Russian FSB Counterintelligence Chief Gets 9 Years in Cybercrime Bribery Scheme

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 Trump’s Dumps.

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 “roof,” 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 Trump’s Dumps, a popular fraud store that invoked the 45th president’s likeness and promised to “make credit card fraud great again.”

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 — 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.

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 group’s 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 didn’t 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 Tsaregorodtsev’s trial, his lawyers argued that their client wasn’t guilty of bribery per se, but that he did admit to fraud because he was ultimately unable to fully perform the services for which he’d 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 Trump’s 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 — such as “js-link[dot]su,” “js-stat[dot]su,” and “js-mod[dot]su.”

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 “web skimmers,” 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 Trump’s Dumps and Sky-Fraud.

Who Stole 3.6M Tax Records from South Carolina?

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 state’s 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 state’s law enforcement division. If approved, this would be Keel’s 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 wasn’t ready to name anyone.

“I think the fact that we didn’t come up with a whole lot of people’s information that got breached is a testament to the work that people have done on this case,” 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 — three days before South Carolina officials say they first learned of the intrusion — a notorious cybercriminal who goes by the handle “Rescator” advertised the sale of “a database of the tax department of one of the states.”

“Bank account information, SSN and all other information,” Rescator’s sales thread on the Russian-language crime forum Embargo read. “If you purchase the entire database, I will give you access to it.”

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.

“There is a lot of information, I am ready to sell the entire database, with access to the database, and in parts,” Rescator told Mazafaka members. “There is also information on corporate taxpayers.”

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. Keel’s 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. Rescator’s 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.

“At 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,” the AP’s Jeffrey Collins wrote.

As it happens, Rescator’s criminal hacking crew was directly responsible for the 2013 breach at Target and the 2014 hack of Home Depot. The Target intrusion saw Rescator’s 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. Keel’s 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 underground’s 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 person’s 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 to a 2013 report from the Treasury Inspector General’s 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.

‘The Manipulaters’ Improve Phishing, Still Fail at Opsec

Roughly nine years ago, KrebsOnSecurity profiled a Pakistan-based cybercrime group called “The Manipulaters,” a sprawling web hosting network of phishing and spam delivery platforms. In January 2024, The Manipulaters pleaded with this author to unpublish previous stories about their work, claiming the group had turned over a new leaf and gone legitimate. But new research suggests that while they have improved the quality of their products and services, these nitwits still fail spectacularly at hiding their illegal activities.

In May 2015, KrebsOnSecurity published a brief writeup about the brazen Manipulaters team, noting that they openly operated hundreds of web sites selling tools designed to trick people into giving up usernames and passwords, or deploying malicious software on their PCs.

The core brand of The Manipulaters has long been a shared cybercriminal identity named “Saim Raza,” who for the past decade has peddled a popular spamming and phishing service variously called “Fudtools,” “Fudpage,” “Fudsender,” “FudCo,” etc. The term “FUD” in those names stands for “Fully Un-Detectable,” and it refers to cybercrime resources that will evade detection by security tools like antivirus software or anti-spam appliances.

A September 2021 story here checked in on The Manipulaters, and found that Saim Raza and company were prospering under their FudCo brands, which they secretly managed from a front company called We Code Solutions.

That piece worked backwards from all of the known Saim Raza email addresses to identify Facebook profiles for multiple We Code Solutions employees, many of whom could be seen celebrating company anniversaries gathered around a giant cake with the words “FudCo” painted in icing.

Since that story ran, KrebsOnSecurity has heard from this Saim Raza identity on two occasions. The first was in the weeks following the Sept. 2021 piece, when one of Saim Raza’s known email addresses — bluebtcus@gmail.com — pleaded to have the story taken down.

“Hello, we already leave that fud etc before year,” the Saim Raza identity wrote. “Why you post us? Why you destroy our lifes? We never harm anyone. Please remove it.”

Not wishing to be manipulated by a phishing gang, KrebsOnSecurity ignored those entreaties. But on Jan. 14, 2024, KrebsOnSecurity heard from the same bluebtcus@gmail.com address, apropos of nothing.

“Please remove this article,” Sam Raza wrote, linking to the 2021 profile. “Please already my police register case on me. I already leave everything.”

Asked to elaborate on the police investigation, Saim Raza said they were freshly released from jail.

“I was there many days,” the reply explained. “Now back after bail. Now I want to start my new work.”

Exactly what that “new work” might entail, Saim Raza wouldn’t say. But a new report from researchers at DomainTools.com finds that several computers associated with The Manipulaters have been massively hacked by malicious data- and password-snarfing malware for quite some time.

DomainTools says the malware infections on Manipulaters PCs exposed “vast swaths of account-related data along with an outline of the group’s membership, operations, and position in the broader underground economy.”

“Curiously, the large subset of identified Manipulaters customers appear to be compromised by the same stealer malware,” DomainTools wrote. “All observed customer malware infections began after the initial compromise of Manipulaters PCs, which raises a number of questions regarding the origin of those infections.”

A number of questions, indeed. The core Manipulaters product these days is a spam delivery service called HeartSender, whose homepage openly advertises phishing kits targeting users of various Internet companies, including Microsoft 365, Yahoo, AOL, Intuit, iCloud and ID.me, to name a few.

HeartSender customers can interact with the subscription service via the website, but the product appears to be far more effective and user-friendly if one downloads HeartSender as a Windows executable program. Whether that HeartSender program was somehow compromised and used to infect the service’s customers is unknown.

However, DomainTools also found the hosted version of HeartSender service leaks an extraordinary amount of user information that probably is not intended to be publicly accessible. Apparently, the HeartSender web interface has several webpages that are accessible to unauthenticated users, exposing customer credentials along with support requests to HeartSender developers.

“Ironically, the Manipulaters may create more short-term risk to their own customers than law enforcement,” DomainTools wrote. “The data table “User Feedbacks” (sic) exposes what appear to be customer authentication tokens, user identifiers, and even a customer support request that exposes root-level SMTP credentials–all visible by an unauthenticated user on a Manipulaters-controlled domain. Given the risk for abuse, this domain will not be published.”

This is hardly the first time The Manipulaters have shot themselves in the foot. In 2019, The Manipulaters failed to renew their core domain name — manipulaters[.]com — the same one tied to so many of the company’s past and current business operations. That domain was quickly scooped up by Scylla Intel, a cyber intelligence firm that focuses on connecting cybercriminals to their real-life identities.

Currently, The Manipulaters seem focused on building out and supporting HeartSender, which specializes in spam and email-to-SMS spamming services.

“The Manipulaters’ newfound interest in email-to-SMS spam could be in response to the massive increase in smishing activity impersonating the USPS,” DomainTools wrote. “Proofs posted on HeartSender’s Telegram channel contain numerous references to postal service impersonation, including proving delivery of USPS-themed phishing lures and the sale of a USPS phishing kit.”

Reached via email, the Saim Raza identity declined to respond to questions about the DomainTools findings.

“First [of] all we never work on virus or compromised computer etc,” Raza replied. “If you want to write like that fake go ahead. Second I leave country already. If someone bind anything with exe file and spread on internet its not my fault.”

Asked why they left Pakistan, Saim Raza said the authorities there just wanted to shake them down.

“After your article our police put FIR on my [identity],” Saim Raza explained. “FIR” in this case stands for “First Information Report,” which is the initial complaint in the criminal justice system of Pakistan.

“They only get money from me nothing else,” Saim Raza continued. “Now some officers ask for money again again. Brother, there is no good law in Pakistan just they need money.”

Saim Raza has a history of being slippery with the truth, so who knows whether The Manipulaters and/or its leaders have in fact fled Pakistan (it may be more of an extended vacation abroad). With any luck, these guys will soon venture into a more Western-friendly, “good law” nation and receive a warm welcome by the local authorities.

Thread Hijacking: Phishes That Prey on Your Curiosity

Thread hijacking attacks. They happen when someone you know has their email account compromised, and you are suddenly dropped into an existing conversation between the sender and someone else. These missives draw on the recipient’s natural curiosity about being copied on a private discussion, which is modified to include a malicious link or attachment. Here’s the story of a thread hijacking attack in which a journalist was copied on a phishing email from the unwilling subject of a recent scoop.

In Sept. 2023, the Pennsylvania news outlet LancasterOnline.com published a story about Adam Kidan, a wealthy businessman with a criminal past who is a major donor to Republican causes and candidates, including Rep. Lloyd Smucker (R-Pa).

Several months after that piece ran, the story’s author Brett Sholtis received two emails from Kidan, both of which contained attachments. One of the messages appeared to be a lengthy conversation between Kidan and a colleague, with the subject line, “Re: Successfully sent data.” The second missive was a more brief email from Kidan with the subject, “Acknowledge New Work Order,” and a message that read simply, “Please find the attached.”

Sholtis said he clicked the attachment in one of the messages, which then launched a web page that looked exactly like a Microsoft Office 365 login page. An analysis of the webpage reveals it would check any submitted credentials at the real Microsoft website, and return an error if the user entered bogus account information. A successful login would record the submitted credentials and forward the victim to the real Microsoft website.

But Sholtis said he didn’t enter his Outlook username and password. Instead, he forwarded the messages to LancasterOneline’s IT team, which quickly flagged them as phishing attempts.

LancasterOnline Executive Editor Tom Murse said the two phishing messages from Mr. Kidan raised eyebrows in the newsroom because Kidan had threatened to sue the news outlet multiple times over Sholtis’s story.

“We were just perplexed,” Murse said. “It seemed to be a phishing attempt but we were confused why it would come from a prominent businessman we’ve written about. Our initial response was confusion, but we didn’t know what else to do with it other than to send it to the FBI.”

In 2006, Kidan was sentenced to 70 months in federal prison after pleading guilty to defrauding lenders along with Jack Abramoff, the disgraced lobbyist whose corruption became a symbol of the excesses of Washington influence peddling. He was paroled in 2009, and in 2014 moved his family to a home in Lancaster County, Pa.

The FBI hasn’t responded to LancasterOnline’s tip. Messages sent by KrebsOnSecurity to Kidan’s emails addresses were returned as blocked. Messages left with Mr. Kidan’s company, Empire Workforce Solutions, went unreturned.

No doubt the FBI saw the messages from Kidan for what they likely were: The result of Mr. Kidan having his Microsoft Outlook account compromised and used to send malicious email to people in his contacts list.

Thread hijacking attacks are hardly new, but that is mainly true because many Internet users still don’t know how to identify them. The email security firm Proofpoint says it has tracked north of 90 million malicious messages in the last five years that leverage this attack method.

One key reason thread hijacking is so successful is that these attacks generally do not include the tell that exposes most phishing scams: A fabricated sense of urgency. A majority of phishing threats warn of negative consequences should you fail to act quickly — such as an account suspension or an unauthorized high-dollar charge going through.

In contrast, thread hijacking campaigns tend to patiently prey on the natural curiosity of the recipient.

Ryan Kalember, chief strategy officer at Proofpoint, said probably the most ubiquitous examples of thread hijacking are “CEO fraud” or “business email compromise” scams, wherein employees are tricked by an email from a senior executive into wiring millions of dollars to fraudsters overseas.

But Kalember said these low-tech attacks can nevertheless be quite effective because they tend to catch people off-guard.

“It works because you feel like you’re suddenly included in an important conversation,” Kalember said. “It just registers a lot differently when people start reading, because you think you’re observing a private conversation between two different people.”

Some thread hijacking attacks actually involve multiple threat actors who are actively conversing while copying — but not addressing — the recipient.

“We call these multi-persona phishing scams, and they’re often paired with thread hijacking,” Kalember said. “It’s basically a way to build a little more affinity than just copying people on an email. And the longer the conversation goes on, the higher their success rate seems to be because some people start replying to the thread [and participating] psycho-socially.”

The best advice to sidestep phishing scams is to avoid clicking on links or attachments that arrive unbidden in emails, text messages and other mediums. If you’re unsure whether the message is legitimate, take a deep breath and visit the site or service in question manually — ideally, using a browser bookmark so as to avoid potential typosquatting sites.

Mozilla Drops Onerep After CEO Admits to Running People-Search Networks

The nonprofit organization that supports the Firefox web browser said today it is winding down its new partnership with Onerep, an identity protection service recently bundled with Firefox that offers to remove users from hundreds of people-search sites. The move comes just days after a report by KrebsOnSecurity forced Onerep’s CEO to admit that he has founded dozens of people-search networks over the years.

Mozilla only began bundling Onerep in Firefox last month, when it announced the reputation service would be offered on a subscription basis as part of Mozilla Monitor Plus. Launched in 2018 under the name Firefox Monitor, Mozilla Monitor also checks data from the website Have I Been Pwned? to let users know when their email addresses or password are leaked in data breaches.

On March 14, KrebsOnSecurity published a story showing that Onerep’s Belarusian CEO and founder Dimitiri Shelest launched dozens of people-search services since 2010, including a still-active data broker called Nuwber that sells background reports on people. Onerep and Shelest did not respond to requests for comment on that story.

But on March 21, Shelest released a lengthy statement wherein he admitted to maintaining an ownership stake in Nuwber, a consumer data broker he founded in 2015 — around the same time he launched Onerep.

Shelest maintained that Nuwber has “zero cross-over or information-sharing with Onerep,” and said any other old domains that may be found and associated with his name are no longer being operated by him.

“I get it,” Shelest wrote. “My affiliation with a people search business may look odd from the outside. In truth, if I hadn’t taken that initial path with a deep dive into how people search sites work, Onerep wouldn’t have the best tech and team in the space. Still, I now appreciate that we did not make this more clear in the past and I’m aiming to do better in the future.” The full statement is available here (PDF).

In a statement released today, a spokesperson for Mozilla said it was moving away from Onerep as a service provider in its Monitor Plus product.

“Though customer data was never at risk, the outside financial interests and activities of Onerep’s CEO do not align with our values,” Mozilla wrote. “We’re working now to solidify a transition plan that will provide customers with a seamless experience and will continue to put their interests first.”

KrebsOnSecurity also reported that Shelest’s email address was used circa 2010 by an affiliate of Spamit, a Russian-language organization that paid people to aggressively promote websites hawking male enhancement drugs and generic pharmaceuticals. As noted in the March 14 story, this connection was confirmed by research from multiple graduate students at my alma mater George Mason University.

Shelest denied ever being associated with Spamit. “Between 2010 and 2014, we put up some web pages and optimize them — a widely used SEO practice — and then ran AdSense banners on them,” Shelest said, presumably referring to the dozens of people-search domains KrebsOnSecurity found were connected to his email addresses (dmitrcox@gmail.com and dmitrcox2@gmail.com). “As we progressed and learned more, we saw that a lot of the inquiries coming in were for people.”

Shelest also acknowledged that Onerep pays to run ads on “on a handful of data broker sites in very specific circumstances.”

“Our ad is served once someone has manually completed an opt-out form on their own,” Shelest wrote. “The goal is to let them know that if they were exposed on that site, there may be others, and bring awareness to there being a more automated opt-out option, such as Onerep.”

Reached via Twitter/X, HaveIBeenPwned founder Troy Hunt said he knew Mozilla was considering a partnership with Onerep, but that he was previously unaware of the Onerep CEO’s many conflicts of interest.

“I knew Mozilla had this in the works and we’d casually discussed it when talking about Firefox monitor,” Hunt told KrebsOnSecurity. “The point I made to them was the same as I’ve made to various companies wanting to put data broker removal ads on HIBP: removing your data from legally operating services has minimal impact, and you can’t remove it from the outright illegal ones who are doing the genuine damage.”

Playing both sides — creating and spreading the same digital disease that your medicine is designed to treat — may be highly unethical and wrong. But in the United States it’s not against the law. Nor is collecting and selling data on Americans. Privacy experts say the problem is that data brokers, people-search services like Nuwber and Onerep, and online reputation management firms exist because virtually all U.S. states exempt so-called “public” or “government” records from consumer privacy laws.

Those include voting registries, property filings, marriage certificates, motor vehicle records, criminal records, court documents, death records, professional licenses, and bankruptcy filings. Data brokers also can enrich consumer records with additional information, by adding social media data and known associates.

The March 14 story on Onerep was the second in a series of three investigative reports published here this month that examined the data broker and people-search industries, and highlighted the need for more congressional oversight — if not regulation — on consumer data protection and privacy.

On March 8, KrebsOnSecurity published A Close Up Look at the Consumer Data Broker Radaris, which showed that the co-founders of Radaris operate multiple Russian-language dating services and affiliate programs. It also appears many of their businesses have ties to a California marketing firm that works with a Russian state-run media conglomerate currently sanctioned by the U.S. government.

On March 20, KrebsOnSecurity published The Not-So-True People-Search Network from China, which revealed an elaborate web of phony people-search companies and executives designed to conceal the location of people-search affiliates in China who are earning money promoting U.S. based data brokers that sell personal information on Americans.

