Treasury Sanctions Creators of 911 S5 Proxy Botnet

The U.S. Department of the Treasury today unveiled sanctions against three Chinese nationals for allegedly operating 911 S5, an online anonymity service that for many years was the easiest and cheapest way to route one’s Web traffic through malware-infected computers around the globe. KrebsOnSecurity identified one of the three men in a July 2022 investigation into 911 S5, which was massively hacked and then closed ten days later.

From 2015 to July 2022, 911 S5 sold access to hundreds of thousands of Microsoft Windows computers daily, as “proxies” that allowed customers to route their Internet traffic through PCs in virtually any country or city around the globe — but predominantly in the United States.

911 built its proxy network mainly by offering “free” virtual private networking (VPN) services. 911’s VPN performed largely as advertised for the user — allowing them to surf the web anonymously — but it also quietly turned the user’s computer into a traffic relay for paying 911 S5 customers.

911 S5’s reliability and extremely low prices quickly made it one of the most popular services among denizens of the cybercrime underground, and the service became almost shorthand for connecting to that “last mile” of cybercrime. Namely, the ability to route one’s malicious traffic through a computer that is geographically close to the consumer whose stolen credit card is about to be used, or whose bank account is about to be emptied.

In July 2022, KrebsOnSecurity published a deep dive into 911 S5, which found the people operating this business had a history of encouraging the installation of their proxy malware by any means available. That included paying affiliates to distribute their proxy software by secretly bundling it with other software.

That story named Yunhe Wang from Beijing as the apparent owner or manager of the 911 S5 proxy service. In today’s Treasury action, Mr. Wang was named as the primary administrator of the botnet that powered 911 S5.

“A review of records from network infrastructure service providers known to be utilized by 911 S5 and two Virtual Private Networks (VPNs) specific to the botnet operation (MaskVPN and DewVPN) showed Yunhe Wang as the registered subscriber to those providers’ services,” reads the Treasury announcement.

Update, May 29, 12:26 p.m. ET: The U.S. Department of Justice (DOJ) just announced they have arrested Wang in connection with the 911 S5 botnet. The DOJ says 911 S5 customers have stolen billions of dollars from financial institutions, credit card issuers, and federal lending programs.

“911 S5 customers allegedly targeted certain pandemic relief programs,” a DOJ statement on the arrest reads. “For example, the United States estimates that 560,000 fraudulent unemployment insurance claims originated from compromised IP addresses, resulting in a confirmed fraudulent loss exceeding $5.9 billion. Additionally, in evaluating suspected fraud loss to the Economic Injury Disaster Loan (EIDL) program, the United States estimates that more than 47,000 EIDL applications originated from IP addresses compromised by 911 S5. Millions of dollars more were similarly identified by financial institutions in the United States as loss originating from IP addresses compromised by 911 S5.”

The sanctions say Jingping Liu was Yunhe Wang’s co-conspirator in the laundering of criminally derived proceeds generated from 911 S5, mainly virtual currency. The government alleges the virtual currencies paid by 911 S5 users were converted into U.S. dollars using over-the-counter vendors who wired and deposited funds into bank accounts held by Liu.

“Jingping Liu assisted Yunhe Wang by laundering criminally derived proceeds through bank accounts held in her name that were then utilized to purchase luxury real estate properties for Yunhe Wang,” the document continues. “These individuals leveraged their malicious botnet technology to compromise personal devices, enabling cybercriminals to fraudulently secure economic assistance intended for those in need and to terrorize our citizens with bomb threats.”

The third man sanctioned is Yanni Zheng, a Chinese national the U.S. Treasury says acted as an attorney for Wang and his firm — Spicy Code Company Limited — and helped to launder proceeds from the business into real estate holdings. Spicy Code Company was also sanctioned, as well as Wang-controlled properties Tulip Biz Pattaya Group Company Limited, and Lily Suites Company Limited.

Ten days after the July 2022 story here on 911 S5, the proxy network abruptly closed up shop, citing a data breach that destroyed key components of its business operations.

In the months that followed, however, 911 S5 would resurrect itself under a different name: Cloud Router. That’s according to spur.us, a U.S.-based startup that tracks proxy and VPN services. In February 2024, Spur published research showing the Cloud Router operators reused many of the same components from 911 S5, making it relatively simple to draw a connection between the two.

Spur found that Cloud Router was being powered by a new VPN service called PaladinVPN, which made it much more explicit to users that their Internet connections were going to be used to relay traffic for others. At the time, Spur found Cloud Router had more than 140,000 Internet addresses for rent.

Spur co-founder Riley Kilmer said Cloud Router appears to have suspended or ceased operations sometime this past weekend. Kilmer said the number of proxies advertised by the service had been trending downwards quite recently before the website suddenly went offline.

Cloud Router’s homepage is currently populated by a message from Cloudflare saying the site’s domain name servers are pointing to a “prohibited IP.”

How Did Authorities Identify the Alleged Lockbit Boss?

Last week, the United States joined the U.K. and Australia in sanctioning and charging a Russian man named Dmitry Yuryevich Khoroshev as the leader of the infamous LockBit ransomware group. LockBit’s leader “LockBitSupp” claims the feds named the wrong guy, saying the charges don’t explain how they connected him to Khoroshev. This post examines the activities of Khoroshev’s many alter egos on the cybercrime forums, and tracks the career of a gifted malware author who has written and sold malicious code for the past 14 years.

On May 7, the U.S. Department of Justice indicted Khoroshev on 26 criminal counts, including extortion, wire fraud, and conspiracy. The government alleges Khoroshev created, sold and used the LockBit ransomware strain to personally extort more than $100 million from hundreds of victim organizations, and that LockBit as a group extorted roughly half a billion dollars over four years.

Federal investigators say Khoroshev ran LockBit as a “ransomware-as-a-service” operation, wherein he kept 20 percent of any ransom amount paid by a victim organization infected with his code, with the remaining 80 percent of the payment going to LockBit affiliates responsible for spreading the malware.

Financial sanctions levied against Khoroshev by the U.S. Department of the Treasury listed his known email and street address (in Voronezh, in southwest Russia), passport number, and even his tax ID number (hello, Russian tax authorities). The Treasury filing says Khoroshev used the emails sitedev5@yandex.ru, and khoroshev1@icloud.com.

According to DomainTools.com, the address sitedev5@yandex.ru was used to register at least six domains, including a Russian business registered in Khoroshev’s name called tkaner.com, which is a blog about clothing and fabrics.

A search at the breach-tracking service Constella Intelligence on the phone number in Tkaner’s registration records  — 7.9521020220 — brings up multiple official Russian government documents listing the number’s owner as Dmitri Yurievich Khoroshev.

Another domain registered to that phone number was stairwell[.]ru, which at one point advertised the sale of wooden staircases. Constella finds that the email addresses webmaster@stairwell.ru and admin@stairwell.ru used the password 225948.

DomainTools reports that stairwell.ru for several years included the registrant’s name as “Dmitrij Ju Horoshev,” and the email address pin@darktower.su. According to Constella, this email address was used in 2010 to register an account for a Dmitry Yurievich Khoroshev from Voronezh, Russia at the hosting provider firstvds.ru.

Cyber intelligence firm Intel 471 finds that pin@darktower.ru was used by a Russian-speaking member called Pin on the English-language cybercrime forum Opensc. Pin was active on Opensc around March 2012, and authored 13 posts that mostly concerned data encryption issues, or how to fix bugs in code.

Other posts concerned custom code Pin claimed to have written that would bypass memory protections on Windows XP and Windows 7 systems, and inject malware into memory space normally allocated to trusted applications on a Windows machine.

Pin also was active at that same time on the Russian-language security forum Antichat, where they told fellow forum members to contact them at the ICQ instant messenger number 669316.

NEROWOLFE

A search on the ICQ number 669316 at Intel 471 shows that in April 2011, a user by the name NeroWolfe joined the Russian cybercrime forum Zloy using the email address d.horoshev@gmail.com, and from an Internet address in Voronezh, RU.

Constella finds the same password tied to webmaster@stairwell.ru (225948) was used by the email address 3k@xakep.ru, which Intel 471 says was registered to more than a dozen NeroWolfe accounts across just as many Russian cybercrime forums between 2011 and 2015.

NeroWolfe’s introductory post to the forum Verified in Oct. 2011 said he was a system administrator and C++ coder.

“Installing SpyEYE, ZeuS, any DDoS and spam admin panels,” NeroWolfe wrote. This user said they specialize in developing malware, creating computer worms, and crafting new ways to hijack Web browsers.

“I can provide my portfolio on request,” NeroWolfe wrote. “P.S. I don’t modify someone else’s code or work with someone else’s frameworks.”

In April 2013, NeroWolfe wrote in a private message to another Verified forum user that he was selling a malware “loader” program that could bypass all of the security protections on Windows XP and Windows 7.

“The access to the network is slightly restricted,” NeroWolfe said of the loader, which he was selling for $5,000. “You won’t manage to bind a port. However, it’s quite possible to send data. The code is written in C.”

In an October 2013 discussion on the cybercrime forum Exploit, NeroWolfe weighed in on the karmic ramifications of ransomware. At the time, ransomware-as-a-service didn’t exist yet, and many members of Exploit were still making good money from “lockers,” relatively crude programs that locked the user out of their system until they agreed to make a small payment (usually a few hundred dollars via prepaid Green Dot cards).

Lockers, which presaged the coming ransomware scourge, were generally viewed by the Russian-speaking cybercrime forums as harmless moneymaking opportunities, because they usually didn’t seek to harm the host computer or endanger files on the system. Also, there were still plenty of locker programs that aspiring cybercriminals could either buy or rent to make a steady income.

NeroWolfe reminded forum denizens that they were just as vulnerable to ransomware attacks as their would-be victims, and that what goes around comes around.

“Guys, do you have a conscience?,” NeroWolfe wrote. “Okay, lockers, network gopstop aka business in Russian. The last thing was always squeezed out of the suckers. But encoders, no one is protected from them, including the local audience.”

If Khoroshev was ever worried that someone outside of Russia might be able to connect his early hacker handles to his real life persona, that’s not clear from reviewing his history online. In fact, the same email address tied to so many of NeroWolfe’s accounts on the forums — 3k@xakep.ru — was used in 2011 to create an account for a Dmitry Yurevich Khoroshev on the Russian social media network Vkontakte.

NeroWolfe seems to have abandoned all of his forum accounts sometime in 2016. In November 2016, an exploit[.]ru member filed an official complaint against NeroWolfe, saying NeroWolfe had been paid $2,000 to produce custom code but never finished the project and vanished.

It’s unclear what happened to NeroWolfe or to Khoroshev during this time. Maybe he got arrested, or some close associates did. Perhaps he just decided it was time to lay low and hit the reset on his operational security efforts, given his past failures in this regard. It’s also possible NeroWolfe landed a real job somewhere for a few years, fathered a child, and/or had to put his cybercrime career on hold.

PUTINKRAB

Or perhaps Khoroshev saw the coming ransomware industry for the endless pot of gold that it was about to become, and then dedicated himself to working on custom ransomware code. That’s what the government believes.

The indictment against Khoroshev says he used the hacker nickname Putinkrab, and Intel 471 says this corresponds to a username that was first registered across three major Russian cybercrime forums in early 2019.

KrebsOnSecurity could find no obvious connections between Putinkrab and any of Khoroshev’s older identities. However, if Putinkrab was Khoroshev, he would have learned from his past mistakes and started fresh with a new identity (which he did). But also, it is likely the government hasn’t shared all of the intelligence it has collected against him (more on that in a bit).

Putinkrab’s first posts on the Russian cybercrime forums XSS, Exploit and UFOLabs saw this user selling ransomware source code written in C.

