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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.
A graphic depicting how 0ktapus leveraged one victim to attack another. Image credit: Amitai Cohen of Wiz.
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.
A booking photo of Noah Michael Urban released by the Volusia County Sheriff.
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.
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.
The last cache of Leaked dot cx indexed by the archive.org on Jan. 11, 2024.
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.”
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.
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.”
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.
Authorities in Australia, the United Kingdom and the United States this week levied financial sanctions against a Russian man accused of stealing data on nearly 10 million customers of the Australian health insurance giant Medibank. 33-year-old Aleksandr Ermakov allegedly stole and leaked the Medibank data while working with one of Russia’s most destructive ransomware groups, but little more is shared about the accused. Here’s a closer look at the activities of Mr. Ermakov’s alleged hacker handles.
Aleksandr Ermakov, 33, of Russia. Image: Australian Department of Foreign Affairs and Trade.
The allegations against Ermakov mark the first time Australia has sanctioned a cybercriminal. The documents released by the Australian government included multiple photos of Mr. Ermakov, and it was clear they wanted to send a message that this was personal.
It’s not hard to see why. The attackers who broke into Medibank in October 2022 stole 9.7 million records on current and former Medibank customers. When the company refused to pay a $10 million ransom demand, the hackers selectively leaked highly sensitive health records, including those tied to abortions, HIV and alcohol abuse.
The U.S. government says Ermakov and the other actors behind the Medibank hack are believed to be linked to the Russia-backed cybercrime gang REvil.
“REvil was among the most notorious cybercrime gangs in the world until July 2021 when they disappeared. REvil is a ransomware-as-a-service (RaaS) operation and generally motivated by financial gain,” a statement from the U.S. Department of the Treasury reads. “REvil ransomware has been deployed on approximately 175,000 computers worldwide, with at least $200 million paid in ransom.”
The sanctions say Ermakov went by multiple aliases on Russian cybercrime forums, including GustaveDore, JimJones, and Blade Runner. A search on the handle GustaveDore at the cyber intelligence platform Intel 471 shows this user created a ransomware affiliate program in November 2021 called Sugar (a.k.a. Encoded01), which focused on targeting single computers and end-users instead of corporations.
An ad for the ransomware-as-a-service program Sugar posted by GustaveDore warns readers against sharing information with security researchers, law enforcement, or “friends of Krebs.”
In November 2020, Intel 471 analysts concluded that GustaveDore’s alias JimJones “was using and operating several different ransomware strains, including a private undisclosed strain and one developed by the REvil gang.”
In 2020, GustaveDore advertised on several Russian discussion forums that he was part of a Russian technology firm called Shtazi, which could be hired for computer programming, web development, and “reputation management.” Shtazi’s website remains in operation today.
A Google-translated version of Shtazi dot ru. Image: Archive.org.
The third result when one searches for shtazi[.]ru in Google is an Instagram post from a user named Mikhail Borisovich Shefel, who promotes Shtazi’s services as if it were also his business. If this name sounds familiar, it’s because in December 2023 KrebsOnSecurity identified Mr. Shefel as “Rescator,” the cybercriminal identity tied to tens of millions of payment cards that were stolen in 2013 and 2014 from big box retailers Target and Home Depot, among others.
How close was the connection between GustaveDore and Mr. Shefel? The Treasury Department’s sanctions page says Ermakov used the email address ae.ermak@yandex.ru. A search for this email at DomainTools.com shows it was used to register just one domain name: millioner1[.]com. DomainTools further finds that a phone number tied to Mr. Shefel (79856696666) was used to register two domains: millioner[.]pw, and shtazi[.]net.
The December 2023 story here that outed Mr. Shefel as Rescator noted that Shefel recently changed his last name to “Lenin” and had launched a service called Lenin[.]biz that sells physical USSR-era Ruble notes bearing the image of Vladimir Lenin, the founding father of the Soviet Union. The Instagram account for Mr. Shefel includes images of stacked USSR-era Ruble notes, as well as multiple links to Shtazi.
The Instagram account of Mikhail Borisovich Shefel, aka MikeMike aka Rescator.
Intel 471’s research revealed Ermakov was affiliated in some way with REvil because the stolen Medibank data was published on a blog that had one time been controlled by REvil affiliates who carried out attacks and paid an affiliate fee to the gang.