Incognito Darknet Market Mass-Extorts Buyers, Sellers

Borrowing from the playbook of ransomware purveyors, the darknet narcotics bazaar Incognito Market has begun extorting all of its vendors and buyers, threatening to publish cryptocurrency transaction and chat records of users who refuse to pay a fee ranging from $100 to $20,000. The bold mass extortion attempt comes just days after Incognito Market administrators reportedly pulled an “exit scam” that left users unable to withdraw millions of dollars worth of funds from the platform.

In the past 24 hours, the homepage for the Incognito Market was updated to include a blackmail message from its owners, saying they will soon release purchase records of vendors who refuse to pay to keep the records confidential.

“We got one final little nasty surprise for y’all,” reads the message to Incognito Market users. “We have accumulated a list of private messages, transaction info and order details over the years. You’ll be surprised at the number of people that relied on our ‘auto-encrypt’ functionality. And by the way, your messages and transaction IDs were never actually deleted after the ‘expiry’….SURPRISE SURPRISE!!! Anyway, if anything were to leak to law enforcement, I guess nobody never slipped up.”

Incognito Market says it plans to publish the entire dump of 557,000 orders and 862,000 cryptocurrency transaction IDs at the end of May.

“Whether or not you and your customers’ info is on that list is totally up to you,” the Incognito administrators advised. “And yes, this is an extortion!!!!”

The extortion message includes a “Payment Status” page that lists the darknet market’s top vendors by their handles, saying at the top that “you can see which vendors care about their customers below.” The names in green supposedly correspond to users who have already opted to pay.

We’ll be publishing the entire dump of 557k orders and 862k crypto transaction IDs at the end of May, whether or not you and your customers’ info is on that list is totally up to you. And yes, this is an extortion!!!!

Incognito Market said it plans to open up a “whitelist portal” for buyers to remove their transaction records “in a few weeks.”

The mass-extortion of Incognito Market users comes just days after a large number of users reported they were no longer able to withdraw funds from their buyer or seller accounts. The cryptocurrency-focused publication Cointelegraph.com reported Mar. 6 that Incognito was exit-scamming its users out of their bitcoins and Monero deposits.

CoinTelegraph notes that Incognito Market administrators initially lied about the situation, and blamed users’ difficulties in withdrawing funds on recent changes to Incognito’s withdrawal systems.

Incognito Market deals primarily in narcotics, so it’s likely many users are now worried about being outed as drug dealers. Creating a new account on Incognito Market presents one with an ad for 5 grams of heroin selling for $450.

The double whammy now hitting Incognito Market users is somewhat akin to the double extortion techniques employed by many modern ransomware groups, wherein victim organizations are hacked, relieved of sensitive information and then presented with two separate ransom demands: One in exchange for a digital key needed to unlock infected systems, and another to secure a promise that any stolen data will not be published or sold, and will be destroyed.

Incognito Market has priced its extortion for vendors based on their status or “level” within the marketplace. Level 1 vendors can supposedly have their information removed by paying a $100 fee. However, larger “Level 5” vendors are asked to cough up $20,000 payments.

The past is replete with examples of similar darknet market exit scams, which tend to happen eventually to all darknet markets that aren’t seized and shut down by federal investigators, said Brett Johnson, a convicted and reformed cybercriminal who built the organized cybercrime community Shadowcrew many years ago.

“Shadowcrew was the precursor to today’s Darknet Markets and laid the foundation for the way modern cybercrime channels still operate today,” Johnson said. “The Truth of Darknet Markets? ALL of them are Exit Scams. The only question is whether law enforcement can shut down the market and arrest its operators before the exit scam takes place.”

FBI’s LockBit Takedown Postponed a Ticking Time Bomb in Fulton County, Ga.

The FBI’s takedown of the LockBit ransomware group last week came as LockBit was preparing to release sensitive data stolen from government computer systems in Fulton County, Ga. But LockBit is now regrouping, and the gang says it will publish the stolen Fulton County data on March 2 unless paid a ransom. LockBit claims the cache includes documents tied to the county’s ongoing criminal prosecution of former President Trump, but court watchers say teaser documents published by the crime gang suggest a total leak of the Fulton County data could put lives at risk and jeopardize a number of other criminal trials.

In early February, Fulton County leaders acknowledged they were responding to an intrusion that caused disruptions for its phone, email and billing systems, as well as a range of county services, including court systems.

On Feb. 13, the LockBit ransomware group posted on its victim shaming blog a new entry for Fulton County, featuring a countdown timer saying the group would publish the data on Feb. 16 unless county leaders agreed to negotiate a ransom.

“We will demonstrate how local structures negligently handled information protection,” LockBit warned. “We will reveal lists of individuals responsible for confidentiality. Documents marked as confidential will be made publicly available. We will show documents related to access to the state citizens’ personal data. We aim to give maximum publicity to this situation; the documents will be of interest to many. Conscientious residents will bring order.”

Yet on Feb. 16, the entry for Fulton County was removed from LockBit’s site without explanation. This usually only happens after the victim in question agrees to pay a ransom demand and/or enters into negotiations with their extortionists.

However, Fulton County Commission Chairman Robb Pitts said the board decided it “could not in good conscience use Fulton County taxpayer funds to make a payment.”

“We did not pay nor did anyone pay on our behalf,” Pitts said at an incident briefing on Feb. 20.

Just hours before that press conference, LockBit’s various websites were seized by the FBI and the U.K.’s National Crime Agency (NCA), which replaced the ransomware group’s homepage with a seizure notice and used the existing design of LockBit’s victim shaming blog to publish press releases about the law enforcement action.

Dubbed “Operation Cronos,” the effort involved the seizure of nearly three-dozen servers; the arrest of two alleged LockBit members; the release of a free LockBit decryption tool; and the freezing of more than 200 cryptocurrency accounts thought to be tied to the gang’s activities. The government says LockBit has claimed more than 2,000 victims worldwide and extorted over $120 million in payments.

UNFOLDING DISASTER

In a lengthy, rambling letter published on Feb. 24 and addressed to the FBI, the ransomware group’s leader LockBitSupp announced that their victim shaming websites were once again operational on the dark web, with fresh countdown timers for Fulton County and a half-dozen other recent victims.

“The FBI decided to hack now for one reason only, because they didn’t want to leak information fultoncountyga.gov,” LockBitSupp wrote. “The stolen documents contain a lot of interesting things and Donald Trump’s court cases that could affect the upcoming US election.”

LockBit has already released roughly two dozen files allegedly stolen from Fulton County government systems, although none of them involve Mr. Trump’s criminal trial. But the documents do appear to include court records that are sealed and shielded from public viewing.

George Chidi writes The Atlanta Objective, a Substack publication on crime in Georgia’s capital city. Chidi says the leaked data so far includes a sealed record related to a child abuse case, and a sealed motion in the murder trial of Juwuan Gaston demanding the state turn over confidential informant identities.

Chidi cites reports from a Fulton County employee who said the confidential material includes the identities of jurors serving on the trial of the rapper Jeffery “Young Thug” Williams, who is charged along with five other defendants in a racketeering and gang conspiracy.

“The screenshots suggest that hackers will be able to give any attorney defending a criminal case in the county a starting place to argue that evidence has been tainted or witnesses intimidated, and that the release of confidential information has compromised cases,” Chidi wrote. “Judge Ural Glanville has, I am told by staff, been working feverishly behind the scenes over the last two weeks to manage the unfolding disaster.”

LockBitSupp also denied assertions made by the U.K.’s NCA that LockBit did not delete stolen data as promised when victims agreed to pay a ransom. The accusation is an explosive one because nobody will pay a ransom if they don’t believe the ransomware group will hold up its end of the bargain.

The ransomware group leader also confirmed information first reported here last week, that federal investigators managed to hack LockBit by exploiting a known vulnerability in PHP, a scripting language that is widely used in Web development.

“Due to my personal negligence and irresponsibility I relaxed and did not update PHP in time,” LockBitSupp wrote. “As a result of which access was gained to the two main servers where this version of PHP was installed.”

LockBitSupp’s FBI letter said the group kept copies of its stolen victim data on servers that did not use PHP, and that consequently it was able to retain copies of files stolen from victims. The letter also listed links to multiple new instances of LockBit dark net websites, including the leak page listing Fulton County’s new countdown timer.

“Even after the FBI hack, the stolen data will be published on the blog, there is no chance of destroying the stolen data without payment,” LockBitSupp wrote. “All FBI actions are aimed at destroying the reputation of my affiliate program, my demoralization, they want me to leave and quit my job, they want to scare me because they can not find and eliminate me, I can not be stopped, you can not even hope, as long as I am alive I will continue to do pentest with postpaid.”

DOX DODGING

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

After the NCA and FBI seized LockBit’s site, the group’s homepage was retrofitted with a blog entry titled, “Who is LockBitSupp? The $10M question.” The teaser made use of LockBit’s own countdown timer, and suggested the real identity of LockBitSupp would soon be revealed.

However, after the countdown timer expired the page was replaced with a taunting message from the feds, but it included no new information about LockBitSupp’s identity.

On Feb. 21, the U.S. Department of State announced rewards totaling up to $15 million for information leading to the arrest and/or conviction of anyone participating in LockBit ransomware attacks. The State Department said $10 million of that is for information on LockBit’s leaders, and up to $5 million is offered for information on affiliates.

In an interview with the malware-focused Twitter/X account Vx-Underground, LockBit staff asserted that authorities had arrested a couple of small-time players in their operation, and that investigators still do not know the real-life identities of the core LockBit members, or that of their leader.

“They assert the FBI / NCA UK / EUROPOL do not know their information,” Vx-Underground wrote. “They state they are willing to double the bounty of $10,000,000. They state they will place a $20,000,000 bounty of their own head if anyone can dox them.”

TROUBLE ON THE HOMEFRONT?

In the weeks leading up to the FBI/NCA takedown, LockBitSupp became embroiled in a number of high-profile personal and business disputes on the Russian cybercrime forums.

Earlier this year, someone used LockBit ransomware to infect the networks of AN-Security, a venerated 30-year-old security and technology company based in St. Petersburg, Russia. This violated the golden rule for cybercriminals based in Russia and former soviet nations that make up the Commonwealth of Independent States, which is that attacking your own citizens in those countries is the surest way to get arrested and prosecuted by local authorities.

LockBitSupp later claimed the attacker had used a publicly leaked, older version of LockBit to compromise systems at AN-Security, and said the attack was an attempt to smear their reputation by a rival ransomware group known as “Clop.” But the incident no doubt prompted closer inspection of LockBitSupp’s activities by Russian authorities.

Then in early February, the administrator of the Russian-language cybercrime forum XSS said LockBitSupp had threatened to have him killed after the ransomware group leader was banned by the community. LockBitSupp was excommunicated from XSS after he refused to pay an arbitration amount ordered by the forum administrator. That dispute related to a complaint from another forum member who said LockBitSupp recently stiffed him on his promised share of an unusually large ransomware payout.

INTERVIEW WITH LOCKBITSUPP

KrebsOnSecurity sought comment from LockBitSupp at the ToX instant messenger ID listed in his letter to the FBI. LockBitSupp declined to elaborate on the unreleased documents from Fulton County, saying the files will be available for everyone to see in a few days.

LockBitSupp said his team was still negotiating with Fulton County when the FBI seized their servers, which is why the county has been granted a time extension. He also denied threatening to kill the XSS administrator.

“I have not threatened to kill the XSS administrator, he is blatantly lying, this is to cause self-pity and damage my reputation,” LockBitSupp told KrebsOnSecurity. “It is not necessary to kill him to punish him, there are more humane methods and he knows what they are.”

Asked why he was so certain the FBI doesn’t know his real-life identity, LockBitSupp was more precise.

“I’m not sure the FBI doesn’t know who I am,” he said. “I just believe they will never find me.”

It seems unlikely that the FBI’s seizure of LockBit’s infrastructure was somehow an effort to stave off the disclosure of Fulton County’s data, as LockBitSupp maintains. For one thing, Europol said the takedown was the result of a months-long infiltration of the ransomware group.

Also, in reporting on the attack’s disruption to the office of Fulton County District Attorney Fani Willis on Feb. 14, CNN reported that by then the intrusion by LockBit had persisted for nearly two and a half weeks.

Finally, if the NCA and FBI really believed that LockBit never deleted victim data, they had to assume LockBit would still have at least one copy of all their stolen data hidden somewhere safe.

Fulton County is still trying to recover systems and restore services affected by the ransomware attack. “Fulton County continues to make substantial progress in restoring its systems following the recent ransomware incident resulting in service outages,” reads the latest statement from the county on Feb. 22. “Since the start of this incident, our team has been working tirelessly to bring services back up.”

Update, Feb. 29, 3:22 p.m. ET: Just hours after this story ran, LockBit changed its countdown timer for Fulton County saying they had until the morning of Feb. 29 (today) to pay a ransonm demand. When the official deadline neared today, Fulton County’s listing was removed from LockBit’s victim shaming website. Asked about the removal of the listing, LockBit’s leader “LockBitSupp” told KrebsOnSecurity that Fulton County paid a ransom demand. County officials have scheduled a press conference on the ransomware attack at 4:15 p.m. ET today.

New Leak Shows Business Side of China’s APT Menace

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

From Cybercrime Saul Goodman to the Russian GRU

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

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

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

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

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

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

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

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

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

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

WHO IS DJAMIX?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

Who is Alleged Medibank Hacker Aleksandr Ermakov?

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.

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.

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.

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.

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.”

E-Crime Rapper ‘Punchmade Dev’ Debuts Card Shop

The rapper and social media personality Punchmade Dev is perhaps best known for his flashy videos singing the praises of a cybercrime lifestyle. With memorable hits such as “Internet Swiping” and “Million Dollar Criminal” earning millions of views, Punchmade has leveraged his considerable following to peddle tutorials on how to commit financial crimes online. But until recently, there wasn’t much to support a conclusion that Punchmade was actually doing the cybercrime things he promotes in his songs.

Punchmade Dev’s most controversial mix — a rap called “Wire Fraud Tutorial” — was taken down by Youtube last summer for violating the site’s rules. Punchmade shared on social media that the video’s removal was prompted by YouTube receiving a legal process request from law enforcement officials.

The 24-year-old rapper told reporters he wasn’t instructing people how to conduct wire fraud, but instead informing his fans on how to avoid being victims of wire fraud. However, this is difficult to discern from listening to the song, which sounds very much like a step-by-step tutorial on how to commit wire fraud.

“Listen up, I’m finna show y’all how to hit a bank,” Wire Fraud Tutorial begins. “Just pay attention, this is a quick way to jug in any state. First you wanna get a bank log from a trusted site. Do your research because the information must be right.”

And even though we’re talking about an individual who regularly appears in videos wearing a half-million dollars worth of custom jewelry draped around his arm and neck (including the functional diamond-encrusted payment card skimming device pictured above), there’s never been much evidence that Punchmade was actually involved in committing cybercrimes himself. Even his most vocal critics acknowledged that the whole persona could just be savvy marketing.

That changed recently when Punchmade’s various video and social media accounts began promoting a new web shop that is selling stolen payment cards and identity data, as well as hacked financial accounts and software for producing counterfeit checks.

The official Punchmadedev account on Instagram links to many of the aforementioned rap videos and tutorials on cybercriming, as well as to Punchmadedev’s other profiles and websites. Among them is mainpage[.]me/punchmade, which includes the following information for “Punchmade Empire ®”

-212,961 subscribers

#1 source on Telegram

Contact: @whopunchmade

24/7 shop: https://punchmade[.]atshop[.]io

Visiting that @whopunchmade Telegram channel shows this user is promoting punchmade[.]atshop[.]io, which is currently selling hacked bank accounts and payment cards with high balances.

Clicking “purchase” on the C@sh App offering, for example, shows that for $80 the buyer will receive logins to Cash App accounts with balances between $3,000 and $5,000. “If you buy this item you’ll get my full support on discord/telegram if there is a problem!,” the site promises. Purchases can be made in cryptocurrencies, and checking out prompts one to continue payment at Coinbase.com.

Another item for sale, “Fullz + Linkable CC,” promises “ID Front + Back, SSN with 700+ Credit Score, and Linkable CC” or credit card. That also can be had for $80 in crypto.

WHO IS PUNCHMADE DEV?

Punchmade has fashioned his public persona around a collection of custom-made, diamond-covered necklaces that are as outlandish and gaudy as they are revelatory. My favorite shot from one of Punchmade’s videos features at least three of these monstrosities: One appears to be a boring old diamond and gold covered bitcoin, but the other two necklaces tell us something about where Punchmade is from:

One of them includes the logo and mascot of the University of Kentucky. The other, an enormous diamond studded skyline, appears to have been designed based on the skyline in Lexington, Ky:

The “About” page on Punchmade Dev’s Spotify profile describes him as “an American artist, rapper, musician, producer, director, entrepreneur, actor and investor.” “Punchmade Dev is best known for his creative ways to use technology, video gaming, and social media to build a fan base,” the profile continues.

