Kevin Breen, senior director of threat research at Immersive Labs, said emails with .url attachments or logs with processes spawning from .url files “should be a high priority for threat hunters given the active exploitation of this vulnerability in the wild.”

The second zero day this month is CVE-2023-36033, which is a vulnerability in the “DWM Core Library” in Microsoft Windows that was exploited in the wild as a zero day and publicly disclosed prior to patches being available. It affects Microsoft Windows 10 and later, as well as Microsoft Windows Server 2019 and subsequent versions.

“This vulnerability can be exploited locally, with low complexity and without needing high-level privileges or user interaction,” said Mike Walters, president and co-founder of the security firm Action1. “Attackers exploiting this flaw could gain SYSTEM privileges, making it an efficient method for escalating privileges, especially after initial access through methods like phishing.”

The final zero day in this month’s Patch Tuesday is a problem in the “Windows Cloud Files Mini Filter Driver” tracked as CVE-2023-36036 that affects Windows 10 and later, as well as Windows Server 2008 at later. Microsoft says it is relatively straightforward for attackers to exploit CVE-2023-36036 as a way to elevate their privileges on a compromised PC.

Beyond the zero day flaws, Breen said organizations running Microsoft Exchange Server should prioritize several new Exchange patches, including CVE-2023-36439, which is a bug that would allow attackers to install malicious software on an Exchange server. This weakness technically requires the attacker to be authenticated to the target’s local network, but Breen notes that a pair of phished Exchange credentials will provide that access nicely.

“This is typically achieved through social engineering attacks with spear phishing to gain initial access to a host before searching for other vulnerable internal targets – just because your Exchange Server doesn’t have internet-facing authentication doesn’t mean it’s protected,” Breen said.

Breen said this vulnerability goes hand in hand with three other Exchange bugs that Microsoft designated as “exploitation more likely:” CVE-2023-36050, CVE-2023-36039 and CVE-2023-36035.

Finally, the SANS Internet Storm Center points to two additional bugs patched by Microsoft this month that aren’t yet showing signs of active exploitation but that were made public prior to today and thus deserve prioritization. Those include: CVE-2023-36038, a denial of service vulnerability in ASP.NET Core, with a CVSS score of 8.2; and CVE-2023-36413: A Microsoft Office security feature bypass. Exploiting this vulnerability will bypass the protected mode when opening a file received via the web.

Windows users, please consider backing up your data and/or imaging your system before applying any updates. And feel free to sound off in the comments if you experience any difficulties as a result of these patches.

Phishers Spoof USPS, 12 Other Natl’ Postal Services

Recent weeks have seen a sizable uptick in the number of phishing scams targeting U.S. Postal Service (USPS) customers. Here’s a look at an extensive SMS phishing operation that tries to steal personal and financial data by spoofing the USPS, as well as postal services in at least a dozen other countries.

KrebsOnSecurity recently heard from a reader who received an SMS purporting to have been sent by the USPS, saying there was a problem with a package destined for the reader’s address. Clicking the link in the text message brings one to the domain usps.informedtrck[.]com.

The landing page generated by the phishing link includes the USPS logo, and says “Your package is on hold for an invalid recipient address. Fill in the correct address info by the link.” Below that message is a “Click update” button that takes the visitor to a page that asks for more information.

The remaining buttons on the phishing page all link to the real USPS.com website. After collecting your address information, the fake USPS site goes on to request additional personal and financial data.

This phishing domain was recently registered and its WHOIS ownership records are basically nonexistent. However, we can find some compelling clues about the extent of this operation by loading the phishing page in Developer Tools, a set of debugging features built into Firefox, Chrome and Safari that allow one to closely inspect a webpage’s code and operations.

Check out the bottom portion of the screenshot below, and you’ll notice that this phishing site fails to load some external resources, including an image from a link called fly.linkcdn[.]to.

A search on this domain at the always-useful URLscan.io shows that fly.linkcdn[.]to is tied to a slew of USPS-themed phishing domains. Here are just a few of those domains (links defanged to prevent accidental clicking):

usps.receivepost[.]com
usps.informedtrck[.]com
usps.trckspost[.]com
postreceive[.]com
usps.trckpackages[.]com
usps.infortrck[.]com
usps.quicktpos[.]com
usps.postreceive].]com
usps.revepost[.]com
trackingusps.infortrck[.]com
usps.receivepost[.]com
usps.trckmybusi[.]com
postreceive[.]com
tackingpos[.]com
usps.trckstamp[.]com
usa-usps[.]shop
usps.infortrck[.]com
unlistedstampreceive[.]com
usps.stampreceive[.]com
usps.stamppos[.]com
usps.stampspos[.]com
usps.trckmypost[.]com
usps.trckintern[.]com
usps.tackingpos[.]com
usps.posinformed[.]com

As we can see in the screenshot below, the developer tools console for informedtrck[.]com complains that the site is unable to load a Google Analytics code — UA-80133954-3 — which apparently was rejected for pointing to an invalid domain.

The valid domain for that Google Analytics code is the official usps.com website. According to dnslytics.com, that same analytics code has shown up on at least six other nearly identical USPS phishing pages dating back nearly as many years, including onlineuspsexpress[.]com, which DomainTools.com says was registered way back in September 2018 to an individual in Nigeria.

A different domain with that same Google Analytics code that was registered in 2021 is peraltansepeda[.]com, which archive.org shows was running a similar set of phishing pages targeting USPS users. DomainTools.com indicates this website name was registered by phishers based in Indonesia.

DomainTools says the above-mentioned USPS phishing domain stamppos[.]com was registered in 2022 via Singapore-based Alibaba.com, but the registrant city and state listed for that domain says “Georgia, AL,” which is not a real location.

Alas, running a search for domains registered through Alibaba to anyone claiming to reside in Georgia, AL reveals nearly 300 recent postal phishing domains ending in “.top.” These domains are either administrative domains obscured by a password-protected login page, or are .top domains phishing customers of the USPS as well as postal services serving other countries.

Those other nations include the Australia Post, An Post (Ireland), Correos.es (Spain), the Costa Rican post, the Chilean Post, the Mexican Postal Service, Poste Italiane (Italy), PostNL (Netherlands), PostNord (Denmark, Norway and Sweden), and Posti (Finland). A complete list of these domains is available here (PDF).

The Georgia, AL domains at Alibaba also encompass several that spoof sites claiming to collect outstanding road toll fees and fines on behalf of the governments of Australia, New Zealand and Singapore.

An anonymous reader wrote in to say they submitted fake information to the above-mentioned phishing site usps.receivepost[.]com via the malware sandbox any.run. A video recording of that analysis shows that the site sends any submitted data via an automated bot on the Telegram instant messaging service.

The traffic analysis just below the any.run video shows that any data collected by the phishing site is being sent to the Telegram user @chenlun, who offers to sell customized source code for phishing pages. From a review of @chenlun’s other Telegram channels, it appears this account is being massively spammed at the moment — possibly thanks to public attention brought by this story.

Meanwhile, researchers at DomainTools recently published a report on an apparently unrelated but equally sprawling SMS-based phishing campaign targeting USPS customers that appears to be the work of cybercriminals based in Iran.

Phishers tend to cast a wide net and often spoof entities that are broadly used by the local population, and few brands are going to have more household reach than domestic mail services. In June, the United Parcel Service (UPS) disclosed that fraudsters were abusing an online shipment tracking tool in Canada to send highly targeted SMS phishing messages that spoofed the UPS and other brands.

With the holiday shopping season nearly upon us, now is a great time to remind family and friends about the best advice to sidestep phishing scams: Avoid clicking on links or attachments that arrive unbidden in emails, text messages and other mediums. Most phishing scams invoke a temporal element that warns of negative 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.

Update: Added information about the Telegram bot and any.run analysis.

Tourists Give Themselves Away by Looking Up. So Do Most Network Intruders.

In large metropolitan areas, tourists are often easy to spot because they’re far more inclined than locals to gaze upward at the surrounding skyscrapers. Security experts say this same tourist dynamic is a dead giveaway in virtually all computer intrusions that lead to devastating attacks like data theft and ransomware, and that more organizations should set simple virtual tripwires that sound the alarm when authorized users and devices are spotted exhibiting this behavior.

In a blog post published last month, Cisco Talos said it was seeing a worrisome “increase in the rate of high-sophistication attacks on network infrastructure.” Cisco’s warning comes amid a flurry of successful data ransom and state-sponsored cyber espionage attacks targeting some of the most well-defended networks on the planet.

But despite their increasing complexity, a great many initial intrusions that lead to data theft could be nipped in the bud if more organizations started looking for the telltale signs of newly-arrived cybercriminals behaving like network tourists, Cisco says.

“One of the most important things to talk about here is that in each of the cases we’ve seen, the threat actors are taking the type of ‘first steps’ that someone who wants to understand (and control) your environment would take,” Cisco’s Hazel Burton wrote. “Examples we have observed include threat actors performing a ‘show config,’ ‘show interface,’ ‘show route,’ ‘show arp table’ and a ‘show CDP neighbor.’ All these actions give the attackers a picture of a router’s perspective of the network, and an understanding of what foothold they have.”

Cisco’s alert concerned espionage attacks from China and Russia that abused vulnerabilities in aging, end-of-life network routers. But at a very important level, it doesn’t matter how or why the attackers got that initial foothold on your network.

It might be zero-day vulnerabilities in your network firewall or file-transfer appliance. Your more immediate and primary concern has to be: How quickly can you detect and detach that initial foothold?

The same tourist behavior that Cisco described attackers exhibiting vis-a-vis older routers is also incredibly common early on in ransomware and data ransom attacks — which often unfurl in secret over days or weeks as attackers methodically identify and compromise a victim’s key network assets.

These virtual hostage situations usually begin with the intruders purchasing access to the target’s network from dark web brokers who resell access to stolen credentials and compromised computers. As a result, when those stolen resources first get used by would-be data thieves, almost invariably the attackers will run a series of basic commands asking the local system to confirm exactly who and where they are on the victim’s network.

This fundamental reality about modern cyberattacks — that cybercriminals almost always orient themselves by “looking up” who and where they are upon entering a foreign network for the first time — forms the business model of an innovative security company called Thinkst, which gives away easy-to-use tripwires or “canaries” that can fire off an alert whenever all sorts of suspicious activity is witnessed.

“Many people have pointed out that there are a handful of commands that are overwhelmingly run by attackers on compromised hosts (and seldom ever by regular users/usage),” the Thinkst website explains. “Reliably alerting when a user on your code-sign server runs whoami.exe can mean the difference between catching a compromise in week-1 (before the attackers dig in) and learning about the attack on CNN.”

These canaries — or “canary tokens” — are meant to be embedded inside regular files, acting much like a web beacon or web bug that tracks when someone opens an email.

“Imagine doing that, but for file reads, database queries, process executions or patterns in log files,” the Canary Tokens documentation explains. “Canarytokens does all this and more, letting you implant traps in your production systems rather than setting up separate honeypots.”

Thinkst operates alongside a burgeoning industry offering so-called “deception” or “honeypot” services — those designed to confuse, disrupt and entangle network intruders. But in an interview with KrebsOnSecurity, Thinkst founder and CEO Haroon Meer said most deception techniques involve some degree of hubris.

“Meaning, you’ll have deception teams in your network playing spy versus spy with people trying to break in, and it becomes this whole counterintelligence thing,” Meer said. “Nobody really has time for that. Instead, we are saying literally the opposite: That you’ve probably got all these [security improvement] projects that are going to take forever. But while you’re doing all that, just drop these 10 canaries, because everything else is going to take a long time to do.”

The idea here is to lay traps in sensitive areas of your network or web applications where few authorized users should ever trod. Importantly, the canary tokens themselves are useless to an attacker. For example, that AWS canary token sure looks like the digital keys to your cloud, but the token itself offers no access. It’s just a lure for the bad guys, and you get an alert when and if it is ever touched.

One nice thing about canary tokens is that Thinkst gives them away for free. Head over to canarytokens.org, and choose from a drop-down menu of available tokens, including:

-a web bug / URL token, designed to alert when a particular URL is visited;
-a DNS token, which alerts when a hostname is requested;
-an AWS token, which alerts when a specific Amazon Web Services key is used;
-a “custom exe” token, to alert when a specific Windows executable file or DLL is run;
-a “sensitive command” token, to alert when a suspicious Windows command is run.
-a Microsoft Excel/Word token, which alerts when a specific Excel or Word file is accessed.

Much like a “wet paint” sign often encourages people to touch a freshly painted surface anyway, attackers often can’t help themselves when they enter a foreign network and stumble upon what appear to be key digital assets, Meer says.

“If an attacker lands on your server and finds a key to your cloud environment, it’s really hard for them not to try it once,” Meer said. “Also, when these sorts of actors do land in a network, they have to orient themselves, and while doing that they are going to trip canaries.”

Meer says canary tokens are as likely to trip up attackers as they are “red teams,” security experts hired or employed by companies seeking to continuously probe their own computer systems and networks for security weaknesses.

“The concept and use of canary tokens has made me very hesitant to use credentials gained during an engagement, versus finding alternative means to an end goal,” wrote Shubham Shah, a penetration tester and co-founder of the security firm Assetnote. “If the aim is to increase the time taken for attackers, canary tokens work well.”

Thinkst makes money by selling Canary Tools, which are honeypots that emulate full blown systems like Windows servers or IBM mainframes. They deploy in minutes and include a personalized, private Canarytoken server.

“If you’ve got a sophisticated defense team, you can start putting these things in really interesting places,” Meer said. “Everyone says their stuff is simple, but we obsess over it. It’s really got to be so simple that people can’t mess it up. And if it works, it’s the best bang for your security buck you’re going to get.”

Further reading:

Dark Reading: Credential Canaries Create Minefield for Attackers
NCC Group: Extending a Thinkst Canary to Become an Interactive Honeypot
Cruise Automation’s experience deploying canary tokens

Karma Catches Up to Global Phishing Service 16Shop

You’ve probably never heard of “16Shop,” but there’s a good chance someone using it has tried to phish you.

The international police organization INTERPOL said last week it had shuttered the notorious 16Shop, a popular phishing-as-a-service platform launched in 2017 that made it simple for even complete novices to conduct complex and convincing phishing scams. INTERPOL said authorities in Indonesia arrested the 21-year-old proprietor and one of his alleged facilitators, and that a third suspect was apprehended in Japan.

The INTERPOL statement says the platform sold hacking tools to compromise more than 70,000 users in 43 countries. Given how long 16Shop has been around and how many paying customers it enjoyed over the years, that number is almost certainly highly conservative.

Also, the sale of “hacking tools” doesn’t quite capture what 16Shop was all about: It was a fully automated phishing platform that gave its thousands of customers a series of brand-specific phishing kits to use, and provided the domain names needed to host the phishing pages and receive any stolen credentials.

Security experts investigating 16Shop found the service used an application programming interface (API) to manage its users, an innovation that allowed its proprietors to shut off access to customers who failed to pay a monthly fee, or for those attempting to copy or pirate the phishing kit.

16Shop also localized phishing pages in multiple languages, and the service would display relevant phishing content depending on the victim’s geolocation.

For example, in 2019 McAfee found that for targets in Japan, the 16Shop kit would also collect Web ID and Card Password, while US victims will be asked for their Social Security Number.

“Depending on location, 16Shop will also collect ID numbers (including Civil ID, National ID, and Citizen ID), passport numbers, social insurance numbers, sort codes, and credit limits,” McAfee wrote.

In addition, 16Shop employed various tricks to help its users’ phishing pages stay off the radar of security firms, including a local “blacklist” of Internet addresses tied to security companies, and a feature that allowed users to block entire Internet address ranges from accessing phishing pages.

The INTERPOL announcement does not name any of the suspects arrested in connection with the 16Shop investigation. However, a number of security firms — including Akamai, McAfee and ZeroFox, previously connected the service to a young Indonesian man named Riswanda Noor Saputra, who sold 16Shop under the hacker handle “Devilscream.”

According to the Indonesian security blog Cyberthreat.id, Saputra admitted being the administrator of 16Shop, but told the publication he handed the project off to others by early 2020.

Nevertheless, Cyberthreat reported that Devilscream was arrested by Indonesian police in late 2021 as part of a collaboration between INTERPOL and the U.S. Federal Bureau of Investigation (FBI). Still, researchers who tracked 16Shop since its inception say Devilscream was not the original proprietor of the phishing platform, and he may not be the last.

RIZKY BUSINESS

It is not uncommon for cybercriminals to accidentally infect their own machines with password-stealing malware, and that is exactly what seems to have happened with one of the more recent administrators of 16Shop.

Constella Intelligence, a data breach and threat actor research platform, now allows users to cross-reference popular cybercrime websites and denizens of these forums with inadvertent malware infections by information-stealing trojans. A search in Constella on 16Shop’s domain name shows that in mid-2022, a key administrator of the phishing service infected their Microsoft Windows desktop computer with the Redline information stealer trojan — apparently by downloading a cracked (and secretly backdoored) copy of Adobe Photoshop.

Redline infections steal gobs of data from the victim machine, including a list of recent downloads, stored passwords and authentication cookies, as well as browser bookmarks and auto-fill data. Those records indicate the 16Shop admin used the nicknames “Rudi” and “Rizki/Rizky,” and maintained several Facebook profiles under these monikers.

It appears this user’s full name (or at least part of it) is Rizky Mauluna Sidik, and they are from Bandung in West Java, Indonesia. One of this user’s Facebook pages says Rizky is the chief executive officer and founder of an entity called BandungXploiter, whose Facebook page indicates it is a group focused mainly on hacking and defacing websites.

A LinkedIn profile for Rizky says he is a backend Web developer in Bandung who earned a bachelor’s degree in information technology in 2020. Mr. Rizky did not respond to requests for comment.

Diligere, Equity-Invest Are New Firms of U.K. Con Man

John Clifton Davies, a convicted fraudster estimated to have bilked dozens of technology startups out of more than $30 million through phony investment schemes, has a brand new pair of scam companies that are busy dashing startup dreams: A fake investment firm called Equity-Invest[.]ch, and Diligere[.]co.uk, a scam due diligence company that Equity-Invest insists all investment partners use.

A native of the United Kingdom, Mr. Davies absconded from justice before being convicted on multiple counts of fraud in 2015. Prior to his conviction, Davies served 16 months in jail before being cleared on suspicion of murdering his third wife on their honeymoon in India.

John Clifton Davies was convicted in 2015 of swindling businesses throughout the U.K. that were struggling financially and seeking to restructure their debt. For roughly six years, Davies ran a series of firms that pretended to offer insolvency services. Instead, he simply siphoned what little remaining money these companies had, spending the stolen funds on lavish cars, home furnishings, vacations and luxury watches.

In a three-part series published in 2020, KrebsOnSecurity exposed how Davies — wanted by authorities in the U.K. — had fled the country, taken on the surname Bernard, remarried, and moved to his new (and fourth) wife’s hometown in Ukraine.

After eluding justice in the U.K., Davies reinvented himself as The Private Office of John Bernard, pretending to be a billionaire Swiss investor who made his fortunes in the dot-com boom 20 years ago and who was seeking private equity investment opportunities.

In case after case, Bernard would promise to invest millions in hi-tech startups, only to insist that companies pay tens of thousands of dollars worth of due diligence fees up front. However, the due diligence company he insisted on using — another Swiss firm called The Inside Knowledge — also was secretly owned by Bernard, who would invariably pull out of the deal after receiving the due diligence money.

Bernard found a constant stream of new marks by offering extraordinarily generous finders fees to investment brokers who could introduce him to companies seeking an infusion of cash. Inside Knowledge and The Private Office both closed up shop not long after being exposed here in 2020.

In April 2023, KrebsOnSecurity wrote about Codes2You, a recent Davies venture which purports to be a “full cycle software development company” based in the U.K. The company’s website no longer lists any of Davies’ known associates, but the site does still reference software and cloud services tied to those associates — including MySolve, a “multi-feature platform for insolvency practitioners.”

Earlier this month, KrebsOnSecurity heard from an investment broker who found out his client had paid more than $50,000 in due diligence fees related to a supposed multi-million dollar investment offer from a Swiss concern called Equity-Invest[.]ch.

The investment broker, who spoke on condition that neither he nor his client be named, said Equity-Invest began getting cold feet after his client plunked down the due diligence fees.