But by the time of the Medibank hack, the REvil group had mostly scattered after a series of high-profile attacks led to the group being disrupted by law enforcement. In November 2021, Europol announced it arrested seven REvil affiliates who collectively made more than $230 million worth of ransom demands since 2019. At the same time, U.S. authorities unsealed two indictments against a pair of accused REvil cybercriminals.
“The posting of Medibank’s data on that blog, however, indicated a connection with that group, although the connection wasn’t clear at the time,” Intel 471 wrote. “This makes sense in retrospect, as Ermakov’s group had also been a REvil affiliate.”
It is easy to dismiss sanctions like these as ineffective, because as long as Mr. Ermakov remains in Russia he has little to fear of arrest. However, his alleged role as an apparent top member of REvil paints a target on him as someone who likely possesses large sums of cryptocurrency, said Patrick Gray, the Australian co-host and founder of the security news podcast Risky Business.
“I’ve seen a few people poo-poohing the sanctions…but the sanctions component is actually less important than the doxing component,” Gray said. “Because this guy’s life just got a lot more complicated. He’s probably going to have to pay some bribes to stay out of trouble. Every single criminal in Russia now knows he is a vulnerable 33 year old with an absolute ton of bitcoin. So this is not a happy time for him.”
Update, Feb. 21, 1:10 p.m. ET: The Russian security firm F.A.C.C.T reports that Ermakov has been arrested in Russia, and charged with violating domestic laws that prohibit the creation, use and distribution of malicious computer programs.
“During the investigation, several defendants were identified who were not only promoting their ransomware, but also developing custom-made malicious software, creating phishing sites for online stores, and driving user traffic to fraudulent schemes popular in Russia and the CIS,” F.A.C.C.T. wrote. “Among those detained was the owner of the nicknames blade_runner, GistaveDore, GustaveDore, JimJones.”
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.
On Dec. 18, 2013, KrebsOnSecurity broke the news that U.S. retail giant Target was battling a wide-ranging computer intrusion that compromised more than 40 million customer payment cards over the previous month. The malware used in the Target breach included the text string “Rescator,” which also was the handle chosen by the cybercriminal who was selling all of the cards stolen from Target customers. Ten years later, KrebsOnSecurity has uncovered new clues about the real-life identity of Rescator.
Rescator, advertising a new batch of cards stolen in a 2014 breach at P.F. Chang’s.
Shortly after breaking the Target story, KrebsOnSecurity reported that Rescator appeared to be a hacker from Ukraine. Efforts to confirm my reporting with that individual ended when they declined to answer questions, and after I declined to accept a bribe of $10,000 not to run my story.
That reporting was based on clues from an early Russian cybercrime forum in which a hacker named Rescator — using the same profile image that Rescator was known to use on other forums — claimed to have originally been known as “Helkern,” the nickname chosen by the administrator of a cybercrime forum called Darklife.
KrebsOnSecurity began revisiting the research into Rescator’s real-life identity in 2018, after the U.S. Department of Justice unsealed an indictment that named a different Ukrainian man as Helkern.
It may be helpful to first recap why Rescator is thought to be so closely tied to the Target breach. For starters, the text string “Rescator” was found in some of the malware used in the Target breach. Investigators would later determine that a variant of the malware used in the Target breach was used in 2014 to steal 56 million payment cards from Home Depot customers. And once again, cards stolen in the Home Depot breach were sold exclusively at Rescator’s shops.
On Nov. 25, 2013, two days before Target said the breach officially began, Rescator could be seen in instant messages hiring another forum member to verify 400,000 payment cards that Rescator claimed were freshly stolen.
By the first week of December 2013, Rescator’s online store — rescator[.]la — was selling more than six million payment card records stolen from Target customers. Prior to the Target breach, Rescator had mostly sold much smaller batches of stolen card and identity data, and the website allowed cybercriminals to automate the sending of fraudulent wire transfers to money mules based in Lviv, Ukraine.
Finally, there is some honor among thieves, and in the marketplace for stolen payment card data it is considered poor form to advertise a batch of cards as “yours” if you are merely reselling cards sold to you by a third-party card vendor or thief. When serious stolen payment card shop vendors wish to communicate that a batch of cards is uniquely their handiwork or that of their immediate crew, they refer to it as “our base.” And Rescator was quite clear in his advertisements that these millions of cards were obtained firsthand.
The new clues about Rescator’s identity came into focus when I revisited the reporting around an April 2013 story here that identified the author of the OSX Flashback Trojan, an early Mac malware strain that quickly spread to more than 650,000 Mac computers worldwide in 2012.