The profile explains that he launched his own record label in 2021 called Punchmade Records, where he produces his own instrumentals and edits his own music videos.

A search on companies that include the name “punchmade” at the website of the Kentucky Secretary of State brings up just one record: OBN Group LLC, in Lexington, Ky. This November 2021 record includes a Certificate of Assumed Name, which shows that Punchmade LLC is the assumed name of OBN Group LLC.

The president of OBN Group LLC is listed as Devon Turner. A search on the Secretary of State website for other businesses tied to Devon Turner reveals just one other record: A now-defunct entity called DevTakeFlightBeats Inc.

The breach tracking service Constella Intelligence finds that Devon Turner from Lexington, Ky. used the email address obndevpayments@gmail.com. A lookup on this email at DomainTools.com shows it was used to register the domain foreverpunchmade[.]com, which is registered to a Devon Turner in Lexington, Ky. A copy of this site at archive.org indicates it once sold Punchmade Dev-branded t-shirts and other merchandise.

Mr. Turner did not respond to multiple requests for comment.

Searching online for Devon Turner and “Punchmade” brings up a video from @brainjuiceofficial, a YouTube channel that focuses on social media celebrities. @Brainjuiceofficial says Turner was born in October 2000, the oldest child of a single mother of five whose husband was not in the picture.

The video says the six-foot five Turner played basketball, track and football in high school, but that he gradually became obsessed with playing the video game NBA 2K17 and building a following of people watching him play the game competitively online.

According to this brief documentary, Turner previously streamed his NBA 2K17 videos on a YouTube channel called DevTakeFlight, although he originally went by the nickname OBN Dev.

“Things may eventually catch up to Devon if he isn’t careful,” @Brainjuiceofficial observed, noting that Turner has been shot at before, and also robbed at an ATM while flexing a bunch of cash for a picture and wearing $500k in jewelry. “Although you have a lot of people that are into what you do, there are a lot of people waiting for you to slip up.”

Alleged Extortioner of Psychotherapy Patients Faces Trial

Prosecutors in Finland this week commenced their criminal trial against Julius Kivimäki, a 26-year-old Finnish man charged with extorting a once popular and now-bankrupt online psychotherapy practice and thousands of its patients. In a 2,200-page report, Finnish authorities laid out how they connected the extortion spree to Kivimäki, a notorious hacker who was convicted in 2015 of perpetrating tens of thousands of cybercrimes, including data breaches, payment fraud, operating a botnet and calling in bomb threats.

In November 2022, Kivimäki was charged with attempting to extort money from the Vastaamo Psychotherapy Center. In that breach, which occurred in October 2020, a hacker using the handle “Ransom Man” threatened to publish patient psychotherapy notes if Vastaamo did not pay a six-figure ransom demand.

Vastaamo refused, so Ransom Man shifted to extorting individual patients — sending them targeted emails threatening to publish their therapy notes unless paid a 500-euro ransom. When Ransom Man found little success extorting patients directly, they uploaded to the dark web a large compressed file containing all of the stolen Vastaamo patient records.

Security experts soon discovered Ransom Man had mistakenly included an entire copy of their home folder, where investigators found many clues pointing to Kivimäki’s involvement. By that time, Kivimäki was no longer in Finland, but the Finnish government nevertheless charged Kivimäki in absentia with the Vastaamo hack. The 2,200-page evidence document against Kivimäki suggests he enjoyed a lavish lifestyle while on the lam, frequenting luxury resorts and renting fabulously expensive cars and living quarters.

But in February 2023, Kivimäki was arrested in France after authorities there responded to a domestic disturbance call and found the defendant sleeping off a hangover on the couch of a woman he’d met the night before. The French police grew suspicious when the 6′ 3″ blonde, green-eyed man presented an ID that stated he was of Romanian nationality.

Finnish prosecutors showed that Kivimäki’s credit card had been used to pay for the virtual server that hosted the stolen Vastaamo patient notes. What’s more, the home folder included in the Vastaamo patient data archive also allowed investigators to peer into other cybercrime projects of the accused, including domains that Ransom Man had access to as well as a lengthy history of commands he’d executed on the rented virtual server.

Some of those domains allegedly administered by Kivimäki were set up to smear the reputations of different companies and individuals. One of those was a website that claimed to have been authored by a person who headed up IT infrastructure for a major bank in Norway which discussed the idea of legalizing child sexual abuse.

Another domain hosted a fake blog that besmirched the reputation of a Tulsa, Okla. man whose name was attached to blog posts about supporting the “white pride” movement and calling for a pardon of the Oklahoma City bomber Timothy McVeigh.

Kivimäki appears to have sought to sully the name of this reporter as well. The 2,200-page document shows that Kivimäki owned and operated the domain krebsonsecurity[.]org, which hosted various hacking tools that Kivimäki allegedly used, including programs for mass-scanning the Internet for systems vulnerable to known security flaws, as well as scripts for cracking database server usernames and passwords, and downloading databases.

Mikko Hyppönen, chief research officer at WithSecure (formerly F-Secure), said the Finnish authorities have done “amazing work,” and that “it’s rare to have this much evidence for a cybercrime case.”

Petteri Järvinen is a respected IT expert and author who has been following the trial, and he said the prosecution’s case so far has been strong.

“The National Bureau of Investigation has done a good job and Mr Kivimäki for his part some elementary mistakes,” Järvinen wrote on LinkedIn. “This sends an important message: online crime does not pay. Traces are left in the digital world too, even if it is very tedious for the police to collect them from servers all around the world.”

Antti Kurittu is an information security specialist and a former criminal investigator. In 2013, Kurittu worked on an investigation involving Kivimäki’s use of the Zbot botnet, among other activities Kivimäki engaged in as a member of the hacker group Hack the Planet (HTP). Kurittu said it remains to be seen if the prosecution can make their case, and if the defense has any answers to all of the evidence presented.

“Based on the public pretrial investigation report, it looks like the case has a lot of details that seem very improbable to be coincidental,” Kurittu told KrebsOnSecurity. “For example, a full copy of the Vastaamo patient database was found on a server that belonged to Scanifi, a company with no reasonable business that Kivimäki was affiliated with. The leaked home folder contents were also connected to Kivimäki and were found on servers that were under his control.”

The Finnish daily yle.fi reports that Kivimäki’s lawyers sought to have their client released from confinement for the remainder of his trial, noting that the defendant has already been detained for eight months.

The court denied that request, saying the defendant was still a flight risk. Kivimäki’s trial is expected to continue until February 2024, in part to accommodate testimony from a large number of victims. Prosecutors are seeking a seven-year sentence for Kivimäki.

Who’s Behind the SWAT USA Reshipping Service?

Last week, KrebsOnSecurity broke the news that one of the largest cybercrime services for laundering stolen merchandise was hacked recently, exposing its internal operations, finances and organizational structure. In today’s Part II, we’ll examine clues about the real-life identity of “Fearlless,” the nickname chosen by the proprietor of the SWAT USA Drops service.

Based in Russia, SWAT USA recruits people in the United States to reship packages containing pricey electronics that are purchased with stolen credit cards. As detailed in this Nov. 2 story, SWAT currently employs more than 1,200 U.S. residents, all of whom will be cut loose without a promised payday at the end of their first month reshipping stolen goods.

The current co-owner of SWAT, a cybercriminal who uses the nickname “Fearlless,” operates primarily on the cybercrime forum Verified. This Russian-language forum has tens of thousands of members, and it has suffered several hacks that exposed more than a decade’s worth of user data and direct messages.

January 2021 posts on Verified show that Fearlless and his partner Universalo purchased the SWAT reshipping business from a Verified member named SWAT, who’d been operating the service for years. SWAT agreed to transfer the business in exchange for 30 percent of the net profit over the ensuing six months.

Cyber intelligence firm Intel 471 says Fearlless first registered on Verified in February 2013. The email address Fearlless used on Verified leads nowhere, but a review of Fearlless’ direct messages on Verified indicates this user originally registered on Verified a year earlier as a reshipping vendor, under the alias “Apathyp.”

There are two clues supporting the conclusion that Apathyp and Fearlless are the same person. First, the Verified administrators warned Apathyp he had violated the forum’s rules barring the use of multiple accounts by the same person, and that Verified’s automated systems had detected that Apathyp and Fearlless were logging in from the same device.  Second, in his earliest private messages on Verified, Fearlless told others to contact him on an instant messenger address that Apathyp had claimed as his.

Intel 471 says Apathyp registered on Verified using the email address triploo@mail.ru. A search on that email address at the breach intelligence service Constella Intelligence found that a password commonly associated with it was “niceone.” But the triploo@mail.ru account isn’t connected to much else that’s interesting except a now-deleted account at Vkontakte, the Russian answer to Facebook.

However, in Sept. 2020, Apathyp sent a private message on Verified to the owner of a stolen credit card shop, saying his credentials no longer worked. Apathyp told the proprietor that his chosen password on the service was “12Apathy.”

A search on that password at Constella reveals it was used by just four different email addresses, two of which are particularly interesting: gezze@yandex.ru and gezze@mail.ru. Constella discovered that both of these addresses were previously associated with the same password as triploo@mail.ru — “niceone,” or some variation thereof.

Constella found that years ago gezze@mail.ru was used to create a Vkontakte account under the name Ivan Sherban (former password: “12niceone“) from Magnitogorsk, an industrial city in the southern region of Russia. That same email address is now tied to a Vkontakte account for an Ivan Sherban who lists his home as Saint Petersburg, Russia. Sherban’s profile photo shows a heavily tattooed, muscular and recently married individual with his beautiful new bride getting ready to drive off in a convertible sports car.

A pivotal clue for validating the research into Apathyp/Fearlless came from the identity intelligence firm myNetWatchman, which found that gezze@mail.ru at one time used the passwords “геззи1991” (gezze1991) and “gezze18081991.”

Care to place a wager on when Vkontakte says is Mr. Sherban’s birthday? Ten points if you answered August 18 (18081991).

Mr. Sherban did not respond to multiple requests for comment.

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.

NJ Man Hired Online to Firebomb, Shoot at Homes Gets 13 Years in Prison

A 22-year-old New Jersey man has been sentenced to more than 13 years in prison for participating in a firebombing and a shooting at homes in Pennsylvania last year. Patrick McGovern-Allen was the subject of a Sept. 4, 2022 story here about the emergence of “violence-as-a-service” offerings, where random people from the Internet hire themselves out to perform a variety of local, physical attacks, including firebombing a home, “bricking” windows, slashing tires, or performing a drive-by shooting at someone’s residence.

McGovern-Allen, of Egg Harbor Township, N.J., was arrested Aug. 12, 2022 on an FBI warrant, which showed he was part of a group of cybercriminals who are settling scores with one another by hiring people to carry out violent attacks on their rivals.

That Sept. 2022 story about his arrest included links to two videos released on Telegram that were recorded and shared by McGovern-Allen and/or a co-conspirator as “proof” that they had carried out the attacks as hired.

The first showed two young men tossing a Molotov Cocktail at the side of a residence in Abington Township, Pa, setting it ablaze. The second featured two men with handguns unloading multiple rounds haphazardly into the first story of a house in West Chester, Pa. Fortunately in both cases, the occupants of the homes were unharmed in the attacks.

Federal prosecutors said McGovern-Allen went by the alias “Tongue” on Discord, and that in one chat he was quite explicit about his violence-as-a-service offering.

“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 against McGovern-Allen explains. “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.”

The chat channels that Tongue 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.

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 copy of McGovern-Allen’s sentencing statement says he pleaded guilty to three criminal counts, including two for stalking, and one for the use of fire in commission of a federal felony. The judge in the case gave McGovern-Allen 160 months in prison — about 13.3 years. After completing his sentence, McGovern-Allen will be on supervised release for three years.

Tech CEO Sentenced to 5 Years in IP Address Scheme

Amir Golestan, the 40-year-old CEO of the Charleston, S.C. based technology company Micfo LLC, has been sentenced to five years in prison for wire fraud. Golestan’s sentencing comes nearly two years after he pleaded guilty to using an elaborate network of phony companies to secure more than 735,000 Internet Protocol (IP) addresses from the American Registry for Internet Numbers (ARIN), the nonprofit which oversees IP addresses assigned to entities in the U.S., Canada, and parts of the Caribbean.

In 2018, ARIN sued Golestan and Micfo, alleging they had obtained hundreds of thousands of IP addresses under false pretenses. ARIN and Micfo settled that dispute in arbitration, with Micfo returning most of the addresses that it hadn’t already sold.

ARIN’s civil case caught the attention of federal prosecutors in South Carolina, who in May 2019 filed criminal wire fraud charges against Golestan, alleging he’d orchestrated a network of shell companies and fake identities to prevent ARIN from knowing the addresses were all going to the same buyer.

Prosecutors showed that each of those shell companies involved the production of notarized affidavits in the names of people who didn’t exist. As a result, the government was able to charge Golestan with 20 counts of wire fraud — one for each payment made by the phony companies that bought the IP addresses from ARIN.

Golestan initially sought to fight those charges. But on just the second day of his trial in November 2021, Golestan changed his mind and pleaded guilty to 20 counts of wire fraud in connection with the phantom companies he used to secure the IP addresses. Prosecutors estimated those addresses were valued at between $10 million and $14 million.

ARIN says the 5-year sentence handed down by the South Carolina judge “sends an important message of deterrence to other parties contemplating fraudulent schemes to obtain or transfer Internet resources.”

“Those who seek to defraud ARIN (or other Regional Internet Registries) are subject to costly and serious civil litigation, criminal charges, and, ultimately, a lengthy term of incarceration,” reads a statement from ARIN on Golestan’s sentencing.

By 2013, a number of Micfo’s customers had landed on the radar of Spamhaus, a group that many network operators rely upon to stem the tide of junk email. Shortly after Spamhaus started blocking Micfo’s IP address ranges, Micfo shifted gears and began reselling IP addresses mainly to companies marketing “virtual private networking” or VPN services that help customers hide their real IP addresses online.

Golestan did not respond to a request for comment. But in a 2020 interview with KrebsOnSecurity, Golestan claimed that Micfo was at one point responsible for brokering roughly 40 percent of the IP addresses used by the world’s largest VPN providers. Throughout that conversation, Golestan maintained his innocence, even as he explained that the creation of the phony companies was necessary to prevent entities like Spamhaus from interfering with his business going forward.

There are fewer than four billion so-called “Internet Protocol version 4” or IPv4 addresses available for use, but the vast majority of them have already been allocated. The global dearth of available IP addresses has turned them into a commodity wherein each IPv4 address can fetch between $15-$25 on the open market.

This has led to boom times for those engaged in the acquisition and sale of IP address blocks, but it has likewise emboldened those who specialize in absconding with and spamming from dormant IP address blocks without permission from the rightful owners.

The U.S Department of Justice says Golestan will serve 60 months in prison, followed by a 2-year term of court-ordered supervision. The Micfo CEO also was ordered to pay nearly $77,000 in restitution to ARIN for its work in assisting federal prosecutors.

A Closer Look at the Snatch Data Ransom Group

Earlier this week, KrebsOnSecurity revealed that the darknet website for the Snatch ransomware group was leaking data about its users and the crime gang’s internal operations. Today, we’ll take a closer look at the history of Snatch, its alleged founder, and their claims that everyone has confused them with a different, older ransomware group by the same name.

According to a September 20, 2023 joint advisory from the FBI and the U.S. Cybersecurity and Infrastructure Security Administration (CISA), Snatch was originally named Team Truniger, based on the nickname of the group’s founder and organizer — Truniger.

The FBI/CISA report says Truniger previously operated as an affiliate of GandCrab, an early ransomware-as-a-service offering that closed up shop after several years and claims to have extorted more than $2 billion from victims. GandCrab dissolved in July 2019, and is thought to have become “REvil,” one of the most ruthless and rapacious Russian ransomware groups of all time.

The government says Snatch used a customized ransomware variant notable for rebooting Microsoft Windows devices into Safe Mode — enabling the ransomware to circumvent detection by antivirus or endpoint protection — and then encrypting files when few services are running.

“Snatch threat actors have been observed purchasing previously stolen data from other ransomware variants in an attempt to further exploit victims into paying a ransom to avoid having their data released on Snatch’s extortion blog,” the FBI/CISA alert reads. It continues:

“Prior to deploying the ransomware, Snatch threat actors were observed spending up to three months on a victim’s system. Within this timeframe, Snatch threat actors exploited the victim’s network moving laterally across the victim’s network with RDP for the largest possible deployment of ransomware and searching for files and folders for data exfiltration followed by file encryption.”