“Things started to go sideways when the investor purportedly booked a trip to the US to meet the team but canceled last minute because ‘his pregnant wife got in a car accident,'” the broker explained. “After that, he was radio silent until the contract expired.”

The broker said he grew suspicious when he learned that the Equity-Invest domain name was less than six months old. The broker’s suspicions were confirmed after he discovered the due diligence company that Equity-Invest insisted on using — Diligere[.]co.uk — included an email address on its homepage for another entity called Ardelis Solutions.

A corporate entity in the UK called Ardelis Solutions was key to showing the connection to Davies’ former scam investment and due diligence firms in the Codes2You investigation published earlier this year.

Although Diligere’s website claims the due diligence firm has “13 years of experiance” [sic], its domain name was only registered in April 2023. What’s more, virtually all of the vapid corporate-speak published on Diligere’s homepage is identical to text on the now-defunct InsideKnowledge[.]ch — the fake due diligence firm secretly owned for many years by The Private Office of John Bernard (John Clifton Davies).

“Our steadfast conviction and energy for results is what makes us stand out,” both sites state. “We care for our clients’ and their businesses, we share their ambitions and align our goals to complement their objectives. Our clients know we’re in this together. We work in close partnership with our clients to deliver palpable results regardless of geography, complexity or controversy.”

Requests for comment sent to the contact address listed on Diligere — info@ardelissolutions[.]com — went unreturned. Equity-Invest did not respond to requests for comment.

Russia Sends Cybersecurity CEO to Jail for 14 Years

The Russian government today handed down a treason conviction and 14-year prison sentence on Iyla Sachkov, the former founder and CEO of one of Russia’s largest cybersecurity firms. Sachkov, 37, has been detained for nearly two years under charges that the Kremlin has kept classified and hidden from public view, and he joins a growing roster of former Russian cybercrime fighters who are now serving hard time for farcical treason convictions.

In 2003, Sachkov founded Group-IB, a cybersecurity and digital forensics company that quickly earned a reputation for exposing and disrupting large-scale cybercrime operations, including quite a few that were based in Russia and stealing from Russian companies and citizens.

In September 2021, the Kremlin issued treason charges against Sachkov, although it has refused to disclose any details about the allegations. Sachkov pleaded not guilty. After a three-week “trial” that was closed to the public, Sachkov was convicted of treason and sentenced to 14 years in prison. Prosecutors had asked for 18 years.

Group-IB relocated its headquarters to Singapore several years ago, although it did not fully exit the Russian market until April 2023. In a statement, Group-IB said that during their founder’s detainment, he was denied the right to communicate — no calls, no letters — with the outside world for the first few months, and was deprived of any visits from family and friends.

“Ultimately, Ilya has been denied a chance for an impartial trial,” reads a blog post on the company’s site. “All the materials of the case are kept classified, and all hearings were held in complete secrecy with no public scrutiny. As a result, we might never know the pretext for his conviction.”

Prior to his arrest in 2021, Sachkov publicly chastised the Kremlin for turning a blind eye to the epidemic of ransomware attacks coming from Russia. In a speech covered by the Financial Times in 2021, Sachkov railed against the likes of Russian hacker Maksim Yakubets, the accused head of a hacking group called Evil Corp. that U.S. officials say has stolen hundreds of millions of dollars over the past decade.

“Yakubets has been spotted driving around Moscow in a fluorescent camouflage Lamborghini, with a custom licence plate that reads ‘THIEF,'” FT’s Max Seddon wrote. “He also ‘provides direct assistance to the Russian government’s malicious cyber efforts,’ according to US Treasury sanctions against him.”

In December 2021, Bloomberg reported that Sachkov was alleged to have given the United States information about the Russian “Fancy Bear” operation that sought to influence the 2016 U.S. election. Fancy Bear is one of several names (e.g., APT28) for an advanced Russian cyber espionage group that has been linked to the Russian military intelligence agency GRU.

In 2019, a Moscow court meted out a 22-year prison sentence for alleged treason charges against Sergei Mikhailov, formerly deputy chief of Russia’s top anti-cybercrime unit. The court also levied a 14-year sentence against Ruslan Stoyanov, a senior employee at Kaspersky Lab. Both men maintained their innocence throughout the trial, and the supposed reason for the treason charges has never been disclosed.

Following their dramatic arrests in 2016, some media outlets reported that the men were suspected of having tipped off American intelligence officials about those responsible for Russian hacking activities tied to the 2016 U.S. presidential election.

That’s because two others arrested for treason at the same time — Mikhailov subordinates Georgi Fomchenkov and Dmitry Dokuchaev — were reported by Russian media to have helped the FBI investigate Russian servers linked to the 2016 hacking of the Democratic National Committee.

LeakedSource Owner Quit Ashley Madison a Month Before 2015 Hack

[This is Part III in a series on research conducted for a recent Hulu documentary on the 2015 hack of marital infidelity website AshleyMadison.com.]

In 2019, a Canadian company called Defiant Tech Inc. pleaded guilty to running LeakedSource[.]com, a service that sold access to billions of passwords and other data exposed in countless data breaches. KrebsOnSecurity has learned that the owner of Defiant Tech, a 32-year-old Ontario man named Jordan Evan Bloom, was hired in late 2014 as a developer for the marital infidelity site AshleyMadison.com. Bloom resigned from AshleyMadison citing health reasons in June 2015 — less than one month before unidentified hackers stole data on 37 million users — and launched LeakedSource three months later.

On Jan. 15, 2018, the Royal Canadian Mounted Police (RCMP) charged then 27-year-old Bloom, of Thornhill, Ontario, with selling stolen personal identities online through the website LeakedSource[.]com.

LeakedSource was advertised on a number of popular cybercrime forums as a service that could help hackers break into valuable or high-profile accounts. LeakedSource also tried to pass itself off as a legal, legitimate business that was marketing to security firms and professionals.

The RCMP arrested Bloom in December 2017, and said he made approximately $250,000 selling hacked data, which included information on 37 million user accounts leaked in the 2015 Ashley Madison breach.

Subsequent press releases from the RCMP about the LeakedSource investigation omitted any mention of Bloom, and referred to the defendant only as Defiant Tech. In a legal settlement that is quintessentially Canadian, the matter was resolved in 2019 after Defiant Tech agreed to plead guilty. The RCMP declined to comment for this story.

A GREY MARKET

The Impact Team, the hacker group that claimed responsibility for stealing and leaking the AshleyMadison user data, also leaked several years worth of email from then-CEO Noel Biderman. A review of those messages shows that Ashley Madison hired Jordan Evan Bloom as a PHP developer in December 2014 — even though the company understood that Bloom’s success as a programmer and businessman was tied to shady and legally murky enterprises.

Bloom’s recommendation came to Biderman via Trevor Sykes, then chief technology officer for Ashley Madison parent firm Avid Life Media (ALM). The following is an email from Sykes to Biderman dated Nov. 14, 2014:

“Greetings Noel,

“We’d like to offer Jordan Bloom the position of PHP developer reporting to Mike Morris for 75k CAD/Year. He did well on the test, but he also has a great understanding of the business side of things having run small businesses himself. This was an internal referral.”

When Biderman responded that he needed more information about the candidate, Sykes replied that Bloom was independently wealthy as a result of his forays into the shadowy world of “gold farming”  — the semi-automated use of large numbers of player accounts to win some advantage that is usually related to cashing out game accounts or inventory. Gold farming is particularly prevalent in massively multiplayer online role-playing games (MMORPGs), such as RuneScape and World of Warcraft.

“In his previous experience he had been doing RMT (Real Money Trading),” Sykes wrote. “This is the practice of selling virtual goods in games for real world money. This is a grey market, which is usually against the terms and services of the game companies.” Here’s the rest of his message to Biderman:

“RMT sellers traditionally have a lot of problems with chargebacks, and payment processor compliance. During my interview with him, I spent some time focusing in on this. He had to demonstrate to the processor, Paypal, at the time he had a business and technical strategy to address his charge back rate.”

“He ran this company himself, and did all the coding, including the integration with the processors,” Sykes continued in his assessment of Bloom. “Eventually he was squeezed out by Chinese gold farmers, and their ability to market with much more investment than he could. In addition the cost of ‘farming’ the virtual goods was cheaper in China to do than in North America.”

COME, ABUSE WITH US

The gold farming reference is fascinating because in 2017 KrebsOnSecurity published Who Ran LeakedSource?, which examined clues suggesting that one of the administrators of LeakedSource also was the admin of abusewith[.]us, a site unabashedly dedicated to helping people hack email and online gaming accounts.

Abusewith[.]us began in September 2013 as a forum for learning and teaching how to hack accounts at Runescape, an MMORPG set in a medieval fantasy realm where players battle for kingdoms and riches.

The currency with which Runescape players buy and sell weapons, potions and other in-game items are virtual gold coins, and many of Abusewith[dot]us’s early members traded in a handful of commodities: Phishing kits and exploits that could be used to steal Runescape usernames and passwords from fellow players; virtual gold plundered from hacked accounts; and databases from hacked forums and websites related to Runescape and other online games.

That 2017 report here interviewed a Michigan man who acknowledged being administrator of Abusewith[.]us, but denied being the operator of LeakedSource. Still, the story noted that LeakedSource likely had more than one operator, and breached records show Bloom was a prolific member of Abusewith[.]us.

In an email to all employees on Dec. 1, 2014, Ashley Madison’s director of HR said Bloom graduated from York University in Toronto with a degree in theoretical physics, and that he has been an active programmer since high school.

“He’s a proprietor of a high traffic multiplayer game and developer/publisher of utilities such as PicTrace,” the HR director enthused. “He will be a great addition to the team.”

PicTrace appears to have been a service that allowed users to glean information about anyone who viewed an image hosted on the platform, such as their Internet address, browser type and version number. A copy of pictrace[.]com from Archive.org in 2012 redirects to the domain qksnap.com, which DomainTools.com says was registered to a Jordan Bloom from Thornhill, ON that same year.

The street address listed in the registration records for qksnap.com — 204 Beverley Glen Blvd — also shows up in the registration records for leakadvisor[.]com, a domain registered in 2017 just months after Canadian authorities seized the servers running LeakedSource.

A review of passive DNS records from DomainTools indicates that in 2013 pictrace[.]com shared a server with just a handful of other domains, including Near-Reality[.]com — a popular RuneScape Private Server (RSPS) game based on the RuneScape MMORPG.

Copies of near-reality[.]com from 2013 via Archive.org show the top of the community’s homepage was retrofitted with a message saying Near Reality was no longer available due to a copyright dispute. Although the site doesn’t specify the other party to the copyright dispute, it appears Near-Reality got sued by Jagex, the owner of RuneScape.

The message goes on to say the website will no longer “encourage, facilitate, enable or condone (i) any infringement of copyright in RuneScape or any other Jagex product; nor (ii) any breach of the terms and conditions of RuneScape or any other Jagex product.”

AGENTJAGS

Near Reality also has a Facebook page that was last updated in 2019, when its owner posted a link to a news story about Defiant Tech’s guilty plea in the LeakedSource investigation. That Facebook page indicates Bloom also went by the nickname “Agentjags.”

“Just a quick PSA,” reads a post to the Near Reality Facebook page dated Jan. 21, 2018, which linked to a story about the charges against Bloom and a photo of Bloom standing in front of his lime-green Lamborghini. “Agentjags has got involved in some shady shit that may have compromised your personal details. I advise anyone who is using an old NR [Near Reality] password for anything remotely important should change it ASAP.”

By the beginning of 2016, Bloom was nowhere to be found, and was suspected of having fled his country for the Caribbean, according to the people commenting on the Near Reality Facebook page:

“Jordan aka Agentjags has gone missing,” wrote a presumed co-owner of the Facebook page. “He is supposedly hiding in St. Lucia, doing what he loved, scuba-diving. Any information to his whereabouts will be appreciated.”

KrebsOnSecurity ran the unusual nickname “AgentJags” through a search at Constella Intelligence, a commercial service that tracks breached data sets. That search returned just a few dozen results — and virtually all were accounts at various RuneScape-themed sites, including a half-dozen accounts at Abusewith[.]us.

Constella found other “AgentJags” accounts tied to the email address ownagegaming1@gmail.com. The marketing firm Apollo.io experienced a data breach several years back, and according to Apollo the email address ownagegaming1@gmail.com belongs to Jordan Bloom in Ontario.

Constella also revealed that the password frequently used by ownagegaming1@gmail.com across many sites was some variation on “niggapls,” which my 2017 report found was also the password used by the administrator of LeakedSource.

Constella discovered that the email eric.malek@rogers.com comes up when one searches for “AgentJags.” This is curious because emails leaked from Ashley Madison’s then-CEO Biderman show that Eric Malek from Toronto was the Ashley Madison employee who initially recommended Bloom for the PHP developer job.

According to DomainTools.com, Eric.Malek@rogers.com was used to register the domain devjobs.ca, which previously advertised “the most exciting developer jobs in Canada, delivered to you weekly.” Constella says eric.malek@rogers.com also had an account at Abusewith[.]us — under the nickname “Jags.”

Biderman’s email records show Eric Malek was also a PHP developer for Ashley Madison, and that he was hired into this position just a few months before Bloom — on Sept. 2, 2014. The CEO’s leaked emails show Eric Malek resigned from his developer position at Ashley Madison on June 19, 2015.

“Please note that Eric Malek has resigned from this position with Avid and his last day will be June 19th,” read a June 5, 2015 email from ALM’s HR director. “He is resigning to deal with some personal issues which include health issues. Because he is not sure how much time it will take to resolve, he is not requesting a leave of absence (his time off will be indefinite). Overall, he likes the company and plans to reach out to Trevor or I when the issues are resolved to see what is available at that time.”

A follow-up email from Biderman demanded, “want to know where he’s truly going….,” and it’s unclear whether there was friction with Malek’s departure. But ALM General Counsel Avi Weisman replied indicating that Malek probably would not sign an “Exit Acknowledgment Form” prior to leaving, and that the company had unanswered questions for Malek.

“Aneka should dig during exit interview,” Weisman wrote. “Let’s see if he balks at signing the Acknowledgment.”

Bloom’s departure notice from Ashley Madison’s HR person, dated June 23, 2015, read:

“Please note that Jordan Bloom has resigned from his position as PHP Developer with Avid. He is leaving for personal reasons. He has a neck issue that will require surgery in the upcoming months and because of his medical appointment schedule and the pain he is experiencing he can no longer commit to a full-time schedule. He may pick up contract work until he is back to 100%.”

A follow-up note to Biderman about this announcement read:

“Note that he has disclosed that he is independently wealthy so he can get by without FT work until he is on the mend. He has signed the Exit Acknowledgement Form already without issue. He also says he would consider reapplying to Avid in the future if we have opportunities available at that time.”

Perhaps Mr. Bloom hurt his neck from craning it around blind spots in his Lamborghini. Maybe it was from a bad scuba outing. Whatever the pain in Bloom’s neck was, it didn’t stop him from launching himself fully into LeakedSource[.]com, which was registered roughly one month after the Impact Team leaked data on 37 million Ashley Madison accounts.

Mr. Malek declined a request for comment. A now-deleted LinkedIn profile for Malek from December 2018 listed him as a “technical recruiter” from Toronto who also attended Mr. Bloom’s alma mater — York University. That resume did not mention Mr. Malek’s brief stint as a PHP developer at Ashley Madison.

“Developer, entrepreneur, and now technical recruiter of the most uncommon variety!” Mr. Malek’s LinkedIn profile enthused. “Are you a developer, or other technical specialist, interested in working with a recruiter who can properly understand your concerns and aspirations, technical, environmental and financial? Don’t settle for a ‘hack’; this is your career, let’s do it right! Connect with me on LinkedIn. Note: If you are not a resident of Canada/Toronto, I cannot help you.”

INTERVIEW WITH BLOOM

Mr. Bloom told KrebsOnSecurity he had no role in harming or hacking Ashley Madison. Bloom validated his identity by responding at one of the email addresses mentioned above, and agreed to field questions so long as KrebsOnSecurity agreed to publish our email conversation in full (PDF).

Bloom said Mr. Malek did recommend him for the Ashley Madison job, but that Mr. Malek also received a $5,000 referral bonus for doing so. Given Mr. Malek’s stated role as a technical recruiter, it seems likely he also recommended several other employees to Ashley Madison.

Bloom was asked whether anyone at the RCMP, Ashley Madison or any authority anywhere ever questioned him in connection with the July 2015 hack of Ashley Madison. He replied that he was called once by someone claiming to be from the Toronto Police Service asking if he knew anything about the Ashley Madison hack.

“The AM situation was not something they pursued according to the RCMP disclosure,” Bloom wrote. “Learning about the RCMP’s most advanced cyber investigative techniques and capabilities was very interesting though. I was eventually told information by a third party which included knowledge that law enforcement effectively knew who the hacker was, but didn’t have enough evidence to proceed with a case. That is the extent of my involvement with any authorities.”

As to his company’s guilty plea for operating LeakedSource, Bloom maintains that the judge at his preliminary inquiry found that even if everything the Canadian government alleged was true it would not constitute a violation of any law in Canada with respect the charges the RCMP leveled against him, which included unauthorized use of a computer and “mischief to data.”

“In Canada at the lower court level we are allowed to possess stolen information and manipulate our copies of them as we please,” Bloom said. “The judge however decided that a trial was required to determine whether any activities of mine were reckless, as the other qualifier of intentionally criminal didn’t apply. I will note here that nothing I was accused of doing would have been illegal if done in the United States of America according to their District Attorney. +1 for free speech in America vs freedom of expression in Canada.”

“Shortly after their having most of their case thrown out, the Government proposed an offer during a closed door meeting where they would drop all charges against me, provide full and complete personal immunity, and in exchange the Corporation which has since been dissolved would plead guilty,” Bloom continued. “The Corporation would also pay a modest fine.”

Bloom said he left Ashley Madison because he was bored, but he acknowledged starting LeakedSource partly in response to the Ashley Madison hack.

“I intended to leverage my gaming connections to get into security work including for other private servers such as Minecraft communities and others,” Bloom said. “After months of asking management for more interesting tasks, I became bored. Some days I had virtually nothing to do except spin in my chair so I would browse the source code for security holes to fix because I found it enjoyable.”

“I believe the decision to start LS [LeakedSource] was partly inspired by the AM hack itself, and the large number of people from a former friend group messaging me asking if XYZ person was in the leak after I revealed to them that I downloaded a copy and had the ability to browse it,” Bloom continued. “LS was never my idea – I was just a builder, and the only Canadian. In other countries it was never thought to be illegal on closer examination of their laws.”

Bloom said he still considers himself independently wealthy, and that still has the lime green Lambo. But he said he’s currently unemployed and can’t seem to land a job in what he views as his most promising career path: Information security.

“As I’m sure you’re aware, having negative media attention associated with alleged (key word) criminal activity can have a detrimental effect on employment, banking and relationships,” Bloom wrote. “I have no current interest in being a business owner, nor do I have any useful business ideas to be honest. I was and am interested in interesting Information Security/programming work but it’s too large of a risk for any business to hire someone who was formerly accused of a crime.”

If you liked this story, please consider reading the first two pieces in this series:

SEO Expert Hired and Fired by Ashley Madison Turned on Company, Promising Revenge

Top Suspect in 2015 Ashley Madison Hack Committed Suicide in 2014

Top Suspect in 2015 Ashley Madison Hack Committed Suicide in 2014

When the marital infidelity website AshleyMadison.com learned in July 2015 that hackers were threatening to publish data stolen from 37 million users, the company’s then-CEO Noel Biderman was quick to point the finger at an unnamed former contractor. But as a new documentary series on Hulu reveals [SPOILER ALERT!], there was just one problem with that theory: Their top suspect had killed himself more than a year before the hackers began publishing stolen user data.

The new documentary, The Ashley Madison Affair, begins airing today on Hulu in the United States and on Disney+ in the United Kingdom. The series features interviews with security experts and journalists, Ashley Madison executives, victims of the breach and jilted spouses.

The series also touches on shocking new details unearthed by KrebsOnSecurity and Jeremy Bullock, a data scientist who worked with the show’s producers at the Warner Bros. production company Wall to Wall Media. Bullock had spent many hours poring over the hundreds of thousands of emails that the Ashley Madison hackers stole from Biderman and published online in 2015.

