The head of counterintelligence for a division of the Russian Federal Security Service (FSB) was sentenced last week to nine years in a penal colony for accepting a USD $1.7 million bribe to ignore the activities of a prolific Russian cybercrime group that hacked thousands of e-commerce websites. The protection scheme was exposed in 2022 when Russian authorities arrested six members of the group, which sold millions of stolen payment cards at flashy online shops like Trumpβs Dumps.
A now-defunct carding shop that sold stolen credit cards and invoked 45βs likeness and name.
As reported by The Record, a Russian court last week sentenced former FSB officer Grigory Tsaregorodtsev for taking a $1.7 million bribe from a cybercriminal group that was seeking a βroof,β a well-placed, corrupt law enforcement official who could be counted on to both disregard their illegal hacking activities and run interference with authorities in the event of their arrest.
Tsaregorodtsev was head of the counterintelligence department for a division of the FSB based in Perm, Russia. In February 2022, Russian authorities arrested six men in the Perm region accused of selling stolen payment card data. They also seized multiple carding shops run by the gang, including Ferum Shop, Sky-Fraud, and Trumpβs Dumps, a popular fraud store that invoked the 45th presidentβs likeness and promised to βmake credit card fraud great again.β
All of the domains seized in that raid were registered by an IT consulting company in Perm called Get-net LLC, which was owned in part by Artem Zaitsev β one of the six men arrested. Zaitsev reportedly was a well-known programmer whose company supplied services and leasing to the local FSB field office.
The message for Trumpβs Dumps users left behind by Russian authorities that seized the domain in 2022.
Russian news sites report that Internal Affairs officials with the FSB grew suspicious when Tsaregorodtsev became a little too interested in the case following the hacking groupβs arrests. The former FSB agent had reportedly assured the hackers he could have their case transferred and that they would soon be free.
But when that promised freedom didnβt materialize, four the of the defendants pulled the walls down on the scheme and brought down their own roof. The FSB arrested Tsaregorodtsev, and seized $154,000 in cash, 100 gold bars, real estate and expensive cars.
At Tsaregorodtsevβs trial, his lawyers argued that their client wasnβt guilty of bribery per se, but that he did admit to fraud because he was ultimately unable to fully perform the services for which heβd been hired.
The Russian news outlet Kommersant reports that all four of those who cooperated were released with probation or correctional labor. Zaitsev received a sentence of 3.5 years in prison, and defendant Alexander Kovalev got four years.
In 2017, KrebsOnSecurity profiled Trumpβs Dumps, and found the contact address listed on the site was tied to an email address used to register more than a dozen domains that were made to look like legitimate Javascript calls many e-commerce sites routinely make to process transactions β such as βjs-link[dot]su,β βjs-stat[dot]su,β and βjs-mod[dot]su.β
Searching on those malicious domains revealed a 2016 report from RiskIQ, which shows the domains featured prominently in a series of hacking campaigns against e-commerce websites. According to RiskIQ, the attacks targeted online stores running outdated and unpatched versions of shopping cart software from Magento, Powerfront and OpenCart.
Those shopping cart flaws allowed the crooks to install βweb skimmers,β malicious Javascript used to steal credit card details and other information from payment forms on the checkout pages of vulnerable e-commerce sites. The stolen customer payment card details were then sold on sites like Trumpβs Dumps and Sky-Fraud.
For nearly a dozen years, residents of South Carolina have been kept in the dark by state and federal investigators over who was responsible for hacking into the stateβs revenue department in 2012 and stealing tax and bank account information for 3.6 million people. The answer may no longer be a mystery: KrebsOnSecurity found compelling clues suggesting the intrusion was carried out by the same Russian hacking crew that stole of millions of payment card records from big box retailers like Home Depot and Target in the years that followed.
Questions about who stole tax and financial data on roughly three quarters of all South Carolina residents came to the fore last week at the confirmation hearing of Mark Keel, who was appointed in 2011 by Gov. Nikki Haley to head the stateβs law enforcement division. If approved, this would be Keelβs third six-year term in that role.
The Associated Press reports that Keel was careful not to release many details about the breach at his hearing, telling lawmakers he knows who did it but that he wasnβt ready to name anyone.
βI think the fact that we didnβt come up with a whole lot of peopleβs information that got breached is a testament to the work that people have done on this case,β Keel asserted.
A ten-year retrospective published in 2022 by The Post and Courier in Columbia, S.C. said investigators determined the breach began on Aug. 13, 2012, after a state IT contractor clicked a malicious link in an email. State officials said they found out about the hack from federal law enforcement on October 10, 2012.