New York City-based cyber intelligence firm Flashpoint said the Snatch ransomware group was created in 2018, based on Truniger’s recruitment both on Russian language cybercrime forums and public Russian programming boards. Flashpoint said Truniger recruited “pen testers” for a new, then-unnamed cybercrime group, by posting their private Jabber instant messenger contact details on multiple Russian language coding forums, as well as on Facebook.

“The command requires Windows system administrators,” Truniger’s ads explained. “Experience in backup, increase privileges, mikicatz, network. Details after contacting on jabber: truniger@xmpp[.]jp.”

In at least some of those recruitment ads — like one in 2018 on the forum sysadmins[.]ru –the username promoting Truniger’s contact information was Semen7907. In April 2020, Truniger was banned from two of the top Russian cybercrime forums, where members from both forums confirmed that Semen7907 was one of Truniger’s known aliases.

[SIDE NOTE: Truniger was banned because he purchased credentials to a company from a network access broker on the dark web, and although he promised to share a certain percentage of whatever ransom amount Truniger’s group extracted from the victim, Truniger paid the access broker just a few hundred dollars off of a six-figure ransom].

According to Constella Intelligence, a data breach and threat actor research platform, a user named Semen7907 registered in 2017 on the Russian-language programming forum pawno[.]ru using the email address tretyakov-files@yandex.ru.

That same email address was assigned to the user “Semen-7907” on the now defunct gaming website tunngle.net, which suffered a data breach in 2020. Semen-7907 registered at Tunngle from the Internet address 31.192.175[.]63, which is in Yekaterinburg, RU.

Constella reports that tretyakov-files@yandex.ru was also used to register an account at the online game stalker[.]so with the nickname Trojan7907.

There is a Skype user by the handle semen7907, and which has the name Semyon Tretyakov from Yekaterinburg, RU. Constella also found a breached record from the Russian mobile telephony site tele2[.]ru, which shows that a user from Yekaterinburg registered in 2019 with the name Semyon Sergeyvich Tretyakov and email address tretyakov-files@ya.ru.

The above accounts, as well as the email address semen_7907@mail.ru, were all registered or accessed from the same Yekaterinburg Internet address mentioned previously: 31.192.175.63. The Russian mobile phone number associated with that tele2[.]ru account is connected to the Telegram account “Perchatka,” (“glove” in Russian).

BAD BEATS

Reached via Telegram, Perchatka (a.k.a. Mr. Tretyakov) said he was not a cybercriminal, and that he currently has a full-time job working in IT at a major company (he declined to specify which).

Presented with the information gathered for this report (and more that is not published here), Mr. Tretyakov acknowledged that Semen7907 was his account on sysadmins[.]ru, the very same account Truniger used to recruit hackers for the Snatch Ransomware group back in 2018.

However, he claims that he never made those posts, and that someone else must have assumed control over his sysadmins[.]ru account and posted as him. Mr. Tretyakov said that KrebsOnSecurity’s outreach this week was the first time he became aware that his sysadmins[.]ru account was used without his permission.

Mr. Tretyakov suggested someone may have framed him, pointing to an August 2023 story at a Russian news outlet about the reported hack and leak of the user database from sysadmins[.]ru, allegedly at the hands of a pro-Ukrainian hacker group called CyberSec.

“Recently, because of the war in Ukraine, a huge number of databases have been leaked and finding information about a person is not difficult,” Tretyakov said. “I’ve been using this login since about 2013 on all the forums where I register, and I don’t always set a strong password. If I had done something illegal, I would have hidden much better :D.”

[For the record, KrebsOnSecurity does not generally find this to be the case, as the ongoing Breadcrumbs series will attest.]

A Semyon Sergeyvich Tretyakov is listed as the composer of a Russian-language rap song called “Parallels,” which seems to be about the pursuit of a high-risk lifestyle online. A snippet of the song goes:

“Someone is on the screen, someone is on the blacklist
I turn on the timer and calculate the risks
I don’t want to stay broke And in the pursuit of money
I can’t take these zeros Life is like a zebra –
everyone wants to be first Either the stripes are white,
or we’re moving through the wilds I won’t waste time.”

Mr. Tretyakov said he was not the author of that particular rhyme, but that he has been known to record his own rhythms.

“Sometimes I make bad beats,” he said. “Soundcloud.”

NEVER MIND THE DOMAIN NAME

The FBI/CISA alert on Snatch Ransomware (PDF) includes an interesting caveat: It says Snatch actually deploys ransomware on victim systems, but it also acknowledges that the current occupants of Snatch’s dark and clear web domains call themselves Snatch Team, and maintain that they are not the same people as Snatch Ransomware from 2018.

Here’s the interesting bit from the FBI/CISA report:

“Since November 2021, an extortion site operating under the name Snatch served as a clearinghouse for data exfiltrated or stolen from victim companies on Clearnet and TOR hosted by a bulletproof hosting service. In August 2023, individuals claiming to be associated with the blog gave a media interview claiming the blog was not associated with Snatch ransomware and “none of our targets has been attacked by Ransomware Snatch…”, despite multiple confirmed Snatch victims’ data appearing on the blog alongside victims associated with other ransomware groups, notably Nokoyawa and Conti.”

Avid readers will recall a story here earlier this week about Snatch Team’s leaky darknet website based in Yekaterinburg, RU that exposed their internal operations and Internet addresses of their visitors. The leaked data suggest that Snatch is one of several ransomware groups using paid ads on Google.com to trick people into installing malware disguised as popular free software, such as Microsoft Teams, Adobe Reader, Mozilla Thunderbird, and Discord.

Snatch Team claims to deal only in stolen data — not in deploying ransomware malware to hold systems hostage.

Representatives of the Snatch Team recently answered questions from Databreaches.net about the claimed discrepancy in the FBI/CISA report.

“First of all, we repeat once again that we have nothing to do with Snatch Ransomware, we are Security Notification Attachment, and we have never violated the terms of the concluded transactions, because our honesty and openness is the guarantee of our income,” the Snatch Team wrote to Databreaches.net in response to questions.

But so far the Snatch Team has not been able to explain why it is using the very same domain names that the Snatch ransomware group used?

Their claim is even more unbelievable because the Snatch Team members told Databreaches.net they didn’t even know that a ransomware group with that name already existed when they initially formed just two years ago.

This is difficult to swallow because even if they were a separate group, they’d still need to somehow coordinate the transfer of the Ransomware group’s domains on the clear and dark webs. If they were hoping for a fresh start or separation, why not just pick a new name and new web destination?

“Snatchteam[.]cc is essentially a data market,” they continued. “The only thing to underline is that we are against selling leaked information, sticking to the idea of free access. Absolutely any team can come to us and offer information for publication. Even more, we have heard rumors that a number of ransomware teams scare their clients that they will post leaked information on our resource. We do not have our own ransomware, but we are open to cooperation on placement and monetization of dates (sic).”

Maybe Snatch Team does not wish to be associated with Snatch Ransomware because they currently believe stealing data and then extorting victim companies for money is somehow less evil than infecting all of the victim’s servers and backups with ransomware.

It is also likely that Snatch Team is well aware of how poorly some of their founders covered their tracks online, and are hoping for a do-over on that front.

‘Snatch’ Ransom Group Exposes Visitor IP Addresses

The victim shaming site operated by the Snatch ransomware group is leaking data about its true online location and internal operations, as well as the Internet addresses of its visitors, KrebsOnSecurity has found. The leaked data suggest that Snatch is one of several ransomware groups using paid ads on Google.com to trick people into installing malware disguised as popular free software, such as Microsoft Teams, Adobe Reader, Mozilla Thunderbird, and Discord.

First spotted in 2018, the Snatch ransomware group has published data stolen from hundreds of organizations that refused to pay a ransom demand. Snatch publishes its stolen data at a website on the open Internet, and that content is mirrored on the Snatch team’s darknet site, which is only reachable using the global anonymity network Tor.

KrebsOnSecurity has learned that Snatch’s darknet site exposes its “server status” page, which includes information about the true Internet addresses of users accessing the website.

Refreshing this page every few seconds shows that the Snatch darknet site generates a decent amount of traffic, often attracting thousands of visitors each day. But by far the most frequent repeat visitors are coming from Internet addresses in Russia that either currently host Snatch’s clear web domain names or recently did.

Probably the most active Internet address accessing Snatch’s darknet site is 193.108.114[.]41, which is a server in Yekaterinburg, Russia that hosts several Snatch domains, including snatchteam[.]top, sntech2ch[.]top, dwhyj2[.]top and sn76930193ch[.]top. It could well be that this Internet address is showing up frequently because Snatch’s clear-web site features a toggle button at the top that lets visitors switch over to accessing the site via Tor.

Another Internet address that showed up frequently in the Snatch server status page was 194.168.175[.]226, currently assigned to Matrix Telekom in Russia. According to DomainTools.com, this address also hosts or else recently hosted the usual coterie of Snatch domains, as well as quite a few domains phishing known brands such as Amazon and Cashapp.

The Moscow Internet address 80.66.64[.]15 accessed the Snatch darknet site all day long, and that address also housed the appropriate Snatch clear-web domains. More interestingly, that address is home to multiple recent domains that appear confusingly similar to known software companies, including libreoff1ce[.]com and www-discord[.]com.

This is interesting because the phishing domains associated with the Snatch ransomware gang were all registered to the same Russian name — Mihail Kolesnikov, a name that is somewhat synonymous with recent phishing domains tied to malicious Google ads.

Kolesnikov could be a nod to a Russian general made famous during Boris Yeltsin’s reign. Either way, it’s clearly a pseudonym, but there are some other commonalities among these domains that may provide insight into how Snatch and other ransomware groups are sourcing their victims.

DomainTools says there are more than 1,300 current and former domain names registered to Mihail Kolesnikov between 2013 and July 2023. About half of the domains appear to be older websites advertising female escort services in major cities around the United States (e.g. the now-defunct pittsburghcitygirls[.]com).

The other half of the Kolesnikov websites are far more recent phishing domains mostly ending in “.top” and “.app” that appear designed to mimic the domains of major software companies, including www-citrix[.]top, www-microsofteams[.]top, www-fortinet[.]top, ibreoffice[.]top, www-docker[.]top, www-basecamp[.]top, ccleaner-cdn[.]top, adobeusa[.]top, and www.real-vnc[.]top.

In August 2023, researchers with Trustwave Spiderlabs said they encountered domains registered to Mihail Kolesnikov being used to disseminate the Rilide information stealer trojan.

But it appears multiple crime groups may be using these domains to phish people and disseminate all kinds of information-stealing malware. In February 2023, Spamhaus warned of a huge surge in malicious ads that were hijacking search results in Google.com, and being used to distribute at least five different families of information stealing trojans, including AuroraStealer, IcedID/Bokbot, Meta Stealer, RedLine Stealer and Vidar.

For example, Spamhaus said victims of these malicious ads would search for Microsoft Teams in Google.com, and the search engine would often return a paid ad spoofing Microsoft or Microsoft Teams as the first result — above all other results. The malicious ad would include a logo for Microsoft and at first glance appear to be a safe and trusted place to download the Microsoft Teams client.

However, anyone who clicked on the result was whisked away instead to mlcrosofteams-us[.]top — yet another malicious domain registered to Mr. Kolesnikov. And while visitors to this website may believe they are only downloading the Microsoft Teams client, the installer file includes a copy of the IcedID malware, which is really good at stealing passwords and authentication tokens from the victim’s web browser.

The founder of the Swiss anti-abuse website abuse.ch told Spamhaus it is likely that some cybercriminals have started to sell “malvertising as a service” on the dark web, and that there is a great deal of demand for this service.

In other words, someone appears to have built a very profitable business churning out and promoting new software-themed phishing domains and selling that as a service to other cybercriminals. Or perhaps they are simply selling any stolen data (and any corporate access) to active and hungry ransomware group affiliates.

The tip about the exposed “server status” page on the Snatch darkweb site came from @htmalgae, the same security researcher who alerted KrebsOnSecurity earlier this month that the darknet victim shaming site run by the 8Base ransomware gang was inadvertently left in development mode.

That oversight revealed not only the true Internet address of the hidden 8Base site (in Russia, naturally), but also the identity of a programmer in Moldova who apparently helped to develop the 8Base code.

@htmalgae said the idea of a ransomware group’s victim shaming site leaking data that they did not intend to expose is deliciously ironic.

“This is a criminal group that shames others for not protecting user data,” @htmalgae said. “And here they are leaking their user data.”

All of the malware mentioned in this story is designed to run on Microsoft Windows devices. But Malwarebytes recently covered the emergence of a Mac-based information stealer trojan called AtomicStealer that was being advertised through malicious Google ads and domains that were confusingly similar to software brands.

Please be extra careful when you are searching online for popular software titles. Cracked, pirated copies of major software titles are a frequent source of infostealer infections, as are these rogue ads masquerading as search results. Make sure to double-check you are actually at the domain you believe you’re visiting *before* you download and install anything.

Stay tuned for Part II of this post, which includes a closer look at the Snatch ransomware group and their founder.

Further reading:

@HTMalgae’s list of the top Internet addresses seen accessing Snatch’s darknet site

Ars Technica: Until Further Notice Think Twice Before Using Google to Download Software

Bleeping Computer: Hackers Abuse Google Ads to Spread Malware in Legit Software

Who’s Behind the 8Base Ransomware Website?

The victim shaming website operated by the cybercriminals behind 8Base — currently one of the more active ransomware groups — was until earlier today leaking quite a bit of information that the crime group probably did not intend to be made public. The leaked data suggests that at least some of website’s code was written by a 36-year-old programmer residing in the capital city of Moldova.

8Base maintains a darknet website that is only reachable via Tor, a freely available global anonymity network. The site lists hundreds of victim organizations and companies — all allegedly hacking victims that refused to pay a ransom to keep their stolen data from being published.

The 8Base darknet site also has a built-in chat feature, presumably so that 8Base victims can communicate and negotiate with their extortionists. This chat feature, which runs on the Laravel web application framework, works fine as long as you are *sending* information to the site (i.e., by making a “POST” request).

However, if one were to try to fetch data from the same chat service (i.e., by making a “GET” request), the website until quite recently generated an extremely verbose error message:

That error page revealed the true Internet address of the Tor hidden service that houses the 8Base website: 95.216.51[.]74, which according to DomainTools.com is a server in Finland that is tied to the Germany-based hosting giant Hetzner.

But that’s not the interesting part: Scrolling down the lengthy error message, we can see a link to a private Gitlab server called Jcube-group: gitlab[.]com/jcube-group/clients/apex/8base-v2. Digging further into this Gitlab account, we can find some curious data points available in the JCube Group’s public code repository.

For example, this “status.php” page, which was committed to JCube Group’s Gitlab repository roughly one month ago, includes code that makes several mentions of the term “KYC” (e.g. KYC_UNVERIFIED, KYC_VERIFIED, and KYC_PENDING).

This is curious because a FAQ on the 8Base darknet site includes a section on “special offers for journalists and reporters,” which says the crime group is open to interviews but that journalists will need to prove their identity before any interview can take place. The 8base FAQ refers to this vetting process as “KYC,” which typically stands for “Know Your Customer.”

“We highly respect the work of journalists and consider information to be our priority,” the 8Base FAQ reads. “We have a special program for journalists which includes sharing information a few hours or even days before it is officially published on our news website and Telegram channel: you would need to go through a KYC procedure to apply. Journalists and reporters can contact us via our PR Telegram channel with any questions.”

The 8Base darknet site also has a publicly accessible “admin” login page, which features an image of a commercial passenger plane parked at what appears to be an airport. Next to the airplane photo is a message that reads, “Welcome to 8Base. Admin Login to 8Base dashboard.”

Right-clicking on the 8Base admin page and selecting “View Source” produces the page’s HTML code. That code is virtually identical to a “login.blade.php” page that was authored and committed to JCube Group’s Gitlab repository roughly three weeks ago.

It appears the person responsible for the JCube Group’s code is a 36-year-old developer from Chisinau, Moldova named Andrei Kolev. Mr. Kolev’s LinkedIn page says he’s a full-stack developer at JCube Group, and that he’s currently looking for work. The homepage for Jcubegroup[.]com lists an address and phone number that Moldovan business records confirm is tied to Mr. Kolev.

The posts on the Twitter account for Mr. Kolev (@andrewkolev) are all written in Russian, and reference several now-defunct online businesses, including pluginspro[.]ru.

Reached for comment via LinkedIn, Mr. Kolev said he had no idea why the 8Base darknet site was pulling code from the “clients” directory of his private JCube Group Gitlab repository, or how the 8Base name was even included.

“I [don’t have] a clue, I don’t have that project in my repo,” Kolev explained. “They [aren’t] my clients. Actually we currently have just our own projects.”