Wall to Wall reached out in July 2022 about collaborating with Bullock after KrebsOnSecurity published A Retrospective on the 2015 Ashley Madison Breach. That piece explored how Biderman — who is Jewish — had become the target of concerted harassment campaigns by anti-Semitic and far-right groups online in the months leading up to the hack.

Whoever hacked Ashley Madison had access to all employee emails, but they only released Biderman’s messages — three years worth. Apropos of my retrospective report, Bullock found that a great many messages in Biderman’s inbox were belligerent and anti-Semitic screeds from a former Ashley Madison employee named William Brewster Harrison.

The messages show that Harrison was hired in March 2010 to help promote Ashley Madison online, but the messages also reveal Harrison was heavily involved in helping to create and cultivate phony female accounts on the service.

There is evidence to suggest that in 2010 Harrison was directed to harass the owner of Ashleymadisonsucks.com into closing the site or selling the domain to Ashley Madison.

Ashley Madison’s parent company — Toronto-based Avid Life Media — filed a trademark infringement complaint in 2010 that succeeded in revealing a man named Dennis Bradshaw as the owner. But after being informed that Bradshaw was not subject to Canadian trademark laws, Avid Life offered to buy AshleyMadisonSucks.com for $10,000.

When Bradshaw refused to sell the domain, he and his then-girlfriend were subject to an unrelenting campaign of online harassment and blackmail. It now appears those attacks were perpetrated by Harrison, who sent emails from different accounts at the free email service Vistomail pretending to be Bradshaw, his then-girlfriend and their friends.

[As the documentary points out, the domain AshleyMadisonSucks.com was eventually transferred to Ashley Madison, which then shrewdly used it for advertising and to help debunk theories about why its service was supposedly untrustworthy].

Harrison even went after Bradshaw’s lawyer and wife, listing them both on a website he created called Contact-a-CEO[.]com, which Harrison used to besmirch the name of major companies — including several past employers — all entities he believed had slighted him or his family in some way. The site also claimed to include the names, addresses and phone numbers of top CEOs.

An exhaustive analysis of domains registered to the various Vistomail pseudonyms used by Harrison shows he also ran Bash-a-Business[.]com, which Harrison dedicated to “all those sorry ass corporate executives out there profiting from your hard work, organs, lives, ideas, intelligence, and wallets.” Copies of the site at archive.org show it was the work of someone calling themselves “The Chaos Creator.”

Will Harrison was terminated as an Ashley Madison employee in November 2011, and by early 2012 he’d turned his considerable harassment skills squarely against the company. Ashley Madison’s long-suspected army of fake female accounts came to the fore in August 2012 after the former sex worker turned activist and blogger Maggie McNeill published screenshots apparently taken from Ashley Madison’s internal systems suggesting that a large percentage of the female accounts on the service were computer-operated bots.

Ashley Madison’s executives understood that only a handful of employees at the time would have had access to the systems needed to produce the screenshots McNeill published online. In one exchange on Aug. 16, 2012, Ashley Madison’s director of IT was asked to produce a list of all company employees with all-powerful administrator access.

“Who or what is asdfdfsda@asdf.com?,” Biderman asked, after being sent a list of nine email addresses.

“It appears to be the email address Will used for his profiles,” the IT director replied.

“And his access was never shut off until today?,” asked the company’s general counsel Mike Dacks.

What prompted the data scientist Bullock to reach out were gobs of anti-Semitic diatribes from Harrison, who had taken to labeling Biderman and others “greedy Jew bastards.”

“So good luck, I’m sure we’ll talk again soon, but for now, Ive got better things in the oven,” Harrison wrote to Biderman after his employment contract with Ashley Madison was terminated. “Just remember I outsmarted you last time and I will outsmart and out maneuver you this time too, by keeping myself far far away from the action and just enjoying the sideline view, cheering for the opposition.”

Harrison signed his threatening missive with the salutation, “We are legion,” suggesting that whatever comeuppance he had in store for Ashley Madison would come from a variety of directions and anonymous hackers.

The leaked Biderman emails show that Harrison made good on his threats, and that in the months that followed Harrison began targeting Biderman and other Ashley Madison executives with menacing anonymous emails and spoofed phone calls laced with profanity and anti-Semitic language.

But on Mar. 5, 2014, Harrison committed suicide by shooting himself in the head with a handgun. This fact was apparently unknown to Biderman and other Ashley Madison executives more than a year later when their July 2015 hack was first revealed.

Does Harrison’s untimely suicide rule him out as a suspect in the 2015 hack? Who is The Chaos Creator, and what else transpired between Harrison and Ashley Madison prior to his death? We’ll explore these questions in Part II of this story, to be published early next week.

Russian Cybersecurity Executive Arrested for Alleged Role in 2012 Megahacks

Nikita Kislitsin, formerly the head of network security for one of Russia’s top cybersecurity firms, was arrested last week in Kazakhstan in response to 10-year-old hacking charges from the U.S. Department of Justice. Experts say Kislitsin’s prosecution could soon put the Kazakhstan government in a sticky diplomatic position, as the Kremlin is already signaling that it intends to block his extradition to the United States.

Kislitsin is accused of hacking into the now-defunct social networking site Formspring in 2012, and conspiring with another Russian man convicted of stealing tens of millions of usernames and passwords from LinkedIn and Dropbox that same year.

In March 2020, the DOJ unsealed two criminal hacking indictments against Kislitsin, who was then head of security at Group-IB, a cybersecurity company that was founded in Russia in 2003 and operated there for more than a decade before relocating to Singapore.

Prosecutors in Northern California indicted Kislitsin in 2014 for his alleged role in stealing account data from Formspring. Kislitsin also was indicted in Nevada in 2013, but the Nevada indictment does not name his alleged victim(s) in that case.

However, documents unsealed in the California case indicate Kislitsin allegedly conspired with Yevgeniy Nikulin, a Russian man convicted in 2020 of stealing 117 million usernames and passwords from Dropbox, Formspring and LinkedIn in 2012. Nikulin is currently serving a seven-year sentence in the U.S. prison system.

As first reported by Cyberscoop in 2020, a trial brief in the California investigation identified Nikulin, Kislitsin and two alleged cybercriminals — Oleg Tolstikh and Oleksandr Vitalyevich Ieremenko — as being present during a 2012 meeting at a Moscow hotel, where participants allegedly discussed starting an internet café business.

A 2010 indictment out of New Jersey accuses Ieremenko and six others with siphoning nonpublic information from the U.S. Securities & Exchange Commission (SEC) and public relations firms, and making $30 million in illegal stock trades based on the proprietary information they stole.

[The U.S. Secret Service has an outstanding $1 million reward for information leading to the arrest of Ieremenko (Александр Витальевич Еременко), who allegedly went by the hacker handles “Zl0m” and “Lamarez.”]

Kislitsin was hired by Group-IB in January 2013, nearly six months after the Formspring hack. Group-IB has since moved its headquarters to Singapore, and in April 2023 the company announced it had fully exited the Russian market.

In a statement provided to KrebsOnSecurity, Group-IB said Mr. Kislitsin is no longer an employee, and that he now works for a Russian organization called FACCT, which stands for “Fight Against Cybercrime Technologies.”

“Dmitry Volkov, co-founder and CEO, sold his stake in Group-IB’s Russia-based business to the company’s local management,” the statement reads. “The stand-alone business in Russia has been operating under the new brand FACCT ever since and will continue to operate as a separate company with no connection to Group-IB.”

FACCT says on its website that it is a “Russian developer of technologies for combating cybercrime,” and that it works with clients to fight targeted attacks, data leaks, fraud, phishing and brand abuse. In a statement published online, FACCT said Kislitsin is responsible for developing its network security business, and that he remains under temporary detention in Kazakhstan “to study the basis for extradition arrest at the request of the United States.”

“According to the information we have, the claims against Kislitsin are not related to his work at FACCT, but are related to a case more than 10 years ago when Nikita worked as a journalist and independent researcher,” FACCT wrote.

From 2006 to 2012, Kislitsin was editor-in-chief of “Hacker,” a popular Russian-language monthly magazine that includes articles on information and network security, programming, and frequently features interviews with and articles penned by notable or wanted Russian hackers.

“We are convinced that there are no legal grounds for detention on the territory of Kazakhstan,” the FACCT statement continued. “The company has hired lawyers who have been providing Nikita with all the necessary assistance since last week, and we have also sent an appeal to the Consulate General of the Russian Federation in Kazakhstan to assist in protecting our employee.”

FACCT indicated that the Kremlin has already intervened in the case, and the Russian government claims Kislitsin is wanted on criminal charges in Russia and must instead be repatriated to his homeland.

“The FACCT emphasizes that the announcement of Nikita Kislitsin on the wanted list in the territory of the Russian Federation became known only today, June 28, 6 days after the arrest in Kazakhstan,” FACCT wrote. “The company is monitoring developments.”

The Kremlin followed a similar playbook in the case of Aleksei Burkov, a cybercriminal who long operated two of Russia’s most exclusive underground hacking forums. Burkov was arrested in 2015 by Israeli authorities, and the Russian government fought Burkov’s extradition to the U.S. for four years — even arresting and jailing an Israeli woman on phony drug charges to force a prisoner swap.

That effort ultimately failed: Burkov was sent to America, pleaded guilty, and was sentenced to nine years in prison.

Arkady Bukh is a U.S. attorney who has represented dozens of accused hackers from Russia and Eastern Europe who were extradited to the United States over the years. Bukh said Moscow is likely to turn the Kislitsin case into a diplomatic time bomb for Kazakhstan, which shares an enormous border and a great deal of cultural ties with Russia. A 2009 census found that Russians make up about 24 percent of the population of Kazakhstan.

“That would put Kazakhstan at a crossroads to choose between unity with Russia or going with the West,” Bukh said. “If that happens, Kazakhstan may have to make some very unpleasant decisions.”

Group-IB’s exodus from Russia comes as its former founder and CEO Ilya Sachkov remains languishing in a Russian prison, awaiting a farcical trial and an inevitable conviction on charges of treason. In September 2021, the Kremlin issued treason charges against Sachkov, although it has so far refused to disclose any details about the allegations.

Sachkov’s pending treason trial has been the subject of much speculation among denizens of Russian cybercrime forums, and the consensus seems to be that Sachkov and Group-IB were seen as a little too helpful to the DOJ in its various investigations involving top Russian hackers.

Indeed, since its inception in 2003, Group-IB’s researchers have helped to identify, disrupt and even catch a number of high-profile Russian hackers, most of whom got busted after years of criminal hacking because they made the unforgivable mistake of stealing from their own citizens.

When the indictments against Kislitsin were unsealed in 2020, Group-IB issued a lengthy statement attesting to his character and saying they would help him with his legal defense. As part of that statement, Group-IB noted that “representatives of the Group-IB company and, in particular, Kislitsin, in 2013, on their own initiative, met with employees of the US Department of Justice to inform them about the research work related to the underground, which was carried out by Kislitsin in 2012.”

U.K. Cyber Thug “PlugwalkJoe” Gets 5 Years in Prison

Joseph James “PlugwalkJoe” O’Connor, a 24-year-old from the United Kingdom who earned his 15 minutes of fame by participating in the July 2020 hack of Twitter, has been sentenced to five years in a U.S. prison. That may seem like harsh punishment for a brief and very public cyber joy ride. But O’Connor also pleaded guilty in a separate investigation involving a years-long spree of cyberstalking and cryptocurrency theft enabled by “SIM swapping,” a crime wherein fraudsters trick a mobile provider into diverting a customer’s phone calls and text messages to a device they control.

On July 16, 2020 — the day after some of Twitter’s most recognizable and popular users had their accounts hacked and used to tweet out a bitcoin scam —  KrebsOnSecurity observed that several social media accounts tied to O’Connor appeared to have inside knowledge of the intrusion. That story also noted that thanks to COVID-19 lockdowns at the time, O’Connor was stuck on an indefinite vacation at a popular resort in Spain.

Not long after the Twitter hack, O’Connor was quoted in The New York Times denying any involvement. “I don’t care,” O’Connor told The Times. “They can come arrest me. I would laugh at them. I haven’t done anything.”

Speaking with KrebsOnSecurity via Instagram instant message just days after the Twitter hack, PlugwalkJoe demanded that his real name be kept out of future blog posts here. After he was told that couldn’t be promised, he remarked that some people in his circle of friends had been known to hire others to deliver physical beatings on people they didn’t like.

O’Connor was still in Spain a year later when prosecutors in the Northern District of California charged him with conspiring to hack Twitter. At the same time, prosecutors in the Southern District of New York charged O’Connor with an impressive array of cyber offenses involving the exploitation of social media accounts, online extortion, cyberstalking, and the theft of cryptocurrency then valued at nearly USD $800,000.

In late April 2023, O’Connor was extradited from Spain to face charges in the United States. Two weeks later, he entered guilty pleas in both California and New York, admitting to all ten criminal charges levied against him. On June 23, O’Connor was sentenced to five years in prison.

PlugwalkJoe was part of a community that specialized in SIM-swapping victims to take over their online identities. Unauthorized SIM swapping is a scheme in which fraudsters trick or bribe employees at wireless phone companies into redirecting the target’s text messages and phone calls to a device they control.

From there, the attackers can reset the password for any of the victim’s online accounts that allow password resets via SMS. SIM swapping also lets attackers intercept one-time passwords needed for SMS-based multi-factor authentication (MFA).

O’Connor admitted to conducting SIM swapping attacks to take control over financial accounts tied to several cryptocurrency executives in May 2019, and to stealing digital currency currently valued at more than $1.6 million.

PlugwalkJoe also copped to SIM-swapping his way into the Snapchat accounts of several female celebrities and threatening to release nude photos found on their phones.

Victims who refused to give up social media accounts or submit to extortion demands were often visited with “swatting attacks,” wherein O’Connor and others would falsely report a shooting or hostage situation in the hopes of tricking police into visiting potentially lethal force on a target’s address.

Prosecutors said O’Connor even swatted and cyberstalked a 16-year-old girl, sending her nude photos and threatening to rape and/or murder her and her family.

In the case of the Twitter hack, O’Connor pleaded guilty to conspiracy to commit computer intrusions, conspiracy to commit wire fraud, and conspiracy to commit money laundering.

To resolve the case against him in New York, O’Connor pleaded guilty to conspiracy to commit computer intrusion, two counts of committing computer intrusions, making extortive communications, two counts of stalking, and making threatening communications.

In addition to the prison term, O’Connor was sentenced to three years of supervised release, and ordered to pay $794,012.64 in forfeiture.

To be clear, the Twitter hack of July 2020 did not involve SIM-swapping. Rather, Twitter said the intruders tricked a Twitter employee over the phone into providing access to internal tools.

Three others were charged along with O’Connor in the Twitter compromise. The alleged mastermind of the hack, then 17-year-old Graham Ivan Clarke from Tampa, Fla., pleaded guilty in 2021 and agreed to serve three years in prison, followed by three years probation.

This story is good reminder about the need to minimize your reliance on the mobile phone companies for securing your online identity. This means reducing the number of ways your life could be turned upside down if someone were to hijack your mobile phone number.

Most online services require users to validate a mobile phone number as part of setting up an account, but some services will let you remove your phone number after the fact. Those services that do you let you remove your phone number or disable SMS/phone calls for account recovery probably also offer more secure multi-factor authentication options, such as app-based one-time passwords and security keys. Check out 2fa.directory for a list of multi-factor options available across hundreds of popular sites and services.

Phishing Domains Tanked After Meta Sued Freenom

The number of phishing websites tied to domain name registrar Freenom dropped precipitously in the months surrounding a recent lawsuit from social networking giant Meta, which alleged the free domain name provider has a long history of ignoring abuse complaints about phishing websites while monetizing traffic to those abusive domains.

Freenom is the domain name registry service provider for five so-called “country code top level domains” (ccTLDs), including .cf for the Central African Republic; .ga for Gabon; .gq for Equatorial Guinea; .ml for Mali; and .tk for Tokelau.

Freenom has always waived the registration fees for domains in these country-code domains, but the registrar also reserves the right to take back free domains at any time, and to divert traffic to other sites — including adult websites. And there are countless reports from Freenom users who’ve seen free domains removed from their control and forwarded to other websites.

By the time Meta initially filed its lawsuit in December 2022, Freenom was the source of well more than half of all new phishing domains coming from country-code top-level domains. Meta initially asked a court to seal its case against Freenom, but that request was denied. Meta withdrew its December 2022 lawsuit and re-filed it in March 2023.

“The five ccTLDs to which Freenom provides its services are the TLDs of choice for cybercriminals because Freenom provides free domain name registration services and shields its customers’ identity, even after being presented with evidence that the domain names are being used for illegal purposes,” Meta’s complaint charged. “Even after receiving notices of infringement or phishing by its customers, Freenom continues to license new infringing domain names to those same customers.”

Meta pointed to research from Interisle Consulting Group, which discovered in 2021 and again last year that the five ccTLDs operated by Freenom made up half of the Top Ten TLDs most abused by phishers.

Interisle partner Dave Piscitello said something remarkable has happened in the months since the Meta lawsuit.

“We’ve observed a significant decline in phishing domains reported in the Freenom commercialized ccTLDs in months surrounding the lawsuit,” Piscitello wrote on Mastodon. “Responsible for over 60% of phishing domains reported in November 2022, Freenom’s percentage has dropped to under 15%.”

Interisle collects data from 12 major blocklists for spam, malware, and phishing, and it receives phishing-specific data from Spamhaus, Phishtank, OpenPhish and the APWG Ecrime Exchange. The company publishes historical data sets quarterly, both on malware and phishing.

Piscitello said it’s too soon to tell the full impact of the Freenom lawsuit, noting that Interisle’s sources of spam and phishing data all have different policies about when domains are removed from their block lists.

“One of the things we don’t have visibility into is how each of the blocklists determine to remove a URL from their lists,” he said. “Some of them time out [listed domains] after 14 days, some do it after 30, and some keep them forever.”

Freenom did not respond to requests for comment.

This is the second time in as many years that a lawsuit by Meta against a domain registrar has disrupted the phishing industry. In March 2020, Meta sued domain registrar giant Namecheap, alleging cybersquatting and trademark infringement.

The two parties settled the matter in April 2022. While the terms of that settlement have not been disclosed, new phishing domains registered through Namecheap declined more than 50 percent the following quarter, Interisle found.

Unfortunately, the lawsuits have had little effect on the overall number of phishing attacks and phishing-related domains, which have steadily increased in volume over the years.  Piscitello said the phishers tend to gravitate toward registrars that offer the least resistance and lowest price per domain. And with new top-level domains constantly being introduced, there is rarely a shortage of super low-priced domains.

“The abuse of a new top-level domain is largely the result of one registrar’s portfolio,” Piscitello told KrebsOnSecurity. “Alibaba or Namecheap or another registrar will run a promotion for a cheap domain, and then we’ll see flocking and migration of the phishers to that TLD. It’s like strip mining, where they’ll buy hundreds or thousands of domains, use those in a campaign, exhaust that TLD and then move on to another provider.”

Piscitello said despite the steep drop in phishing domains coming out of Freenom, the alternatives available to phishers are many. After all, there are more than 2,000 accredited domain registrars, not to mention dozens of services that let anyone set up a website for free without even owning a domain.

“There is no evidence that the trend line is even going to level off,” he said. “I think what the Meta lawsuit tells us is that litigation is like giving someone a standing eight count. It temporarily disrupts a process. And in that sense, litigation appears to be working.”

$10M Is Yours If You Can Get This Guy to Leave Russia

The U.S. government this week put a $10 million bounty on a Russian man who for the past 18 years operated Try2Check, one of the cybercrime underground’s most trusted services for checking the validity of stolen credit card data. U.S. authorities say 43-year-old Denis Kulkov‘s card-checking service made him at least $18 million, which he used to buy a Ferrari, Land Rover, and other luxury items.

Launched in 2005, Try2Check soon was processing more than a million card-checking transactions per month — charging 20 cents per transaction. Cybercriminals turned to services like this after purchasing stolen credit card data from an underground shop, with an eye toward minimizing the number of cards that are inactive by the time they are put to criminal use.

Try2Check was so reliable that it eventually became the official card-checking service for some of the underground’s most bustling crime bazaars, including Vault Market, Unicc, and Joker’s Stash. Customers of these carding shops who chose to use the shop’s built-in (but a-la-carte) card checking service from Try2Check could expect automatic refunds on any cards that were found to be inactive or canceled at the time of purchase.