That story about the Flashback author was possible because a source had obtained a Web browser authentication cookie for a founding member of a Russian cybercrime forum called BlackSEO. Anyone in possession of that cookie could then browse the invite-only BlackSEO forum and read the user’s private messages without having to log in.
BlackSEO.com VIP member “Mavook” tells forum admin Ika in a private message that he is the Flashback author.
The legitimate owner of that BlackSEO user cookie went by the nickname Ika, and Ika’s private messages on the forum showed he was close friends with the Flashback author. At the time, Ika also was the administrator of Pustota[.]pw — a closely-guarded Russian forum that counted among its members some of the world’s most successful and established spammers and malware writers.
For many years, Ika held a key position at one of Russia’s largest Internet service providers, and his (mostly glowing) reputation as a reliable provider of web hosting to the Russian cybercrime community gave him an encyclopedic knowledge about nearly every major player in that scene at the time.
The story on the Flashback author featured redacted screenshots that were taken from Ika’s BlackSEO account (see image above). The day after that story ran, Ika posted a farewell address to his mates, expressing shock and bewilderment over the apparent compromise of his BlackSEO account.
In a lengthy post on April 4, 2013 titled “I DON’T UNDERSTAND ANYTHING,” Ika told Pustota forum members he was so spooked by recent events that he was closing the forum and quitting the cybercrime business entirely. Ika recounted how the Flashback story had come the same week that rival cybercriminals tried to “dox” him (their dox named the wrong individual, but included some of Ika’s more guarded identities).
“It’s no secret that karma farted in my direction,” Ika said at the beginning of his post. Unbeknownst to Ika at the time, his Pustota forum also had been completely hacked that week, and a copy of its database shared with this author.
A Google translated version of the farewell post from Ika, the administrator of Pustota, a Russian language cybercrime forum focused on botnets and spam. Click to enlarge.
Ika said the two individuals who tried to dox him did so on an even more guarded Russian language forum — DirectConnection[.]ws, perhaps the most exclusive Russian cybercrime community ever created. New applicants of this forum had to pay a non-refundable deposit, and receive vouches by three established cybercriminals already on the forum. Even if one managed to steal (or guess) a user’s DirectConnection password, the login page could not be reached unless the visitor also possessed a special browser certificate that the forum administrator gave only to approved members.
In no uncertain terms, Ika declared that Rescator went by the nickname MikeMike on DirectConnection:
“I did not want to bring any of this to real life. Especially since I knew the patron of the clowns – specifically Pavel Vrublevsky. Yes, I do state with confidence that the man with the nickname Rescator a.k.a. MikeMike with his partner Pipol have been Pavel Vrublevsky’s puppets for a long time.”
Pavel Vrublevsky is a convicted cybercriminal who became famous as the CEO of the Russian e-payments company ChronoPay, which specialized in facilitating online payments for a variety of “high-risk” businesses, including gambling, pirated Mp3 files, rogue antivirus software and “male enhancement” pills.
As detailed in my 2014 book Spam Nation, Vrublevsky not-so-secretly ran a pharmacy affiliate spam program called Rx-Promotion, which paid spammers and virus writers to blast out tens of billions of junk emails advertising generic Viagra and controlled pharmaceuticals like pain relief medications. Much of my reporting on Vrublevsky’s cybercrime empire came from several years worth of internal ChronoPay emails and documents that were leaked online in 2010 and 2011.
Pavel Vrublevsky’s former Facebook profile photo.
In 2014, KrebsOnSecurity learned from a trusted source close to the Target breach investigation that the user MikeMike on DirectConnection — the same account that Ika said belonged to Rescator — used the email address “zaxvatmira@gmail.com.”
At the time, KrebsOnSecurity could not connect that email address to anything or anyone. However, a recent search on zaxvatmira@gmail.com at the breach tracking service Constella Intelligence returns just one result: An account created in November 2010 at the site searchengines[.]ru under the handle “r-fac1.”
A search on “r-fac1” at cyber intelligence firm Intel 471 revealed that this user’s introductory post on searchengines[.]ru advertised musictransferonline[.]com, an affiliate program that paid people to drive traffic to sites that sold pirated music files for pennies apiece.
According to leaked ChronoPay emails from 2010, this domain was registered and paid for by ChronoPay. Those missives also show that in August 2010 Vrublevsky authorized a payment of ~$1,200 for a multi-user license of an Intranet service called MegaPlan.