Mr. Kolev shared a screenshot of his current projects, but very quickly after that deleted it. However, KrebsOnSecurity captured a copy of the image before it was removed:

Within minutes of explaining why I was reaching out to Mr. Kolev and walking him through the process of finding this connection, the 8Base website was changed, and the error message that linked to the JCube Group private Gitlab repository no longer appeared. Instead, trying the same “GET” method described above caused the 8Base website to return a “405 Method Not Allowed” error page:

Mr. Kolev claimed he didn’t know anything about the now-removed error page on 8Base’s site that referenced his private Gitlab repo, and said he deleted the screenshot from our LinkedIn chat because it contained private information.

Ransomware groups are known to remotely hire developers for specific projects without disclosing exactly who they are or how the new hire’s code is intended to be used, and it is possible that one of Mr. Kolev’s clients is merely a front for 8Base. But despite 8Base’s statement that they are happy to correspond with journalists, KrebsOnSecurity is still waiting for a reply from the group via their Telegram channel.

The tip about the leaky 8Base website was provided by a reader who asked to remain anonymous. That reader, a legitimate security professional and researcher who goes by the handle @htmalgae on Twitter, said it is likely that whoever developed the 8Base website inadvertently left it in “development mode,” which is what caused the site to be so verbose with its error messages.

“If 8Base was running the app in production mode instead of development mode, this Tor de-anonymization would have never been possible,” @htmalgae said.

A recent blog post from VMware/Carbon Black called the 8Base ransomware group “a heavy hitter” that has remained relatively unknown despite the massive spike in activity in Summer of 2023.

“8Base is a Ransomware group that has been active since March 2022 with a significant spike in activity in June of 2023,” Carbon Black researchers wrote. “Describing themselves as ‘simple pen testers,’ their leak site provided victim details through Frequently Asked Questions and Rules sections as well as multiple ways to contact them. ”

According to VMware, what’s particularly interesting about 8Base’s communication style is the use of verbiage that is strikingly familiar to another known cybercriminal group: RansomHouse.

“The group utilizes encryption paired with ‘name-and-shame’ techniques to compel their victims to pay their ransoms,” VMware researchers wrote. “8Base has an opportunistic pattern of compromise with recent victims spanning across varied industries. Despite the high amount of compromises, the information regarding identities, methodology, and underlying motivation behind these incidents still remains a mystery.”

Update, Sept. 21, 10:43 a.m. ET: The author of Databreaches.net was lurking in the 8Base Telegram channel when I popped in to ask the crime group a question, and reports that 8Base did eventually reply: ““hi at the moment we r not doing interviews. we have nothing to say. we r a little busy.”

Karma Catches Up to Global Phishing Service 16Shop

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

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

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

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

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

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

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

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

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

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

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

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

RIZKY BUSINESS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LeakedSource Owner Quit Ashley Madison a Month Before 2015 Hack

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

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

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

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

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

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

A GREY MARKET

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

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

“Greetings Noel,

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

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

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

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

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

COME, ABUSE WITH US

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

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

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

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

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

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

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

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

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

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

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

AGENTJAGS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

INTERVIEW WITH BLOOM

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Top Suspect in 2015 Ashley Madison Hack Committed Suicide in 2014

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

[This is Part II of a story published here last week on reporting that went into a new Hulu documentary series on the 2015 Ashley Madison hack.]

It was around 9 p.m. on Sunday, July 19, when I received a message through the contact form on KrebsOnSecurity.com that the marital infidelity website AshleyMadison.com had been hacked. The message contained links to confidential Ashley Madison documents, and included a manifesto that said a hacker group calling itself the Impact Team was prepared to leak data on all 37 million users unless Ashley Madison and a sister property voluntarily closed down within 30 days.

The message included links to files containing highly sensitive information, including snippets of leaked user account data, maps of internal AshleyMadison company servers, employee network account information, company bank account data and salary information.

A master employee contact list was among the documents leaked that evening. Helpfully, it included the cell phone number for Noel Biderman, then the CEO of Ashley Madison parent firm Avid Life Media (ALM). To my everlasting surprise, Biderman answered on the first ring and acknowledged they’d been hacked without even waiting to be asked.

“We’re on the doorstep of [confirming] who we believe is the culprit, and unfortunately that may have triggered this mass publication,” Biderman told me on July 19, just minutes before I published the first known public report about the breach. “I’ve got their profile right in front of me, all their work credentials. It was definitely a person here that was not an employee but certainly had touched our technical services.”

On Aug 18, 2015, the Impact Team posted a “Time’s up!” message online, along with links to 60 gigabytes of Ashley Madison user data. The data leak led to the public shaming and extortion of many Ashley Madison users, and to at least two suicides. Many other users lost their jobs or their marriages. To this day, nobody has been charged in the hack, and incredibly Ashley Madison remains a thriving company.

THE CHAOS MAKER

The former employee that Biderman undoubtedly had in mind on July 19, 2015 was William Brewster Harrison, a self-described expert in search engine optimization (SEO) tricks that are designed to help websites increase their rankings for various keywords in Google and other search engines.

It is evident that Harrison was Biderman’s top suspect immediately after the breach became public because — in addition to releasing data on 37 million users a month later in August 2015 — the hackers also dumped three years worth of email they stole from Biderman. And Biderman’s inbox is full of messages about hate-filled personal attacks from Harrison.

A Native of Northern Virginia, Harrison eventually settled in North Carolina, had a son with his then-wife, and started a fence-building business. ALM hired Harrison in March 2010 to promote its various adult brands online, and it is clear that one of his roles was creating and maintaining female profiles on Ashley Madison, and creating blogs that were made to look like they were written by women who’d just joined Ashley Madison.

It appears Harrison was working as an affiliate of Ashley Madison prior to his official employment with the company, which suggests that Harrison had already demonstrated he could drive signups to the service and help improve its standing in the search engine rankings.

What is less clear is whether anyone at ALM ever performed a basic background check on Harrison before hiring him. Because if they had, the results almost certainly would have given them pause. Virginia prosecutors charged the young 20-something Harrison with a series of misdemeanors, including trespassing, unlawful entry, drunk in public, and making obscene phone calls.

In 2008, North Carolina authorities charged Harrison with criminal extortion, a case that was transferred to South Carolina before ultimately being dismissed. In December 2009, Harrison faced charges of false imprisonment, charges that were also dropped by the local district attorney.

By the time Ashley Madison officially hired him, Harrison’s life was falling apart. His fence business had failed, and he’d just filed for bankruptcy. Also, his marriage had soured, and after a new arrest for driving under the influence, he was in danger of getting divorced, losing access to his son, and/or going to jail.

It also seems likely that nobody at ALM bothered to look at the dozens of domain names registered to Harrison’s various Vistomail.com email addresses, because had they done so they likely would have noticed two things.

One is that Harrison had a history of creating websites to lambaste companies he didn’t like, or that he believed had slighted him or his family in some way. Some of these websites included content that defamed and doxed executives, such as bash-a-business[.]com, google-your-business[.]com, contact-a-ceo[.]com, lowes-is-a-cancer[.]com (according to Harrison, the home improvement chain once employed his wife).

A background check on Harrison’s online footprint also would have revealed he was a self-styled rapper who claimed to be an active menace to corporate America. Harrison’s website lyrical-gangsta[.]com included a number of works, such as “Slim Thug — I Run — Remix Spoof,” which are replete with menacing words for unnamed corporate executives:

[HOOK]
I surf the net all night n day (the web love thug)
cuz I still surf the net all night n day
yuhh I type for my mind, got smart for my ego
still running circles round them, what’s good?
cuz I still surf, the net all night n day,
I cant stay away.

They don’t make to [sic] many hackers like me
bonafide hustler certified G
still pumpin’ the TOP 10 results
if you got the right dough!
think the results are fake? sucka Google ME
smarter than executives, bigger then Wal-Mart
Nelly strugglin’ with the fact that I’m #1 NOW
street boys know me, ain’t nuttin’ new
about to make my mill, with an all new crew
I-95 execs don’t know what to do, or where to go
watchin them stocks evaporate all their dough
I already left the hood, got up off the streets
its in my blood im a gangsta till Im deceased

moving lumber for money or typin’ in a zone
all night hackin’ till 6 in the mornin
that shit im focusin’ on, stronger then cologne
you can prolly smell the jealousy
through your LCD screen
if you still broke– better work for some green
called them Fortune execs on that legal bluff
cuz the Feds busy raidin other stuff
Imma run the Net til im six feet under
I’m a leave my mark — no reason to wonder
(Yea Yea)

The same theme appears in another rap (“The Hacker Backstage”) penned by Harrison’s rapper alter ego — “Chaos Dog:”

…this hacker was born to write
bust off the rhymes and watch em take flight
you know all about them corporate jets
and handing out pinkslips without regrets
oversized companies are the problem

well, I’ve got a solution
It’s called good ol’ fashioned retribution
file bankruptcy, boycott you like Boston colonists
Corporate America cant stop this Eminem style columnist
2pac would have honored my style
Im the next generation of hacker inspiration
Americans don’t want a corporate nation
All that DOW Jones shit is a dying sensation

In addition to pimping Ashley Madison with fake profiles and phony user blogs, it appears Harrison also went after the company’s enemies during the brief time he was an employee. As noted in Part I of this story, Harrison used multiple pseudonymous Vistomail.com email addresses to harass the owners of AshleyMadisonSucks[.]com into selling or shutting down the site.

When the owner of AshleyMadisonSucks[.]com refused to sell the domain, he and his then-girlfriend were subject to an unrelenting campaign of online harassment and blackmail. It now appears those attacks were perpetrated by Harrison, who sent emails from different accounts at the free email service Vistomail pretending to be the domain owner, his then-girlfriend and their friends. Harrison even went after the domain owner’s lawyer and wife, listing them both on his Contact-A-CEO[.]com website.

TURNABOUT IS FAIR PLAY

Things started going sideways for Ashley Madison when Harrison’s employment contract was terminated in November 2011. The leaked emails do not explain why Harrison was fired, but his mercurial temperament likely played a major role. According to Harrison, it was because he had expressed some moral reservations with certain aspects of his duties, although he was not specific on that point and none of this could be confirmed.

Shortly after Harrison was fired, the company’s executives began noticing that Google was auto-completing the words “Jew” and “Jewish” whenever someone searched for Biderman’s name. The results returned when one accepted Google’s recommended search at the time filled the first page with links to Stormfront, a far-right, neo-Nazi hate group. The company strongly suspected someone was using underhanded SEO techniques to slander and attack its CEO.

In July 2022, KrebsOnSecurity published a retrospective on the 2015 Ashley Madison breach which found that Biderman had become the subject of increasing ire from members of Stormfront and other extremists groups in the years leading up to the hack. According to the neo-Nazi groups, Biderman was a worthy target of their harassment not just because he was a successful Jewish CEO, but also because his company was hellbent on destroying Christian morals and families.

Biderman’s leaked emails show that in February 2012 he hired Brian Cuban — the attorney brother of Mark Cuban, the owner of the Dallas Mavericks and one the main “sharks” on the ABC reality television series Shark Tank. Through Cuban, Ashley Madison appealed their case to both Google and to the Anti-Defamation League, but neither was apparently able or willing to help.

Also in early January 2012, Biderman and other Ashley Madison executives found themselves inundated with anonymous Vistomail.com emails that were replete with profanity and slurs against Jews. Although he used fake names and email addresses, Harrison made little effort to hide his identity in several of these nastygrams.

One particularly ugly message from Harrison even included a link to a Youtube video he’d put online of his young son playing basketball for a school team. That Youtube video was included in an email wherein Harrison – then separated from his wife — lamented all the hours he spent working for Ashley Madison up in Canada instead of spending time with his son.

Harrison then turned to making threatening phone calls to Ashley Madison executives. In one incident in March 2012, Harrison called the company’s former director of Human Resources using a caller ID spoofing service to make it look like he was calling from inside the building.

ALM’s lawyers contacted the Toronto police in response to Harrison’s harassment.

“For Will to have disguised his phone number as Mark’s strongly suggest he has hacked my email, legal counsel for the opposing side in a perceived legal dispute,” ALM VP and general counsel Mike Dacks wrote in a letter to a detective at the Toronto Police. “Over the months of his many hundreds of emails he alluded a number of times to undertaking cyberattacks against us and this was noted in my original report to police.”

Based on the exchanges in Bidernman’s inbox it appears those appeals to the Toronto authorities were successful in having Harrison barred from being able to enter Canada.

ALM also contacted a detective in Harrison’s home county in North Carolina. But when the local police paid a visit to Harrison’s home to follow up on the harassment complaints, Harrison fled out his back porch, injuring himself after jumping off the second-story deck.

It is unclear if the police ever succeeded in interviewing Harrison in response to the harassment complaints from ALM. The Raleigh police officer contacted by ALM did not respond to requests for information. But the visit from the local cops only seemed to embolden and anger Harrison even more, and Biderman’s emails indicate the harassment continued after this incident.

HUMAN DECOYS

Then in August 2012, the former sex worker turned blogger and activist Maggie McNeill published screenshots from an internal system that Ashley Madison used called the “Human Decoy Interface,” which was a fancy way of describing a system built to manage phony female accounts on the service.

The screenshots appeared to show that a great many female accounts were in fact bots designed to bring in paying customers. Ashley Madison was always free to join, but users had to pay if they wished to chat directly with other users.

Although Harrison had been fired nearly a year earlier, Biderman’s leaked emails show that Harrison’s access to Ashley Madison’s internal tools wasn’t revoked until after the screenshots were posted online and the company began reviewing which employee accounts had access to the Human Decoy Interface.

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

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

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

TRUTH BOMBS

Biderman’s leaked emails suggest that Harrison stopped his harassment campaign sometime after 2012. A decade later, KrebsOnSecurity sought to track down and interview Harrison. Finding nobody at his former addresses and phone numbers in North Carolina, KrebsOnSecurity wound up speaking with Will’s stepmother, who lives with Will’s dad in Northern Virginia and asked that her name not be used in this story.

Will’s stepmom quickly dropped two big truth bombs after patiently listening to my spiel about why I was calling and looking for Mr. Harrison. The first was that Will was brought up Jewish, although he did not practice the faith: A local rabbi and friend of the family gave the service at Will’s funeral in 2014.

She also shared that her stepson had killed himself in 2014, shooting himself in the head with a handgun. Will’s mother discovered his body.

“Will committed suicide in March 2014,” Will’s stepmother shared. “I’ve heard all those stories you just mentioned. Will was severely mentally ill. He was probably as close to a sociopath as I can imagine anyone being. He was also a paranoid schizophrenic who wouldn’t take his medication.”

William B. Harrison died on March 5, 2014, nearly 16 months before The Impact Team announced they’d hacked Ashley Madison.

Will’s stepmom said she constantly felt physically threatened when Will was around. But she had trouble believing that her stepson was a raging anti-Semite. She also said she thought the timing of Will’s suicide effectively ruled him out as a suspect in the 2015 Ashley Madison hack.

“Considering the date of death, I’m not sure if he’s your guy,” she offered toward the end of our conversation.

[There is one silver lining to Will Harrison’s otherwise sad tale: His widow has since remarried, and her new husband agreed to adopt their son as his own.]

ANALYSIS

Does Harrison’s untimely death rule him out as a suspect, as his stepmom suggested? This remains an open question. In a parting email to Biderman in late 2012, Harrison signed his real name and said he was leaving, but not going away.

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

Nothing in the leaked Biderman emails suggests that Ashley Madison did much to revamp the security of its computer systems in the wake of Harrison’s departure and subsequent campaign of harassment — apart from removing an administrator account of his a year after he’d already left the company.

KrebsOnSecurity found nothing in Harrison’s extensive domain history suggesting he had any real malicious hacking skills. But given the clientele that typically employed his skills — the adult entertainment industry — it seems likely Harrison was at least conversant in the dark arts of “Black SEO,” which involves using underhanded or else downright illegal methods to game search engine results.

Armed with such experience, it would not have been difficult for Harrison to have worked out a way to maintain access to working administrator accounts at Ashley Madison. If that in fact did happen, it would have been trivial for him to sell or give those credentials to someone else.

Or to something else. Like Nazi groups. As KrebsOnSecurity reported last year, in the six months leading up to the July 2015 hack, Ashley Madison and Biderman became a frequent subject of derision across multiple neo-Nazi websites.

On Jan. 14, 2015, a member of the neo-Nazi forum Stormfront posted a lively thread about Ashley Madison in the general discussion area titled, “Jewish owned dating website promoting adultery.”

On July 3, 2015, Andrew Anglin, the editor of the alt-right publication Daily Stormer, posted excerpts about Biderman from a story titled, “Jewish Hyper-Sexualization of Western Culture,” which referred to Biderman as the “Jewish King of Infidelity.”

On July 10, a mocking montage of Biderman photos with racist captions was posted to the extremist website Vanguard News Network, as part of a thread called “Jews normalize sexual perversion.”

Some readers have suggested that the data leaked by the Impact Team could have originally been stolen by Harrison. But that timeline does not add up given what we know about the hack. For one thing, the financial transaction records leaked from Ashley Madison show charges up until mid-2015. Also, the final message in the archive of Biderman’s stolen emails was dated July 7, 2015 — almost two weeks before the Impact Team would announce their hack.