In April 2019, Putkinkrab offered an affiliate program that would run on top of his custom-made ransomware code.

“I want to work for a share of the ransoms: 20/80,” Putinkrab wrote on Exploit. “20 percent is my percentage for the work, you get 80% of the ransoms. The percentage can be reduced up to 10/90 if the volumes are good. But now, temporarily, until the service is fully automated, we are working using a different algorithm.”

Throughout the summer of 2019, Putinkrab posted multiple updates to Exploit about new features being added to his ransomware strain, as well as novel evasion techniques to avoid detection by security tools. He also told forum members he was looking for investors for a new ransomware project based on his code.

In response to an Exploit member who complained that the security industry was making it harder to profit from ransomware, Putinkrab said that was because so many cybercriminals were relying on crappy ransomware code.

“The vast majority of top antiviruses have acquired behavioral analysis, which blocks 95% of crypto-lockers at their root,” Putinkrab wrote. “Cryptolockers made a lot of noise in the press, but lazy system administrators don’t make backups after that. The vast majority of cryptolockers are written by people who have little understanding of cryptography. Therefore, decryptors appear on the Internet, and with them the hope that files can be decrypted without paying a ransom. They just sit and wait. Contact with the owner of the key is lost over time.”

Putinkrab said he had every confidence his ransomware code was a game-changer, and a huge money machine.

“The game is just gaining momentum,” Putinkrab wrote. “Weak players lose and are eliminated.”

The rest of his response was structured like a poem:

“In this world, the strongest survive.
Our life is just a struggle.
The winner will be the smartest,
Who has his head on his shoulders.”

Putinkrab’s final post came on August 23, 2019. The Justice Department says the LockBit ransomware affiliate program was officially launched five months later. From there on out, the government says, Khoroshev adopted the persona of LockBitSupp. In his introductory post on Exploit, LockBit’s mastermind said the ransomware strain had been in development since September 2019.

The original LockBit malware was written in C (a language that NeroWolfe excelled at). Here’s the original description of LockBit, from its maker:

“The software is written in C and Assembler; encryption is performed through the I/O Completion Port; there is a port scanning local networks and an option to find all DFS, SMB, WebDAV network shares, an admin panel in Tor, automatic test decryption; a decryption tool is provided; there is a chat with Push notifications, a Jabber bot that forwards correspondence and an option to terminate services/processes in line which prevent the ransomware from opening files at a certain moment. The ransomware sets file permissions and removes blocking attributes, deletes shadow copies, clears logs and mounts hidden partitions; there is an option to drag-and-drop files/folders and a console/hidden mode. The ransomware encrypts files in parts in various places: the larger the file size, the more parts there are. The algorithms used are AES + RSA.

You are the one who determines the ransom amount after communicating with the victim. The ransom paid in any currency that suits you will be transferred to your wallets. The Jabber bot serves as an admin panel and is used for banning, providing decryption tools, chatting – Jabber is used for absolutely everything.”

CONCLUSION

Does the above timeline prove that NeroWolfe/Khoroshev is LockBitSupp? No. However, it does indicate Khoroshev was for many years deeply invested in countless schemes involving botnets, stolen data, and malware he wrote that others used to great effect. NeroWolfe’s many private messages from fellow forum members confirm this.

NeroWolfe’s specialty was creating custom code that employed novel stealth and evasion techniques, and he was always quick to volunteer his services on the forums whenever anyone was looking help on a malware project that called for a strong C or C++ programmer.

Someone with those qualifications — as well as demonstrated mastery of data encryption and decryption techniques — would have been in great demand by the ransomware-as-a-service industry that took off at around the same time NeroWolfe vanished from the forums.

Someone like that who is near or at the top of their game vis-a-vis their peers does not simply walk away from that level of influence, community status, and potential income stream unless forced to do so by circumstances beyond their immediate control.

It’s important to note that Putinkrab didn’t just materialize out of thin air in 2019 — suddenly endowed with knowledge about how to write advanced, stealthy ransomware strains. That knowledge clearly came from someone who’d already had years of experience building and deploying ransomware strains against real-life victim organizations.

Thus, whoever Putinkrab was before they adopted that moniker, it’s a safe bet they were involved in the development and use of earlier, highly successful ransomware strains. One strong possible candidate is Cerber ransomware, the most popular and effective affiliate program operating between early 2016 and mid-2017. Cerber thrived because it emerged as an early mover in the market for ransomware-as-a-service offerings.

In February 2024, the FBI seized LockBit’s cybercrime infrastructure on the dark web, following an apparently lengthy infiltration of the group’s operations. The United States has already indicted and sanctioned at least five other alleged LockBit ringleaders or affiliates, so presumably the feds have been able to draw additional resources from those investigations.

Also, it seems likely that the three national intelligence agencies involved in bringing these charges are not showing all of their cards. For example, the Treasury documents on Khoroshev mention a single cryptocurrency address, and yet experts interviewed for this story say there are no obvious clues connecting this address to Khoroshev or Putinkrab.

But given that LockBitSupp has been actively involved in Lockbit ransomware attacks against organizations for four years now, the government almost certainly has an extensive list of the LockBit leader’s various cryptocurrency addresses — and probably even his bank accounts in Russia. And no doubt the money trail from some of those transactions was traceable to its ultimate beneficiary (or close enough).

Not long after Khoroshev was charged as the leader of LockBit, a number of open-source intelligence accounts on Telegram began extending the information released by the Treasury Department. Within hours, these sleuths had unearthed more than a dozen credit card accounts used by Khoroshev over the past decade, as well as his various bank account numbers in Russia.

The point is, this post is based on data that’s available to and verifiable by KrebsOnSecurity. Woodward & Bernstein’s source in the Watergate investigation — Deep Throat — famously told the two reporters to “follow the money.” This is always excellent advice. But these days, that can be a lot easier said than done — especially with people who a) do not wish to be found, and b) don’t exactly file annual reports.

Arrests in $400M SIM-Swap Tied to Heist at FTX?

Three Americans were charged this week with stealing more than $400 million in a November 2022 SIM-swapping attack. The U.S. government did not name the victim organization, but there is every indication that the money was stolen from the now-defunct cryptocurrency exchange FTX, which had just filed for bankruptcy on that same day.

An indictment unsealed this week and first reported on by Ars Technica alleges that Chicago man Robert Powell, a.k.a. “R,” “R$” and “ElSwapo1,” was the ringleader of a SIM-swapping group called the “Powell SIM Swapping Crew.” Colorado resident Emily “Em” Hernandez allegedly helped the group gain access to victim devices in service of SIM-swapping attacks between March 2021 and April 2023. Indiana resident Carter Rohn, a.k.a. “Carti,” and “Punslayer,” allegedly assisted in compromising devices.

In a SIM-swapping attack, the crooks transfer the target’s phone number to a device they control, allowing them to intercept any text messages or phone calls sent to the victim, including one-time passcodes for authentication or password reset links sent via SMS.

The indictment states that the perpetrators in this heist stole the $400 million in cryptocurrencies on Nov. 11, 2022 after they SIM-swapped an AT&T customer by impersonating them at a retail store using a fake ID. However, the document refers to the victim in this case only by the name “Victim 1.”

Wired’s Andy Greenberg recently wrote about FTX’s all-night race to stop a $1 billion crypto heist that occurred on the evening of November 11:

“FTX’s staff had already endured one of the worst days in the company’s short life. What had recently been one of the world’s top cryptocurrency exchanges, valued at $32 billion only 10 months earlier, had just declared bankruptcy. Executives had, after an extended struggle, persuaded the company’s CEO, Sam Bankman-Fried, to hand over the reins to John Ray III, a new chief executive now tasked with shepherding the company through a nightmarish thicket of debts, many of which it seemed to have no means to pay.”

“FTX had, it seemed, hit rock bottom. Until someone—a thief or thieves who have yet to be identified—chose that particular moment to make things far worse. That Friday evening, exhausted FTX staffers began to see mysterious outflows of the company’s cryptocurrency, publicly captured on the Etherscan website that tracks the Ethereum blockchain, representing hundreds of millions of dollars worth of crypto being stolen in real time.”

The indictment says the $400 million was stolen over several hours between November 11 and 12, 2022. Tom Robinson, co-founder of the blockchain intelligence firm Elliptic, said the attackers in the FTX heist began to drain FTX wallets on the evening of Nov. 11, 2022 local time, and continuing until the 12th of November.

Robinson said Elliptic is not aware of any other crypto heists of that magnitude occurring on that date.

“We put the value of the cryptoassets stolen at $477 million,” Robinson said. “The FTX administrators have reported overall losses due to “unauthorized third-party transfers” of $413 million – the discrepancy is likely due to subsequent seizure and return of some of the stolen assets. Either way, it’s certainly over $400 million, and we are not aware of any other thefts from crypto exchanges on this scale, on this date.”

The SIM-swappers allegedly responsible for the $400 million crypto theft are all U.S. residents. But there are some indications they had help from organized cybercriminals based in Russia. In October 2023, Elliptic released a report that found the money stolen from FTX had been laundered through exchanges with ties to criminal groups based in Russia.

“A Russia-linked actor seems a stronger possibility,” Elliptic wrote. “Of the stolen assets that can be traced through ChipMixer, significant amounts are combined with funds from Russia-linked criminal groups, including ransomware gangs and darknet markets, before being sent to exchanges. This points to the involvement of a broker or other intermediary with a nexus in Russia.”

Nick Bax, director of analytics at the cryptocurrency wallet recovery firm Unciphered, said the flow of stolen FTX funds looks more like what his team has seen from groups based in Eastern Europe and Russian than anything they’ve witnessed from US-based SIM-swappers.

“I was a bit surprised by this development but it seems to be consistent with reports from CISA [the Cybersecurity and Infrastructure Security Agency] and others that “Scattered Spider” has worked with [ransomware] groups like ALPHV/BlackCat,” Bax said.

CISA’s alert on Scattered Spider says they are a cybercriminal group that targets large companies and their contracted information technology (IT) help desks.

“Scattered Spider threat actors, per trusted third parties, have typically engaged in data theft for extortion and have also been known to utilize BlackCat/ALPHV ransomware alongside their usual TTPs,” CISA said, referring to the group’s signature “Tactics, Techniques an Procedures.”

Earlier this week, KrebsOnSecurity published a story noting that a Florida man recently charged with being part of a SIM-swapping conspiracy is thought to be a key member of Scattered Spider, a hacking group also known as 0ktapus. That group has been blamed for a string of cyber intrusions at major U.S. technology companies during the summer of 2022.

Financial claims involving FTX’s bankruptcy proceedings are being handled by the financial and risk consulting giant Kroll. In August 2023, Kroll suffered its own breach after a Kroll employee was SIM-swapped. According to Kroll, the thieves stole user information for multiple cryptocurrency platforms that rely on Kroll services to handle bankruptcy proceedings.

KrebsOnSecurity sought comment for this story from Kroll, the FBI, the prosecuting attorneys, and Sullivan & Cromwell, the law firm handling the FTX bankruptcy. This story will be updated in the event any of them respond.

Attorneys for Mr. Powell said they do not know who Victim 1 is in the indictment, as the government hasn’t shared that information yet. Powell’s next court date is a detention hearing on Feb. 2, 2024.

Update, Feb. 3, 12:19 p.m. ET: The FBI declined a request to comment.

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.

Here’s Some Bitcoin: Oh, and You’ve Been Served!

A California man who lost $100,000 in a 2021 SIM-swapping attack is suing the unknown holder of a cryptocurrency wallet that harbors his stolen funds. The case is thought to be the first in which a federal court has recognized the use of information included in a bitcoin transaction — such as a link to a civil claim filed in federal court — as reasonably likely to provide notice of the lawsuit to the defendant. Experts say the development could make it easier for victims of crypto heists to recover stolen funds through the courts without having to wait years for law enforcement to take notice or help.