Many established stolen card shops will allow customers to request refunds on dead cards based on official reports from trusted third-party checking services. But in general, the bigger shops have steered customers toward using their own white-labeled version of the Try2Check service — primarily to help minimize disputes over canceled cards.

On Wednesday, May 3, Try2Check’s websites were replaced with a domain seizure notice from the U.S. Secret Service and U.S. Department of Justice, as prosecutors in the Eastern District of New York unsealed an indictment and search warrant naming Denis Gennadievich Kulkov of Samara, Russia as the proprietor.

At the same time, the U.S. Department of State issued a $10 million reward for information leading to the arrest or conviction of Kulkov. In November 2021, the State Department began offering up to to $10 million for the name or location of any key leaders of REvil, a major Russian ransomware gang.

As noted in the Secret Service’s criminal complaint (PDF), the Try2Check service was first advertised on the closely-guarded Russian cybercrime forum Mazafaka, by someone using the handle “KreenJo.” That handle used the same ICQ instant messenger account number (555724) as a Mazafaka denizen named “Nordex.”

In February 2005, Nordex posted to Mazafaka that he was in the market for hacked bank accounts, and offered 50 percent of the take. He asked interested partners to contact him at the ICQ number 228427661 or at the email address polkas@bk.ru. As the government noted in its search warrant, Nordex exchanged messages with forum users at the time identifying himself as a then-24-year-old “Denis” from Samara, RU.

In 2017, U.S. law enforcement seized the cryptocurrency exchange BTC-e, and the Secret Service said those records show that a Denis Kulkov from Samara supplied the username “Nordexin,” email address nordexin@ya.ru, and an address in Samara.

Investigators had already found Instagram accounts where Kulkov posted pictures of his Ferrari and his family. Authorities were able to identify that Kulkov had an iCloud account tied to the address nordexin@icloud.com, and upon subpoenaing that found passport photos of Kulkov, and well as more photos of his family and pricey cars.

Like many other top cybercriminals based in Russia or in countries with favorable relations to the Kremlin, the proprietor of Try2Check was not particularly difficult to link to a real-life identity. In Kulkov’s case, it no doubt was critical to U.S. investigators that they had access to a wealth of personal information tied to a cryptocurrency exchange Kulkov had used.

However, the link between Kulkov and Try2Check can be made — ironically — based on records that have been plundered by hackers and published online over the years — including Russian email services, Russian government records, and hacked cybercrime forums.

NORDEX

According to cybersecurity firm Constella Intelligence, the address polkas@bk.ru was used to register an account with the username “Nordex” at bankir[.]com, a now defunct news website that was almost standard reading for Russian speakers interested in news about various Russian financial markets.

Nordex appears to have been a finance nerd. In his early days on the forums, Nordex posted several long threads on his views about the Russian stock market and mutual fund investments.

That Bankir account was registered from the Internet address 193.27.237.66 in Samara, Russia, and included Nordex’s date of birth as April 8, 1980, as well as their ICQ number (228427661).

Cyber intelligence firm Intel 471 found that Internet address also was used to register the account “Nordex” on the Russian hacking forum Exploit back in 2006.

Constella tracked another Bankir[.]com account created from that same Internet address under the username “Polkas.” This account had the same date of birth as Nordex, but a different email address: nordia@yandex.ru. This and other “nordia@” emails shared a password: “anna59.”

NORDIA

Nordia@yandex.ru shares several passwords with nordia@list.ru, which Constella says was used to create an account at a religious website for an Anna Kulikova from Samara. At the Russian home furnishing store Westwing.ru, Ms. Kulikova listed her full name as Anna Vnrhoturkina Kulikova, and her address as 29 Kommunistrecheskya St., Apt. 110.

A search on that address in Constella brings up a record for an Anna Denis Vnrhoturkina Kulkov, and the phone number 879608229389.

Russian vehicle registration records have also been hacked and leaked online over the years. Those records show that Anna’s Apt 110 address is tied to a Denis Gennadyvich Kulkov, born April 8, 1980.

The vehicle Kolkov registered in 2015 at that address was a 2010 Ferrari Italia, with the license plate number K022YB190. The phone number associated with this record — 79608229389 — is exactly like Anna’s, only minus the (mis?)leading “8”. That number also is tied to a now-defunct Facebook account, and to the email addresses nordexin@ya.ru and nordexin@icloud.com.

Kulkov’s Ferrari has been photographed numerous times over the years by Russian car aficionados, including this one with the driver’s face redacted by the photographer:

As the title of this story suggests, the hard part for Western law enforcement isn’t identifying the Russian cybercriminals who are major players in the scene. Rather, it’s finding creative ways to capture high-value suspects if and when they do leave the protection that Russia generally extends to domestic cybercriminals within its borders who do not also harm Russian companies or consumers, or interfere with state interests.

But Russia’s war against Ukraine has caused major fault lines to appear in the cybercrime underground: Cybercriminal syndicates that previously straddled Russia and Ukraine with ease were forced to reevaluate many comrades who were suddenly working for The Other Side.

Many cybercriminals who operated with impunity from Russia and Ukraine prior to the war chose to flee those countries following the invasion, presenting international law enforcement agencies with rare opportunities to catch most-wanted cybercrooks. One of those was Mark Sokolovsky, a 26-year-old Ukrainian man who operated the popular “Raccoon” malware-as-a-service offering; Sokolovsky was apprehended in March 2022 after fleeing Ukraine’s mandatory military service orders.

Also nabbed on the lam last year was Vyacheslav “Tank” Penchukov, a senior Ukrainian member of a transnational cybercrime group that stole tens of millions of dollars over nearly a decade from countless hacked businesses. Penchukov was arrested after leaving Ukraine to meet up with his wife in Switzerland.

3CX Breach Was a Double Supply Chain Compromise

We learned some remarkable new details this week about the recent supply-chain attack on VoIP software provider 3CX. The lengthy, complex intrusion has all the makings of a cyberpunk spy novel: North Korean hackers using legions of fake executive accounts on LinkedIn to lure people into opening malware disguised as a job offer; malware targeting Mac and Linux users working at defense and cryptocurrency firms; and software supply-chain attacks nested within earlier supply chain attacks.

In late March 2023, 3CX disclosed that its desktop applications for both Windows and macOS were compromised with malicious code that gave attackers the ability to download and run code on all machines where the app was installed. 3CX says it has more than 600,000 customers and 12 million users in a broad range of industries, including aerospace, healthcare and hospitality.

3CX hired incident response firm Mandiant, which released a report on Wednesday that said the compromise began in 2022 when a 3CX employee installed a malware-laced software package distributed via an earlier software supply chain compromise that began with a tampered installer for X_TRADER, a software package provided by Trading Technologies.

“This is the first time Mandiant has seen a software supply chain attack lead to another software supply chain attack,” reads the April 20 Mandiant report.

Mandiant found the earliest evidence of compromise uncovered within 3CX’s network was through the VPN using the employee’s corporate credentials, two days after the employee’s personal computer was compromised.

“Eventually, the threat actor was able to compromise both the Windows and macOS build environments,” 3CX said in an April 20 update on their blog.

Mandiant concluded that the 3CX attack was orchestrated by the North Korean state-sponsored hacking group known as Lazarus, a determination that was independently reached earlier by researchers at Kaspersky Lab and Elastic Security.

Mandiant found the compromised 3CX software would download malware that sought out new instructions by consulting encrypted icon files hosted on GitHub. The decrypted icon files revealed the location of the malware’s control server, which was then queried for a third stage of the malware compromise — a password stealing program dubbed ICONICSTEALER.

Meanwhile, the security firm ESET today published research showing remarkable similarities between the malware used in the 3CX supply chain attack and Linux-based malware that was recently deployed via fake job offers from phony executive profiles on LinkedIn. The researchers said this was the first time Lazarus had been spotted deploying malware aimed at Linux users.

As reported in a series last summer here, LinkedIn has been inundated this past year by fake executive profiles for people supposedly employed at a range of technology, defense, energy and financial companies. In many cases, the phony profiles spoofed chief information security officers at major corporations, and some attracted quite a few connections before their accounts were terminated.

Mandiant, Proofpoint and other experts say Lazarus has long used these bogus LinkedIn profiles to lure targets into opening a malware-laced document that is often disguised as a job offer. This ongoing North Korean espionage campaign using LinkedIn was first documented in August 2020 by ClearSky Security, which said the Lazarus group operates dozens of researchers and intelligence personnel to maintain the campaign globally.

Microsoft Corp., which owns LinkedIn, said in September 2022 that it had detected a wide range of social engineering campaigns using a proliferation of phony LinkedIn accounts. Microsoft said the accounts were used to impersonate recruiters at technology, defense and media companies, and to entice people into opening a malicious file. Microsoft found the attackers often disguised their malware as legitimate open-source software like Sumatra PDF and the SSH client Putty.

Microsoft attributed those attacks to North Korea’s Lazarus hacking group, although they’ve traditionally referred to this group as “ZINC“. That is, until earlier this month, when Redmond completely revamped the way it names threat groups; Microsoft now references ZINC as “Diamond Sleet.”

The ESET researchers said they found a new fake job lure tied to an ongoing Lazarus campaign on LinkedIn designed to compromise Linux operating systems. The malware was found inside of a document that offered an employment contract at the multinational bank HSBC.

“A few weeks ago, a native Linux payload was found on VirusTotal with an HSBC-themed PDF lure,” wrote ESET researchers Peter Kalnai and Marc-Etienne M.Leveille. “This completes Lazarus’s ability to target all major desktop operating systems. In this case, we were able to reconstruct the full chain, from the ZIP file that delivers a fake HSBC job offer as a decoy, up until the final payload.”

ESET said the malicious PDF file used in the scheme appeared to have a file extension of “.pdf,” but that this was a ruse. ESET discovered that the dot in the filename wasn’t a normal period but instead a Unicode character (U+2024) representing a “leader dot,” which is often used in tables of contents to connect section headings with the page numbers on which those sections begin.

“The use of the leader dot in the filename was probably an attempt to trick the file manager into treating the file as an executable instead of a PDF,” the researchers continued. “This could cause the file to run when double-clicked instead of opening it with a PDF viewer.”

ESET said anyone who opened the file would see a decoy PDF with a job offer from HSBC, but in the background the executable file would download additional malware payloads. The ESET team also found the malware was able to manipulate the program icon displayed by the malicious PDF, possibly because fiddling with the file extension could cause the user’s system to display a blank icon for the malware lure.

Kim Zetter, a veteran Wired.com reporter and now independent security journalist, interviewed Mandiant researchers who said they expect “many more victims” will be discovered among the customers of Trading Technologies and 3CX now that news of the compromised software programs is public.

“Mandiant informed Trading Technologies on April 11 that its X_Trader software had been compromised, but the software maker says it has not had time to investigate and verify Mandiant’s assertions,” Zetter wrote in her Zero Day newsletter on Substack. For now, it remains unclear whether the compromised X_Trader software was downloaded by people at other software firms.

If there’s a silver lining here, the X_Trader software had been decommissioned in April 2020 — two years before the hackers allegedly embedded malware in it.

“The company hadn’t released new versions of the software since that time and had stopped providing support for the product, making it a less-than-ideal vector for the North Korean hackers to infect customers,” Zetter wrote.

Giving a Face to the Malware Proxy Service ‘Faceless’

For the past seven years, a malware-based proxy service known as “Faceless” has sold anonymity to countless cybercriminals. For less than a dollar per day, Faceless customers can route their malicious traffic through tens of thousands of compromised systems advertised on the service. In this post we’ll examine clues left behind over the past decade by the proprietor of Faceless, including some that may help put a face to the name.

Riley Kilmer is co-founder of Spur.us, a company that tracks thousands of VPN and proxy networks, and helps customers identify traffic coming through these anonymity services. Kilmer said Faceless has emerged as one of the underground’s most reliable malware-based proxy services, mainly because its proxy network has traditionally included a great many compromised “Internet of Things” devices — such as media sharing servers — that are seldom included on malware or spam block lists.

Kilmer said when Spur first started looking into Faceless, they noticed almost every Internet address that Faceless advertised for rent also showed up in the IoT search engine Shodan.io as a media sharing device on a local network that was somehow exposed to the Internet.

“We could reliably look up the [fingerprint] for these media sharing devices in Shodan and find those same systems for sale on Faceless,” Kilmer said.

In January 2023, the Faceless service website said it was willing to pay for information about previously undocumented security vulnerabilities in IoT devices. Those with IoT zero-days could expect payment if their exploit involved at least 5,000 systems that could be identified through Shodan.

Recently, Faceless has shown ambitions beyond just selling access to poorly-secured IoT devices. In February, Faceless re-launched a service that lets users drop an email bomb on someone — causing the target’s inbox to be filled with tens of thousands of junk messages.

And in March 2023, Faceless started marketing a service for looking up Social Security Numbers (SSNs) that claims to provide access to “the largest SSN database on the market with a very high hit rate.”

Kilmer said Faceless wants to become a one-stop-fraud-shop for cybercriminals who are seeking stolen or synthetic identities from which to transact online, and a temporary proxy that is geographically close to the identity being sold. Faceless currently sells this bundled product for $9 — $8 for the identity and $1 for the proxy.

“They’re trying to be this one-stop shop for anonymity and personas,” Kilmer said. “The service basically says ‘here’s an SSN and proxy connection that should correspond to that user’s location and make sense to different websites.'”

MRMURZA

Faceless is a project from MrMurza, a particularly talkative member of more than a dozen Russian-language cybercrime forums over the past decade. According to cyber intelligence firm Flashpoint, MrMurza has been active in the Russian underground since at least September 2012. Flashpoint said MrMurza appears to be extensively involved in botnet activity and “drops” — fraudulent bank accounts created using stolen identity data that are often used in money laundering and cash-out schemes.

Faceless grew out of a popular anonymity service called iSocks, which was launched in 2014 and advertised on multiple Russian crime forums as a proxy service that customers could use to route their malicious Web traffic through compromised computers.

Flashpoint says that in the months before iSocks went online, MrMurza posted on the Russian language crime forum Verified asking for a serious partner to assist in opening a proxy service, noting they had a botnet that was powered by malware that collected proxies with a 70 percent infection rate.

In September 2016, MrMurza sent a message to all iSocks users saying the service would soon be phased out in favor of Faceless, and that existing iSocks users could register at Faceless for free if they did so quickly — before Faceless began charging new users registration fees between $50 and $100.

Verified and other Russian language crime forums where MrMurza had a presence have been hacked over the years, with contact details and private messages leaked online. In a 2014 private message to the administrator of Verified explaining his bona fides, MrMurza said he received years of positive feedback as a seller of stolen Italian credit cards and a vendor of drops services.

MrMurza told the Verified admin that he used the nickname AccessApproved on multiple other forums over the years. MrMurza also told the admin that his account number at the now-defunct virtual currency Liberty Reserve was U1018928.

According to cyber intelligence firm Intel 471, the user AccessApproved joined the Russian crime forum Zloy in Jan. 2012, from an Internet address in Magnitogorsk, RU. In a 2012 private message where AccessApproved was arguing with another cybercriminal over a deal gone bad, AccessApproved asked to be paid at the Liberty Reserve address U1018928.

In 2013, U.S. federal investigators seized Liberty Reserve and charged its founders with facilitating billions of dollars in money laundering tied to cybercrime. The Liberty Reserve case was prosecuted out of the Southern District of New York, which in 2016 published a list of account information (PDF) tied to thousands of Liberty Reserve addresses the government asserts were involved in money laundering.

That document indicates the Liberty Reserve account claimed by MrMurza/AccessApproved — U1018928 — was assigned in 2011 to a “Vadim Panov” who used the email address lesstroy@mgn.ru.

PANOV

Constella Intelligence, a threat intelligence firm that tracks breached databases, says lesstroy@mgn.ru was used for an account “Hackerok” at the accounting service klerk.ru that was created from an Internet address in Magnitogorsk. The password chosen by this user was “1232.”

In addition to selling access to hacked computers and bank accounts, both MrMurza and AccessApproved ran side hustles on the crime forums selling clothing from popular retailers that refused to ship directly to Russia.

On one cybercrime forum where AccessApproved had clothing customers, denizens of the forum created a lengthy discussion thread to help users identify incoming emails associated with various reshipping services advertised within their community. Reshippers tend to rely on a large number of people in the United States and Europe helping to forward packages overseas, but in many cases the notifications about purchases and shipping details would be forwarded to reshipping service customers from a consistent email account.

That thread said AccessApproved’s clothing reshipping service forwarded confirmation emails from the address panov-v@mail.ru. This address is associated with accounts on two Russian cybercrime forums registered from Magnitogorsk in 2010 using the handle “Omega^gg4u.”

This Omega^gg4u identity sold software that can rapidly check the validity of large batches of stolen credit cards. Interestingly, both Omega^gg4u and AccessApproved also had another niche: Reselling heavily controlled substances — such as human growth hormone and anabolic steroids — from chemical suppliers in China.

A search in Constella on the address panov-v@mail.ru and many variations on that address shows these accounts cycled through the same passwords, including 055752403k, asus666, 01091987h, and the relatively weak password 1232 (recall that 1232 was picked by whoever registered the lesstroy@mgn.ru account at Klerk.ru).

Constella says the email address asus666@yandex.ru relied on the passwords asus666 and 01091987h. The 01091987h password also was used by asus666@mail.ru, which also favored the password 24587256.

Constella further reports that whoever owned the much shorter address asus@mail.ru also used the password 24587256. In addition, it found the password 2318922479 was tied to both asus666@mail.ru and asus@mail.ru.

The email addresses asus@mail.ru, asus2504@mail.ru, and zaxar2504@rambler.ru were all used to register Vkontakte social media accounts for a Denis ***@VIP*** Pankov. There are a number of other Vkontakte accounts registered to asus@mail.ru and many variations of this address under a different name. But none of those other profiles appear tied to real-life identities.

PANKOV

Constella’s data shows the email addresses asus2504@mail.ru and zaxar2504@rambler.ru used the rather unique password denis250485, which was also used by the email address denispankov@yandex.ru and almost a dozen variations at other Russian-language email providers.

Russian vehicle registration records from 2016 show the email address denispankov@yandex.ru belongs to Denis Viktorovich Pankov, born on April 25, 1985. That explains the “250485” portion of Pankov’s favored password. The registration records further indicate that in 2016 Pankov’s vehicle was registered in a suburb of Moscow.

Russian incorporation records show that denispankov@yandex.com is tied to IP Pankov Denis Viktorovich, a now-defunct transportation company in the Volograd Oblast, a region in southern Russia that shares a long border with western Kazazkhstan.

More recent records for IP Pankov Denis Viktorovich show a microenterprise with this name in Omsk that described its main activity as “retail sale by mail or via the Internet.” Russian corporate records indicate this entity was liquidated in 2021.

A reverse password search on “denis250485” via Constella shows this password was used by more than 75 email addresses, most of which are some variation of gaihnik@mail.ru — such as gaihnik25@mail.ru, or gaihnik2504@rambler.ru.

In 2012, someone posted answers to a questionnaire on behalf of Denis Viktorovich Pankov to a Russian-language discussion forum on Chinese crested dog breeds. The message said Pankov was seeking a puppy of a specific breed and was a resident of Krasnogorsk, a city that is adjacent to the northwestern boundary of Moscow.

The message said Pankov was a then 27-year-old manager in an advertising company, and could be reached at the email address gaihnik@mail.ru.

GAIHNIK

Constella Intelligence shows gaihnik@mail.ru registered at the now-defunct email marketing service Smart Responder from an address in Gagarin, which is about 115 miles west of Moscow.

Back in 2015, the user Gaihnik25 was banned from the online game World of Tanks for violating the game’s terms that prohibit “bot farming,” or the automated use of large numbers of player accounts to win some advantage that is usually related to cashing out game accounts or inventory.

For the past few years, someone using the nickname Gaihnik25 has been posting messages to the Russian-language hacking forum Gerki[.]pw, on discussion threads regarding software designed to “brute force” or mass-check online accounts for weak or compromised passwords.

A new member of the Russian hacking forum Nohide[.]Space using the handle Gaihnik has been commenting recently about proxy services, credential checking software, and the sale of hacked mailing lists. Gaihnik’s first post on the forum concerned private software for checking World of Tanks accounts.

The address gaihnik@mail.ru shows how so many email addresses tied to Pankov were also connected to apparently misleading identities on Vkontakte and elsewhere. Constella found this address was tied to a Vkontakte account for a Dmitriy Zakarov.