Whoever hacked Ashley Madison clearly wanted to disrupt the company as a business, and disgrace its CEO as the endgame. The Impact Team’s intrusion struck just as Ashley Madison’s parent was preparing go public with an initial public offering (IPO) for investors. Also, the hackers stated that while they stole all employee emails, they were only interested in leaking Biderman’s.

Also, the Impact Team had to know that ALM would never comply with their demands to dismantle Ashley Madison and Established Men. In 2014, ALM reported revenues of $115 million. There was little chance the company was going to shut down some of its biggest money machines.

Hence, it appears the Impact Team’s goal all along was to create prodigious amounts of drama and tension by announcing the hack of a major cheating website, and then let that drama play out over the next few months as millions of exposed Ashley Madison users freaked out and became the targets of extortion attacks and public shaming.

After the Impact Team released Biderman’s email archives, several media outlets pounced on salacious exchanges in those messages as supposed proof he had carried on multiple affairs. Biderman resigned as CEO of Ashley Madison on Aug. 28, 2015.

Complicating things further, it appears more than one malicious party may have gained access to Ashley’s Madison’s network in 2015 or possibly earlier. Cyber intelligence firm Intel 471 recorded a series of posts by a user with the handle “Brutium” on the Russian-language cybercrime forum Antichat between 2014 and 2016.

Brutium routinely advertised the sale of large, hacked databases, and on Jan. 24, 2015, this user posted a thread offering to sell data on 32 million Ashley Madison users. However, there is no indication whether anyone purchased the information. Brutium’s profile has since been removed from the Antichat forum.

I realize this ending may be unsatisfying for many readers, as it is for me. The story I wrote in 2015 about the Ashley Madison hack is still the biggest scoop I’ve published here (in terms of traffic), yet it remains perhaps the single most frustrating investigation I’ve ever pursued. But my hunch is that there is still more to this story that has yet to unfold.

Russian Cybersecurity Executive Arrested for Alleged Role in 2012 Megahacks

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why Malware Crypting Services Deserve More Scrutiny

If you operate a cybercrime business that relies on disseminating malicious software, you probably also spend a good deal of time trying to disguise or “crypt” your malware so that it appears benign to antivirus and security products. In fact, the process of “crypting” malware is sufficiently complex and time-consuming that most serious cybercrooks will outsource this critical function to a handful of trusted third parties. This story explores the history and identity behind Cryptor[.]biz, a long-running crypting service that is trusted by some of the biggest names in cybercrime.

Virtually all malware that is deployed for use in data stealing at some point needs to be crypted. This highly technical, laborious process involves iteratively altering the appearance and behavior of a malicious file until it no longer sets off alarm bells when scanned by different antivirus tools.

Experienced malware purveyors understand that if they’re not continuously crypting their malware before sending it out, then a lot more of whatever digital disease they are trying to spread is going to get flagged by security tools. In short, if you are running a cybercrime enterprise and you’re not equipped to handle this crypting process yourself, you probably need to pay someone else to do it for you.

Thanks to the high demand for reliable crypting services, there are countless cybercriminals who’ve hung out their shingles as crypting service providers. However, most of these people do not appear to be very good at what they do, because most are soon out of business.

One standout is Cryptor[.]biz. This service is actually recommended by the purveyors of the RedLine information stealer malware, which is a popular and powerful malware kit that specializes in stealing victim data and is often used to lay the groundwork for ransomware attacks. Cryptor[.]biz also has been recommended to customers of the Vidar information stealer malware family (via the malware’s Telegram support channels).

WHO RUNS CRYPTOR[.]BIZ?

As good as Cryptor[.]biz may be at obfuscating malware, its proprietor does not appear to have done a great job covering his own tracks. The registration records for the website Cryptor[.]biz are hidden behind privacy protection services, but the site’s homepage says potential customers should register by visiting the domain crypt[.]guru, or by sending a Jabber instant message to the address “masscrypt@exploit.im.”

Crypt[.]guru’s registration records also are hidden, yet passive domain name system (DNS) records for both cryptor[.]biz and crypt[.]guru show that in 2018 the domains were forwarding incoming email to the address obelisk57@gmail.com.

Cyber intelligence firm Intel 471 reports that obelisk57@gmail.com was used to register an account on the forum Blacksoftware under the nickname “Kerens.” Meanwhile, the Jabber address masscrypt@exploit.im has been associated with the user Kerens on the Russian hacking forum Exploit from 2011 to the present day.

The very first post by Kerens on Exploit in 2011 was a negative review of a popular crypting service that predated Cryptor[.]biz called VIP Crypt, which Kerens accused of being “shitty” and unreliable. But Intel 471 finds that after his critical review of VIP Crypt, Kerens did not post publicly on Exploit again for another four years until October 2016, when they suddenly began advertising Cryptor[.]biz.

Intel 471 found that Kerens used the email address pepyak@gmail.com, which also was used to register Kerens accounts on the Russian language hacking forums Verified and Damagelab.

Ironically, Verified has itself been hacked multiple times over the years, with its private messages and user registration details leaked online. Those records indicate the user Kerens registered on Verified in March 2009 from an Internet address in Novosibirsk, a city in the southern Siberian region of Russia.

In 2010, someone with the username Pepyak on the Russian language affiliate forum GoFuckBiz[.]com shared that they typically split their time during the year between living in Siberia (during the milder months) and Thailand (when Novosibirsk is typically -15 °C/°5F).

For example, in one conversation about the best car to buy for navigating shoddy roads, Pepyak declared, “We have shitty roads in Siberia.” In January 2010, Pepyak asked the GoFuckBiz community where one might find a good USB-based modem in Phuket, Thailand.

DomainTools.com says the email address pepyak@gmail.com was used to register 28 domain names over the years, including a now-defunct Russian automobile sales website called “autodoska[.]biz.” DomainTools shows this website was registered in 2008 to a Yuri Churnov from Sevastpol, Crimea (prior to Russia’s annexation of Crimea in 2014, the peninsula was part of Ukraine).

The WHOIS records for autodoska[.]biz were changed in 2010 to Sergey Purtov (pepyak@gmail.com) from Yurga, a town in Russia’s Kemerovo Oblast, which is a relatively populous area in Western Siberia that is adjacent to Novosibirsk.

Many of the 28 domains registered to pepyak@gmail.com have another email address in their registration records: unforgiven57@mail.ru. According to DomainTools, the Unforgiven email address was used to register roughly a dozen domains, including three that were originally registered to Keren’s email address — pepyak@gmail.com (e.g., antivirusxp09[.]com).

One of the domains registered in 2006 to the address unforgiven57@mail.ru was thelib[.]ru, which for many years was a place to download pirated e-books. DomainTools says thelib[.]ru was originally registered to a Sergey U Purtov.

Most of the two-dozen domains registered to pepyak@gmail.com shared a server at one point with a small number of other domains, including mobile-soft[.]su, which was registered to the email address spurtov@gmail.com.

CDEK, an express delivery company based in Novosibirsk, was apparently hacked at some point because cyber intelligence firm Constella Intelligence found that its database shows the email address spurtov@gmail.com was assigned to a Sergey Yurievich Purtov (Сергей Юрьевич Пуртов).

DomainTools says the same phone number in the registration records for autodoska[.]biz (+7.9235059268) was used to secure two other domains — bile[.]ru and thelibrary[.]ru, both of which were registered to a Sergey Y Purtov.

A search on the phone number 79235059268 in Skype reveals these digits belong to a “Sergey” from Novosibirsk with the now-familiar username  — Pepyak.

Bringing things full circle, Constella Intelligence shows that various online accounts tied to the email address unforgiven57@mail.ru frequently relied on the somewhat unique password, “plk139t51z.” Constella says that same password was used for just a handful of other email addresses, including gumboldt@gmail.com.

Hacked customer records from CDEK show gumboldt@gmail.com was tied to a customer named Sergey Yurievich Purtov. DomainTools found that virtually all of the 15 domain names registered to gumboldt@gmail.com (including the aforementioned mobile-soft[.]su) were at one point registered to spurtov@gmail.com.

Intel 471 reports that gumboldt@gmail.com was used in 2009 to register a user by the nickname “Kolumb” on the Russian hacking forum Antichat. From Kolumb’s posts on Antichat, it seems this user was mostly interested in buying access to compromised computers inside of Russia.

Then in December 2009, Kolumb said they were in desperate need of a reliable crypting service or full-time cryptor.

“We need a person who will crypt software every day, sometimes even a couple of times a day,” Kolumb wrote on Antichat.

Mr. Purtov did not respond to requests for comment sent to any of the email addresses referenced in this report. Mail.ru responded that the email address spurtov@mail.ru is no longer active.

ANALYSIS

As KrebsOnSecurity opined on Mastodon earlier this week, it makes a lot of sense for cybersecurity researchers and law enforcement alike to focus attention on the top players in the crypting space — for several reasons. Most critically, the cybercriminals offering time-tested crypting services also tend to be among the most experienced and connected malicious coders on the planet.

Think of it this way: By definition, a crypting service scans and examines all types of malware before those new nasties are first set loose in the wild. This fact alone should make these criminal enterprises a primary target of cybersecurity firms looking to gain more timely intelligence about new malware.

Also, a review of countless posts and private messages from Pepyak and other crypting providers shows that a successful crypting service will have direct and frequent contact with some of the world’s most advanced malware authors.

In short, infiltrating or disrupting a trusted crypting service can be an excellent way to slow down or even sideline a large number of cybercrime operations all at once.

Further reading on the crypting industry:

This Service Helps Malware Authors Fix Flaws in Their Code
Antivirus is Dead: Long Live Antivirus!

Ask Fitis, the Bear: Real Crooks Sign Their Malware

Code-signing certificates are supposed to help authenticate the identity of software publishers, and provide cryptographic assurance that a signed piece of software has not been altered or tampered with. Both of these qualities make stolen or ill-gotten code-signing certificates attractive to cybercriminal groups, who prize their ability to add stealth and longevity to malicious software. This post is a deep dive on “Megatraffer,” a veteran Russian hacker who has practically cornered the underground market for malware focused code-signing certificates since 2015.

A review of Megatraffer’s posts on Russian crime forums shows this user began peddling individual stolen code-signing certs in 2015 on the Russian-language forum Exploit, and soon expanded to selling certificates for cryptographically signing applications and files designed to run in Microsoft Windows, Java, Adobe AIR, Mac and Microsoft Office.

Megatraffer explained that malware purveyors need a certificate because many antivirus products will be far more interested in unsigned software, and because signed files downloaded from the Internet don’t tend to get blocked by security features built into modern web browsers. Additionally, newer versions of Microsoft Windows will complain with a bright yellow or red alert message if users try to install a program that is not signed.

“Why do I need a certificate?” Megatraffer asked rhetorically in their Jan. 2016 sales thread on Exploit. “Antivirus software trusts signed programs more. For some types of software, a digital signature is mandatory.”

At the time, Megatraffer was selling unique code-signing certificates for $700 apiece, and charging more than twice that amount ($1,900) for an “extended validation” or EV code-signing cert, which is supposed to only come with additional identity vetting of the certificate holder. According to Megatraffer, EV certificates were a “must-have” if you wanted to sign malicious software or hardware drivers that would reliably work in newer Windows operating systems.

Megatraffer has continued to offer their code-signing services across more than a half-dozen other Russian-language cybercrime forums, mostly in the form of sporadically available EV and non-EV code-signing certificates from major vendors like Thawte and Comodo.

More recently, it appears Megatraffer has been working with ransomware groups to help improve the stealth of their malware. Shortly after Russia invaded Ukraine in February 2022, someone leaked several years of internal chat logs from the Conti ransomware gang, and those logs show Megatraffer was working with the group to help code-sign their malware between July and October 2020.

WHO IS MEGATRAFFER?

According to cyber intelligence firm Intel 471, Megatraffer has been active on more than a half-dozen crime forums from September 2009 to the present day. And on most of these identities, Megatraffer has used the email address 774748@gmail.com. That same email address also is tied to two forum accounts for a user with the handle “O.R.Z.”

Constella Intelligence, a company that tracks exposed databases, finds that 774748@gmail.com was used in connection with just a handful of passwords, but most frequently the password “featar24“. Pivoting off of that password reveals a handful of email addresses, including akafitis@gmail.com.

Intel 471 shows akafitis@gmail.com was used to register another O.R.Z. user account — this one on Verified[.]ru in 2008. Prior to that, akafitis@gmail.com was used as the email address for the account “Fitis,” which was active on Exploit between September 2006 and May 2007. Constella found the password “featar24” also was used in conjunction with the email address spampage@yandex.ru, which is tied to yet another O.R.Z. account on Carder[.]su from 2008.

The email address akafitis@gmail.com was used to create a Livejournal blog profile named Fitis that has a large bear as its avatar. In November 2009, Fitis wrote, “I am the perfect criminal. My fingerprints change beyond recognition every few days. At least my laptop is sure of it.”

Fitis’s real-life identity was exposed in 2010 after two of the biggest sponsors of pharmaceutical spam went to war with each other, and large volumes of internal documents, emails and chat records seized from both spam empires were leaked to this author. That protracted and public conflict formed the backdrop of my 2014 book — “Spam Nation: The Inside Story of Organized Cybercrime, from Global Epidemic to Your Front Door.”

One of the leaked documents included a Microsoft Excel spreadsheet containing the real names, addresses, phone numbers, emails, street addresses and WebMoney addresses for dozens of top earners in Spamit — at the time the most successful pharmaceutical spam affiliate program in the Russian hacking scene and one that employed most of the top Russian botmasters.

That document shows Fitis was one of Spamit’s most prolific recruiters, bringing more than 75 affiliates to the Spamit program over several years prior to its implosion in 2010 (and earning commissions on any future sales from all 75 affiliates).

The document also says Fitis got paid using a WebMoney account that was created when its owner presented a valid Russian passport for a Konstantin Evgenievich Fetisov, born Nov. 16, 1982 and residing in Moscow. Russian motor vehicle records show two different vehicles are registered to this person at the same Moscow address.

The most interesting domain name registered to the email address spampage@yahoo.com, fittingly enough, is fitis[.]ru, which DomainTools.com says was registered in 2005 to a Konstantin E. Fetisov from Moscow.

The Wayback Machine at archive.org has a handful of mostly blank pages indexed for fitis[.]ru in its early years, but for a brief period in 2007 it appears this website was inadvertently exposing all of its file directories to the Internet.

One of the exposed files — Glavmed.html — is a general invitation to the infamous Glavmed pharmacy affiliate program, a now-defunct scheme that paid tens of millions of dollars to affiliates who advertised online pill shops mainly by hacking websites and manipulating search engine results. Glavmed was operated by the same Russian cybercriminals who ran the Spamit program.

Archive.org shows the fitis[.]ru webpage with the Glavmed invitation was continuously updated with new invite codes. In their message to would-be Glavmed affiliates, the program administrator asked applicants to contact them at the ICQ number 165540027, which Intel 471 found was an instant messenger address previously used by Fitis on Exploit.

The exposed files in the archived version of fitis[.]ru include source code for malicious software, lists of compromised websites used for pharmacy spam, and a handful of what are apparently personal files and photos. Among the photos is a 2007 image labeled merely “fitis.jpg,” which shows a bespectacled, bearded young man with a ponytail standing next to what appears to be a newly-married couple at a wedding ceremony.

Mr. Fetisov did not respond to requests for comment.

As a veteran organizer of affiliate programs, Fitis did not waste much time building a new moneymaking collective after Spamit closed up shop. New York City-based cyber intelligence firm Flashpoint found that Megatraffer’s ICQ was the contact number for Himba[.]ru, a cost-per-acquisition (CPA) program launched in 2012 that paid handsomely for completed application forms tied to a variety of financial instruments, including consumer credit cards, insurance policies, and loans.

“Megatraffer’s entrenched presence on cybercrime forums strongly suggests that malicious means are used to source at least a portion of traffic delivered to HIMBA’s advertisers,” Flashpoint observed in a threat report on the actor.

Intel 471 finds that Himba was an active affiliate program until around May 2019, when it stopping paying its associates.

Flashpoint notes that in September 2015, Megatraffer posted a job ad on Exploit seeking experienced coders to work on browser plugins, installers and “loaders” — basically remote access trojans (RATs) that establish communication between the attacker and a compromised system.

“The actor specified that he is looking for full-time, onsite help either in his Moscow or Kiev locations,” Flashpoint wrote.

Interview With a Crypto Scam Investment Spammer

Social networks are constantly battling inauthentic bot accounts that send direct messages to users promoting scam cryptocurrency investment platforms. What follows is an interview with a Russian hacker responsible for a series of aggressive crypto spam campaigns that recently prompted several large Mastodon communities to temporarily halt new registrations. According to the hacker, their spam software has been in private use until the last few weeks, when it was released as open source code.