Ryan Dellone, a healthcare worker in Fresno, Calif., asserts that thieves stole his bitcoin on Dec. 14, 2021, by executing an unauthorized SIM-swap that involved an employee at his mobile phone provider who switched Dellone’s phone number over to a new device the attackers controlled.

Dellone says the crooks then used his phone number to break into his account at Coinbase and siphon roughly $100,000 worth of cryptocurrencies. Coinbase is also named as a defendant in the lawsuit, which alleges the company ignored multiple red flags, and that it should have detected and stopped the theft. Coinbase did not respond to requests for comment.

Working with experts who track the flow of funds stolen in cryptocurrency heists, Dellone’s lawyer Ethan Mora identified a bitcoin wallet that was the ultimate destination of his client’s stolen crypto. Mora says his client has since been made aware that the bitcoin address in question is embroiled in an ongoing federal investigation into a cryptocurrency theft ring.

Mora said it’s unclear if the bitcoin address that holds his client’s stolen money is being held by the government or by the anonymous hackers. Nevertheless, he is pursuing a novel legal strategy that allows his client to serve notice of the civil suit to that bitcoin address — and potentially win a default judgment to seize his client’s funds within — without knowing the identity of his attackers or anything about the account holder.

In a civil lawsuit seeking monetary damages, a default judgment is usually entered on behalf of the plaintiff if the defendant fails to respond to the complaint within a specified time. Assuming that the cybercriminals who stole the money don’t dispute Dellone’s claim, experts say the money could be seized by cryptocurrency exchanges if the thieves ever tried to move it or spend it.

The U.S. courts have generally held that if you’re going to sue someone, you have to provide some kind of meaningful and timely communication about that lawsuit to the defendant in a way that is reasonably likely to provide them notice.

Not so long ago, you had track down your defendant and hire someone to physically serve them with a copy of the court papers. But legal experts say the courts have evolved their thinking in recent years about what constitutes meaningful service, and now allow notification via email.

On Dec. 14, 2023, a federal judge in the Eastern District of California granted Dellone permission to serve notice of his lawsuit directly to the suspected hackers’ bitcoin address — using a short message that was attached to roughly $100 worth of bitcoin Mora sent to the address.

Bitcoin transactions are public record, and each transaction can be sent along with an optional short message. The message uses what’s known as an “OP RETURN,” or an instruction of the Bitcoin scripting language that allows users to attach metadata to a transaction — and thus save it on the blockchain.

In the $100 bitcoin transaction Mora sent to the disputed bitcoin address, the OP RETURN message read: “OSERVICE – SUMMONS, COMPLAINT U.S. Dist. E.D. Cal. LINK: t.ly/123cv01408_service,” which is a short link to a copy of the lawsuit hosted on Google Drive.

“The courts are adapting to the new style of service of process,” said Mark Rasch, a former federal prosecutor at the U.S. Department of Justice. “And that’s helpful and useful and necessary.”

Rasch said Mora’s strategy could force the government to divulge information about their case, or else explain to a judge why the plaintiff shouldn’t be able to recover their stolen funds without further delay. Rasch said it could be that Dellone’s stolen crypto was seized as part of a government asset forfeiture, but that either way there is no reason Uncle Sam should hold some cybercrime victims’ life savings indefinitely.

“The government doesn’t need the crypto as evidence, but in a forfeiture action the money goes to the government,” Rasch said. “But it was never the government’s money, and that doesn’t help the victim. The government should be providing information to the victims of cryptocurrency theft so that their attorneys can go get the money back themselves.”

Nick Bax is a security researcher who specializes in tracing the labyrinthine activity of criminals trying to use cryptocurrency exchanges and other financial instruments to launder the proceeds of cybercrime. Bax said Mora’s method could allow more victims to stake legitimate legal claims to their stolen funds.

“If you get a default judgment against a bitcoin address, for example, and then down the road that bitcoin gets sent to an exchange that complies with or abides by U.S. court orders, then it’s yours,” Bax said. “I’ve seen funds with a court order on them get frozen by the exchanges that decided it made sense to comply with orders from a U.S. federal court.”

Bax’s research was featured in a Sept. 2023 story here about how experts now believe it’s likely hackers are cracking open some of the password vaults stolen in the 2022 data breach at LastPass.

“I’ve talked to a lot victims who have had life-changing amounts of money being seized and would like that money back,” Bax said. “A big goal here is just making civil cases more efficient. Because then people can help themselves and they don’t need to rely solely on law enforcement with its limited resources. And that’s really the goal: To scale this and make it economically viable.”

While Dellone’s lawsuit may be the first time anyone has obtained approval from a federal judge to use bitcoin to notify another party of a civil action, the technique has been used in several recent unrelated cases involving other cryptocurrencies, including Ethereum and NFTs.

The law firm DLAPiper writes that in November 2022, the U.S. District Court for the Southern District of Florida “authorized service of a lawsuit seeking the recovery of stolen digital assets by way of a non-fungible token or NFT containing the text of the complaint and summons, as well as a hyperlink to a website created by the plaintiffs containing all pleadings and orders in the action.”

In approving Dellone’s request for service via bitcoin transaction, the judge overseeing the case cited a recent New York Superior Court ruling in a John Doe case brought by victims seeking to unmask the crooks behind a $1.3 million cyberheist.

In the New York case, the state trial court found it was acceptable for the plaintiffs to serve notice of the suit via cryptocurrency transactions because the defendants regularly used the Blockchain address to which the tokens were sent, and had recently done so. Also, the New York court found that because the account in question contained a significant sum of money, it was unlikely to be abandoned or forgotten.

“Thus the court inferred the defendants were likely to access the account in the future,” wrote Judge Helena M. March-Kuchta, for the Eastern District of California, summarizing the New York case. “Finally, the plaintiff had no alternative means of contacting these unknown defendants.”

Experts say regardless of the reason for a cryptocurrency theft or loss — whether it’s from a romance scam or a straight-up digital mugging — it’s important for victims to file an official report both with their local police and with the FBI’s Internet Crime Complaint Center (ic3.gov). The IC3 collects reports on cybercrime and sometimes bundles victim reports into cases for DOJ/FBI prosecutors and investigators.

The hard truth is that most victims will never see their stolen funds again. But sometimes federal investigators win minor victories and manage to seize or freeze crypto assets that are known to be associated with specific crimes and criminals. In those cases, the government will eventually make an effort to find, contact and in some cases remunerate known victims.

It might take many years for this process to unfold. But if and when they do make that effort, federal investigators are likely to focus their energies and attention responding to victims who staked a claim and can support it with documentation.

But have no illusions that any of this is likely to happen in a timeframe that is meaningful to victims in the short run. For example, in 2013 the U.S. government seized the assets of the virtual currency Liberty Reserve, massively disrupting a major vehicle for laundering the proceeds of cybercrime and other illegal activities.

When the government offered remuneration to Liberty Reserve account holders who wished to make a financial loss claim and supply supporting documentation, KrebsOnSecurity filed a claim. There wasn’t money much in my Liberty Reserve account; I simply wanted to know how long it would take for federal investigators to follow up on my claim, or indeed if they would at all.

In 2020 KrebsOnSecurity was contacted by an investigator with the U.S. Internal Revenue Service (IRS) who was seeking to discuss my claim. The investigator said they would have called sooner, but that it had taken that long for the IRS to gain legal access to the funds seized in the 2013 Liberty Reserve takedown.

Russian Reshipping Service ‘SWAT USA Drop’ Exposed

One of the largest cybercrime services for laundering stolen merchandise was hacked recently, exposing its internal operations, finances and organizational structure. Here’s a closer look at the Russia-based SWAT USA Drop Service, which currently employs more than 1,200 people across the United States who are knowingly or unwittingly involved in reshipping expensive consumer goods purchased with stolen credit cards.

Among the most common ways that thieves extract cash from stolen credit card accounts is through purchasing pricey consumer goods online and reselling them on the black market. Most online retailers grew wise to these scams years ago and stopped shipping to regions of the world most frequently associated with credit card fraud, including Eastern Europe, North Africa, and Russia.

But such restrictions have created a burgeoning underground market for reshipping scams, which rely on willing or unwitting residents in the United States and Europe to receive stolen goods and relay them to crooks living in the embargoed areas.

Services like SWAT are known as “Drops for stuff” on cybercrime forums. The “drops” are people who have responded to work-at-home package reshipping jobs advertised on craigslist.com and job search sites. Most reshipping scams promise employees a monthly salary and even cash bonuses. In reality, the crooks in charge almost always stop communicating with drops just before the first payday, usually about a month after the drop ships their first package.

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

SWAT takes a percentage cut (up to 50 percent) where “stuffers” — thieves armed with stolen credit card numbers — pay a portion of each product’s retail value to SWAT as the reshipping fee. The stuffers use stolen cards to purchase high-value products from merchants and have the merchants ship the items to the drops’ address. Once the drops receive and successfully reship the stolen packages, the stuffers then sell the products on the local black market.

The SWAT drop service has been around in various names and under different ownership for almost a decade. But in early October 2023, SWAT’s current co-owner — a Russian-speaking individual who uses the handle “Fearlless” — took to his favorite cybercrime forum to lodge a formal complaint against the owner of a competing reshipping service, alleging his rival had hacked SWAT and was trying to poach his stuffers and reshippers by emailing them directly.

Milwaukee-based security firm Hold Security shared recent screenshots of a working SWAT stuffer’s user panel, and those images show that SWAT currently lists more than 1,200 drops in the United States that are available for stuffers to rent. The contact information for Kareem, a young man from Maryland, was listed as an active drop. Contacted by KrebsOnSecurity, Kareem agreed to speak on condition that his full name not be used in this story.

Kareem said he’d been hired via an online job board to reship packages on behalf of a company calling itself CTSI, and that he’s been receiving and reshipping iPads and Apple watches for several weeks now. Kareem was less than thrilled to learn he would probably not be getting his salary on the promised payday, which was coming up in a few days.

Kareem said he was instructed to create an account at a website called portal-ctsi[.]com, where each day he was expected to log in and check for new messages about pending shipments. Anyone can sign up at this website as a potential reshipping mule, although doing so requires applicants to share a great deal of personal and financial information, as well as copies of an ID or passport matching the supplied name.

On a suspicion that the login page for portal-ctsi[.]com might be a custom coding job, KrebsOnSecurity selected “view source” from the homepage to expose the site’s HTML code. Grabbing a snippet of that code (e.g., “smarty/default/jui/js/jquery-ui-1.9.2.min.js”) and searching on it at publicwww.com reveals more than four dozen other websites running the same login panel. And all of those appear to be geared toward either stuffers or drops.