Microsoft’s Bing search engine says gaihnik@mail.ru belongs to 37-year-old Denis Pankov, yet clicking the Mail.ru profile for that user brings up a profile for a much older man by the name Gavril Zakarov. However, when you log in to a Mail.ru account and view that profile, it shows that most of the account’s profile photos are of a much younger man.

Many of those same photos show up in an online dating profile at dating.ru for the user Gaihnik, a.k.a “Denchik,” who says he is a 37-year-old Taurus from Gagarin who enjoys going for walks in nature, staying up late, and being on the Internet.

Mr. Pankov did not respond to multiple requests for comment sent to all of the email addresses mentioned in this story. However, some of those addresses produced detailed error responses; Mail.ru reported that the users panov-v@mail.ru, asus666@mail.ru, and asus2504@mail.ru were terminated, and that gaihnik25@mail.ru is now disabled.

Messages sent to many other email addresses connected via passwords to Pankov and using some variation of asus####@mail.ru also returned similar account termination messages.

Why is ‘Juice Jacking’ Suddenly Back in the News?

KrebsOnSecurity received a nice bump in traffic this week thanks to tweets from the Federal Bureau of Investigation (FBI) and the Federal Communications Commission (FCC) about “juice jacking,” a term first coined here in 2011 to describe a potential threat of data theft when one plugs their mobile device into a public charging kiosk. It remains unclear what may have prompted the alerts, but the good news is that there are some fairly basic things you can do to avoid having to worry about juice jacking.

On April 6, 2023, the FBI’s Denver office issued a warning about juice jacking in a tweet.

“Avoid using free charging stations in airports, hotels or shopping centers,” the FBI’s Denver office warned. “Bad actors have figured out ways to use public USB ports to introduce malware and monitoring software onto devices. Carry your own charger and USB cord and use an electrical outlet instead.”

Five days later, the Federal Communications Commission (FCC) issued a similar warning. “Think twice before using public charging stations,” the FCC tweeted. “Hackers could be waiting to gain access to your personal information by installing malware and monitoring software to your devices. This scam is referred to as juice jacking.”

The FCC tweet also provided a link to the agency’s awareness page on juice jacking, which was originally published in advance of the Thanksgiving Holiday in 2019 but was updated in 2021 and then again shortly after the FBI’s tweet was picked up by the news media. The alerts were so broadly and breathlessly covered in the press that a mention of juice jacking even made it into this week’s Late Late Show with James Corden.

The term juice jacking crept into the collective paranoia of gadget geeks in the summer of 2011, thanks to the headline for a story here about researchers at the DEFCON hacker convention in Vegas who’d set up a mobile charging station designed to educate the unwary to the reality that many mobile devices connected to a computer would sync their data by default.

Since then, Apple, Google and other mobile device makers have changed the way their hardware and software works so that their devices no longer automatically sync data when one plugs them into a computer with a USB charging cable. Instead, users are presented with a prompt asking if they wish to trust a connected computer before any data transfer can take place.

On the other hand, the technology needed to conduct a sneaky juice jacking attack has become far more miniaturized, accessible and cheap. And there are now several products anyone can buy that are custom-built to enable juice jacking attacks.

Probably the best known example is the OMG cable, a $180 hacking device made for professional penetration testers that looks more or less like an Apple or generic USB charging cable. But inside the OMG cable is a tiny memory chip and a Wi-Fi transmitter that creates a Wi-Fi hotspot, to which the attacker can remotely connect using a smartphone app and run commands on the device.

Brian Markus is co-founder of Aries Security, and one of the researchers who originally showcased the threat from juice jacking at the 2011 DEFCON. Markus said he isn’t aware of any public accounts of juice jacking kiosks being found in the wild, and said he’s unsure what prompted the recent FBI alert.

But Markus said juice jacking is still a risk because it is far easier and cheaper these days for would-be attackers to source and build the necessary equipment.

“Since then, the technology and components have become much smaller and very easy to build, which puts this in the hands of less sophisticated threat actors,” Markus said. “Also, you can now buy all this stuff over the counter. I think the risk is possibly higher now than it was a decade ago, because a much larger population of people can now pull this off easily.”

How seriously should we take the recent FBI warning? An investigation by the myth-busting site Snopes suggests the FBI tweet was just a public service announcement based on a dated advisory. Snopes reached out to both the FBI and the FCC to request data about how widespread the threat of juice jacking is in 2023.

“The FBI replied that its tweet was a ‘standard PSA-type post’ that stemmed from the FCC warning,” Snopes reported. “An FCC spokesperson told Snopes that the commission wanted to make sure that their advisory on “juice-jacking,” first issued in 2019 and later updated in 2021, was up-to-date so as to ensure ‘the consumers have the most up-to-date information.’ The official, who requested anonymity, added that they had not seen any rise in instances of consumer complaints about juice-jacking.”

What can you do to avoid juice jacking? Bring your own gear. A general rule of thumb in security is that if an adversary has physical access to your device, you can no longer trust the security or integrity of that device. This also goes for things that plug into your devices.

Juice jacking isn’t possible if a device is charged via a trusted AC adapter, battery backup device, or through a USB cable with only power wires and no data wires present. If you lack these things in a bind and still need to use a public charging kiosk or random computer, at least power your device off before plugging it in.

Microsoft (& Apple) Patch Tuesday, April 2023 Edition

Microsoft today released software updates to plug 100 security holes in its Windows operating systems and other software, including a zero-day vulnerability that is already being used in active attacks. Not to be outdone, Apple has released a set of important updates addressing two zero-day vulnerabilities that are being used to attack iPhones, iPads and Macs.

On April 7, Apple issued emergency security updates to fix two weaknesses that are being actively exploited, including CVE-2023-28206, which can be exploited by apps to seize control over a device. CVE-2023-28205 can be used by a malicious or hacked website to install code.

Both vulnerabilities are addressed in iOS/iPadOS 16.4.1, iOS 15.7.5, and macOS 12.6.5 and 11.7.6. If you use Apple devices and you don’t have automatic updates enabled (they are on by default), you should probably take care of that soon as detailed instructions on how to attack CVE-2023-28206 are now public.

Microsoft’s bevy of 100 security updates released today include CVE-2023-28252, which is a weakness in Windows that Redmond says is under active attack. The vulnerability is in the Windows Common Log System File System (CLFS) driver, a core Windows component that was the source of attacks targeting a different zero-day vulnerability in February 2023.

“If it seems familiar, that’s because there was a similar 0-day patched in the same component just two months ago,” said Dustin Childs at the Trend Micro Zero Day Initiative. “To me, that implies the original fix was insufficient and attackers have found a method to bypass that fix. As in February, there is no information about how widespread these attacks may be. This type of exploit is typically paired with a code execution bug to spread malware or ransomware.”

According to the security firm Qualys, this vulnerability has been leveraged by cyber criminals to deploy Nokoyawa ransomware.

“This is a relatively new strain for which there is some open source intel to suggest that it is possibly related to Hive ransomware – one of the most notable ransomware families of 2021 and linked to breaches of over 300+ organizations in a matter of just a few months,” said Bharat Jogi, director of vulnerability and threat research at Qualys.

Jogi said while it is still unclear which exact threat actor is targeting CVE-2023-28252, targets have been observed in South and North America, regions across Asia and at organizations in the Middle East.

Satnam Narang at Tenable notes that CVE-2023-28252 is also the second CLFS zero-day disclosed to Microsoft by researchers from Mandiant and DBAPPSecurity (CVE-2022-37969), though it is unclear if both of these discoveries are related to the same attacker.

Seven of the 100 vulnerabilities Microsoft fixed today are rated “Critical,” meaning they can be used to install malicious code with no help from the user. Ninety of the flaws earned Redmond’s slightly less-dire “Important” label, which refers to weaknesses that can be used to undermine the security of the system but which may require some amount of user interaction.

Narang said Microsoft has rated nearly 90% of this month’s vulnerabilities as “Exploitation Less Likely,” while just 9.3% of flaws were rated as “Exploitation More Likely.” Kevin Breen at Immersive Labs zeroed in on several notable flaws in that 9.3%, including CVE-2023-28231, a remote code execution vulnerability in a core Windows network process (DHCP) with a CVSS score of 8.8.

“‘Exploitation more likely’ means it’s not being actively exploited but adversaries may look to try and weaponize this one,” Breen said. “Micorosft does note that successful exploitation requires an attacker to have already gained initial access to the network. This could be via social engineering, spear phishing attacks, or exploitation of other services.”

Breen also called attention to CVE-2023-28220 and CVE-2023-28219 — a pair of remote code execution vulnerabilities affecting Windows Remote Access Servers (RAS) that also earned Microsoft’s “exploitation more likely” label.

“An attacker can exploit this vulnerability by sending a specially crafted connection request to a RAS server, which could lead to remote code execution,” Breen said. While not standard in all organizations, RAS servers typically have direct access from the Internet where most users and services are connected. This makes it extremely enticing for attackers as they don’t need to socially engineer their way into an organization. They can simply scan the internet for RAS servers and automate the exploitation of vulnerable devices.”

For more details on the updates released today, see the SANS Internet Storm Center roundup. If today’s updates cause any stability or usability issues in Windows, AskWoody.com will likely have the lowdown on that.

Please consider backing up your data and/or imaging your system before applying any updates. And feel free to sound off in the comments if you experience any problems as a result of these patches.

A Serial Tech Investment Scammer Takes Up Coding?

John Clifton Davies, a 60-year-old con man from the United Kingdom who fled the country in 2015 before being sentenced to 12 years in prison for fraud, has enjoyed a successful life abroad swindling technology startups by pretending to be a billionaire investor. Davies’ newest invention appears to be “CodesToYou,” which purports to be a “full cycle software development company” based in the U.K.

Several articles here have delved into the history of John Bernard, the pseudonym used by a fake billionaire technology investor who tricked dozens of startups into giving him tens of millions of dollars.

John Bernard’s real name is John Clifton Davies, a convicted fraudster from the United Kingdom who is currently a fugitive from justice. For several years until reinventing himself again quite recently, Bernard pretended to be a billionaire Swiss investor who made his fortunes in the dot-com boom 20 years ago.

“The Private Office of John Bernard” let it be known to investment brokers that he had tens of millions of dollars to invest in tech startups, and he attracted a stream of new victims by offering extraordinarily generous finder’s fees to brokers who helped him secure new clients. But those brokers would eventually get stiffed because Bernard’s company would never consummate a deal.

Bernard would promise to invest millions in tech startups, and then insist that companies pay tens of thousands of dollars worth of due diligence fees up front. However, the due diligence company he insisted on using — another Swiss firm called The Inside Knowledge GmbH — also was secretly owned by Bernard, who would invariably pull out of the deal after receiving the due diligence money.

A variety of clues suggest Davies has recently adopted at least one other identity — Alan John Mykhailov — who is listed as chairman of a British concern called CodesToYou LTD, incorporated in May 2022. The CodesToYou website says the company employs talented coders in several countries, and that its programmers offer “your ultimate balance between speed, cost and quality.”

In response to questions from KrebsOnSecurity, CodesToYou’s marketing manager — who gave their name only as “Zhena” — said the company was not affiliated with any John Bernard or John Clifton Davies, and maintained that CodesToYou is a legitimate enterprise.

But publicly available information about this company and its leadership suggests otherwise. Official incorporation documents from the U.K.’s Companies House represent that CodesToYou is headed by an Alan John Mykhailov, a British citizen born in March 1958.

Companies House says Mykhailov is an officer in three other companies, including one called Blackstone Corporate Alliance Ltd. According to the Swiss business tracking service business-monitor.ch, Blackstone Corporate Alliance Ltd. is currently the entity holding a decision-making role in John Bernard’s fake due diligence company — The Inside Knowledge GmbH — which is now in liquidation.

Also listed as a partner in Blackstone Corporate Alliance Limited is Igor Hubskyi (a.k.a. Igor Gubskyi), a Ukrainian man who was previously president of The Inside Knowledge GmbH.

The CodesToYou website says the company’s marketing team lead is Maria Yakovleva, and the photo of this employee matches the profile for the LinkedIn account name “Maria Y.” That same LinkedIn profile and photo previously listed Maria by a different first and last name — Mariya Kulikova; back then, Ms. Kulikova’s LinkedIn profile said she was an executive assistant in The Private Office of Mr. John Bernard.

Companies House lists Alan John Mykhailov as a current officer in two other companies, including Frisor Limited, and Ardelis Solutions Limited. A cached copy of the now-defunct Ardelis Solutions website says it was a private equity firm.

CodesToYou’s Maria also included Ardelis Solutions in the work history section of her LinkedIn resume. That is, until being contacted by this author on LinkedIn, after which Maria’s profile picture and any mention of Ardelis Solutions were deleted.

Listed as head of business development at CodesToYou is David Bruno, a Canadian man whose LinkedIn profile says he is founder of an organization called “World Privacy Resource.” As KrebsOnSecurity reported in 2020, Bruno was at the time promoting himself as the co-CEO of a company called SafeSwiss Secure Communication AG, and the founder of another tech startup called Secure Swiss Data.

Secure Swiss Data’s domain — secureswissdata.com — is a Swiss concern that sells encrypted email and data services. According to DomainTools.com, that website name was registered in 2015 by The Inside Knowledge GmbH. In February 2020, a press release announced that Secure Swiss Data was purchased in an “undisclosed multimillion buyout” by SafeSwiss Secure Communication AG.

When reached in 2020 and asked about his relationship to Mr. Bernard, Mr. Bruno said the two were business partners and that he couldn’t imagine that Mr. Bernard would be involved in anything improper. To this day Mr. Bruno is the only person I’ve spoken to who has had anything positive to say about Mr. Bernard.

Mr. Bruno did not respond to requests for comment this time around, but his LinkedIn profile no longer makes any mention of Secure Swiss Data or SafeSwiss — both companies he claimed to run for many years. Nor does it mention CodesToYou. However, Mr. Bruno’s former company SafeSwiss is listed as one of the six “portfolio” companies whose services are promoted on the CodesToYou website.

In mid-2021, Bruno announced he was running for public office in Ontario.

“The Kenora resident is no stranger to the government as he contributed to Canada’s new Digital Charter, Bill C-11, which is a new Cyber Security policy,” reported Drydennow.com, a news website that covers Northwestern Ontario. Drydennow says the next federal election is expected to be held on or before Oct. 16, 2023.

John Clifton Davies was convicted in 2015 of swindling businesses throughout the U.K. that were struggling financially and seeking to restructure their debt. For roughly six years, Davies ran a series of firms that pretended to offer insolvency services, but instead simply siphoned what little remaining money these companies had.

The very first entity mentioned in the technology portfolio advertised on the CodesToYou website is called “MySolve,” and it purports to offer a “multi-feature platform for insolvency practitioners.”

Mr. Davies’ fourth wife, Iryna Davies, is listed as a director of one of the insolvency consulting businesses in the U.K. that was part of John Davies’ 2015 fraud conviction. Prior to his trial for fraud, Davies served 16 months in jail before being cleared of murdering his third wife on their honeymoon in India: Colette Davies, 39, died after falling 80 feet from a viewing point at a steep gorge in the Himachal Pradesh region of India.

Mr. Davies was charged with murder and fraud after he attempted to collect GBP 132,000 in her life insurance payout, but British prosecutors ultimately conceded they did not have enough evidence to convict him.

The scams favored by Davies and his alter egos are smart because he never approaches investors directly; rather, investors are incentivized to put his portfolio in front of tech firms seeking financial backing. And all the best cons begin as an idea or possibility planted in the target’s mind.

It’s also a reliable scam because companies bilked by small-time investment schemes rarely pursue legal action, mainly because the legal fees involved can quickly surpass the losses. On top of that, many victims will likely be too ashamed to admit their duping. Victims who do press their case in court and win then face the daunting challenge of collecting damages from a slew of ephemeral shell corporations.

The latest Bernard victim to speak publicly — a Norwegian company hoping to build a fleet of environmentally friendly shipping vessels — is now embroiled in a lawsuit over a deal gone bad. As part of that scam, Bernard falsely claimed to have secured $100 million from six other wealthy investors, including the founder of Uber and the artist Abel Makkonen Tesfaye, better known as The Weeknd.

Feds Charge NY Man as BreachForums Boss “Pompompurin”

The U.S. Federal Bureau of Investigation (FBI) this week arrested a New York man on suspicion of running BreachForums, a popular English-language cybercrime forum where some of the world biggest hacked databases routinely show up for sale. The forum’s administrator “Pompompurin” has been a thorn in the side of the FBI for years, and BreachForums is widely considered a reincarnation of RaidForums, a remarkably similar crime forum that the FBI infiltrated and dismantled in 2022.

In an affidavit filed with the District Court for the Southern District of New York, FBI Special Agent John Longmire said that at around 4:30 p.m. on March 15, 2023, he led a team of law enforcement agents that made a probable cause arrest of a Conor Brian Fitzpatrick in Peekskill, NY.

“When I arrested the defendant on March 15, 2023, he stated to me in substance and in part that: a) his name was Conor Brian Fitzpatrick; b) he used the alias ‘pompompurin/’ and c) he was the owner and administrator of ‘BreachForums’ the data breach website referenced in the Complaint,” Longmire wrote.

Pompompurin has been something of a nemesis to the FBI for several years. In November 2021, KrebsOnSecurity broke the news that thousands of fake emails about a cybercrime investigation were blasted out from the FBI’s email systems and Internet addresses.

Pompompurin took credit for that stunt, and said he was able to send the FBI email blast by exploiting a flaw in an FBI portal designed to share information with state and local law enforcement authorities. The FBI later acknowledged that a software misconfiguration allowed someone to send the fake emails.

In December, 2022, KrebsOnSecurity broke the news that hackers active on BreachForums had infiltrated the FBI’s InfraGard program, a vetted FBI program designed to build cyber and physical threat information sharing partnerships with experts in the private sector. The hackers impersonated the CEO of a major financial company, applied for InfraGard membership in the CEO’s name, and were granted admission to the community.

From there, the hackers plundered the InfraGard member database, and proceeded to sell contact information on more than 80,000 InfraGard members in an auction on BreachForums. The FBI responded by disabling the portal for some time, before ultimately forcing all InfraGard members to re-apply for membership.

More recently, BreachForums was the sales forum for data stolen from DC Health Link, a health insurance exchange based in Washington, D.C. that suffered a data breach this month. The sales thread initially said the data included the names, Social Security numbers, dates of birth, health plan and enrollee information and more on 170,000 individuals, although the official notice about the breach says 56,415 people were affected.

In April 2022, U.S. Justice Department seized the servers and domains for RaidForums, an extremely popular English-language cybercrime forum that sold access to more than 10 billion consumer records stolen in some of the world’s largest data breaches since 2015. As part of that operation, the feds also charged the alleged administrator, 21-year-old Diogo Santos Coelho of Portugal, with six criminal counts.

Coelho was arrested in the United Kingdom on Jan. 31, 2022. By that time, the new BreachForums had been live for just under a week, but with a familiar look.

BreachForums remains accessible online, and from reviewing the live chat stream on the site’s home page it appears the forum’s active users are only just becoming aware that their administrator — and the site’s database — is likely now in FBI hands:

“Wait if they arrested pom then doesn’t the FBI have all of our details we’ve registered with?” asked one worried BreachForums member.

“But we all have good VPNs I guess, right…right guys?” another denizen offered.

“Like pom would most likely do a plea bargain and cooperate with the feds as much as possible,” replied another.

Fitzpatrick could not be immediately reached for comment. The FBI declined to comment for this story.

There is only one page to the criminal complaint against Fitzpatrick (PDF), which charges him with one count of conspiracy to commit access device fraud. The affidavit on his arrest is available here (PDF).

Update: Corrected spelling of FBI agent’s last name.

Sued by Meta, Freenom Halts Domain Registrations

The domain name registrar Freenom, whose free domain names have long been a draw for spammers and phishers, has stopped allowing new domain name registrations. The move comes after the Dutch registrar was sued by Meta, which alleges the company ignores abuse complaints about phishing websites while monetizing traffic to those abusive domains.

Freenom is the domain name registry service provider for five so-called “country code top level domains” (ccTLDs), including .cf for the Central African Republic; .ga for Gabon; .gq for Equatorial Guinea; .ml for Mali; and .tk for Tokelau.