ChronoPay used the MegaPlan service to help manage the sprawling projects that Vrublevsky referred to internally as their “black” payment processing operations, including pirated pills, porn, Mp3s, and fake antivirus products. ChronoPay employees used their MegaPlan accounts to track payment disputes, order volumes, and advertising partnerships for these high-risk programs.
Borrowing a page from the Quentin Tarantino movie Reservoir Dogs, the employees adopted nicknames like “Mr. Kink,” “Mr. Heppner,” and “Ms. Nati.” However, in a classic failure of operational security, many of these employees had their MegaPlan account messages automatically forwarded to their real ChronoPay email accounts.
A screen shot of the org chart from ChronoPay’s MegaPlan Intranet system.
When ChronoPay’s internal emails were leaked in 2010, the username and password for its MegaPlan subscription were still working and valid. An internal user directory for that subscription included the personal (non-ChronoPay) email address tied to each employee Megaplan nickname. That directory listing said the email address zaxvatmira@gmail.com was assigned to the head of the Media/Mp3 division for ChronoPay, pictured at the top left of the organizational chart above as “Babushka Vani and Koli.”
[Author’s note: I initially overlooked the presence of the email address zaxvatmira@gmail.com in my notes because it did not show up in text searches of my saved emails, files or messages. I rediscovered it recently when a text search for zaxvatmira@gmail.com on my Mac found the address in a screenshot of the ChronoPay MegaPlan interface.]
The nickname two rungs down from “Babushka” in the ChronoPay org chart is “Lev Tolstoy,” which the MegaPlan service showed was picked by someone who used the email address v.zhabukin@freefrog-co-ru.
ChronoPay’s emails show that this Freefrog email address belongs to a Vasily Borisovich Zhabykin from Moscow. The Russian business tracking website rusprofile[.]ru reports that Zhabykin is or was the supervisor or owner of three Russian organizations, including one called JSC Hot Spot.
[Author’s note: The word “babushka” means “grandma” in Russian, and it could be that this nickname is a nod to the ChronoPay CEO’s wife, Vera. The leaked ChronoPay emails show that Vera Vrublevsky managed a group of hackers working with their media division, and was at least nominally in charge of MP3 projects for ChronoPay. Indeed, in messages exposed by the leaked ChronoPay email cache, Zhabykin stated that he was “directly subordinate” to Mrs. Vrublevsky].
JSC Hot Spot is interesting because its co-founder is another ChronoPay employee: 37-year-old Mikhail “Mike” Shefel. A Facebook profile for Mr. Shefel says he is or was vice president of payment systems at ChronoPay. However, the last update on that profile is from 2018, when Shefel appears to have legally changed his last name.
Archive.org shows that Hot Spot’s website — myhotspot[.]ru — sold a variety of consulting services, including IT security assessments, code and system audits, and email marketing. The earliest recorded archive of the Hot Spot website listed three clients on its homepage, including ChronoPay and Freefrog.
ChronoPay internal emails show that Freefrog was one of its investment projects that facilitated the sale of pirated Mp3 files. Rusprofile[.]ru reports that Freefrog’s official company name — JSC Freefrog — is incorporated by a thinly-documented entity based in the Seychelles called Impex Consulting Ltd., and it is unclear who its true owners are.
However, a search at DomainTools.com on the phone number listed on the homepage of myhotspot[.]ru (74957809554) reveals that number is associated with eight domain names.
Six of those domains are some variation of FreeFrog. Another domain registered to that phone number is bothunter[.]me, which included a copyright credit to “Hot Spot 2011.” At the annual Russian Internet Week IT convention in Moscow in 2012, Mr. Shefel gave a short presentation about bothunter, which he described as a service he designed to identify inauthentic (bot) accounts on Russian social media networks.
Interestingly, one of r-fac1’s first posts to Searchengines[.]ru a year earlier saw this user requesting help from other members who had access to large numbers of hacked social media accounts. R-fac1 told forum members that he was only looking to use those accounts to post harmless links and comments to the followers of the hacked profiles, and his post suggested he was testing something.
“Good afternoon,” r-fac1 wrote on Dec. 20, 2010. “I’m looking for people with their own not-recently-registered accounts on forums, (except for search) Social networks, Twitter, blogs, their websites. Tasks, depending on your accounts, post text and a link, sometimes just a link. Most often the topic is chatter, relaxation, discussion. Posting my links in your profiles, on your walls. A separate offer for people with a large set of contacts in instant messengers to try to use viral marketing.”