In fact, more than half of the domains that use this same login panel actually include the word “stuffer” in the login URL, according to publicwww. Each of the domains below that end in “/user/login.php” are sites for active and prospective drops, and each corresponds to a unique fake company that is responsible for managing its own stable of drops:

lvlup-store[.]com/stuffer/login.php
personalsp[.]com/user/login.php
destaf[.]com/stuffer/login.php
jaderaplus[.]com/stuffer/login.php
33cow[.]com/stuffer/login.php
panelka[.]net/stuffer/login.php
aaservice[.]net/stuffer/login.php
re-shipping[.]ru/stuffer/login.php
bashar[.]cc/stuffer/login.php
marketingyoursmall[.]biz/stuffer/login.php
hovard[.]xyz/stuffer/login.php
pullback[.]xyz/stuffer/login.php
telollevoexpress[.]com/stuffer/login.php
postme[.]today/stuffer/login.php
wint-job[.]com/stuffer/login.php
squadup[.]club/stuffer/login.php
mmmpack[.]pro/stuffer/login.php
yoursmartpanel[.]com/user/login.php
opt257[.]org/user/login.php
touchpad[.]online/stuffer/login.php
peresyloff[.]top/stuffer/login.php
ruzke[.]vodka/stuffer/login.php
staf-manager[.]net/stuffer/login.php
data-job[.]club/stuffer/login.php
logistics-services[.]org/user/login.php
swatship[.]club/stuffer/login.php
logistikmanager[.]online/user/login.php
endorphine[.]world/stuffer/login.php
burbon[.]club/stuffer/login.php
bigdropproject[.]com/stuffer/login.php
jobspaket[.]net/user/login.php
yourcontrolboard[.]com/stuffer/login.php
packmania[.]online/stuffer/login.php
shopping-bro[.]com/stuffer/login.php
dash-redtag[.]com/user/login.php
mnger[.]net/stuffer/login.php
begg[.]work/stuffer/login.php
dashboard-lime[.]com/user/login.php
control-logistic[.]xyz/user/login.php
povetru[.]biz/stuffer/login.php
dash-nitrologistics[.]com/user/login.php
cbpanel[.]top/stuffer/login.php
hrparidise[.]pro/stuffer/login.php
d-cctv[.]top/user/login.php
versandproject[.]com/user/login.php
packitdash[.]com/user/login.php
avissanti-dash[.]com/user/login.php
e-host[.]life/user/login.php
pacmania[.]club/stuffer/login.php

Why so many websites? In practice, all drops are cut loose within approximately 30 days of their first shipment — just before the promised paycheck is due. Because of this constant churn, each stuff shop operator must be constantly recruiting new drops. Also, with this distributed setup, even if one reshipping operation gets shut down (or exposed online), the rest can keep on pumping out dozens of packages a day.

A 2015 academic study (PDF) on criminal reshipping services found the average financial hit from a reshipping scheme per cardholder was $1,156.93. That study looked into the financial operations of several reshipping schemes, and estimated that approximately 1.6 million credit and debit cards are used to commit at least $1.8 billion in reshipping fraud each year.

It’s not hard to see how reshipping can be a profitable enterprise for card crooks. For example, a stuffer buys a stolen payment card off the black market for $10, and uses that card to purchase more than $1,100 worth of goods. After the reshipping service takes its cut (~$550), and the stuffer pays for his reshipping label (~$100), the stuffer receives the stolen goods and sells them on the black market in Russia for $1,400. He has just turned a $10 investment into more than $700. Rinse, wash, and repeat.

The breach at SWAT exposed not only the nicknames and contact information for all of its stuffers and drops, but also the group’s monthly earnings and payouts. SWAT apparently kept its books in a publicly accessible Google Sheets document, and that document reveals Fearlless and his business partner each routinely made more than $100,000 every month operating their various reshipping businesses.

The exposed SWAT financial records show this crime group has tens of thousands of dollars worth of expenses each month, including payments for the following recurring costs:

-advertising the service on crime forums and via spam;
-people hired to re-route packages, usually by voice over the phone;
-third-party services that sell hacked/stolen USPS/Fedex labels;
-“drops test” services, contractors who will test the honesty of drops by sending them fake jewelry;
-“documents,” e.g. sending drops to physically pick up legal documents for new phony front companies.

The spreadsheet also included the cryptocurrency account numbers that were to be credited each month with SWAT’s earnings. Unsurprisingly, a review of the blockchain activity tied to the bitcoin addresses listed in that document shows that many of them have a deep association with cybercrime, including ransomware activity and transactions at darknet sites that peddle stolen credit cards and residential proxy services.

The information leaked from SWAT also has exposed the real-life identity and financial dealings of its principal owner — Fearlless, a.k.a. “SwatVerified.” We’ll hear more about Fearlless in Part II of this story. Stay tuned.

Kroll Employee SIM-Swapped for Crypto Investor Data

Security consulting giant Kroll disclosed today that a SIM-swapping attack against one of its employees led to the theft of user information for multiple cryptocurrency platforms that are relying on Kroll services in their ongoing bankruptcy proceedings. And there are indications that fraudsters may already be exploiting the stolen data in phishing attacks.

Cryptocurrency lender BlockFi and the now-collapsed crypto trading platform FTX each disclosed data breaches this week thanks to a recent SIM-swapping attack targeting an employee of Kroll — the company handling both firms’ bankruptcy restructuring.

In a statement released today, New York City-based Kroll said it was informed that on Aug. 19, 2023, someone targeted a T-Mobile phone number belonging to a Kroll employee “in a highly sophisticated ‘SIM swapping’ attack.”

“Specifically, T-Mobile, without any authority from or contact with Kroll or its employees, transferred that employee’s phone number to the threat actor’s phone at their request,” the statement continues. “As a result, it appears the threat actor gained access to certain files containing personal information of bankruptcy claimants in the matters of BlockFi, FTX and Genesis.”

T-Mobile has not yet responded to requests for comment.

Countless websites and online services use SMS text messages for both password resets and multi-factor authentication. This means that stealing someone’s phone number often can let cybercriminals hijack the target’s entire digital life in short order — including access to any financial, email and social media accounts tied to that phone number.

SIM-swapping groups will often call employees on their mobile devices, pretend to be someone from the company’s IT department, and then try to get the employee to visit a phishing website that mimics the company’s login page.

Multiple SIM-swapping gangs have had great success using this method to target T-Mobile employees for the purposes of reselling a cybercrime service that can be hired to divert any T-Mobile user’s text messages and phone calls to another device.

In February 2023, KrebsOnSecurity chronicled SIM-swapping attacks claimed by these groups against T-Mobile employees in more than 100 separate incidents in the second half of 2022. The average cost to SIM swap any T-Mobile phone number was approximately $1,500.

The unfortunate result of the SIM-swap against the Kroll employee is that people who had financial ties to BlockFi, FTX, or Genesis now face increased risk of becoming targets of SIM-swapping and phishing attacks themselves.

And there is some indication this is already happening. Multiple readers who said they got breach notices from Kroll today also shared phishing emails they received this morning that spoofed FTX and claimed, “You have been identified as an eligible client to begin withdrawing digital assets from your FTX account.”

A major portion of Kroll’s business comes from helping organizations manage cyber risk. Kroll is often called in to investigate data breaches, and it also sells identity protection services to companies that recently experienced a breach and are grasping at ways to demonstrate that they doing something to protect their customers from further harm.

Kroll did not respond to questions. But it’s a good bet that BlockFi, FTX and Genesis customers will soon enjoy yet another offering of free credit monitoring as a result of the T-Mobile SIM swap.

Kroll’s website says it employs “elite cyber risk leaders uniquely positioned to deliver end-to-end cyber security services worldwide.” Apparently, these elite cyber risk leaders did not consider the increased attack surface presented by their employees using T-Mobile for wireless service.

The SIM-swapping attack against Kroll is a timely reminder that you should do whatever you can to minimize your reliance on mobile phone companies for your security. For example, many online services require you to provide a phone number upon registering an account, but that number can often be removed from your profile afterwards.

Why do I suggest this? Many online services allow users to reset their passwords just by clicking a link sent via SMS, and this unfortunately widespread practice has turned mobile phone numbers into de facto identity documents. Which means losing control over your phone number thanks to an unauthorized SIM swap or mobile number port-out, divorce, job termination or financial crisis can be devastating.

If you haven’t done so lately, take a moment to inventory your most important online accounts, and see how many of them can still have their password reset by receiving an SMS at the phone number on file. This may require stepping through the website’s account recovery or lost password flow.

If the account that stores your mobile phone number does not allow you to delete your number, check to see whether there is an option to disallow SMS or phone calls for authentication and account recovery. If more secure options are available, such as a security key or a one-time code from a mobile authentication app, please take advantage of those instead. The website 2fa.directory is a good starting point for this analysis.

Now, you might think that the mobile providers would share some culpability when a customer suffers a financial loss because a mobile store employee got tricked into transferring that customer’s phone number to criminals. But earlier this year, a California judge dismissed a lawsuit against AT&T that stemmed from a 2017 SIM-swapping attack which netted the thieves more than $24 million in cryptocurrency.

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.

Google Suspends Chinese E-Commerce App Pinduoduo Over Malware

Google says it has suspended the app for the Chinese e-commerce giant Pinduoduo after malware was found in versions of the software. The move comes just weeks after Chinese security researchers published an analysis suggesting the popular e-commerce app sought to seize total control over affected devices by exploiting multiple security vulnerabilities in a variety of Android-based smartphones.

In November 2022, researchers at Google’s Project Zero warned about active attacks on Samsung mobile phones which chained together three security vulnerabilities that Samsung patched in March 2021, and which would have allowed an app to add or read any files on the device.

Google said it believes the exploit chain for Samsung devices belonged to a “commercial surveillance vendor,” without elaborating further. The highly technical writeup also did not name the malicious app in question.

On Feb. 28, 2023, researchers at the Chinese security firm DarkNavy published a blog post purporting to show evidence that a major Chinese ecommerce company’s app was using this same three-exploit chain to read user data stored by other apps on the affected device, and to make its app nearly impossible to remove.

DarkNavy likewise did not name the app they said was responsible for the attacks. In fact, the researchers took care to redact the name of the app from multiple code screenshots published in their writeup. DarkNavy did not respond to requests for clarification.

“At present, a large number of end users have complained on multiple social platforms,” reads a translated version of the DarkNavy blog post. “The app has problems such as inexplicable installation, privacy leakage, and inability to uninstall.”

Update, March 27, 1:24 p.m. ET: Dan Goodin over at Ars Technica has an important update on this story that indicates the Pinduoduo code was exploiting a zero-day vulnerability in Android — not Samsung. From that piece:

“A preliminary analysis by Lookout found that at least two off-Play versions of Pinduoduo for Android exploited CVE-2023-20963, the tracking number for an Android vulnerability Google patched in updates that became available to end users two weeks ago. This privilege-escalation flaw, which was exploited prior to Google’s disclosure, allowed the app to perform operations with elevated privileges. The app used these privileges to download code from a developer-designated site and run it within a privileged environment.

“The malicious apps represent “a very sophisticated attack for an app-based malware,” Christoph Hebeisen, one of three Lookout researchers who analyzed the file, wrote in an email. “In recent years, exploits have not usually been seen in the context of mass-distributed apps. Given the extremely intrusive nature of such sophisticated app-based malware, this is an important threat mobile users need to protect against.”

On March 3, 2023, a denizen of the now-defunct cybercrime community BreachForums posted a thread which noted that a unique component of the malicious app code highlighted by DarkNavy also was found in the ecommerce application whose name was apparently redacted from the DarkNavy analysis: Pinduoduo.

On March 4, 2023, e-commerce expert Liu Huafang posted on the Chinese social media network Weibo that Pinduoduo’s app was using security vulnerabilities to gain market share by stealing user data from its competitors. That Weibo post has since been deleted.

On March 7, the newly created Github account Davinci1010 published a technical analysis claiming that until recently Pinduoduo’s source code included a “backdoor,” a hacking term used to describe code that allows an adversary to remotely and secretly connect to a compromised system at will.

That analysis includes links to archived versions of Pinduoduo’s app released before March 5 (version 6.50 and lower), which is when Davinci1010 says a new version of the app removed the malicious code.

Pinduoduo has not yet responded to requests for comment. Pinduoduo parent company PDD Holdings told Reuters Google has not shared details about why it suspended the app.

The company told CNN that it strongly rejects “the speculation and accusation that Pinduoduo app is malicious just from a generic and non-conclusive response from Google,” and said there were “several apps that have been suspended from Google Play at the same time.”

Pinduoduo is among China’s most popular e-commerce platforms, boasting approximately 900 million monthly active users.