Freenom has always waived the registration fees for domains in these country-code domains, presumably as a way to encourage users to pay for related services, such as registering a .com or .net domain, for which Freenom does charge a fee.

On March 3, 2023, social media giant Meta sued Freenom in a Northern California court, alleging cybersquatting violations and trademark infringement. The lawsuit also seeks information about the identities of 20 different “John Does” — Freenom customers that Meta says have been particularly active in phishing attacks against Facebook, Instagram, and WhatsApp users.

The lawsuit points to a 2021 study (PDF) on the abuse of domains conducted by Interisle Consulting Group, which discovered that those ccTLDs operated by Freenom made up five of the Top Ten TLDs most abused by phishers.

“The five ccTLDs to which Freenom provides its services are the TLDs of choice for cybercriminals because Freenom provides free domain name registration services and shields its customers’ identity, even after being presented with evidence that the domain names are being used for illegal purposes,” the complaint charges. “Even after receiving notices of infringement or phishing by its customers, Freenom continues to license new infringing domain names to those same customers.”

Meta further alleges that “Freenom has repeatedly failed to take appropriate steps to investigate and respond appropriately to reports of abuse,” and that it monetizes the traffic from infringing domains by reselling them and by adding “parking pages” that redirect visitors to other commercial websites, websites with pornographic content, and websites used for malicious activity like phishing.

Freenom has not yet responded to requests for comment. But attempts to register a domain through the company’s website as of publication time generated an error message that reads:

“Because of technical issues the Freenom application for new registrations is temporarily out-of-order. Please accept our apologies for the inconvenience. We are working on a solution and hope to resume operations shortly. Thank you for your understanding.”

Although Freenom is based in The Netherlands, some of its other sister companies named as defendants in the lawsuit are incorporated in the United States.

Meta initially filed this lawsuit in December 2022, but it asked the court to seal the case, which would have restricted public access to court documents in the dispute. That request was denied, and Meta amended and re-filed the lawsuit last week.

According to Meta, this isn’t just a case of another domain name registrar ignoring abuse complaints because it’s bad for business. The lawsuit alleges that the owners of Freenom “are part of a web of companies created to facilitate cybersquatting, all for the benefit of Freenom.”

“On information and belief, one or more of the ccTLD Service Providers, ID Shield, Yoursafe, Freedom Registry, Fintag, Cervesia, VTL, Joost Zuurbier Management Services B.V., and Doe Defendants were created to hide assets, ensure unlawful activity including cybersquatting and phishing goes undetected, and to further the goals of Freenom,” Meta charged.

It remains unclear why Freenom has stopped allowing domain registration. In June 2015, ICANN suspended Freenom’s ability to create new domain names or initiate inbound transfers of domain names for 90 days. According to Meta, the suspension was premised on ICANN’s determination that Freenom “has engaged in a pattern and practice of trafficking in or use of domain names identical or confusingly similar to a trademark or service mark of a third party in which the Registered Name Holder has no rights or legitimate interest.”

A spokesperson for ICANN said the organization has no insight as to why Freenom might have stopped registering domain names. But it said Freenom (d/b/a OpenTLD B.V.) also received formal enforcement notices from ICANN in 2017 and 2020 for violating different obligations.

A copy of the amended complaint against Freenom, et. al, is available here (PDF).

March 8, 6:11 p.m. ET: Updated story with response from ICANN. Corrected attribution of the domain abuse report.

When Low-Tech Hacks Cause High-Impact Breaches

Web hosting giant GoDaddy made headlines this month when it disclosed that a multi-year breach allowed intruders to steal company source code, siphon customer and employee login credentials, and foist malware on customer websites. Media coverage understandably focused on GoDaddy’s admission that it suffered three different cyberattacks over as many years at the hands of the same hacking group.  But it’s worth revisiting how this group typically got in to targeted companies: By calling employees and tricking them into navigating to a phishing website.

In a filing with the U.S. Securities and Exchange Commission (SEC), GoDaddy said it determined that the same “sophisticated threat actor group” was responsible for three separate intrusions, including:

-March 2020: A spear-phishing attack on a GoDaddy employee compromised the hosting login credentials of approximately 28,000 GoDaddy customers, as well as login credentials for a small number employees;

-November 2021: A compromised GoDaddy password let attackers steal source code and information tied to 1.2 million customers, including website administrator passwords, sFTP credentials, and private SSL keys;

-December 2022: Hackers gained access to and installed malware on GoDaddy’s cPanel hosting servers that “intermittently redirected random customer websites to malicious sites.”

“Based on our investigation, we believe these incidents are part of a multi-year campaign by a sophisticated threat actor group that, among other things, installed malware on our systems and obtained pieces of code related to some services within GoDaddy,” the company stated in its SEC filing.

What else do we know about the cause of these incidents? We don’t know much about the source of the November 2021 incident, other than GoDaddy’s statement that it involved a compromised password, and that it took about two months for the company to detect the intrusion. GoDaddy has not disclosed the source of the breach in December 2022 that led to malware on some customer websites.

But we do know the March 2020 attack was precipitated by a spear-phishing attack against a GoDaddy employee. GoDaddy described the incident at the time in general terms as a social engineering attack, but one of its customers affected by that March 2020 breach actually spoke to one of the hackers involved.

The hackers were able to change the Domain Name System (DNS) records for the transaction brokering site escrow.com so that it pointed to an address in Malaysia that was host to just a few other domains, including the then brand-new phishing domain servicenow-godaddy[.]com.

The general manager of Escrow.com found himself on the phone with one of the GoDaddy hackers, after someone who claimed they worked at GoDaddy called and said they needed him to authorize some changes to the account.

In reality, the caller had just tricked a GoDaddy employee into giving away their credentials, and he could see from the employee’s account that Escrow.com required a specific security procedure to complete a domain transfer.

The general manager of Escrow.com said he suspected the call was a scam, but decided to play along for about an hour — all the while recording the call and coaxing information out of the scammer.

“This guy had access to the notes, and knew the number to call,” to make changes to the account, the CEO of Escrow.com told KrebsOnSecurity. “He was literally reading off the tickets to the notes of the admin panel inside GoDaddy.”

About halfway through this conversation — after being called out by the general manager as an imposter — the hacker admitted that he was not a GoDaddy employee, and that he was in fact part of a group that enjoyed repeated success with social engineering employees at targeted companies over the phone.

Absent from GoDaddy’s SEC statement is another spate of attacks in November 2020, in which unknown intruders redirected email and web traffic for multiple cryptocurrency services that used GoDaddy in some capacity.

It is possible this incident was not mentioned because it was the work of yet another group of intruders. But in response to questions from KrebsOnSecurity at the time, GoDaddy said that incident also stemmed from a “limited” number of GoDaddy employees falling for a sophisticated social engineering scam.

“As threat actors become increasingly sophisticated and aggressive in their attacks, we are constantly educating employees about new tactics that might be used against them and adopting new security measures to prevent future attacks,” GoDaddy said in a written statement back in 2020.

Voice phishing or “vishing” attacks typically target employees who work remotely. The phishers will usually claim that they’re calling from the employer’s IT department, supposedly to help troubleshoot some issue. The goal is to convince the target to enter their credentials at a website set up by the attackers that mimics the organization’s corporate email or VPN portal.

Experts interviewed for an August 2020 story on a steep rise in successful voice phishing attacks said there are generally at least two people involved in each vishing scam: One who is social engineering the target over the phone, and another co-conspirator who takes any credentials entered at the phishing page — including multi-factor authentication codes shared by the victim — and quickly uses them to log in to the company’s website.

The attackers are usually careful to do nothing with the phishing domain until they are ready to initiate a vishing call to a potential victim. And when the attack or call is complete, they disable the website tied to the domain.

This is key because many domain registrars will only respond to external requests to take down a phishing website if the site is live at the time of the abuse complaint. This tactic also can stymie efforts by companies that focus on identifying newly-registered phishing domains before they can be used for fraud.

GoDaddy’s latest SEC filing indicates the company had nearly 7,000 employees as of December 2022. In addition, GoDaddy contracts with another 3,000 people who work full-time for the company via business process outsourcing companies based primarily in India, the Philippines and Colombia.

Many companies now require employees to supply a one-time password — such as one sent via SMS or produced by a mobile authenticator app — in addition to their username and password when logging in to company assets online. But both SMS and app-based codes can be undermined by phishing attacks that simply request this information in addition to the user’s password.

One multifactor option — physical security keys — appears to be immune to these advanced scams. The most commonly used security keys are inexpensive USB-based devices. A security key implements a form of multi-factor authentication known as Universal 2nd Factor (U2F), which allows the user to complete the login process simply by inserting the USB device and pressing a button on the device. The key works without the need for any special software drivers.

The allure of U2F devices for multi-factor authentication is that even if an employee who has enrolled a security key for authentication tries to log in at an impostor site, the company’s systems simply refuse to request the security key if the user isn’t on their employer’s legitimate website, and the login attempt fails. Thus, the second factor cannot be phished, either over the phone or Internet.

In July 2018, Google disclosed that it had not had any of its 85,000+ employees successfully phished on their work-related accounts since early 2017, when it began requiring all employees to use physical security keys in place of one-time codes.

U.S., U.K. Sanction 7 Men Tied to Trickbot Hacking Group

Authorities in the United States and United Kingdom today levied financial sanctions against seven men accused of operating “Trickbot,” a cybercrime-as-a-service platform based in Russia that has enabled countless ransomware attacks and bank account takeovers since its debut in 2016. The U.S. Department of the Treasury says the Trickbot group is associated with Russian intelligence services, and that this alliance led to the targeting of many U.S. companies and government entities.

Initially a stealthy trojan horse program delivered via email and used to steal passwords, Trickbot evolved into “a highly modular malware suite that provides the Trickbot Group with the ability to conduct a variety of illegal cyber activities, including ransomware attacks,” the Treasury Department said.

“During the height of the COVID-19 pandemic in 2020, Trickbot targeted hospitals and healthcare centers, launching a wave of ransomware attacks against hospitals across the United States,” the sanctions notice continued. “In one of these attacks, the Trickbot Group deployed ransomware against three Minnesota medical facilities, disrupting their computer networks and telephones, and causing a diversion of ambulances. Members of the Trickbot Group publicly gloated over the ease of targeting the medical facilities and the speed with which the ransoms were paid to the group.”

Only one of the men sanctioned today is known to have been criminally charged in connection with hacking activity. According to the Treasury Department, the alleged senior leader of the Trickbot group is 34-year-old Russian national Vitaly “Bentley” Kovalev.

A New Jersey grand jury indicted Kovalev in 2012 after an investigation by the U.S. Secret Service determined that he ran a massive “money mule” scheme, which used phony job offers to trick people into laundering money stolen from hacked small to mid-sized businesses in the United States. The 2012 indictment against Kovalev relates to cybercrimes he allegedly perpetrated prior to the creation of Trickbot.

BOTNET, THE MOVIE

In 2015, Kovalev reportedly began filming a movie in Russia about cybercrime called “Botnet.” According to a 2016 story from Forbes.ru, Botnet’s opening scene was to depict the plight of Christina Svechinskaya, a Russian student arrested by FBI agents in September 2010.

Svechinskaya was one of Bentley’s money mules, most of whom were young Russian students on temporary travel visas in the United States. She was among 37 alleged mules charged with aiding an international cybercrime operation — basically, setting up phony corporate bank accounts for the sole purpose of laundering stolen funds.

Although she possessed no real hacking skills, Svechinskaya’s mugshot and social media photos went viral online and she was quickly dubbed “the world’s sexiest computer hacker” by the tabloids.

Kovalev’s Botnet film project was disrupted after Russian authorities raided the film production company’s offices as part of a cybercrime investigation. In February 2016, Reuters reported that the raid was connected to a crackdown on “Dyre,” a sophisticated trojan that U.S. federal investigators say was the precursor to the Trickbot malware. The Forbes.ru article cited sources close to the investigation who said the film studio was operating as a money-laundering front for the cybercrooks behind Dyre.

TREASON

But shifting political winds in Russia would soon bring high treason charges against three of the Russian cybercrime investigators tied to the investigation into the film studio. In a major shakeup in 2017, the Kremlin levied treason charges against Sergey Mikhaylov, then deputy chief of Russia’s top anti-cybercrime unit.

Also charged with treason was Ruslan Stoyanov, then a senior employee at Russian security firm Kaspersky Lab [the Forbes.ru report from 2016 said investigators from Mikhaylov’s unit and Kaspersky Lab were present at the film company raid].

Russian media outlets have speculated that the men were accused of treason for helping American cybercrime investigators pursue top Russian hackers. However, the charges against both men were classified and have never been officially revealed. After their brief, closed trial, both men were convicted of treason. Mikhaylov was given a 22 year prison sentence; Stoyanov was sentenced to 14 years in prison.

In September 2021, the Kremlin issued treason charges against Ilya Sachkov, formerly head of the cybersecurity firm Group-IB. According to Reuters, Sachkov and his company were hired by the film studio “to advise the Botnet director and writers on the finer points of cybercrime.” Sachkov remains imprisoned in Russia pending his treason trial.

A WELL-OILED CYBERCRIME MACHINE

Trickbot was heavily used by Conti and Ryuk, two of Russia’s most ruthless and successful ransomware groups. Blockchain analysis firm Chainalysis estimates that in 2021 alone, Conti extorted more than USD $100 million from its hacking victims; Chainalysis estimates Ryuk extorted more than USD $150 million from its ransomware victims.

The U.S. cybersecurity firm CrowdStrike has long tracked the activities of Trickbot, Ryuk and Conti under the same moniker — “Wizard Spider” — which CrowdStrike describes as “a Russia-nexus cybercriminal group behind the core development and distribution of a sophisticated arsenal of criminal tools, that allow them to run multiple different types of operations.”

“CrowdStrike Intelligence has observed WIZARD SPIDER targeting multiple countries and industries such as academia, energy, financial services, government, and more,” said Adam Meyers, head of intelligence at CrowdStrike.

This is not the U.S. government’s first swipe at the Trickbot group. In early October 2020, KrebsOnSecurity broke the news that someone had launched a series of coordinated attacks designed to disrupt the Trickbot botnet. A week later, The Washington Post ran a story saying the attack on Trickbot was the work of U.S. Cyber Command, a branch of the Department of Defense headed by the director of the U.S. National Security Agency (NSA).

Days after Russia invaded Ukraine in February 2022, a Ukrainian researcher leaked several years of internal chat logs from the Conti ransomware gang. Those candid conversations offer a fascinating view into the challenges of running a sprawling criminal enterprise with more than 100 salaried employees. They also showed that Conti enjoyed protection from prosecution by Russian authorities, as long as the hacker group took care not to target Russian organizations.

In addition, the leaked Conti chats confirmed there was considerable overlap in the operation and leadership of Conti, Trickbot and Ryuk.

Michael DeBolt, chief intelligence officer at cybersecurity firm Intel 471, said the leaked Conti chats showed Bentley oversaw a team of coders tasked with ensuring that the Trickbot and Conti malware remained undetected by the different antivirus and security software vendors.

In the years prior to the emergence of Trickbot in 2016, Bentley worked closely on the Gameover ZeuS trojan, a peer-to-peer malware threat that infected between 500,000 and a million computers with an automated ransomware strain called Cryptolocker, DeBolt said.

The FBI has a standing $3 million bounty offered for the capture of Evgeny “Slavik” Bogachev, the alleged author of the Zeus trojan. And there are indications that Bentley worked directly with Bogachev. DeBolt pointed to an October 2014 discussion on the exclusive Russian hacking forum Mazafaka that included a complaint by a Russian hosting firm against a forum user by the name “Ferrari” who had failed to pay a $30,000 hosting bill.

In that discussion thread, it emerged that the hosting company thought it was filing a complaint against Slavik. But the Mazafaka member who vouched for Ferrari’s membership on the forum said they knew Ferrari as Bentley the mule handler, and at some point Slavik and Bentley must have been sharing the Ferrari user account.

“It is likely that Slavik (aka. Bogachev) and Bentley (aka. Kovalev) shared the same ‘Ferrari’ handle on the Mazafaka forum circa 2014, which suggests the two had a working relationship at that time, and supports the recent US and UK Government announcements regarding Kovalev’s past involvement in cybercrime predating Dyre or the Trickbot Group,” DeBolt said.

CrowdStrike’s Meyers said while Wizard Spider operations have significantly reduced following the demise of Conti in June 2022, today’s sanctions will likely cause temporary disruptions for the cybercriminal group while they look for ways to circumvent the financial restrictions — which make it illegal to transact with or hold the assets of sanctioned persons or entities.

“Often, when cybercriminal groups are disrupted, they will go dark for a time only to rebrand under a new name,” Meyers said.

The prosecution of Kovalev is being handled by the U.S. Attorney’s Office in New Jersey. A copy of the now-unsealed 2012 indictment of Kovalev is here (PDF).

Patch Tuesday, November 2022 Election Edition

Let’s face it: Having “2022 election” in the headline above is probably the only reason anyone might read this story today. Still, while most of us here in the United States are anxiously awaiting the results of how well we’ve patched our Democracy, it seems fitting that Microsoft Corp. today released gobs of security patches for its ubiquitous Windows operating systems. November’s patch batch includes fixes for a whopping six zero-day security vulnerabilities that miscreants and malware are already exploiting in the wild.

Probably the scariest of the zero-day flaws is CVE-2022-41128, a “critical” weakness in the Windows scripting languages that could be used to foist malicious software on vulnerable users who do nothing more than browse to a hacked or malicious site that exploits the weakness. Microsoft credits Google with reporting the vulnerability, which earned a CVSS score of 8.8.

CVE-2022-41073 is a zero-day flaw in the Windows Print Spooler, a Windows component that Microsoft has patched mightily over the past year. Kevin Breen, director of cyber threat research at Immersive Labs, noted that the print spooler has been a popular target for vulnerabilities in the last 12 months, with this marking the 9th patch.

The third zero-day Microsoft patched this month is CVE-2022-41125, which is an “elevation of privilege” vulnerability in the Windows Cryptography API: Next Generation (CNG) Key Isolation Service, a service for isolating private keys. Satnam Narang, senior staff research engineer at Tenable, said exploitation of this vulnerability could grant an attacker SYSTEM privileges.

The fourth zero-day, CVE-2022-41091, was previously disclosed and widely reported on in October. It is a Security Feature Bypass of “Windows Mark of the Web” – a mechanism meant to flag files that have come from an untrusted source.

The other two zero-day bugs Microsoft patched this month were for vulnerabilities being exploited in Exchange Server. News that these two Exchange flaws were being exploited in the wild surfaced in late September 2022, and many were surprised when Microsoft let October’s Patch Tuesday sail by without issuing official patches for them (the company instead issued mitigation instructions that it was forced to revise multiple times). Today’s patch batch addresses both issues.

Greg Wiseman, product manager at Rapid7, said the Exchange flaw CVE-2022-41040 is a “critical” elevation of privilege vulnerability, and CVE-2022-41082 is considered Important, allowing Remote Code Execution (RCE) when PowerShell is accessible to the attacker.

“Both vulnerabilities have been exploited in the wild,” Wiseman said. “Four other CVEs affecting Exchange Server have also been addressed this month. Three are rated as Important, and CVE-2022-41080 is another privilege escalation vulnerability considered Critical. Customers are advised to update their Exchange Server systems immediately, regardless of whether any previously recommended mitigation steps have been applied. The mitigation rules are no longer recommended once systems have been patched.”

Adobe usually issues security updates for its products on Patch Tuesday, but it did not this month. For a closer look at the patches released by Microsoft today and indexed by severity and other metrics, check out the always-useful Patch Tuesday roundup from the SANS Internet Storm Center. And it’s not a bad idea to hold off updating for a few days until Microsoft works out any kinks in the updates: AskWoody.com usually has the lowdown on any patches that may be causing problems for Windows users.

As always, please consider backing up your system or at least your important documents and data before applying system updates. And if you run into any problems with these updates, please drop a note about it here in the comments.

Accused ‘Raccoon’ Malware Developer Fled Ukraine After Russian Invasion

A 26-year-old Ukrainian man is awaiting extradition from The Netherlands to the United States on charges that he acted as a core developer for Raccoon, a popular “malware-as-a-service” offering that helped paying customers steal passwords and financial data from millions of cybercrime victims. KrebsOnSecurity has learned that the defendant was busted in March 2022, after fleeing mandatory military service in Ukraine in the weeks following the Russian invasion.