Neither Mr. Shefel nor Mr. Zhabykin responded to requests for comment.
Mr. Zhabykin soon moved on to bigger ventures, co-founding a cryptocurrency exchange based in Moscow’s financial center called Suex. In September 2021, Suex earned the distinction of becoming the first crypto firm to be sanctioned by the U.S. Department of the Treasury, which effectively blocked Suex from the global financial system. The Treasury alleged Suex helped to process millions in criminal transactions, including the proceeds of numerous ransomware attacks.
“I don’t understand how I got mixed up in this,” Zhabykin told The New York Times in 2021. Zhabykin said Suex, which is registered in the Czech Republic, was mostly a failure and had conducted only a half dozen or so transactions since 2019.
The Russian business tracking service Rusprofile says Zhabykin also is the owner of a company based in the United Kingdom called RideWithLocal; the company’s website says it specializes in arranging excursions for extreme sports, including snowboarding, skiing, surfing and parasailing. Images from the RideWithLocal Facebook page show helicopters dropping snowboarders and skiers atop some fairly steep mountains.
A screenshot from the Facebook page of RideWithLocal.
Constella Intelligence found a cached copy of a now-deleted LinkedIn profile for Mr. Zhabykin, who described himself as a “sporttech/fintech specialist and mentor.”
“I create products and services worldwide, focusing on innovation and global challenges,” his LinkedIn profile said. “I’ve started my career in 2002 and since then I worked in Moscow, different regions of Russia, including Siberia and in Finland, Brazil, United Kingdom, Sri Lanka. Over the last 15 years I contributed to many amazing products in the following industries: sports, ecology, sport tech, fin tech, electronic payments, big data, telecommunications, pulp and paper industry, wood processing and travel. My specialities are Product development, Mentorship, Strategy and Business development.”
Rusprofile reports that Mikhail Borisovich Shefel is associated with at least eight current or now-defunct companies in Russia, including Dengi IM (Money IM), Internet Capital, Internet Lawyer, Internet 2, Zao Hot Spot, and (my personal favorite) an entity incorporated in 2021 called “All the Money in the World.”
Constella Intelligence found several official documents for Mr. Shefel that came from hacked Russian phone, automobile and residence records. They indicate Mr. Shefel is the registrant of a black Porsche Cayenne (Plate:X537SR197) and a Mercedes (Plate:P003PX90). Those vehicle records show Mr. Shefel was born on May 28, 1986.
Rusprofile reveals that at some point near the end of 2018, Shefel changed his last name to Lenin. DomainTools reports that in 2018, Mr. Shefel’s company Internet 2 LLC registered the domain name Lenin[.]me. This now-defunct service sold physical USSR-era Ruble notes that bear the image of Vladimir Lenin, the founding father of the Soviet Union.
Meanwhile, Pavel Vrublevsky remains imprisoned in Russia, awaiting trial on fraud charges levied against the payment company CEO in March 2022. Authorities allege Vrublevsky operated several fraudulent SMS-based payment schemes. They also accused Vrublevsky of facilitating money laundering for Hydra, the largest Russian darknet market. Hydra trafficked in illegal drugs and financial services, including cryptocurrency tumbling for money laundering, exchange services between cryptocurrency and Russian rubles, and the sale of falsified documents and hacking services.
In 2013, Vrublevsky was sentenced to 2.5 years in a Russian penal colony for convincing one of his top spammers and botmasters to launch a distributed denial-of-service (DDoS) attack against a ChronoPay competitor that shut down the ticketing system for the state-owned Aeroflot airline.
Following his release, Vrublevsky began working on a new digital payments platform based in Hong Kong called HPay Ltd (a.k.a. Hong Kong Processing Corporation). HPay appears to have had a great number of clients that were running schemes which bamboozled people with fake lotteries and prize contests.
KrebsOnSecurity sought comment on this research from the Federal Bureau of Investigation (FBI) and the U.S. Secret Service, both of which have been involved in the Target breach investigation over the years. The FBI declined to comment. The Secret Service declined to confirm or dispute any of the findings, but said it is still interested in hearing from anyone who might have more information.
“The U.S. Secret Service does not comment on any open investigation and won’t confirm or deny the accuracy in any reporting related to a criminal manner,” the agency said in a written statement. “However, If you have any information relating to the subjects referenced in this article, please contact the U.S. Secret Service at mostwanted@usss.dhs.gov. The Secret Service pays a reward for information leading to the arrest of cybercriminals.”
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