Most of the news coverage of Google’s move against Pinduoduo emphasizes that the malware was found in versions of the Pinduoduo app available outside of Google’s app store — Google Play.

“Off-Play versions of this app that have been found to contain malware have been enforced on via Google Play Protect,” a Google spokesperson said in a statement to Reuters, adding that the Play version of the app has been suspended for security concerns.

However, Google Play is not available to consumers in China. As a result, the app will still be available via other mobile app stores catering to the Chinese market — including those operated by Huawei, Oppo, Tencent and VIVO.

Google said its ban did not affect the PDD Holdings app Temu, which is an online shopping platform in the United States. According to The Washington Post, four of the Apple App Store’s 10 most-downloaded free apps are owned by Chinese companies, including Temu and the social media network TikTok.

The Pinduoduo suspension comes as lawmakers in Congress this week are gearing up to grill the CEO of TikTok over national security concerns. TikTok, which is owned by Beijing-based ByteDance, said last month that it now has roughly 150 million monthly active users in the United States.

A new cybersecurity strategy released earlier this month by the Biden administration singled out China as the greatest cyber threat to the U.S. and Western interests. The strategy says China now presents the “broadest, most active, and most persistent threat to both government and private sector networks,” and says China is “the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do so.”

Hackers Claim They Breached T-Mobile More Than 100 Times in 2022

Three different cybercriminal groups claimed access to internal networks at communications giant T-Mobile in more than 100 separate incidents throughout 2022, new data suggests. In each case, the goal of the attackers 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.

The conclusions above are based on an extensive analysis of Telegram chat logs from three distinct cybercrime groups or actors that have been identified by security researchers as particularly active in and effective at “SIM-swapping,” which involves temporarily seizing control over a target’s mobile phone number.

Countless websites and online services use SMS text messages for both password resets and multi-factor authentication. This means that stealing someone’s phone number often can let cybercriminals hijack the target’s entire digital life in short order — including access to any financial, email and social media accounts tied to that phone number.

All three SIM-swapping entities that were tracked for this story remain active in 2023, and they all conduct business in open channels on the instant messaging platform Telegram. KrebsOnSecurity is not naming those channels or groups here because they will simply migrate to more private servers if exposed publicly, and for now those servers remain a useful source of intelligence about their activities.

Each advertises their claimed access to T-Mobile systems in a similar way. At a minimum, every SIM-swapping opportunity is announced with a brief “Tmobile up!” or “Tmo up!” message to channel participants. Other information in the announcements includes the price for a single SIM-swap request, and the handle of the person who takes the payment and information about the targeted subscriber.

The information required from the customer of the SIM-swapping service includes the target’s phone number, and the serial number tied to the new SIM card that will be used to receive text messages and phone calls from the hijacked phone number.

Initially, the goal of this project was to count how many times each entity claimed access to T-Mobile throughout 2022, by cataloging the various “Tmo up!” posts from each day and working backwards from Dec. 31, 2022.

But by the time we got to claims made in the middle of May 2022, completing the rest of the year’s timeline seemed unnecessary. The tally shows that in the last seven-and-a-half months of 2022, these groups collectively made SIM-swapping claims against T-Mobile on 104 separate days — often with multiple groups claiming access on the same days.

KrebsOnSecurity shared a large amount of data gathered for this story with T-Mobile. The company declined to confirm or deny any of these claimed intrusions. But in a written statement, T-Mobile said this type of activity affects the entire wireless industry.

“And we are constantly working to fight against it,” the statement reads. “We have continued to drive enhancements that further protect against unauthorized access, including enhancing multi-factor authentication controls, hardening environments, limiting access to data, apps or services, and more. We are also focused on gathering threat intelligence data, like what you have shared, to help further strengthen these ongoing efforts.”

TMO UP!

While it is true that each of these cybercriminal actors periodically offer SIM-swapping services for other mobile phone providers — including AT&T, Verizon and smaller carriers — those solicitations appear far less frequently in these group chats than T-Mobile swap offers. And when those offers do materialize, they are considerably more expensive.

The prices advertised for a SIM-swap against T-Mobile customers in the latter half of 2022 ranged between USD $1,000 and $1,500, while SIM-swaps offered against AT&T and Verizon customers often cost well more than twice that amount.

To be clear, KrebsOnSecurity is not aware of specific SIM-swapping incidents tied to any of these breach claims. However, the vast majority of advertisements for SIM-swapping claims against T-Mobile tracked in this story had two things in common that set them apart from random SIM-swapping ads on Telegram.

First, they included an offer to use a mutually trusted “middleman” or escrow provider for the transaction (to protect either party from getting scammed). More importantly, the cybercriminal handles that were posting ads for SIM-swapping opportunities from these groups generally did so on a daily or near-daily basis — often teasing their upcoming swap events in the hours before posting a “Tmo up!” message announcement.

In other words, if the crooks offering these SIM-swapping services were ripping off their customers or claiming to have access that they didn’t, this would be almost immediately obvious from the responses of the more seasoned and serious cybercriminals in the same chat channel.

There are plenty of people on Telegram claiming to have SIM-swap access at major telecommunications firms, but a great many such offers are simply four-figure scams, and any pretenders on this front are soon identified and banned (if not worse).

One of the groups that reliably posted “Tmo up!” messages to announce SIM-swap availability against T-Mobile customers also reliably posted “Tmo down!” follow-up messages announcing exactly when their claimed access to T-Mobile employee tools was discovered and revoked by the mobile giant.

A review of the timestamps associated with this group’s incessant “Tmo up” and “Tmo down” posts indicates that while their claimed access to employee tools usually lasted less than an hour, in some cases that access apparently went undiscovered for several hours or even days.

TMO TOOLS

How could these SIM-swapping groups be gaining access to T-Mobile’s network as frequently as they claim? Peppered throughout the daily chit-chat on their Telegram channels are solicitations for people urgently needed to serve as “callers,” or those who can be hired to social engineer employees over the phone into navigating to a phishing website and entering their employee credentials.

Allison Nixon is chief research officer for the New York City-based cybersecurity firm Unit 221B. Nixon said these SIM-swapping groups will typically call employees on their mobile devices, pretend to be someone from the company’s IT department, and then try to get the person on the other end of the line to visit a phishing website that mimics the company’s employee login page.

Nixon argues that many people in the security community tend to discount the threat from voice phishing attacks as somehow “low tech” and “low probability” threats.

“I see it as not low-tech at all, because there are a lot of moving parts to phishing these days,” Nixon said. “You have the caller who has the employee on the line, and the person operating the phish kit who needs to spin it up and down fast enough so that it doesn’t get flagged by security companies. Then they have to get the employee on that phishing site and steal their credentials.”

In addition, she said, often there will be yet another co-conspirator whose job it is to use the stolen credentials and log into employee tools. That person may also need to figure out how to make their device pass “posture checks,” a form of device authentication that some companies use to verify that each login is coming only from employer-issued phones or laptops.

For aspiring criminals with little experience in scam calling, there are plenty of sample call transcripts available on these Telegram chat channels that walk one through how to impersonate an IT technician at the targeted company — and how to respond to pushback or skepticism from the employee. Here’s a snippet from one such tutorial that appeared recently in one of the SIM-swapping channels:

“Hello this is James calling from Metro IT department, how’s your day today?”

(yea im doing good, how r u)

i’m doing great, thank you for asking

i’m calling in regards to a ticket we got last week from you guys, saying you guys were having issues with the network connectivity which also interfered with [Microsoft] Edge, not letting you sign in or disconnecting you randomly. We haven’t received any updates to this ticket ever since it was created so that’s why I’m calling in just to see if there’s still an issue or not….”

TMO DOWN!

The TMO UP data referenced above, combined with comments from the SIM-swappers themselves, indicate that while many of their claimed accesses to T-Mobile tools in the middle of 2022 lasted hours on end, both the frequency and duration of these events began to steadily decrease as the year wore on.

T-Mobile declined to discuss what it may have done to combat these apparent intrusions last year. However, one of the groups began to complain loudly in late October 2022 that T-Mobile must have been doing something that was causing their phished access to employee tools to die very soon after they obtained it.

One group even remarked that they suspected T-Mobile’s security team had begun monitoring their chats.

Indeed, the timestamps associated with one group’s TMO UP/TMO DOWN notices show that their claimed access was often limited to less than 15 minutes throughout November and December of 2022.

Whatever the reason, the calendar graphic above clearly shows that the frequency of claimed access to T-Mobile decreased significantly across all three SIM-swapping groups in the waning weeks of 2022.

SECURITY KEYS

T-Mobile US reported revenues of nearly $80 billion last year. It currently employs more than 71,000 people in the United States, any one of whom can be a target for these phishers.

T-Mobile declined to answer questions about what it may be doing to beef up employee authentication. But Nicholas Weaver, a researcher and lecturer at University of California, Berkeley’s International Computer Science Institute, said T-Mobile and all the major wireless providers should be requiring employees to use physical security keys for that second factor when logging into company resources.

“These breaches should not happen,” Weaver said. “Because T-Mobile should have long ago issued all employees security keys and switched to security keys for the second factor. And because security keys provably block this style of attack.”

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 key 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.

THE ROLE OF MINORS IN SIM-SWAPPING

Nixon said one confounding aspect of SIM-swapping is that these criminal groups tend to recruit teenagers to do their dirty work.

“A huge reason this problem has been allowed to spiral out of control is because children play such a prominent role in this form of breach,” Nixon said.

Nixon said SIM-swapping groups often advertise low-level jobs on places like Roblox and Minecraft, online games that are extremely popular with young adolescent males.

“Statistically speaking, that kind of recruiting is going to produce a lot of people who are underage,” she said. “They recruit children because they’re naive, you can get more out of them, and they have legal protections that other people over 18 don’t have.”

For example, she said, even when underage SIM-swappers are arrested, the offenders tend to go right back to committing the same crimes as soon as they’re released.

In January 2023, T-Mobile disclosed that a “bad actor” stole records on roughly 37 million current customers, including their name, billing address, email, phone number, date of birth, and T-Mobile account number.

In August 2021, T-Mobile acknowledged that hackers made off with the names, dates of birth, Social Security numbers and driver’s license/ID information on more than 40 million current, former or prospective customers who applied for credit with the company. That breach came to light after a hacker began selling the records on a cybercrime forum.

In the shadow of such mega-breaches, any damage from the continuous attacks by these SIM-swapping groups can seem insignificant by comparison. But Nixon says it’s a mistake to dismiss SIM-swapping as a low volume problem.

“Logistically, you may only be able to get a few dozen or a hundred SIM-swaps in a day, but you can pick any customer you want across their entire customer base,” she said. “Just because a targeted account takeover is low volume doesn’t mean it’s low risk. These guys have crews that go and identify people who are high net worth individuals and who have a lot to lose.”

Nixon said another aspect of SIM-swapping that causes cybersecurity defenders to dismiss the threat from these groups is the perception that they are full of low-skilled “script kiddies,” a derisive term used to describe novice hackers who rely mainly on point-and-click hacking tools.

“They underestimate these actors and say this person isn’t technically sophisticated,” she said. “But if you’re rolling around in millions worth of stolen crypto currency, you can buy that sophistication. I know for a fact some of these compromises were at the hands of these ‘script kiddies,’ but they’re not ripping off other people’s scripts so much as hiring people to make scripts for them. And they don’t care what gets the job done, as long as they get to steal the money.”

Hacked Ring Cams Used to Record Swatting Victims

Two U.S. men have been charged with hacking into the Ring home security cameras of a dozen random people and then “swatting” them — falsely reporting a violent incident at the target’s address to trick local police into responding with force. Prosecutors say the duo used the compromised Ring devices to stream live video footage on social media of police raiding their targets’ homes, and to taunt authorities when they arrived.