The U.S. Attorney for the Western District of Texas unsealed an indictment last week that named Ukrainian national Mark Sokolovsky as the core developer for the Raccoon Infostealer business, which was marketed on several Russian-language cybercrime forums beginning in 2019.

Raccoon was essentially a Web-based control panel, where — for $200 a month — customers could get the latest version of the Raccoon Infostealer malware, and interact with infected systems in real time. Security experts say the passwords and other data stolen by Raccoon malware were often resold to groups engaged in deploying ransomware.

Working with investigators in Italy and The Netherlands, U.S. authorities seized a copy of the server used by Raccoon to help customers manage their botnets. According to the U.S. Justice Department, FBI agents have identified more than 50 million unique credentials and forms of identification (email addresses, bank accounts, cryptocurrency addresses, credit card numbers, etc.) stolen with the help of Raccoon.

The unsealed indictment (PDF) doesn’t delve much into how investigators tied Sokolovsky to Raccoon, but two sources close to the investigation shared more information about that process on condition of anonymity because they were not authorized to discuss the case publicly.

According to those sources, U.S. authorities zeroed in on an operational security mistake that the Raccoon developer made early on in his posts to the crime forums, connecting a Gmail account for a cybercrime forum identity used by the Raccoon developer (“Photix”) to an Apple iCloud account belonging to Sokolovsky. For example, the indictment includes a photo that investigators subpoenaed from Sokolovsky’s iCloud account that shows him posing with several stacks of bundled cash.

When Russia invaded Ukraine in late February 2022, Sokolovsky was living in Kharkiv, a city in northeast Ukraine that would soon come under heavy artillery bombardment from Russian forces. Authorities monitoring Sokolovsky’s iCloud account had spent weeks watching him shuttle between Kharkiv and the Ukrainian capital Kyiv, but on Mar. 18, 2022, his phone suddenly showed up in Poland.

Investigators learned from Polish border guards that Sokolovsky had fled Ukraine in a Porsche Cayenne along with a young blond woman, leaving his mother and other family behind. The image at the top of this post was shared with U.S. investigators by Polish border security officials, and it shows Sokolovsky leaving Poland for Germany on Mar. 18.

At the time, all able-bodied men of military age were required to report for service to help repel the Russian invasion, and it would have been illegal for Sokolovsky to leave Ukraine without permission. But both sources said investigators believe Sokolovsky bribed border guards to let them pass.

Authorities soon tracked Sokolovsky’s phone through Germany and eventually to The Netherlands, with his female companion helpfully documenting every step of the trip on her Instagram account. Here is a picture she posted of the two embracing upon their arrival in Amsterdam’s Dam Square:

Authorities in The Netherlands arrested Sokolovsky on Mar. 20, and quickly seized control over the Raccoon Infostealer infrastructure. Meanwhile, on March 25 the accounts that had previously advertised the Raccoon Stealer malware on cybercrime forums announced the service was closing down. The parting message to customers said nothing of an arrest, and instead insinuated that the core members in charge of the malware-as-a-service project had perished in the Russian invasion.

“Unfortunately, due to the ‘special operation,’ we will have to close our Raccoon Stealer project,” the team announced Mar. 25. “Our team members who were responsible for critical components of the product are no longer with us. Thank you for this experience and time, for every day, unfortunately everything, sooner or later, the end of the WORLD comes to everyone.”

Sokolovsky’s extradition to the United States has been granted, but he is appealing that decision. He faces one count of conspiracy to commit computer fraud; one count of conspiracy to commit wire fraud; one count of conspiracy to commit money laundering, and one count of aggravated identity theft.

Sources tell KrebsOnSecurity that Sokolovsky has been consulting with Houston, Tx.-based attorney F. Andino Reynal, the same lawyer who represented Alex Jones in the recent defamation lawsuit against Jones and his conspiracy theory website Infowars. Reynal was responsible for what Jones himself referred to as the “Perry Mason” moment of the trial, wherein the plaintiff’s lawyer revealed that Reynal had inadvertently given them an entire digital copy of Jones’s cell phone. Mr. Reynal did not respond to requests for comment.

If convicted, Sokolovsky faces a maximum penalty of 20 years in prison for the wire fraud and money laundering offenses, five years for the conspiracy to commit computer fraud charge, and a mandatory consecutive two-year term for the aggravated identity theft offense.

The Justice Department has set up a website — raccoon.ic3.gov — that allows visitors to check whether their email address shows up in the data collected by the Raccoon Stealer service.

Report: Big U.S. Banks Are Stiffing Account Takeover Victims

When U.S. consumers have their online bank accounts hijacked and plundered by hackers, U.S. financial institutions are legally obligated to reverse any unauthorized transactions as long as the victim reports the fraud in a timely manner. But new data released this week suggests that for some of the nation’s largest banks, reimbursing account takeover victims has become more the exception than the rule.

The findings came in a report released by Sen. Elizabeth Warren (D-Mass.), who in April 2022 opened an investigation into fraud tied to Zelle, the “peer-to-peer” digital payment service used by many financial institutions that allows customers to quickly send cash to friends and family.

Zelle is run by Early Warning Services LLC (EWS), a private financial services company which is jointly owned by Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank, and Wells Fargo. Zelle is enabled by default for customers at over 1,000 different financial institutions, even if a great many customers still don’t know it’s there.

Sen. Warren said several of the EWS owner banks — including Capital One, JPMorgan and Wells Fargo — failed to provide all of the requested data. But Warren did get the requested information from PNC, Truist and U.S. Bank.

“Overall, the three banks that provided complete data sets reported 35,848 cases of scams, involving over $25.9 million of payments in 2021 and the first half of 2022,” the report summarized. “In the vast majority of these cases, the banks did not repay the customers that reported being scammed. Overall these three banks reported repaying customers in only 3,473 cases (representing nearly 10% of scam claims) and repaid only $2.9 million.”

Importantly, the report distinguishes between cases that involve straight up bank account takeovers and unauthorized transfers (fraud), and those losses that stem from “fraudulently induced payments,” where the victim is tricked into authorizing the transfer of funds to scammers (scams).

A common example of the latter is the Zelle Fraud Scam, which uses an ever-shifting set of come-ons to trick people into transferring money to fraudsters. The Zelle Fraud Scam often employs text messages and phone calls spoofed to look like they came from your bank, and the scam usually relates to fooling the customer into thinking they’re sending money to themselves when they’re really sending it to the crooks.

Here’s the rub: When a customer issues a payment order to their bank, the bank is obligated to honor that order so long as it passes a two-stage test. The first question asks, Did the request actually come from an authorized owner or signer on the account? In the case of Zelle scams, the answer is yes.

Trace Fooshee, a strategic advisor in the anti money laundering practice at Aite-Novarica, said the second stage requires banks to give the customer’s transfer order a kind of “sniff test” using “commercially reasonable” fraud controls that generally are not designed to detect patterns involving social engineering.

Fooshee said the legal phrase “commercially reasonable” is the primary reason why no bank has much — if anything — in the way of controlling for scam detection.

“In order for them to deploy something that would detect a good chunk of fraud on something so hard to detect they would generate egregiously high rates of false positives which would also make consumers (and, then, regulators) very unhappy,” Fooshee said. “This would tank the business case for the service as a whole rendering it something that the bank can claim to NOT be commercially reasonable.”

Sen. Warren’s report makes clear that banks generally do not pay consumers back if they are fraudulently induced into making Zelle payments.

“In simple terms, Zelle indicated that it would provide redress for users in cases of unauthorized transfers in which a user’s account is accessed by a bad actor and used to transfer a payment,” the report continued. “However, EWS’ response also indicated that neither Zelle nor its parent bank owners would reimburse users fraudulently induced by a bad actor into making a payment on the platform.”

Still, the data suggest banks did repay at least some of the funds stolen from scam victims about 10 percent of the time. Fooshee said he’s surprised that number is so high.

“That banks are paying victims of authorized payment fraud scams anything at all is noteworthy,” he said. “That’s money that they’re paying for out of pocket almost entirely for goodwill. You could argue that repaying all victims is a sound strategy especially in the climate we’re in but to say that it should be what all banks do remains an opinion until Congress changes the law.”

UNAUTHORIZED FRAUD

However, when it comes to reimbursing victims of fraud and account takeovers, the report suggests banks are stiffing their customers whenever they can get away with it. “Overall, the four banks that provided complete data sets indicated that they reimbursed only 47% of the dollar amount of fraud claims they received,” the report notes.

How did the banks behave individually? From the report:

-In 2021 and the first six months of 2022, PNC Bank indicated that its customers reported 10,683 cases of unauthorized payments totaling over $10.6 million, of which only 1,495 cases totaling $1.46 were refunded to consumers. PNC Bank left 86% of its customers that reported cases of fraud without recourse for fraudulent activity that occurred on Zelle.

-Over this same time period, U.S. Bank customers reported a total of 28,642 cases of unauthorized transactions totaling over $16.2 million, while only refunding 8,242 cases totaling less than $4.7 million.

-In the period between January 2021 and September 2022, Bank of America customers reported 81,797 cases of unauthorized transactions, totaling $125 million. Bank of America refunded only $56.1 million in fraud claims – less than 45% of the overall dollar value of claims made in that time.

–Truist indicated that the bank had a much better record of reimbursing defrauded customers over this same time period. During 2021 and the first half of 2022, Truist customers filed 24,752 unauthorized transaction claims amounting to $24.4 million. Truist reimbursed 20,349 of those claims, totaling $20.8 million – 82% of Truist claims were reimbursed over this period. Overall, however, the four banks that provided complete data sets indicated that they reimbursed only 47% of the dollar amount of fraud claims they received.

Fooshee said there has long been a great deal of inconsistency in how banks reimburse unauthorized fraud claims — even after the Consumer Financial Protection Bureau (CPFB) came out with guidance on what qualifies as an unauthorized fraud claim.

“Many banks reported that they were still not living up to those standards,” he said. “As a result, I imagine that the CFPB will come down hard on those with fines and we’ll see a correction.”

Fooshee said many banks have recently adjusted their reimbursement policies to bring them more into line with the CFPB’s guidance from last year.

“So this is heading in the right direction but not with sufficient vigor and speed to satisfy critics,” he said.

Seth Ruden is a payments fraud expert who serves as director of global advisory for digital identity company BioCatch. Ruden said Zelle has recently made “significant changes to its fraud program oversight because of consumer influence.”

“It is clear to me that despite sensational headlines, progress has been made to improve outcomes,” Ruden said. “Presently, losses in the network on a volume-adjusted basis are lower than those typical of credit cards.”

But he said any failure to reimburse victims of fraud and account takeovers only adds to pressure on Congress to do more to help victims of those scammed into authorizing Zelle payments.

“The bottom line is that regulations have not kept up with the speed of payment technology in the United States, and we’re not alone,” Ruden said. “For the first time in the UK, authorized payment scam losses have outpaced credit card losses and a regulatory response is now on the table. Banks have the choice right now to take action and increase controls or await regulators to impose a new regulatory environment.”

Sen. Warren’s report is available here (PDF).

There are, of course, some versions of the Zelle fraud scam that may be confusing financial institutions as to what constitutes “authorized” payment instructions. For example, the variant I wrote about earlier this year began with a text message that spoofed the target’s bank and warned of a pending suspicious transfer.

Those who responded at all received a call from a number spoofed to make it look like the victim’s bank calling, and were asked to validate their identities by reading back a one-time password sent via SMS. In reality, the thieves had simply asked the bank’s website to reset the victim’s password, and that one-time code sent via text by the bank’s site was the only thing the crooks needed to reset the target’s password and drain the account using Zelle.

None of the above discussion involves the risks affecting businesses that bank online. Businesses in the United States do not enjoy the same fraud liability protection afforded to consumers, and if a banking trojan or clever phishing site results in a business account getting drained, most banks will not reimburse that loss.

This is why I have always and will continue to urge small business owners to conduct their online banking affairs only from a dedicated, access restricted and security-hardened device — and preferably a non-Windows machine.

For consumers, the same old advice remains the best: Watch your bank statements like a hawk, and immediately report and contest any charges that appear fraudulent or unauthorized.

Botched Crypto Mugging Lands Three U.K. Men in Jail

Three men in the United Kingdom were arrested this month for attempting to assault a local man and steal his virtual currencies. The incident is the latest example of how certain cybercriminal communities are increasingly turning to physical violence to settle scores and disputes.

Shortly after 11 p.m. on September 6, a resident in the Spalding Common area in the district of Lincolnshire, U.K. phoned police to say three men were acting suspiciously, and had jumped a nearby fence.

“The three men made off in a VW Golf and were shortly stopped nearby,” reads a statement by the Lincolnshire Police. “The car was searched by officers who found an imitation firearm, taser, a baseball bat and police uniform in the boot.”

Thomas Green, 23, Rayhan Miah, 23, and Leonardo Sapiano, 24 were all charged with possession of the weapons, and “with intent to cause loss to another to make an unwarranted demand of Crypto Currency from a person.”

KrebsOnSecurity has learned that the defendants were in Spalding Common to pay a surprise visit to a 19-year-old hacker known by the handles “Discoli,” “Disco Dog,” and “Chinese.” In December 2020, Discoli took credit for hacking and leaking the user database for OGUsers, a forum overrun with people looking to buy, sell and trade access to compromised social media accounts.

Reached via Telegram, Discoli confirmed that police believe the trio was trying to force their way into his home in Spalding Common, and that one of them was wearing a police uniform when they approached his residence.

“They were obvious about being fake police, so much so that one of our neighbours called,” Discoli said in an instant message chat. “That call led to the arrests. Their intent was for robbery/blackmail of crypto, I just happened to not be home at the time.”

The Lincolnshire Police declined to comment for this story, citing an ongoing investigation.

Discoli said he didn’t know any of the men charged, but believes they were hired by one of his enemies. And he said his would-be assailants didn’t just target him specifically.

“They had a list of people they wanted to hit consecutively as far as I know,” he said.

The foiled robbery is the latest drama tied to members of certain criminal hacking communities who are targeting one another with physical violence, by making a standing offer to pay thousands of dollars to anyone in the target’s region who agrees to carry out the assaults.

Last month, a 21-year-old New Jersey man was arrested and charged with stalking in connection with a federal investigation into groups of cybercriminals who are settling scores by hiring people to carry out physical attacks on their rivals.

Prosecutors say Patrick McGovern-Allen recently participated in several of these schemes — including firing a handgun into a Pennsylvania home and torching a residence in another part of the state with a Molotov Cocktail.

McGovern-Allen and the three U.K. defendants are part of an online community that is at the forefront of a dangerous escalation in coercion and intimidation tactics increasingly used by competing cybercriminal groups to steal cryptocurrency from one another and to keep their rivals in check.

The Telegram chat channels where these young men transact have hundreds to thousands of members each, and some of the more interesting solicitations on these communities are job offers for in-person assignments and tasks that can be found if one searches for posts titled, “If you live near,” or “IRL job” — short for “in real life” job.

A number of these classified ads are in service of performing “brickings,” where someone is hired to visit a specific address and toss a brick through the target’s window. Indeed, prior to McGovern-Allen’s arrest, his alleged Telegram persona bragged that he’d carried out several brickings for hire.

Many of the individuals involved in paying others to commit these physical attacks are also frequent participants in Telegram chat channels focused singularly on SIM swapping, a crime in which identity thieves hijack a target’s mobile phone number and use that to wrest control over the victim’s various online accounts and identities.

Unsurprisingly, the vast majority of people currently being targeted for brickings and other real-life physical assaults via Telegram tend to be other cybercriminals involved in SIM swapping crimes (or individuals on the periphery of that scene).

The United Kingdom is home to a number of young men accused of stealing millions of dollars worth of cryptocurrencies via SIM swapping. Joseph James O’Connor, a.k.a. “Plugwalk Joe”, was arrested in Spain in July 2021 under an FBI warrant on 10 counts of offenses related to unauthorized computer access and cyber bullying. U.S. investigators say O’Connor also played a central role in the 2020 intrusion at Twitter, wherein Twitter accounts for top celebrities and public figures were forced to tweet out links to cryptocurrency scams. O’Connor is currently fighting extradition to the United States.

Robert Lewis Barr, a 25-year-old Scottish man who allegedly stole more than $8 million worth of crypto, was arrested on an FBI warrant last year and is also fighting his extradition. U.S. investigators say Barr SIM swapped a U.S. bitcoin broker in 2017, and that he spent much of the stolen funds throwing lavish parties at rented luxury apartments in central Glasgow.

In many ways, these violence-as-a-service incidents are a natural extension of “swatting,” wherein fake bomb threats, hostage situations and other violent scenarios are phoned in to police as part of a scheme to trick them into visiting potentially deadly force on a target’s address. According to prosecutors, both Barr and O’Connor have a history of swatting their enemies and their SIM swapping victims.

When Efforts to Contain a Data Breach Backfire

Earlier this month, the administrator of the cybercrime forum Breached received a cease-and-desist letter from a cybersecurity firm. The missive alleged that an auction on the site for data stolen from 10 million customers of Mexico’s second-largest bank was fake news and harming the bank’s reputation. The administrator responded to this empty threat by purchasing the stolen banking data and leaking it on the forum for everyone to download.

On August 3, 2022, someone using the alias “Holistic-K1ller” posted on Breached a thread selling data allegedly stolen from Grupo Financiero Banorte, Mexico’s second-biggest financial institution by total loans. Holistic-K1ller said the database included the full names, addresses, phone numbers, Mexican tax IDs (RFC), email addresses and balances on more than 10 million citizens.

There was no reason to believe Holistic-K1ller had fabricated their breach claim. This identity has been highly active on Breached and its predecessor RaidForums for more than two years, mostly selling databases from hacked Mexican entities. Last month, they sold customer information on 36 million customers of the Mexican phone company Telcel; in March, they sold 33,000 images of Mexican IDs — with the front picture and a selfie of each citizen. That same month, they also sold data on 1.4 million customers of Mexican lending platform Yotepresto.

But this history was either overlooked or ignored by Group-IB, the Singapore-based cybersecurity firm apparently hired by Banorte to help respond to the data breach.

“The Group-IB team has discovered a resource containing a fraudulent post offering to buy Grupo Financiero Banorte’s leaked databases,” reads a letter the Breach administrator said they received from Group-IB. “We ask you to remove this post containing Banorte data. Thank you for your cooperation and prompt attention to this urgent matter.”

The administrator of Breached is “Pompompurin,” the same individual who alerted this author in November 2021 to a glaring security hole in a U.S. Justice Department website that was used to spoof security alerts from the FBI. In a post to Breached on Aug. 8, Pompompurin said they bought the Banorte database from Holistic-K1ller’s sales thread because Group-IB was sending emails complaining about it.

“They also attempted to submit DMCA’s against the website,” Pompompurin wrote, referring to legal takedown requests under the Digital Millennium Copyright Act. “Make sure to tell Banorte that now they need to worry about the data being leaked instead of just being sold.”

Group-IB CEO Dmitriy Volkov said the company has seen some success in the past asking hackers to remove or take down certain information, but that making such requests is not a typical response for the security firm.

“It is not a common practice to send takedown notifications to such forums demanding that such content be removed,” Volkov said. “But these abuse letters are legally binding, which helps build a foundation for further steps taken by law enforcement agencies. Actions contrary to international rules in the regulated space of the Internet only lead to more severe crimes, which — as we know from the case of Raidforums — are successfully investigated and stopped by law enforcement.”

Banorte did not respond to requests for comment. But in a brief written statement picked up on Twitter, Banorte said there was no breach involving their infrastructure, and the data being sold is old.

“There has been no violation of our platforms and technological infrastructure,” Banorte said. “The set of information referred to is inaccurate and outdated, and does not put our users and customers at risk.”

That statement may be 100 percent true. Still, it is difficult to think of a better example of how not to do breach response. Banorte shrugging off this incident as a nothingburger is baffling: While it is almost certainly true that the bank balance information in the Banorte leak is now out of date, the rest of the information (tax IDs, phone numbers, email addresses) is harder to change.

“Is there one person from our community that think sending cease and desist letter to a hackers forum operator is a good idea?,” asked Ohad Zaidenberg, founder of CTI League, a volunteer emergency response community that emerged in 2020 to help fight COVID-19 related scams. “Who does it? Instead of helping, they pushed the organization from the hill.”