KrebsOnSecurity examined posts across dozens of cybercrime forums around that time, and found only one instance of someone selling large volumes of tax data in the year surrounding the breach date.
On Oct. 7, 2012 β three days before South Carolina officials say they first learned of the intrusion β a notorious cybercriminal who goes by the handle βRescatorβ advertised the sale of βa database of the tax department of one of the states.β
βBank account information, SSN and all other information,β Rescatorβs sales thread on the Russian-language crime forum Embargo read. βIf you purchase the entire database, I will give you access to it.β
A week later, Rescator posted a similar offer on the exclusive Russian forum Mazafaka, saying he was selling information from a U.S. state tax database, without naming the state. Rescator said the data exposed included Social Security Number (SSN), employer, name, address, phone, taxable income, tax refund amount, and bank account number.
βThere is a lot of information, I am ready to sell the entire database, with access to the database, and in parts,β Rescator told Mazafaka members. βThere is also information on corporate taxpayers.β
On Oct. 26, 2012, the state announced the breach publicly. State officials said they were working with investigators from the U.S. Secret Service and digital forensics experts from Mandiant, which produced an incident report (PDF) that was later published by South Carolina Dept. of Revenue. KrebsOnSecurity sought comment from the Secret Service, South Carolina prosecutors, and Mr. Keelβs office. This story will be updated if any of them respond. Update: The Secret Service declined to comment.
On Nov. 18, 2012, Rescator told fellow denizens of the forum Verified he was selling a database of 65,000 records with bank account information from several smaller, regional financial institutions. Rescatorβs sales thread on Verified listed more than a dozen database fields, including account number, name, address, phone, tax ID, date of birth, employer and occupation.
Asked to provide more context about the database for sale, Rescator told forum members the database included financial records related to tax filings of a U.S. state. Rescator added that there was a second database of around 80,000 corporations that included social security numbers, names and addresses, but no financial information.
The AP says South Carolina paid $12 million to Experian for identity theft protection and credit monitoring for its residents after the breach.
βAt the time, it was one of the largest breaches in U.S. history but has since been surpassed greatly by hacks to Equifax, Yahoo, Home Depot, Target and PlayStation,β the APβs Jeffrey Collins wrote.
As it happens, Rescatorβs criminal hacking crew was directly responsible for the 2013 breach at Target and the 2014 hack of Home Depot. The Target intrusion saw Rescatorβs cybercrime shops selling roughly 40 million stolen payment cards, and 56 million cards from Home Depot customers.
Who is Rescator? On Dec. 14, 2023, KrebsOnSecurity published the results of a 10-year investigation into the identity of Rescator, a.k.a. Mikhail Borisovich Shefel, a 36-year-old who lives in Moscow and who recently changed his last name to Lenin.
Mr. Keelβs assertion that somehow the efforts of South Carolina officials following the breach may have lessened its impact on citizens seems unlikely. The stolen tax and financial data appears to have been sold openly on cybercrime forums by one of the Russian undergroundβs most aggressive and successful hacking crews.
While there are no indications from reviewing forum posts that Rescator ever sold the data, his sales threads came at a time when the incidence of tax refund fraud was skyrocketing.
Tax-related identity theft occurs when someone uses a stolen identity and SSN to file a tax return in that personβs name claiming a fraudulent refund. Victims usually first learn of the crime after having their returns rejected because scammers beat them to it. Even those who are not required to file a return can be victims of refund fraud, as can those who are not actually owed a refund from the U.S. Internal Revenue Service (IRS).
According toΒ a 2013 reportΒ from the Treasury Inspector Generalβs office, the IRS issued nearly $4 billion in bogus tax refunds in 2012, and more than $5.8 billion in 2013. The money largely was sent to people who stole SSNs and other information on U.S. citizens, and then filed fraudulent tax returns on those individuals claiming a large refund but at a different address.
It remains unclear why Shefel has never been officially implicated in the breaches at Target, Home Depot, or in South Carolina. It may be that Shefel has been indicted, and that those indictments remain sealed for some reason. Perhaps prosecutors were hoping Shefel would decide to leave Russia, at which point it would be easier to apprehend him if he believed no one was looking for him.
But all signs are that Shefel is deeply rooted in Russia, and has no plans to leave. In January 2024, authorities in Australia, the United States and the U.K. levied financial sanctions against 33-year-old Russian man Aleksandr Ermakov for allegedly stealing data on 10 million customers of the Australian health insurance giant Medibank.
A week after those sanctions were put in place, KrebsOnSecurity published a deep dive on Ermakov, which found that he co-ran a Moscow-based IT security consulting business along with Mikhail Shefel called Shtazi-IT.
A Google-translated version of Shtazi dot ru. Image: Archive.org.