Prosecutors in Los Angeles allege 20-year-old James Thomas Andrew McCarty, a.k.a. “Aspertaine,” of Charlotte, N.C., and Kya Christian Nelson, a.k.a. “ChumLul,” 22, of Racine, Wisc., conspired to hack into Yahoo email accounts belonging to victims in the United States. From there, the two allegedly would check how many of those Yahoo accounts were associated with Ring accounts, and then target people who used the same password for both accounts.

An indictment unsealed this week says that in the span of just one week in November 2020, McCarty and Nelson identified and swatted at least a dozen different victims across the country.

“The defendants then allegedly accessed without authorization the victims’ Ring devices and transmitted the audio and video from those devices on social media during the police response,” reads a statement from Martin Estrada, the U.S. Attorney for the Central District of California. “They also allegedly verbally taunted responding police officers and victims through the Ring devices during several of the incidents.”

The indictment charges that McCarty continued his swatting spree in 2021 from his hometown in Kayenta, Ariz., where he called in bomb threats or phony hostage situations on more than two dozen occasions.

The Telegram and Discord aliases allegedly used by McCarty — “Aspertaine” and “Couch,” among others — correspond to an identity that was active in certain channels dedicated to SIM-swapping, a crime that involves stealing wireless phone numbers and hijacking the online financial and social media accounts tied to those numbers.

Aspertaine bragged on Discord that he’d amassed more than $330,000 in virtual currency. On Telegram, the Aspertaine/Couch alias frequented several popular SIM-swapping channels, where they initially were active as a “holder” — a SIM-swapping group member who agrees to hold SIM cards used in the heist after an account takeover is completed. Aspertaine later claimed more direct involvement in individual SIM-swapping attacks.

In September, KrebsOnSecurity broke the news about a wide-ranging federal investigation into “violence-as-a-service” offerings on Telegram and other social media networks, wherein people can settle scores by hiring total strangers to carry out physical attacks such as brickings, shootings, and firebombings at a target’s address.

The story observed that SIM swappers were especially enamored of these “IRL” or “In Real Life” violence services, which they frequently used to target one another in response to disagreements over how stolen money should be divided amongst themselves. And a number of Aspertaine’s peers on these SIM-swapping channels claimed they’d been ripped off after Aspertaine took more than a fair share from them.

In August, a member of a popular SIM-swapping group on Telegram who was slighted by Aspertaine put out the word that he was looking for some physical violence to be visited on McCarty’s address in North Carolina. “Anyone live near here and wants to [do] a job for me,” the job ad with McCarty’s home address read. “Jobs range from $1k-$50k. Payment in BTC [bitcoin].” It’s unclear if anyone responded to that job offer.

Ring, Inc., which is owned by Amazon, said it learned bad actors used stolen customer email credentials obtained from external (non-Ring) services to access other accounts, and took immediate steps to help those customers secure their Ring accounts.

“We also supported the FBI in identifying the individuals responsible,” the company said in a written statement. “We take the security of our customers extremely seriously — that’s why we made two-step verification mandatory, conduct regular scans for Ring passwords compromised in non-Ring breaches, and continually invest in new security protections to harden our systems. We are committed to continuing to protect our customers and vigorously going after those who seek to harm them.”

KrebsOnSecurity recently published The Wages of Password ReUse: Your Money or Your Life, which noted that when normal computer users fall into the nasty habit of recycling passwords, the result is most often some type of financial loss. Whereas, when cybercriminals reuse passwords, it often costs them their freedom.

But perhaps that story should be updated, because it’s now clear that password reuse can also put you in mortal danger. Swatting attacks are dangerous, expensive hoaxes that sometimes end in tragedy.

In June 2021, an 18-year-old serial swatter from Tennessee was sentenced to five years in prison for his role in a fraudulent swatting attack that led to the death of a 60-year-old man.

In 2019, prosecutors handed down a 20-year sentence to Tyler Barriss, a then 26-year-old serial swatter from California who admitted making a phony emergency call to police in late 2017 that led to the shooting death of an innocent Kansas man.

McCarty was arrested last week, and charged with conspiracy to intentionally access computers without authorization. Prosecutors said Nelson is currently incarcerated in Kentucky in connection with unrelated investigation.

If convicted on the conspiracy charge, both defendants would face a statutory maximum penalty of five years in federal prison. The charge of intentionally accessing without authorization a computer carries a maximum possible sentence of five years. A conviction on the additional charge against Nelson — aggravated identity theft — carries a mandatory two-year consecutive sentence.

Update, 11:48 a.m., Dec. 20: Added statement from Ring. Modified description of a “holder” in the SIM-swapping parlance.

U.S. Govt. Apps Bundled Russian Code With Ties to Mobile Malware Developer

A recent scoop by Reuters revealed that mobile apps for the U.S. Army and the Centers for Disease Control and Prevention (CDC) were integrating software that sends visitor data to a Russian company called Pushwoosh, which claims to be based in the United States. But that story omitted an important historical detail about Pushwoosh: In 2013, one of its developers admitted to authoring the Pincer Trojan, malware designed to surreptitiously intercept and forward text messages from Android mobile devices.

Pushwoosh says it is a U.S. based company that provides code for software developers to profile smartphone app users based on their online activity, allowing them to send tailor-made notifications. But a recent investigation by Reuters raised questions about the company’s real location and truthfulness.

The Army told Reuters it removed an app containing Pushwoosh in March, citing “security concerns.” The Army app was used by soldiers at one of the nation’s main combat training bases.

Reuters said the CDC likewise recently removed Pushwoosh code from its app over security concerns, after reporters informed the agency Pushwoosh was not based in the Washington D.C. area — as the company had represented — but was instead operated from Novosibirsk, Russia.

Pushwoosh’s software also was found in apps for “a wide array of international companies, influential nonprofits and government agencies from global consumer goods company Unilever and the Union of European Football Associations (UEFA) to the politically powerful U.S. gun lobby, the National Rifle Association (NRA), and Britain’s Labour Party.”

The company’s founder Max Konev told Reuters Pushwoosh “has no connection with the Russian government of any kind” and that it stores its data in the United States and Germany.

But Reuters found that while Pushwoosh’s social media and U.S. regulatory filings present it as a U.S. company based variously in California, Maryland and Washington, D.C., the company’s employees are located in Novosibirsk, Russia.

Reuters also learned that the company’s address in California does not exist, and that two LinkedIn accounts for Pushwoosh employees in Washington, D.C. were fake.

“Pushwoosh never mentioned it was Russian-based in eight annual filings in the U.S. state of Delaware, where it is registered, an omission which could violate state law,” Reuters reported.

Pushwoosh admitted the LinkedIn profiles were fake, but said they were created by a marketing firm to drum up business for the company — not misrepresent its location.

Pushwoosh told Reuters it used addresses in the Washington, D.C. area to “receive business correspondence” during the coronavirus pandemic. A review of the Pushwoosh founder’s online presence via Constella Intelligence shows his Pushwoosh email address was tied to a phone number in Washington, D.C. that was also connected to email addresses and account profiles for over a dozen other Pushwoosh employees.

THE PINCER TROJAN CONNECTION

The dust-up over Pushwoosh came in part from data gathered by Zach Edwards, a security researcher who until recently worked for the Internet Safety Labs, a nonprofit organization that funds research into online threats.

Edwards said Pushwoosh began as Arello-Mobile, and for several years the two co-branded — appearing side by side at various technology expos. Around 2016, he said, the two companies both started using the Pushwoosh name.

A search on Pushwoosh’s code base shows that one of the company’s longtime developers is a 41-year-old from Novosibirsk named Yuri Shmakov. In 2013, KrebsOnSecurity interviewed Shmakov for the story, “Who Wrote the Pincer Android Trojan?” wherein Shmakov acknowledged writing the malware as a freelance project.

Shmakov told me that, based on the client’s specifications, he suspected it might ultimately be put to nefarious uses. Even so, he completed the job and signed his work by including his nickname in the app’s code.

“I was working on this app for some months, and I was hoping that it would be really helpful,” Shmakov wrote. “[The] idea of this app is that you can set it up as a spam filter…block some calls and SMS remotely, from a Web service. I hoped that this will be [some kind of] blacklist, with logging about blocked [messages/calls]. But of course, I understood that client [did] not really want this.”

Shmakov did not respond to requests for comment. His LinkedIn profile says he stopped working for Arello Mobile in 2016, and that he currently is employed full-time as the Android team leader at an online betting company.

In a blog post responding to the Reuters story, Pushwoosh said it is a privately held company incorporated under the state laws of Delaware, USA, and that Pushwoosh Inc. was never owned by any company registered in the Russian Federation.

“Pushwoosh Inc. used to outsource development parts of the product to the Russian company in Novosibirsk, mentioned in the article,” the company said. “However, in February 2022, Pushwoosh Inc. terminated the contract.”

However, Edwards noted that dozens of developer subdomains on Pushwoosh’s main domain still point to JSC Avantel, an Internet provider based in Novosibirsk, Russia.

WAR GAMES

Edwards said the U.S. Army’s app had a custom Pushwoosh configuration that did not appear on any other customer implementation.

“It had an extremely custom setup that existed nowhere else,” Edwards said. “Originally, it was an in-app Web browser, where it integrated a Pushwoosh javascript so that any time a user clicked on links, data went out to Pushwoosh and they could push back whatever they wanted through the in-app browser.”

An Army Times article published the day after the Reuters story ran said at least 1,000 people downloaded the app, which “delivered updates for troops at the National Training Center on Fort Irwin, Calif., a critical waypoint for deploying units to test their battlefield prowess before heading overseas.”

In April 2022, roughly 4,500 Army personnel converged on the National Training Center for a war games exercise on how to use lessons learned from Russia’s war against Ukraine to prepare for future fights against a major adversary such as Russia or China.

Edwards said despite Pushwoosh’s many prevarications, the company’s software doesn’t appear to have done anything untoward to its customers or users.

“Nothing they did has been seen to be malicious,” he said. “Other than completely lying about where they are, where their data is being hosted, and where they have infrastructure.”

GOV 311

Edwards also found Pushwoosh’s technology embedded in nearly two dozen mobile apps that were sold to cities and towns across Illinois as a way to help citizens access general information about their local communities and officials.

The Illinois apps that bundled Pushwoosh’s technology were produced by a company called Government 311, which is owned by Bill McCarty, the current director of the Springfield Office of Budget and Management. A 2014 story in The State Journal-Register said Gov 311’s pricing was based on population, and that the app would cost around $2,500 per year for a city with approximately 25,000 people.

McCarty told KrebsOnSecurity that his company stopped using Pushwoosh “years ago,” and that it now relies on its own technology to provide push notifications through its 311 apps.

But Edwards found some of the 311 apps still try to phone home to Pushwoosh, such as the 311 app for Riverton, Ill.

“Riverton ceased being a client several years ago, which [is] probably why their app was never updated to change out Pushwoosh,” McCarty explained. “We are in the process of updating all client apps and a website refresh. As part of that, old unused apps like Riverton 311 will be deleted.”

FOREIGN ADTECH THREAT?

Edwards said it’s far from clear how many other state and local government apps and Web sites rely on technology that sends user data to U.S. adversaries overseas. In July, Congress introduced an amended version of the Intelligence Authorization Act for 2023, which included a new section focusing on data drawn from online ad auctions that could be used to geolocate individuals or gain other information about them.

Business Insider reports that if this section makes it into the final version — which the Senate also has to pass — the Office for the Director of National Intelligence (ODNI) will have 60 days after the Act becomes law to produce a risk assessment. The assessment will look into “the counterintelligence risks of, and the exposure of intelligence community personnel to, tracking by foreign adversaries through advertising technology data,” the Act states.