Kurt Seifried, director of IT for the CloudSecurityAlliance, was similarly perplexed by the response to the Banorte breach.

“If the data wasn’t real….did the bank think a cease and desist would result in the listing being removed?” Seifried wondered on Twitter. “I mean, isn’t selling breach data a worse crime usually than slander or libel? What was their thought process?”

A more typical response when a large bank suspects a breach is to approach the seller privately through an intermediary to ascertain if the information is valid and what it might cost to take it off the market. While it may seem odd to expect cybercriminals to make good on their claims to sell stolen data to only one party, removing sold stolen items from inventory is a fairly basic function of virtually all cybercriminal markets today (apart from perhaps sites that traffic in stolen identity data).

At a minimum, negotiating or simply engaging with a data seller can buy the victim organization additional time and clues with which to investigate the claim and ideally notify affected parties of a breach before the stolen data winds up online.

It is true that a large number of hacked databases put up for sale on the cybercrime underground are sold only after a small subset of in-the-know thieves have harvested all of the low-hanging fruit in the data — e.g., access to cryptocurrency accounts or user credentials that are recycled across multiple websites. And it’s certainly not unheard of for cybercriminals to go back on their word and re-sell or leak information that they have sold previously.

But companies in the throes of responding to a data security incident do themselves and customers no favors when they underestimate their adversaries, or try to intimidate cybercrooks with legal threats. Such responses generally accomplish nothing, except unnecessarily upping the stakes for everyone involved while displaying a dangerous naiveté about how the cybercrime underground works.

Update, Aug. 17, 10:32 a.m.: Thanks to a typo by this author, a request for comment sent to Group-IB was not delivered in advance of this story. The copy above has been updated to include a comment from Group-IB’s CEO.

A Retrospective on the 2015 Ashley Madison Breach

It’s been seven years since the online cheating site AshleyMadison.com was hacked and highly sensitive data about its users posted online. The leak led to the public shaming and extortion of many Ashley Madison users, and to at least two suicides. To date, little is publicly known about the perpetrators or the true motivation for the attack. But a recent review of Ashley Madison mentions across Russian cybercrime forums and far-right websites in the months leading up to the hack revealed some previously unreported details that may deserve further scrutiny.

As first reported by KrebsOnSecurity on July 19, 2015, a group calling itself the “Impact Team” released data sampled from millions of users, as well as maps of internal company servers, employee network account information, company bank details and salary information.

The Impact Team said it decided to publish the information because ALM “profits on the pain of others,” and in response to a paid “full delete” service Ashley Madison parent firm Avid Life Media offered that allowed members to completely erase their profile information for a $19 fee.

According to the hackers, although the delete feature promised “removal of site usage history and personally identifiable information from the site,” users’ purchase details — including real name and address — weren’t actually scrubbed.

“Full Delete netted ALM $1.7mm in revenue in 2014. It’s also a complete lie,” the hacking group wrote. “Users almost always pay with credit card; their purchase details are not removed as promised, and include real name and address, which is of course the most important information the users want removed.”

The Impact Team said ALM had one month to take Ashley Madison offline, along with a sister property called Established Men. The hackers promised that if a month passed and the company did not capitulate, it would release “all customer records, including profiles with all the customers’ secret sexual fantasies and matching credit card transactions, real names and addresses, and employee documents and emails.”

Exactly 30 days later, on Aug. 18, 2015, the Impact Team posted a “Time’s up!” message online, along with links to 60 gigabytes of Ashley Madison user data.

AN URGE TO DESTROY ALM

One aspect of the Ashley Madison breach that’s always bothered me is how the perpetrators largely cast themselves as fighting a crooked company that broke their privacy promises, and how this narrative was sustained at least until the Impact Team decided to leak all of the stolen user account data in August 2015.

Granted, ALM had a lot to answer for. For starters, after the breach it became clear that a great many of the female Ashley Madison profiles were either bots or created once and never used again. Experts combing through the leaked user data determined that fewer than one percent of the female profiles on Ashley Madison had been used on a regular basis, and the rest were used just once — on the day they were created. On top of that, researchers found 84 percent of the profiles were male.

But the Impact Team had to know that ALM would never comply with their demands to dismantle Ashley Madison and Established Men. In 2014, ALM reported revenues of $115 million. There was little chance the company was going to shut down some of its biggest money machines.

Hence, it appears the Impact Team’s goal all along was to create prodigious amounts of drama and tension by announcing the hack of a major cheating website, and then letting that drama play out over the next few months as millions of exposed Ashley Madison users freaked out and became the targets of extortion attacks and public shaming.

Robert Graham, CEO of Errata Security, penned a blog post in 2015 concluding that the moral outrage professed by the Impact Team was pure posturing.

“They appear to be motivated by the immorality of adultery, but in all probability, their motivation is that #1 it’s fun and #2 because they can,” Graham wrote.

Per Thorsheim, a security researcher in Norway, told Wired at the time that he believed the Impact Team was motivated by an urge to destroy ALM with as much aggression as they could muster.

“It’s not just for the fun and ‘because we can,’ nor is it just what I would call ‘moralistic fundamentalism,'” Thorsheim told Wired. “Given that the company had been moving toward an IPO right before the hack went public, the timing of the data leaks was likely no coincidence.”

NEO-NAZIS TARGET ASHLEY MADISON CEO

As the seventh anniversary of the Ashley Madison hack rolled around, KrebsOnSecurity went back and looked for any mentions of Ashley Madison or ALM on cybercrime forums in the months leading up to the Impact Team’s initial announcement of the breach on July 19, 2015. There wasn’t much, except a Russian guy offering to sell payment and contact information on 32 million AshleyMadison users, and a bunch of Nazis upset about a successful Jewish CEO promoting adultery.

Cyber intelligence firm Intel 471 recorded a series of posts by a user with the handle “Brutium” on the Russian-language cybercrime forum Antichat between 2014 and 2016. Brutium routinely advertised the sale of large, hacked databases, and on Jan. 24, 2015, this user posted a thread offering to sell data on 32 million Ashley Madison users:

“Data from July 2015
Total ~32 Million contacts:
full name; email; phone numbers; payment, etc.”

It’s unclear whether the postdated “July 2015” statement was a typo, or if Brutium updated that sales thread at some point. There is also no indication whether anyone purchased the information. Brutium’s profile has since been removed from the Antichat forum.

Flashpoint is a threat intelligence company in New York City that keeps tabs on hundreds of cybercrime forums, as well as extremist and hate websites. A search in Flashpoint for mentions of Ashley Madison or ALM prior to July 19, 2015 shows that in the six months leading up to the hack, Ashley Madison and its then-CEO Noel Biderman became a frequent subject of derision across multiple neo-Nazi websites.

On Jan. 14, 2015, a member of the neo-Nazi forum Stormfront posted a lively thread about Ashley Madison in the general discussion area titled, “Jewish owned dating website promoting adultery.”

On July 3, 2015, Andrew Anglin, the editor of the alt-right publication Daily Stormer, posted excerpts about Biderman from a story titled, “Jewish Hyper-Sexualization of Western Culture,” which referred to Biderman as the “Jewish King of Infidelity.”

On July 10, a mocking montage of Biderman photos with racist captions was posted to the extremist website Vanguard News Network, as part of a thread called “Jews normalize sexual perversion.”

“Biderman himself says he’s a happily married father of two and does not cheat,” reads the story posted by Anglin on the Daily Stormer. “In an interview with the ‘Current Affair’ program in Australia, he admitted that if he found out his own wife was accessing his cheater’s site, ‘I would be devastated.'”

The leaked AshleyMadison data included more than three years’ worth of emails stolen from Biderman. The hackers told Motherboard in 2015 they had 300 GB worth of employee emails, but that they saw no need to dump the inboxes of other company employees.

Several media outlets pounced on salacious exchanges in Biderman’s emails as proof he had carried on multiple affairs. Biderman resigned as CEO on Aug. 28, 2015. The last message in the archive of Biderman’s stolen emails was dated July 7, 2015 — almost two weeks before the Impact Team would announce their hack.

Biderman told KrebsOnSecurity on July 19, 2015 that the company believed the hacker was some type of insider.

“We’re on the doorstep of [confirming] who we believe is the culprit, and unfortunately that may have triggered this mass publication,” Biderman said. “I’ve got their profile right in front of me, all their work credentials. It was definitely a person here that was not an employee but certainly had touched our technical services.”

Certain language in the Impact Team’s manifesto seemed to support this theory, such as the line: “For a company whose main promise is secrecy, it’s like you didn’t even try, like you thought you had never pissed anyone off.”

But despite ALM offering a belated $500,000 reward for information leading to the arrest and conviction of those responsible, to this day no one has been charged in connection with the hack.

Massive Losses Define Epidemic of ‘Pig Butchering’

U.S. state and federal investigators are being inundated with reports from people who’ve lost hundreds of thousands or millions of dollars in connection with a complex investment scam known as “pig butchering,” wherein people are lured by flirtatious strangers online into investing in cryptocurrency trading platforms that eventually seize any funds when victims try to cash out.

The term “pig butchering” refers to a time-tested, heavily scripted, and human-intensive process of using fake profiles on dating apps and social media to lure people into investing in elaborate scams. In a more visceral sense, pig butchering means fattening up a prey before the slaughter.

“The fraud is named for the way scammers feed their victims with promises of romance and riches before cutting them off and taking all their money,” the Federal Bureau of Investigation (FBI) warned in April 2022. “It’s run by a fraud ring of cryptocurrency scammers who mine dating apps and other social media for victims and the scam is becoming alarmingly popular.”

As documented in a series of investigative reports published over the past year across Asia, the people creating these phony profiles are largely men and women from China and neighboring countries who have been kidnapped and trafficked to places like Cambodia, where they are forced to scam complete strangers over the Internet — day after day.

The most prevalent pig butchering scam today involves sophisticated cryptocurrency investment platforms, where investors invariably see fantastic returns on their deposits — until they try to withdraw the funds. At that point, investors are told they owe huge tax bills. But even those who pay the phony levies never see their money again.

The come-ons for these scams are prevalent on dating sites and apps, but they also frequently start with what appears to be a wayward SMS — such as an instant message about an Uber ride that never showed. Or a reminder from a complete stranger about a planned meetup for coffee. In many ways, the content of the message is irrelevant; the initial goal to simply to get the recipient curious enough to respond in some way.

Those who respond are asked to continue the conversation via WhatsApp, where an attractive, friendly profile of the opposite gender will work through a pre-set script that is tailored to their prey’s apparent socioeconomic situation. For example, a divorced, professional female who responds to these scams will be handled with one profile type and script, while other scripts are available to groom a widower, a young professional, or a single mom.

‘LIKE NOTHING I’VE SEEN BEFORE’

That’s according to Erin West, deputy district attorney for Santa Clara County in Northern California. West said her office has been fielding a large number of pig butchering inquiries from her state, but also from law enforcement entities around the country that are ill-equipped to investigate such fraud.

“The people forced to perpetrate these scams have a guide and a script, where if your victim is divorced say this, or a single mom say this,” West said. “The scale of this is so massive. It’s a major problem with no easy answers, but also with victim volumes I’ve never seen before. With victims who are really losing their minds and in some cases are suicidal.”

West is a key member of REACT, a task force set up to tackle especially complex forms of cyber theft involving virtual currencies. West said the initial complaints from pig butchering victims came early this year.

“I first thought they were one-off cases, and then I realized we were getting these daily,” West said. “A lot of them are being reported to local agencies that don’t know what to do with them, so the cases languish.”

West said pig butchering victims are often quite sophisticated and educated people.

“One woman was a university professor who lost her husband to COVID, got lonely and was chatting online, and eventually ended up giving away her retirement,” West recalled of a recent case. “There are just horrifying stories that run the gamut in terms of victims, from young women early in their careers, to senior citizens and even to people working in the financial services industry.”

In some cases reported to REACT, the victims said they spent days or weeks corresponding with the phony WhatsApp persona before the conversation shifted to investing.

“They’ll say ‘Hey, this is the food I’m eating tonight’ and the picture they share will show a pretty setting with a glass of wine, where they’re showcasing an enviable lifestyle but not really mentioning anything about how they achieved that,” West said. “And then later, maybe a few hours or days into the conversation, they’ll say, ‘You know I made some money recently investing in crypto,’ kind of sliding into the topic as if this wasn’t what they were doing the whole time.”

Curious investors are directed toward elaborate and official-looking online crypto platforms that appear to have thousands of active investors. Many of these platforms include extensive study materials and tutorials on cryptocurrency investing. New users are strongly encouraged to team up with more seasoned investors on the platform, and to make only small investments that they can afford to lose.

“They’re able to see some value increase, and maybe even be allowed to take out that value increase so that they feel comfortable about the situation,” West said. Some investors then need little encouragement to deposit additional funds, which usually generate increasingly higher “returns.”

West said many crypto trading platforms associated with pig butchering scams appear to have been designed much like a video game, where investor hype is built around upcoming “trading opportunities” that hint at even more fantastic earnings.

“There are bonus levels and VIP levels, and they’ll build hype and a sense of frenzy into the trading,” West said. “There are definitely some psychological mechanisms at work to encourage people to invest more.”

“What’s so devastating about many of the victims is they lose that sense of who they are,” she continued. “They thought they were a savvy, sophisticated person, someone who’s sort of immune to scams. I think the large scale of the trickery and psychological manipulation being used here can’t be understated. It’s like nothing I’ve seen before.”

A $5,000,000 LOSS

Courtney Nolan, a divorced mother of three daughters, says she lost more than $5 million to a pig butchering scam. Nolan lives in St. Louis and has a background in investment finance, but only started investing in cryptocurrencies in the past year.

Nolan’s case may be especially bad because she was already interested in crypto investing when the scammer reached out. At the time, Bitcoin was trading at or near all-time highs of nearly $68,000 per coin.

Nolan said her nightmare began in late 2021 with a Twitter direct message from someone who was following many of the same cryptocurrency influencers she followed. Her fellow crypto enthusiast then suggested they continue their discussion on WhatsApp. After much back and forth about his trading strategies, her new friend agreed to mentor her on how to make reliable profits using the crypto trading platform xtb.com.

“I had dabbled in leveraged trading before, but his mentor program gave me over 100 pages of study materials and agreed to walk me through their investment strategies over the course of a year,” Nolan told KrebsOnSecurity.

Nolan’s mentor had her create an account website xtb-market[.]com, which was made to be confusingly similar to XTB’s official platform. The site promoted several different investment packages, including a “starter plan” that involves a $5,250 up-front investment and promises more than 15 percent return across four separate trading bursts.

Platinum plans on xtb-market promised a whopping 45 percent ROI, with a minimum investment of $265,000. The site also offered a generous seven percent commission for referrals, which encouraged new investors to recruit others.

While chatting via WhatsApp, Nolan and her mentor would trade side by side in xtb-market, initially with small investments ranging from $500 to $5,000. When those generated hefty returns, Nolan made bigger deposits. On several occasions she was able to withdraw amounts ranging from $10,000 to $30,000.

But after investing more than $4.5 million of her own money over nearly four months, Nolan found her account was suddenly frozen. She was then issued a tax statement saying she owed nearly $500,000 in taxes before she could reactivate her account or access her funds.

Nolan said it seems obvious in hindsight that she should never have paid the tax bill. Because xtb-market and her mentor cut all communications with her after that, and the entire website disappeared just a few weeks later.

Justin Maile, an investigation partner manager at Chainalysis, told Vice News that the tax portion of the pig butchering scam relies on the “sunk costs fallacy,” when people are reluctant to abandon a failing strategy or course of action because they have already invested heavily in it.

“Once the victim starts getting skeptical or tries to withdraw their funds, they are often told that they have to pay tax on the gains before funds can be unlocked,” Maile told Vice News. “The scammers will try to get any last payments out of the victims by exploiting the sunk cost fallacy and dangling huge profits in front of them.”

Vice recently published an in-depth report on pig butchering’s link to organized crime gangs in Asia that lure young job seekers with the promise of customer service jobs in call centers. Instead, those who show up at the appointed place and time are taken on long car rides and/or forced hikes across the borders into Cambodia, where they are pressed into indentured servitude.

Vice found many of the people forced to work in pig-butchering scams are being held in Chinese-owned casinos operating in Cambodia. Many of those casinos were newly built when the Covid pandemic hit. As the new casinos and hotels sat empty, organized crime groups saw an opportunity to use these facilities to generate huge income streams, and many foreign travelers stranded in neighboring countries were eventually trafficked to these scam centers.

Vice reports:

“While figures on the number of people in scam centers in Cambodia is unknown, best estimates pieced together from various sources point to the tens of thousands across scam centers in Sihanoukville, Phnom Penh, and sites in border regions Poipet and Bavet. In April, Thailand’s assistant national police commissioner said 800 Thai citizens had been rescued from scam centers in Cambodia in recent months, with a further 1,000 citizens still trapped across the country. One Vietnamese worker estimated 300 of his compatriots were held on just one floor in a tall office block hosting scam operations.”

“…within Victory Paradise Resort alone there were 7,000 people, the majority from mainland China, but also Indonesians, Singaporeans and Filipinos. According to the Khmer Times, one 10-building complex of high-rises in Sihanoukville, known as The China Project, holds between 8,000 to 10,000 people participating in various scams—a workforce that would generate profits around the $1 billion mark each year at $300 per worker per day.”

THE KILLING FLOOR

REACTs’ West said while there are a large number of pig butchering victims reporting their victimization to the FBI, very few are receiving anything more than instructions about filing a complaint with the FBI’s Internet Crime Complaint Center (IC3), which keeps track of cybercrime losses and victims.

“There’s a huge gap in victims that are seeing any kind of service at all, where they’re reporting to the FBI but not being able to talk to anyone,” she said. “They’re filling out the IC3 form and never hearing back. It sort of feels like the federal government is ignoring this, so people are going to local agencies, which are sending these victims our way.”

For many younger victims of pig butchering, even losses of a few thousand dollars can be financially devastating. KrebsOnSecurity recently heard from two different readers who said they were in their 20s and lost more than $40,000 each when the investment platforms they were trading on vanished with their money.

The FBI can often bundle numerous IC3 complaints involving the same assailants and victims into a single case for federal prosecutors to pursue the guilty, and/or try to recapture what was stolen. In general, however, victims of crypto crimes rarely see that money again, or if they do it can take many years.

“The next piece is what can we actually do with these cases,” West said. “We used to frame success as getting bad people behind bars, but these cases leave us as law enforcement with not a lot of opportunity there.”

West said the good news is U.S. authorities are seeing some success in freezing cryptocurrency wallets suspected of being tied to large-scale cybercriminal operations. Indeed, Nolan told KrebsOnSecurity that her losses were substantial enough to warrant an official investigation by the FBI, which she says has since taken steps to freeze at least some of the assets tied to xtb-market[.]com.

Likewise, West said she was recently able to freeze cryptocurrency funds stolen from some pig butchering victims, and now REACT is focusing on helping state and local authorities learn how to do the same.

“It’s important to be able to mobilize quickly and know how to freeze and seize crypto and get it back to its rightful owner,” West said. “We definitely have made seizures in cases involving pig butchering, but we haven’t gotten that back to the rightful owners yet.”

In April, the FBI warned Internet users to be on guard against pig butchering scams, which it said attracts victims with “promises of romance and riches” before duping them out of their money. The IC3 said it received more than 4,300 complaints related to crypto-romance scams, resulting in losses of more than $429 million.

Here are some common elements of a pig butchering scam:

–Dating apps: Pig-butchering attempts are common on dating apps, but they can begin with almost any type of communication, including SMS text messages.
–WhatsApp: In virtually all documented cases of pig butchering, the target is moved fairly quickly into chatting with the scammer via WhatsApp.
–No video: The scammers will come up with all kinds of excuses not to do a video call. But they will always refuse.
–Investment chit-chat: Your contact (eventually) claims to have inside knowledge about the cryptocurrency market and can help you make money.

The FBI’s tips on avoiding crypto scams:

-Never send money, trade, or invest based on the advice of someone you have only met online.
-Don’t talk about your current financial status to unknown and untrusted people.
-Don’t provide your banking information, Social Security Number, copies of your identification or passport, or any other sensitive information to anyone online or to a site you do not know is legitimate.
-If an online investment or trading site is promoting unbelievable profits, it is most likely that—unbelievable.
-Be cautious of individuals who claim to have exclusive investment opportunities and urge you to act fast.