Renaud Chaput is a freelance programmer working on modernizing and scaling the Mastodon project infrastructure — including joinmastodon.org, mastodon.online, and mastodon.social. Chaput said that on May 4, 2023, someone unleashed a spam torrent targeting users on these Mastodon communities via “private mentions,” a kind of direct messaging on the platform.

The messages said recipients had earned an investment credit at a cryptocurrency trading platform called moonxtrade[.]com. Chaput said the spammers used more than 1,500 Internet addresses across 400 providers to register new accounts, which then followed popular accounts on Mastodon and sent private mentions to the followers of those accounts.

Since then, the same spammers have used this method to advertise more than 100 different crypto investment-themed domains. Chaput said that at one point this month the volume of bot accounts being registered for the crypto spam campaign started overwhelming the servers that handle new signups at Mastodon.social.

“We suddenly went from like three registrations per minute to 900 a minute,” Chaput said. “There was nothing in the Mastodon software to detect that activity, and the protocol is not designed to handle this.”

Seeking to gain a temporary handle on the spam wave, Chaput said he briefly disabled new account registrations on mastodon.social and mastondon.online. Shortly after that, those same servers came under a sustained distributed denial-of-service (DDoS) attack.

Chaput said whoever was behind the DDoS was definitely not using point-and-click DDoS tools, like a booter or stresser service.

“This was three hours non-stop, 200,000 to 400,000 requests per second,” Chaput said of the DDoS. “At first, they were targeting one path, and when we blocked that they started to randomize things. Over three hours the attack evolved several times.”

Chaput says the spam waves have died down since they retrofitted mastodon.social with a CAPTCHA, those squiggly letter and number combinations designed to stymie automated account creation tools. But he’s worried that other Mastodon instances may not be as well-staffed and might be easy prey for these spammers.

“We don’t know if this is the work of one person, or if this is [related to] software or services being sold to others,” Chaput told KrebsOnSecurity. “We’re really impressed by the scale of it — using hundreds of domains and thousands of Microsoft email addresses.”

Chaput said a review of their logs indicates many of the newly registered Mastodon spam accounts were registered using the same 0auth credentials, and that a domain common to those credentials was quot[.]pw.

A DIRECT QUOT

The domain quot[.]pw has been registered and abandoned by several parties since 2014, but the most recent registration data available through DomainTools.com shows it was registered in March 2020 to someone in Krasnodar, Russia with the email address edgard011012@gmail.com.

This email address is also connected to accounts on several Russian cybercrime forums, including “__edman__,” who had a history of selling “logs” — large amounts of data stolen from many bot-infected computers — as well as giving away access to hacked Internet of Things (IoT) devices.

In September 2018, a user by the name “ципа” (phonetically “Zipper” in Russian) registered on the Russian hacking forum Lolzteam using the edgard0111012@gmail.com address. In May 2020, Zipper told another Lolzteam member that quot[.]pw was their domain. That user advertised a service called “Quot Project” which said they could be hired to write programming scripts in Python and C++.

“I make Telegram bots and other rubbish cheaply,” reads one February 2020 sales thread from Zipper.

Clicking the “open chat in Telegram” button on Zipper’s Lolzteam profile page launched a Telegram instant message chat window where the user Quotpw responded almost immediately. Asked if they were aware their domain was being used to manage a spam botnet that was pelting Mastodon instances with crypto scam spam, Quotpw confirmed the spam was powered by their software.

“It was made for a limited circle of people,” Quotpw said, noting that they recently released the bot software as open source on GitHub.

Quotpw went on to say the spam botnet was powered by well more than the hundreds of IP addresses tracked by Chaput, and that these systems were mostly residential proxies. A residential proxy generally refers to a computer or mobile device running some type of software that enables the system to be used as a pass-through for Internet traffic from others.

Very often, this proxy software is installed surreptitiously, such as through a “Free VPN” service or mobile app. Residential proxies also can refer to households protected by compromised home routers running factory-default credentials or outdated firmware.

Quotpw maintains they have earned more than $2,000 sending roughly 100,000 private mentions to users of different Mastodon communities over the past few weeks. Quotpw said their conversion rate for the same bot-powered direct message spam on Twitter is usually much higher and more profitable, although they conceded that recent adjustments to Twitter’s anti-bot CAPTCHA have put a crimp in their Twitter earnings.

“My partners (I’m programmer) lost time and money while ArkoseLabs (funcaptcha) introduced new precautions on Twitter,” Quotpw wrote in a Telegram reply. “On Twitter, more spam and crypto scam.”

Asked whether they felt at all conflicted about spamming people with invitations to cryptocurrency scams, Quotpw said in their hometown “they pay more for such work than in ‘white’ jobs” — referring to legitimate programming jobs that don’t involve malware, botnets, spams and scams.

“Consider salaries in Russia,” Quotpw said. “Any spam is made for profit and brings illegal money to spammers.”

THE VIENNA CONNECTION

Shortly after edgard011012@gmail.com registered quot[.]pw, the WHOIS registration records for the domain were changed again, to msr-sergey2015@yandex.ru, and to a phone number in Austria: +43.6607003748.

Constella Intelligence, a company that tracks breached data, finds that the address msr-sergey2015@yandex.ru has been associated with accounts at the mobile app site aptoide.com (user: CoolappsforAndroid) and vimeworld.ru that were created from different Internet addresses in Vienna, Austria.

A search in Skype on that Austrian phone number shows it belongs to a Sergey Proshutinskiy who lists his location as Vienna, Austria. The very first result that comes up when one searches that unusual name in Google is a LinkedIn profile for a Sergey Proshutinskiy from Vienna, Austria.

Proshutinskiy’s LinkedIn profile says he is a Class of 2024 student at TGM, which is a state-owned, technical and engineering school in Austria. His resume also says he is a data science intern at Mondi Group, an Austrian manufacturer of sustainable packaging and paper.

Mr. Proshutinskiy did not respond to requests for comment.

Quotpw denied being Sergey, and said Sergey was a friend who registered the domain as a birthday present and favor last year.

“Initially, I bought it for 300 rubles,” Quotpw explained. “The extension cost 1300 rubles (expensive). I waited until it expired and forgot to buy it. After that, a friend (Sergey) bought [the] domain and transferred access rights to me.”

“He’s not even an information security specialist,” Quotpw said of Sergey. “My friends do not belong to this field. None of my friends are engaged in scams or other black [hat] activities.”

It may seem unlikely that someone would go to all this trouble to spam Mastodon users over several weeks using an impressive number of resources — all for just $2,000 in profit. But it is likely that whoever is actually running the various crypto scam platforms advertised by Quotpw’s spam messages pays handsomely for any investments generated by their spam.

According to the FBI, financial losses from cryptocurrency investment scams dwarfed losses for all other types of cybercrime in 2022, rising from $907 million in 2021 to $2.57 billion last year.

Update, May 25, 10:30 a.m.:  Corrected attribution of the Austrian school TGM.

Russian Hacker “Wazawaka” Indicted for Ransomware

A Russian man identified by KrebsOnSecurity in January 2022 as a prolific and vocal member of several top ransomware groups was the subject of two indictments unsealed by the Justice Department today. U.S. prosecutors say Mikhail Pavolovich Matveev, a.k.a. “Wazawaka” and “Boriselcin” worked with three different ransomware gangs that extorted hundreds of millions of dollars from companies, schools, hospitals and government agencies.

Indictments returned in New Jersey and the District of Columbia allege that Matveev was involved in a conspiracy to distribute ransomware from three different strains or affiliate groups, including Babuk, Hive and LockBit.

The indictments allege that on June 25, 2020, Matveev and his LockBit co-conspirators deployed LockBit ransomware against a law enforcement agency in Passaic County, New Jersey. Prosecutors say that on May 27, 2022, Matveev conspired with Hive to ransom a nonprofit behavioral healthcare organization headquartered in Mercer County, New Jersey. And on April 26, 2021, Matveev and his Babuk gang allegedly deployed ransomware against the Metropolitan Police Department in Washington, D.C.

Meanwhile, the U.S. Department of Treasury has added Matveev to its list of persons with whom it is illegal to transact financially. Also, the U.S. State Department is offering a $10 million reward for the capture and/or prosecution of Matveev, although he is unlikely to face either as long as he continues to reside in Russia.

In a January 2021 discussion on a top Russian cybercrime forum, Matveev’s alleged alter ego Wazawaka said he had no plans to leave the protection of “Mother Russia,” and that traveling abroad was not an option for him.

“Mother Russia will help you,” Wazawaka concluded. “Love your country, and you will always get away with everything.”

In January 2022, KrebsOnSecurity published Who is the Network Access Broker ‘Wazawaka,’ which followed clues from Wazawaka’s many pseudonyms and contact details on the Russian-language cybercrime forums back to a 33-year-old Mikhail Matveev from Abaza, RU (the FBI says his date of birth is Aug. 17, 1992).

A month after that story ran, a man who appeared identical to the social media photos for Matveev began posting on Twitter a series of bizarre selfie videos in which he lashed out at security journalists and researchers (including this author), while using the same Twitter account to drop exploit code for a widely-used virtual private networking (VPN) appliance.

“Hello Brian Krebs! You did a really great job actually, really well, fucking great — it’s great that journalism works so well in the US,” Matveev said in one of the videos. “By the way, it is my voice in the background, I just love myself a lot.”

Prosecutors allege Matveev used a dizzying stream of monikers on the cybercrime forums, including “Boriselcin,” a talkative and brash personality who was simultaneously the public persona of Babuk, a ransomware affiliate program that surfaced on New Year’s Eve 2020.

Previous reporting here revealed that Matveev’s alter egos included “Orange,” the founder of the RAMP ransomware forum. RAMP stands for “Ransom Anon Market Place, and analysts at the security firm Flashpoint say the forum was created “directly in response to several large Dark Web forums banning ransomware collectives on their site following the Colonial Pipeline attack by ransomware group ‘DarkSide.”

As noted in last year’s investigations into Matveev, his alleged cybercriminal handles all were driven by a uniquely communitarian view that when organizations being held for ransom decline to cooperate or pay up, any data stolen from the victim should be published on the Russian cybercrime forums for all to plunder — not privately sold to the highest bidder.

In thread after thread on the crime forum XSS, Matveev’s alleged alias “Uhodiransomwar” could be seen posting download links to databases from companies that have refused to negotiate after five days.

Matveev is charged with conspiring to transmit ransom demands, conspiring to damage protected computers, and intentionally damaging protected computers. If convicted, he faces more than 20 years in prison.

Further reading:

Who is the Network Access Broker “Wazawaka?”

Wazawaka Goes Waka Waka

The New Jersey indictment against Matveev (PDF)

The indictment from the U.S. attorney’s office in Washington, D.C. (PDF)

Feds Take Down 13 More DDoS-for-Hire Services

The U.S. Federal Bureau of Investigation (FBI) this week seized 13 domain names connected to “booter” services that let paying customers launch crippling distributed denial-of-service (DDoS) attacks. Ten of the domains are reincarnations of DDoS-for-hire services the FBI seized in December 2022, when it charged six U.S. men with computer crimes for allegedly operating booters.

Booter services are advertised through a variety of methods, including Dark Web forums, chat platforms and even youtube.com. They accept payment via PayPal, Google Wallet, and/or cryptocurrencies, and subscriptions can range in price from just a few dollars to several hundred per month. The services are generally priced according to the volume of traffic to be hurled at the target, the duration of each attack, and the number of concurrent attacks allowed.

The websites that saw their homepages replaced with seizure notices from the FBI this week include booter services like cyberstress[.]org and exoticbooter[.]com, which the feds say were used to launch millions of attacks against millions of victims.

“School districts, universities, financial institutions and government websites are among the victims who have been targeted in attacks launched by booter services,” federal prosecutors in Los Angeles said in a statement.

Purveyors of booters or “stressers” claim they are not responsible for how customers use their services, and that they aren’t breaking the law because — like most security tools — these services can be used for good or bad purposes. Most booter sites employ wordy “terms of use” agreements that require customers to agree they will only stress-test their own networks — and that they won’t use the service to attack others.

But the DOJ says these disclaimers usually ignore the fact that most booter services are heavily reliant on constantly scanning the Internet to commandeer misconfigured devices that are critical for maximizing the size and impact of DDoS attacks. What’s more, none of the services seized by the government required users to demonstrate that they own the Internet addresses being stress-tested, something a legitimate testing service would insist upon.

This is the third in a series of U.S. and international law enforcement actions targeting booter services. In December 2022, the feds seized four-dozen booter domains and charged six U.S. men with computer crimes related to their alleged ownership of the popular DDoS-for-hire services. In December 2018, the feds targeted 15 booter sites, and three booter store defendants who later pleaded guilty.

While the FBI’s repeated seizing of booter domains may seem like an endless game of virtual Whac-a-Mole, continuously taking these services offline imposes high enough costs for the operators that some of them will quit the business altogether, says Richard Clayton, director of Cambridge University’s Cybercrime Centre.

In 2020, Clayton and others published “Cybercrime is Mostly Boring,” an academic study on the quality and types of work needed to build, maintain and defend illicit enterprises that make up a large portion of the cybercrime-as-a-service market. The study found that operating a booter service effectively requires a mind-numbing amount of constant, tedious work that tends to produce high burnout rates for booter service operators — even when the service is operating efficiently and profitably.

For example, running an effective booter service requires a substantial amount of administrative work and maintenance, much of which involves constantly scanning for, commandeering and managing large collections of remote systems that can be used to amplify online attacks, Clayton said. On top of that, building brand recognition and customer loyalty takes time.

“If you’re running a booter and someone keeps taking your domain or hosting away, you have to then go through doing the same boring work all over again,” Clayton told KrebsOnSecurity. “One of the guys the FBI arrested in December [2022] spent six months moaning that he lost his servers, and could people please lend him some money to get it started again.”

In a statement released Wednesday, prosecutors in Los Angeles said four of the six men charged last year for running booter services have since pleaded guilty. However, at least one of the defendants from the 2022 booter bust-up — John M. Dobbs, 32, of Honolulu, HI — has pleaded not guilty and is signaling he intends to take his case to trial.

Dobbs is a computer science graduate student who for the past decade openly ran IPStresser[.]com, a popular and powerful attack-for-hire service that he registered with the state of Hawaii using his real name and address. Likewise, the domain was registered in Dobbs’s name and hometown in Pennsylvania. Prosecutors say Dobbs’ service attracted more than two million registered users, and was responsible for launching a staggering 30 million distinct DDoS attacks.

Many accused stresser site operators have pleaded guilty over the years after being hit with federal criminal charges. But the government’s core claim — that operating a booter site is a violation of U.S. computer crime laws — wasn’t properly tested in the courts until September 2021.

That was when a jury handed down a guilty verdict against Matthew Gatrel, a then 32-year-old St. Charles, Ill. man charged in the government’s first 2018 mass booter bust-up. Despite admitting to FBI agents that he ran two booter services (and turning over plenty of incriminating evidence in the process), Gatrel opted to take his case to trial, defended the entire time by court-appointed attorneys.

Gatrel was convicted on all three charges of violating the Computer Fraud and Abuse Act, including conspiracy to commit unauthorized impairment of a protected computer, conspiracy to commit wire fraud, and unauthorized impairment of a protected computer. He was sentenced to two years in prison.

A copy of the FBI’s booter seizure warrant is here (PDF). According to the DOJ, the defendants who pleaded guilty to operating booter sites include:

–Jeremiah Sam Evans Miller, aka “John The Dev,” 23, of San Antonio, Texas, who pleaded guilty on April 6 to conspiracy and violating the computer fraud and abuse act related to the operation of a booter service named RoyalStresser[.]com (formerly known as Supremesecurityteam[.]com);

–Angel Manuel Colon Jr., aka “Anonghost720” and “Anonghost1337,” 37, of Belleview, Florida, who pleaded guilty on February 13 to conspiracy and violating the computer fraud and abuse act related to the operation of a booter service named SecurityTeam[.]io;

–Shamar Shattock, 19, of Margate, Florida, who pleaded guilty on March 22 to conspiracy to violate the computer fraud and abuse act related to the operation of a booter service known as Astrostress[.]com;

–Cory Anthony Palmer, 23, of Lauderhill, Florida, who pleaded guilty on February 16 to conspiracy to violate the computer fraud and abuse act related to the operation of a booter service known as Booter[.]sx.

All four defendants are scheduled to be sentenced this summer.