Edwards says he’s hoping those changes pass, because what he found with Pushwoosh is likely just a drop in a bucket.

“I’m hoping that Congress acts on that,” he said. “If they were to put a requirement that there’s an annual audit of risks from foreign ad tech, that would at least force people to identify and document those connections.”

Battle with Bots Prompts Mass Purge of Amazon, Apple Employee Accounts on LinkedIn

On October 10, 2022, there were 576,562 LinkedIn accounts that listed their current employer as Apple Inc. The next day, half of those profiles no longer existed. A similarly dramatic drop in the number of LinkedIn profiles claiming employment at Amazon comes as LinkedIn is struggling to combat a significant uptick in the creation of fake employee accounts that pair AI-generated profile photos with text lifted from legitimate users.

Jay Pinho is a developer who is working on a product that tracks company data, including hiring. Pinho has been using LinkedIn to monitor daily employee headcounts at several dozen large organizations, and last week he noticed that two of them had far fewer people claiming to work for them than they did just 24 hours previously.

Pinho’s screenshot below shows the daily count of employees as displayed on Amazon’s LinkedIn homepage. Pinho said his scraper shows that the number of LinkedIn profiles claiming current roles at Amazon fell from roughly 1.25 million to 838,601 in just one day, a 33 percent drop:

As stated above, the number of LinkedIn profiles that claimed to work at Apple fell by approximately 50 percent on Oct. 10, according to Pinho’s analysis:

Neither Amazon or Apple responded to requests for comment. LinkedIn declined to answer questions about the account purges, saying only that the company is constantly working to keep the platform free of fake accounts. In June, LinkedIn acknowledged it was seeing a rise in fraudulent activity happening on the platform.

KrebsOnSecurity hired Menlo Park, Calif.-based SignalHire to check Pinho’s numbers. SignalHire keeps track of active and former profiles on LinkedIn, and during the Oct 9-11 timeframe SignalHire said it saw somewhat smaller but still unprecedented drops in active profiles tied to Amazon and Apple.

“The drop in the percentage of 7-10 percent [of all profiles], as it happened [during] this time, is not something that happened before,” SignalHire’s Anastacia Brown told KrebsOnSecurity.

Brown said the normal daily variation in profile numbers for these companies is plus or minus one percent.

“That’s definitely the first huge drop that happened throughout the time we’ve collected the profiles,” she said.

In late September 2022, KrebsOnSecurity warned about the proliferation of fake LinkedIn profiles for Chief Information Security Officer (CISO) roles at some of the world’s largest corporations. A follow-up story on Oct. 5 showed how the phony profile problem has affected virtually all executive roles at corporations, and how these fake profiles are creating an identity crisis for the businesses networking site and the companies that rely on it to hire and screen prospective employees.

A day after that second story ran, KrebsOnSecurity heard from a recruiter who noticed the number of LinkedIn profiles that claimed virtually any role in network security had dropped seven percent overnight. LinkedIn declined to comment about that earlier account purge, saying only that, “We’re constantly working at taking down fake accounts.”

It’s unclear whether LinkedIn is responsible for this latest account purge, or if individually affected companies are starting to take action on their own. The timing, however, argues for the former, as the account purges for Apple and Amazon employees tracked by Pinho appeared to happen within the same 24 hour period.

It’s also unclear who or what is behind the recent proliferation of fake executive profiles on LinkedIn. Cybersecurity firm Mandiant (recently acquired by Google) told Bloomberg that hackers working for the North Korean government have been copying resumes and profiles from leading job listing platforms LinkedIn and Indeed, as part of an elaborate scheme to land jobs at cryptocurrency firms.

On this point, Pinho said he noticed an account purge in early September that targeted fake profiles tied to jobs at cryptocurrency exchange Binance. Up until Sept. 3, there were 7,846 profiles claiming current executive roles at Binance. The next day, that number stood at 6,102, a 23 percent drop (by some accounts that 6,102 head count is still wildly inflated).

Fake profiles also may be tied to so-called “pig butchering” scams, 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.

In addition, identity thieves have been known to masquerade on LinkedIn as job recruiters, collecting personal and financial information from people who fall for employment scams.

Nicholas Weaver, a researcher for the International Computer Science Institute at University of California, Berkeley, suggested another explanation for the recent glut of phony LinkedIn profiles: Someone may be setting up a mass network of accounts in order to more fully scrape profile information from the entire platform.

“Even with just a standard LinkedIn account, there’s a pretty good amount of profile information just in the default two-hop networks,” Weaver said. “We don’t know the purpose of these bots, but we know creating bots isn’t free and creating hundreds of thousands of bots would require a lot of resources.”

In response to last week’s story about the explosion of phony accounts on LinkedIn, the company said it was exploring new ways to protect members, such as expanding email domain verification. Under such a scheme, LinkedIn users would be able to publicly attest that their profile is accurate by verifying that they can respond to email at the domain associated with their current employer.

LinkedIn claims that its security systems detect and block approximately 96 percent of fake accounts. And despite the recent purges, LinkedIn may be telling the truth, Weaver said.

“There’s no way you can test for that,” he said. “Because technically, it may be that there were actually 100 million bots trying to sign up at LinkedIn as employees at Amazon.”

Weaver said the apparent mass account purge at LinkedIn underscores the size of the bot problem, and could present a “real and material change” for LinkedIn.

“It may mean the statistics they’ve been reporting about usage and active accounts are off by quite a bit,” Weaver said.

SIM Swapper Abducted, Beaten, Held for $200k Ransom

A Florida teenager who served as a lackey for a cybercriminal group that specializes in cryptocurrency thefts was beaten and kidnapped last week by a rival cybercrime gang. The teen’s captives held guns to his 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. The youth is now reportedly cooperating with U.S. federal investigators, who are responding to an alarming number of reports of physical violence tied to certain online crime communities.

The grisly kidnapping video has been circulating on a number of Telegram chat channels dedicated to SIM-swapping — the practice of tricking or bribing mobile phone store employees into diverting a target’s phone number, text messages and calls to a device the attackers control.

The teen, known to the SIM-swapping community by the handle “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.

“Yo, Dan, please bro send the 200k,” Foreshadow said in the video, which was shot on Sept. 15 in the backseat of a moving car. Bleeding from a swollen mouth with two handguns pointed at his head, Foreshadow pleaded for his life. A still shot from that video is available here [Warning: the image is quite graphic].

“They’re going to kill me if you don’t,” Foreshadow continued, offering to get a job as a complicit mobile store employee or “plug” to help with future SIM-swaps. “I’ll pay you back. Just let me know what you need. I got you, for real. Any work for free. Whatever. However long you need me, too. I’ll apply to any store you need me to apply to. I can be a plug. I don’t care if I get caught by the cops or anything. I’ll get that money back for you. I used to do that work.”

It’s not clear where in the world the hostage video was recorded. But at one point in the video, the vehicle’s radio can be heard in the background mentioning WMIB, which is a hip-hop station in South Florida that serves both Ft. Lauderdale and Miami.

As Foreshadow’s hostage video began making the rounds on SIM-swapping Telegram channels, a rumor surfaced that Foreshadow had died after being shot in the leg. It soon emerged that Foreshadow had not died, and that he was cooperating with the Federal Bureau of Investigation (FBI). Members of the SIM-swapping community were then warned to delete any messages to or from Foreshadow. One of those messages read:

JUST IN: FORESHADOW IS NOT DEAD!!!!

HES CURRENTLY CO-OPERATING WITH THE FBI DUE TO HIM BEING KIDNAPPED AND AN ATTEMPT TO EXTORT HIM FOR 200K

IF YOU HAVE CHATS WITH HIM CLEAR THEM

Foreshadow appears to be a teenager from Florida whose first name is Justin. Foreshadow’s main Telegram account was converted from a user profile into a channel on Sept. 15 — the same day he was assaulted and kidnapped — and it is not currently responding to messages.

Foreshadow’s erstwhile boss Jarik told KrebsOnSecurity that the youth was indeed shot by his captors, and blamed the kidnapping on a rival SIM-swapper from Australia who was angry over getting shortchanged of the profits from a previous SIM-swapping escapade.

The FBI did not immediately respond to requests for comment.

Reached via Telegram, the alleged mastermind of the kidnapping — a SIM-swapper who uses the handle “Gus” — confirmed that he ordered the attack on Foreshadow because the holder had held back some of his stolen funds. In the same breath, Gus said Jarik was “gonna get done in next” for sharing Gus’ real name and address with KrebsOnSecurity.

“No1 cared about that nigga anyway, he snaked targs [targets] and flaunted it everywhere,” Gus said of Foreshadow. “I’ve been fucked over so many times I’ve lost millions. I am just a guy trying to make more money.”

Foreshadow’s experience is the latest example of a rapidly escalating cycle of physical violence that is taking hold of criminal SIM-swapping communities online. Earlier this month, KrebsOnSecurity detailed how multiple SIM-swapping Telegram channels are now replete with “violence-as-a-service” offerings, wherein denizens of the underground hire themselves out to perform various forms of physical violence — from slashing tires and throwing a brick through someone’s window, to conducting drive-by shootings, firebombings and home invasions.

On Aug. 12, 2022, 21-year-old Patrick McGovern-Allen of Egg Harbor Township, N.J. was arrested by the FBI and charged with stalking in connection with several of these violence-as-a-service jobs. Prosecutors say the defendant fired a handgun into a Pennsylvania home, and helped to torch another residence in the state with a Molotov Cocktail — all allegedly in service of a beef over stolen cryptocurrency.

Earlier this month, three men in the United Kingdom were arrested for attempting to assault a local man and steal his virtual currencies. The local man’s neighbor called the cops and said the three men were acting suspiciously and that one of them was wearing a police uniform. U.K. police stopped the three men allegedly fleeing the scene, and found a police uniform and weapons in the trunk of the car. All three defendants in that case were charged with “intent to cause loss to another to make an unwarranted demand of Crypto Currency from a person.”

Dina Temple-Raston and Sean Powers over at The Record recently interviewed several members of the SIM-swapping community about this escalation in violence. That story is also available on the Click Here podcast — Throwing Bricks for $$$: Violence-as-a-Service Comes of Age.

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.

Violence-as-a-Service: Brickings, Firebombings & Shootings for Hire

A 21-year-old New Jersey man has been 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 the defendant 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.

Patrick McGovern-Allen of Egg Harbor Township, N.J. was arrested on Aug. 12 on a warrant from the U.S. Federal Bureau of Investigation. An FBI complaint alleges McGovern-Allen was part of a group of co-conspirators who are at the forefront of a dangerous escalation in coercion and intimidation tactics increasingly used by competing cybercriminal groups.

Prosecutors say that around 2 a.m. on Jan 2, 2022, McGovern-Allen and an unidentified co-conspirator fired multiple handgun rounds into a residence in West Chester, Pa. Fortunately, none of the residents inside the home at the time were injured. But prosecutors say the assailants actually recorded video of the attack as “proof” that the shooting had been carried out.

A copy of that video was obtained by KrebsOnSecurity. According to investigators, McGovern-Allen was one of the shooters, who yelled “Justin Active was here” as they haphazardly fired at least eight rounds into the lower story of the West Chester residence.

On Dec. 18, 2021, police in Abington Township, Pa., responded to reports of a house fire from homeowners who said it sounded like something was thrown at their residence just prior to the fire.

Weeks later, on the day of the shooting in West Chester, a detective with the Westtown East Goshen Police Department contacted the Abington police and shared another video that was circulating on several online message boards that appeared to show two individuals setting fire to the Abington Township residence. The criminal complaint said the two police officers agreed the same suspect was present in both videos.

A copy of that video also was obtained by KrebsOnSecurity, and it shows at least two individuals smashing a window, then lighting a rag-soaked Mad Dog 20/20 grape wine bottle and hurling it at the side of the home [Update: My apologies for the file download link, but YouTube just deleted both of the videos included in this story — for allegedly violating their community standards].

“The Molotov cocktail caused the immediate surrounding area to ignite, including the siding of the house, grass, and the wooden chair,” the government’s complaint against McGovern-Allen states. “The two suspects then fled on foot toward the street and begin yelling something when the video stops.”

The government mentions the victims only by their initials — “K.M.” in the shooting and “A.R.” in the firebombing — but said both had been the target of previous harassment by rival cybercriminal groups that included swatting attacks, wherein the perpetrators spoof a distress call to the police about a hostage situation, suicide or bomb threat with the goal of sending a heavily-armed police response to a targeted address.

A number of previous swatting incidents have turned deadly. But these more “hands-on” and first person attacks are becoming increasingly common within certain cybercriminal communities, particularly those engaged in 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.

The complaint mentions a handle and user ID allegedly used by McGovern-Allen’s online persona “Tongue” on the Discord chat service, (user: “Tongue#0001”).

“In the chats, [Tongue] tells other Discord users that he was the person who shot K.M.’s house and that he was willing to commit firebombings using Molotov Cocktails,” the complaint alleges. “For example, in one Discord chat from March 2022, [the defendant] states ‘if you need anything done for $ lmk [“let me know”]/I did a shooting/Molotov/but I can also do things for ur entertainment.”

KrebsOnsecurity reviewed hundreds of chat records tied to this Tongue alias, and it appears both attacks were motivated by a desire to get back at a rival cybercriminal by attacking the female friends of that rival.

Recall that the shooters in the West Chester, Pa. incident shouted “Justin Active was here.” Justin Active is the nickname of an individual who is just as active in the same cybercriminal channels, but who has vehemently denied knowledge of or participation in the shooting. Justin Active said on Telegram that the person targeted in the shooting was his ex-girlfriend, and that the firebombing targeted another friend of his.

Justin Active has claimed for months that McGovern-Allen was responsible for both attacks, saying they were intended as an intimidation tactic against him. “DO THE PATRICK MCGOVERN ALLEN RAID DANCE!,” Justin Active’s alias “Nutcase68” shouted on Telegram on Aug. 12, the same day McGovern-Allen was arrested by authorities.

Justin Active’s version of events seems to be supported by a reference in the criminal complaint to an April 2, 2022 chat in which Tongue explained the reason for the shooting.

“The video/is [K]’s house/getting shit/shot/justin active/ was her current bf/ the reason it happened,” Tongue explained. “So that’s why Justin active was there.”

The Telegram chat channels that Justin Active and Tongue both frequented 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.

“If you live near Edmonton Canada dm me need someone bricked,” reads on Telegram message on May 31, 2022.

“If you live near [address redacted] Lakewood, CA, dm [redacted] Paying 3k to slash the tires,” reads another help wanted ad in the same channel on Feb. 24, 2022. “If you live near here and can brick them, dm [address omitted] Richland, WA,” reads another from that same day.

McGovern-Allen was in the news not long ago. According to a Sept. 2020 story from The Press of Atlantic City, a then 19-year-old Patrick McGovern Allen was injured after driving into a building and forcing residents from their home.

“Police found a 2007 Lexus, driven by Patrick McGovern-Allen, 19, that had lost control and left the road, crashing into the eastern end of the 1600 building,” the story recounted. “The car was driven through the steps that provide access to the second-floor apartments, destroying them, and also caused damage to the outer wall.”

A search on the Inmate Locator of the U.S. Bureau of Prisons website shows that McGovern-Allen remains in federal custody at a detention facility in Philadelphia. He’s currently represented by a public defender who has not responded to requests for comment.

A copy of the criminal complaint against McGovern-Allen is available here (PDF).

ANALYSIS

Many of the individuals involved in paying others to commit these physical attacks are also frequent participants in several Telegram channels focused singularly on SIM swapping activity. As a result, the vast majority of the people being targeted for brickings and other real-life physical assaults tend to be other cybercriminals involved in SIM swapping crimes (or individuals on the periphery of that scene).

There are dozens of SIM swappers who are now teenage or 20-something millionaires, by virtue of having stolen vast sums of cryptocurrencies from SIM swapping victims. And now many of these same individuals are finding that communities like Telegram can be leveraged to hire physical harassment and intimidation of their rivals and competitors.

The primary barrier to hiring someone to brick a home or slash some tires seems to be the costs involved: A number of solicitations for these services advertised payment of $3,000 or more upon proof of successful completion, which usually involves recording the attack and hiring a getaway driver in the town where the crime is to take place (calling a cab or hailing an Uber from the scene of a bricking isn’t the brightest idea).

My fear is these violence-as-a-service offerings will at some point migrate outside of the SIM swapping communities. This is precisely what happened with swatting, which for years was a crime perpetrated almost exclusively against online gamers and people streaming their games online. These days, swatting attacks are commonly used by SIM swapping groups as a way to harass and extort regular Internet users into giving up prized social media account names that can be resold for thousands of dollars.

It Might Be Our Data, But It’s Not Our Breach

A cybersecurity firm says it has intercepted a large, unique stolen data set containing the names, addresses, email addresses, phone numbers, Social Security Numbers and dates of birth on nearly 23 million Americans. The firm’s analysis of the data suggests it corresponds to current and former customers of AT&T. The telecommunications giant stopped short of saying the data wasn’t theirs, but it maintains the records do not appear to have come from its systems and may be tied to a previous data incident at another company.

Milwaukee-based cybersecurity consultancy Hold Security said it intercepted a 1.6 gigabyte compressed file on a popular dark web file-sharing site. The largest item in the archive is a 3.6 gigabyte file called “dbfull,” and it contains 28.5 million records, including 22.8 million unique email addresses and 23 million unique SSNs. There are no passwords in the database.

Hold Security founder Alex Holden said a number of patterns in the data suggest it relates to AT&T customers. For starters, email addresses ending in “att.net” accounted for 13.7 percent of all addresses in the database, with addresses from SBCGLobal.net and Bellsouth.net — both AT&T companies — making up another seven percent. In contrast, Gmail users made up more than 30 percent of the data set, with Yahoo addresses accounting for 24 percent. More than 10,000 entries in the database list “none@att.com” in the email field.

Holden’s team also examined the number of email records that included an alias in the username portion of the email, and found 293 email addresses with plus addressing. Of those, 232 included an alias that indicated the customer had signed up at some AT&T property; 190 of the aliased email addresses were “+att@”; 42 were “+uverse@,” an oddly specific reference to an AT&T entity that included broadband Internet. In September 2016, AT&T rebranded U-verse as AT&T Internet.

According to its website, AT&T Internet is offered in 21 states, including Alabama, Arkansas, California, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Nevada, North Carolina, Ohio, Oklahoma, Tennessee, Texas and Wisconsin. Nearly all of the records in the database that contain a state designation corresponded to those 21 states; all other states made up just 1.64 percent of the records, Hold Security found.

The vast majority of records in this database belong to consumers, but almost 13,000 of the entries are for corporate entities. Holden said 387 of those corporate names started with “ATT,” with various entries like “ATT PVT XLOW” appearing 81 times. And most of the addresses for these entities are AT&T corporate offices.

How old is this data? One clue may be in the dates of birth exposed in this database. There are very few records in this file with dates of birth after 2000.

“Based on these statistics, we see that the last significant number of subscribers born in March of 2000,” Holden told KrebsOnSecurity, noting that AT&T requires new account holders to be 18 years of age or older. “Therefore, it makes sense that the dataset was likely created close to March of 2018.”

There was also this anomaly: Holden said one of his analysts is an AT&T customer with a 13-letter last name, and that her AT&T bill has always had the same unique misspelling of her surname (they added yet another letter). He said the analyst’s name is identically misspelled in this database.

KrebsOnSecurity shared the large data set with AT&T, as well as Hold Security’s analysis of it. AT&T ultimately declined to say whether all of the people in the database are or were at some point AT&T customers. The company said the data appears to be several years old, and that “it’s not immediately possible to determine the percentage that may be customers.”

“This information does not appear to have come from our systems,” AT&T said in a written statement. “It may be tied to a previous data incident at another company. It is unfortunate that data can continue to surface over several years on the dark web. However, customers often receive notices after such incidents, and advice for ID theft is consistent and can be found online.”

The company declined to elaborate on what they meant by “a previous data incident at another company.”

But it seems likely that this database is related to one that went up for sale on a hacker forum on August 19, 2021. That auction ran with the title “AT&T Database +70M (SSN/DOB),” and was offered by ShinyHunters, a well-known threat actor with a long history of compromising websites and developer repositories to steal credentials or API keys.

ShinyHunters established the starting price for the auction at $200,000, but set the “flash” or “buy it now” price at $1 million. The auction also included a small sampling of the stolen information, but that sample is no longer available. The hacker forum where the ShinyHunters sales thread existed was seized by the FBI in April, and its alleged administrator arrested.

But cached copies of the auction, as recorded by cyber intelligence firm Intel 471, show ShinyHunters received bids of up to $230,000 for the entire database before they suspended the sale.

“This thread has been deleted several times,” ShinyHunters wrote in their auction discussion on Sept. 6, 2021. “Therefore, the auction is suspended. AT&T will be available on WHM as soon as they accept new vendors.”

The WHM initialism was a reference to the White House Market, a dark web marketplace that shut down in October 2021.

“In many cases, when a database is not sold, ShinyHunters will release it for free on hacker forums,” wrote BleepingComputer’s Lawrence Abrams, who broke the news of the auction last year and confronted AT&T about the hackers’ claims.

AT&T gave Abrams a similar statement, saying the data didn’t come from their systems.

“When asked whether the data may have come from a third-party partner, AT&T chose not to speculate,” Abrams wrote. “‘Given this information did not come from us, we can’t speculate on where it came from or whether it is valid,'” AT&T told BleepingComputer.

Asked to respond to AT&T’s denial, ShinyHunters told BleepingComputer at the time, “I don’t care if they don’t admit. I’m just selling.”

On June 1, 2022, a 21-year-old Frenchman was arrested in Morocco for allegedly being a member of ShinyHunters. Databreaches.net reports the defendant was arrested on an Interpol “Red Notice” at the request of a U.S. federal prosecutor from Washington state.

Databreaches.net suggests the warrant could be tied to a ShinyHunters theft in May 2020, when the group announced they had exfiltrated 500 GB of Microsoft’s source code from Microsoft’s private GitHub repositories.

“Researchers assess that Shiny Hunters gained access to roughly 1,200 private repositories around March 28, 2020, which have since been secured,” reads a May 2020 alert posted by the New Jersey Cybersecurity & Communications Integration Cell, a component within the New Jersey Office of Homeland Security and Preparedness.

“Though the breach was largely dismissed as insignificant, some images of the directory listing appear to contain source code for Azure, Office, and some Windows runtimes, and concerns have been raised regarding access to private API keys or passwords that may have been mistakenly included in some private repositories,” the alert continues. “Additionally, Shiny Hunters is flooding dark web marketplaces with breached databases.”

Last month, T-Mobile agreed to pay $350 million to settle a consolidated class action lawsuit over a breach in 2021 that affected 40 million current and former customers. The breach came to light on Aug. 16, 2021, when someone starting selling tens of millions of SSN/DOB records from T-Mobile on the same hacker forum where the ShinyHunters would post their auction for the claimed AT&T database just three days later.

T-Mobile has not disclosed many details about the “how” of last year’s breach, but it said the intruder(s) “leveraged their knowledge of technical systems, along with specialized tools and capabilities, to gain access to our testing environments and then used brute force attacks and other methods to make their way into other IT servers that included customer data.”