The booter domains seized by the FBI this week include:

cyberstress[.]org
exoticbooter[.]com
layerstress[.]net
orbitalstress[.]xyz
redstresser[.]io
silentstress[.]wtf
sunstresser[.]net
silent[.]to
mythicalstress[.]net
dreams-stresser[.]org
stresserbest[.]io
stresserus[.]io
quantum-stress[.]org

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

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

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

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

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

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

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

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

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

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

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

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

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

NORDEX

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

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

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

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

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

NORDIA

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

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

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

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

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

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

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

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

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

3CX Breach Was a Double Supply Chain Compromise

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Giving a Face to the Malware Proxy Service ‘Faceless’

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

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

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

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

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

Recently, Faceless has shown ambitions beyond just selling access to poorly-secured IoT devices. In February, Faceless re-launched a service that lets users drop an email bomb on someone — causing the target’s inbox to be filled with tens of thousands of junk messages.

And in March 2023, Faceless started marketing a service for looking up Social Security Numbers (SSNs) that claims to provide access to “the largest SSN database on the market with a very high hit rate.”

Kilmer said Faceless wants to become a one-stop-fraud-shop for cybercriminals who are seeking stolen or synthetic identities from which to transact online, and a temporary proxy that is geographically close to the identity being sold. Faceless currently sells this bundled product for $9 — $8 for the identity and $1 for the proxy.

“They’re trying to be this one-stop shop for anonymity and personas,” Kilmer said. “The service basically says ‘here’s an SSN and proxy connection that should correspond to that user’s location and make sense to different websites.'”

MRMURZA

Faceless is a project from MrMurza, a particularly talkative member of more than a dozen Russian-language cybercrime forums over the past decade. According to cyber intelligence firm Flashpoint, MrMurza has been active in the Russian underground since at least September 2012. Flashpoint said MrMurza appears to be extensively involved in botnet activity and “drops” — fraudulent bank accounts created using stolen identity data that are often used in money laundering and cash-out schemes.

Faceless grew out of a popular anonymity service called iSocks, which was launched in 2014 and advertised on multiple Russian crime forums as a proxy service that customers could use to route their malicious Web traffic through compromised computers.

Flashpoint says that in the months before iSocks went online, MrMurza posted on the Russian language crime forum Verified asking for a serious partner to assist in opening a proxy service, noting they had a botnet that was powered by malware that collected proxies with a 70 percent infection rate.

In September 2016, MrMurza sent a message to all iSocks users saying the service would soon be phased out in favor of Faceless, and that existing iSocks users could register at Faceless for free if they did so quickly — before Faceless began charging new users registration fees between $50 and $100.

Verified and other Russian language crime forums where MrMurza had a presence have been hacked over the years, with contact details and private messages leaked online. In a 2014 private message to the administrator of Verified explaining his bona fides, MrMurza said he received years of positive feedback as a seller of stolen Italian credit cards and a vendor of drops services.

MrMurza told the Verified admin that he used the nickname AccessApproved on multiple other forums over the years. MrMurza also told the admin that his account number at the now-defunct virtual currency Liberty Reserve was U1018928.

According to cyber intelligence firm Intel 471, the user AccessApproved joined the Russian crime forum Zloy in Jan. 2012, from an Internet address in Magnitogorsk, RU. In a 2012 private message where AccessApproved was arguing with another cybercriminal over a deal gone bad, AccessApproved asked to be paid at the Liberty Reserve address U1018928.

In 2013, U.S. federal investigators seized Liberty Reserve and charged its founders with facilitating billions of dollars in money laundering tied to cybercrime. The Liberty Reserve case was prosecuted out of the Southern District of New York, which in 2016 published a list of account information (PDF) tied to thousands of Liberty Reserve addresses the government asserts were involved in money laundering.

That document indicates the Liberty Reserve account claimed by MrMurza/AccessApproved — U1018928 — was assigned in 2011 to a “Vadim Panov” who used the email address lesstroy@mgn.ru.

PANOV

Constella Intelligence, a threat intelligence firm that tracks breached databases, says lesstroy@mgn.ru was used for an account “Hackerok” at the accounting service klerk.ru that was created from an Internet address in Magnitogorsk. The password chosen by this user was “1232.”

In addition to selling access to hacked computers and bank accounts, both MrMurza and AccessApproved ran side hustles on the crime forums selling clothing from popular retailers that refused to ship directly to Russia.

On one cybercrime forum where AccessApproved had clothing customers, denizens of the forum created a lengthy discussion thread to help users identify incoming emails associated with various reshipping services advertised within their community. Reshippers tend to rely on a large number of people in the United States and Europe helping to forward packages overseas, but in many cases the notifications about purchases and shipping details would be forwarded to reshipping service customers from a consistent email account.

That thread said AccessApproved’s clothing reshipping service forwarded confirmation emails from the address panov-v@mail.ru. This address is associated with accounts on two Russian cybercrime forums registered from Magnitogorsk in 2010 using the handle “Omega^gg4u.”

This Omega^gg4u identity sold software that can rapidly check the validity of large batches of stolen credit cards. Interestingly, both Omega^gg4u and AccessApproved also had another niche: Reselling heavily controlled substances — such as human growth hormone and anabolic steroids — from chemical suppliers in China.

A search in Constella on the address panov-v@mail.ru and many variations on that address shows these accounts cycled through the same passwords, including 055752403k, asus666, 01091987h, and the relatively weak password 1232 (recall that 1232 was picked by whoever registered the lesstroy@mgn.ru account at Klerk.ru).

Constella says the email address asus666@yandex.ru relied on the passwords asus666 and 01091987h. The 01091987h password also was used by asus666@mail.ru, which also favored the password 24587256.

Constella further reports that whoever owned the much shorter address asus@mail.ru also used the password 24587256. In addition, it found the password 2318922479 was tied to both asus666@mail.ru and asus@mail.ru.

The email addresses asus@mail.ru, asus2504@mail.ru, and zaxar2504@rambler.ru were all used to register Vkontakte social media accounts for a Denis ***@VIP*** Pankov. There are a number of other Vkontakte accounts registered to asus@mail.ru and many variations of this address under a different name. But none of those other profiles appear tied to real-life identities.

PANKOV

Constella’s data shows the email addresses asus2504@mail.ru and zaxar2504@rambler.ru used the rather unique password denis250485, which was also used by the email address denispankov@yandex.ru and almost a dozen variations at other Russian-language email providers.

Russian vehicle registration records from 2016 show the email address denispankov@yandex.ru belongs to Denis Viktorovich Pankov, born on April 25, 1985. That explains the “250485” portion of Pankov’s favored password. The registration records further indicate that in 2016 Pankov’s vehicle was registered in a suburb of Moscow.

Russian incorporation records show that denispankov@yandex.com is tied to IP Pankov Denis Viktorovich, a now-defunct transportation company in the Volograd Oblast, a region in southern Russia that shares a long border with western Kazazkhstan.

More recent records for IP Pankov Denis Viktorovich show a microenterprise with this name in Omsk that described its main activity as “retail sale by mail or via the Internet.” Russian corporate records indicate this entity was liquidated in 2021.

A reverse password search on “denis250485” via Constella shows this password was used by more than 75 email addresses, most of which are some variation of gaihnik@mail.ru — such as gaihnik25@mail.ru, or gaihnik2504@rambler.ru.

In 2012, someone posted answers to a questionnaire on behalf of Denis Viktorovich Pankov to a Russian-language discussion forum on Chinese crested dog breeds. The message said Pankov was seeking a puppy of a specific breed and was a resident of Krasnogorsk, a city that is adjacent to the northwestern boundary of Moscow.

The message said Pankov was a then 27-year-old manager in an advertising company, and could be reached at the email address gaihnik@mail.ru.

GAIHNIK

Constella Intelligence shows gaihnik@mail.ru registered at the now-defunct email marketing service Smart Responder from an address in Gagarin, which is about 115 miles west of Moscow.

Back in 2015, the user Gaihnik25 was banned from the online game World of Tanks for violating the game’s terms that prohibit “bot farming,” or the automated use of large numbers of player accounts to win some advantage that is usually related to cashing out game accounts or inventory.

For the past few years, someone using the nickname Gaihnik25 has been posting messages to the Russian-language hacking forum Gerki[.]pw, on discussion threads regarding software designed to “brute force” or mass-check online accounts for weak or compromised passwords.

A new member of the Russian hacking forum Nohide[.]Space using the handle Gaihnik has been commenting recently about proxy services, credential checking software, and the sale of hacked mailing lists. Gaihnik’s first post on the forum concerned private software for checking World of Tanks accounts.

The address gaihnik@mail.ru shows how so many email addresses tied to Pankov were also connected to apparently misleading identities on Vkontakte and elsewhere. Constella found this address was tied to a Vkontakte account for a Dmitriy Zakarov.

Microsoft’s Bing search engine says gaihnik@mail.ru belongs to 37-year-old Denis Pankov, yet clicking the Mail.ru profile for that user brings up a profile for a much older man by the name Gavril Zakarov. However, when you log in to a Mail.ru account and view that profile, it shows that most of the account’s profile photos are of a much younger man.

Many of those same photos show up in an online dating profile at dating.ru for the user Gaihnik, a.k.a “Denchik,” who says he is a 37-year-old Taurus from Gagarin who enjoys going for walks in nature, staying up late, and being on the Internet.

Mr. Pankov did not respond to multiple requests for comment sent to all of the email addresses mentioned in this story. However, some of those addresses produced detailed error responses; Mail.ru reported that the users panov-v@mail.ru, asus666@mail.ru, and asus2504@mail.ru were terminated, and that gaihnik25@mail.ru is now disabled.

Messages sent to many other email addresses connected via passwords to Pankov and using some variation of asus####@mail.ru also returned similar account termination messages.

A Serial Tech Investment Scammer Takes Up Coding?

John Clifton Davies, a 60-year-old con man from the United Kingdom who fled the country in 2015 before being sentenced to 12 years in prison for fraud, has enjoyed a successful life abroad swindling technology startups by pretending to be a billionaire investor. Davies’ newest invention appears to be “CodesToYou,” which purports to be a “full cycle software development company” based in the U.K.

Several articles here have delved into the history of John Bernard, the pseudonym used by a fake billionaire technology investor who tricked dozens of startups into giving him tens of millions of dollars.

John Bernard’s real name is John Clifton Davies, a convicted fraudster from the United Kingdom who is currently a fugitive from justice. For several years until reinventing himself again quite recently, Bernard pretended to be a billionaire Swiss investor who made his fortunes in the dot-com boom 20 years ago.

“The Private Office of John Bernard” let it be known to investment brokers that he had tens of millions of dollars to invest in tech startups, and he attracted a stream of new victims by offering extraordinarily generous finder’s fees to brokers who helped him secure new clients. But those brokers would eventually get stiffed because Bernard’s company would never consummate a deal.

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

A variety of clues suggest Davies has recently adopted at least one other identity — Alan John Mykhailov — who is listed as chairman of a British concern called CodesToYou LTD, incorporated in May 2022. The CodesToYou website says the company employs talented coders in several countries, and that its programmers offer “your ultimate balance between speed, cost and quality.”

In response to questions from KrebsOnSecurity, CodesToYou’s marketing manager — who gave their name only as “Zhena” — said the company was not affiliated with any John Bernard or John Clifton Davies, and maintained that CodesToYou is a legitimate enterprise.

But publicly available information about this company and its leadership suggests otherwise. Official incorporation documents from the U.K.’s Companies House represent that CodesToYou is headed by an Alan John Mykhailov, a British citizen born in March 1958.

Companies House says Mykhailov is an officer in three other companies, including one called Blackstone Corporate Alliance Ltd. According to the Swiss business tracking service business-monitor.ch, Blackstone Corporate Alliance Ltd. is currently the entity holding a decision-making role in John Bernard’s fake due diligence company — The Inside Knowledge GmbH — which is now in liquidation.

Also listed as a partner in Blackstone Corporate Alliance Limited is Igor Hubskyi (a.k.a. Igor Gubskyi), a Ukrainian man who was previously president of The Inside Knowledge GmbH.

The CodesToYou website says the company’s marketing team lead is Maria Yakovleva, and the photo of this employee matches the profile for the LinkedIn account name “Maria Y.” That same LinkedIn profile and photo previously listed Maria by a different first and last name — Mariya Kulikova; back then, Ms. Kulikova’s LinkedIn profile said she was an executive assistant in The Private Office of Mr. John Bernard.

Companies House lists Alan John Mykhailov as a current officer in two other companies, including Frisor Limited, and Ardelis Solutions Limited. A cached copy of the now-defunct Ardelis Solutions website says it was a private equity firm.

CodesToYou’s Maria also included Ardelis Solutions in the work history section of her LinkedIn resume. That is, until being contacted by this author on LinkedIn, after which Maria’s profile picture and any mention of Ardelis Solutions were deleted.

Listed as head of business development at CodesToYou is David Bruno, a Canadian man whose LinkedIn profile says he is founder of an organization called “World Privacy Resource.” As KrebsOnSecurity reported in 2020, Bruno was at the time promoting himself as the co-CEO of a company called SafeSwiss Secure Communication AG, and the founder of another tech startup called Secure Swiss Data.

Secure Swiss Data’s domain — secureswissdata.com — is a Swiss concern that sells encrypted email and data services. According to DomainTools.com, that website name was registered in 2015 by The Inside Knowledge GmbH. In February 2020, a press release announced that Secure Swiss Data was purchased in an “undisclosed multimillion buyout” by SafeSwiss Secure Communication AG.

When reached in 2020 and asked about his relationship to Mr. Bernard, Mr. Bruno said the two were business partners and that he couldn’t imagine that Mr. Bernard would be involved in anything improper. To this day Mr. Bruno is the only person I’ve spoken to who has had anything positive to say about Mr. Bernard.

Mr. Bruno did not respond to requests for comment this time around, but his LinkedIn profile no longer makes any mention of Secure Swiss Data or SafeSwiss — both companies he claimed to run for many years. Nor does it mention CodesToYou. However, Mr. Bruno’s former company SafeSwiss is listed as one of the six “portfolio” companies whose services are promoted on the CodesToYou website.

In mid-2021, Bruno announced he was running for public office in Ontario.

“The Kenora resident is no stranger to the government as he contributed to Canada’s new Digital Charter, Bill C-11, which is a new Cyber Security policy,” reported Drydennow.com, a news website that covers Northwestern Ontario. Drydennow says the next federal election is expected to be held on or before Oct. 16, 2023.

John Clifton Davies was convicted in 2015 of swindling businesses throughout the U.K. that were struggling financially and seeking to restructure their debt. For roughly six years, Davies ran a series of firms that pretended to offer insolvency services, but instead simply siphoned what little remaining money these companies had.

The very first entity mentioned in the technology portfolio advertised on the CodesToYou website is called “MySolve,” and it purports to offer a “multi-feature platform for insolvency practitioners.”

Mr. Davies’ fourth wife, Iryna Davies, is listed as a director of one of the insolvency consulting businesses in the U.K. that was part of John Davies’ 2015 fraud conviction. Prior to his trial for fraud, Davies served 16 months in jail before being cleared of murdering his third wife on their honeymoon in India: Colette Davies, 39, died after falling 80 feet from a viewing point at a steep gorge in the Himachal Pradesh region of India.

Mr. Davies was charged with murder and fraud after he attempted to collect GBP 132,000 in her life insurance payout, but British prosecutors ultimately conceded they did not have enough evidence to convict him.

The scams favored by Davies and his alter egos are smart because he never approaches investors directly; rather, investors are incentivized to put his portfolio in front of tech firms seeking financial backing. And all the best cons begin as an idea or possibility planted in the target’s mind.

It’s also a reliable scam because companies bilked by small-time investment schemes rarely pursue legal action, mainly because the legal fees involved can quickly surpass the losses. On top of that, many victims will likely be too ashamed to admit their duping. Victims who do press their case in court and win then face the daunting challenge of collecting damages from a slew of ephemeral shell corporations.

The latest Bernard victim to speak publicly — a Norwegian company hoping to build a fleet of environmentally friendly shipping vessels — is now embroiled in a lawsuit over a deal gone bad. As part of that scam, Bernard falsely claimed to have secured $100 million from six other wealthy investors, including the founder of Uber and the artist Abel Makkonen Tesfaye, better known as The Weeknd.

German Police Raid DDoS-Friendly Host ‘FlyHosting’

Authorities in Germany this week seized Internet servers that powered FlyHosting, a dark web offering that catered to cybercriminals operating DDoS-for-hire services, KrebsOnSecurity has learned. FlyHosting first advertised on cybercrime forums in November 2022, saying it was a Germany-based hosting firm that was open for business to anyone looking for a reliable place to host malware, botnet controllers, or DDoS-for-hire infrastructure.

A statement released today by the German Federal Criminal Police Office says they served eight search warrants on March 30, and identified five individuals aged 16-24 suspected of operating “an internet service” since mid-2021. The German authorities did not name the suspects or the Internet service in question.

“Previously unknown perpetrators used the Internet service provided by the suspects in particular for so-called ‘DDoS attacks’, i.e. the simultaneous sending of a large number of data packets via the Internet for the purpose of disrupting other data processing systems,” the statement reads.

News of a raid on FlyHosting first surfaced Thursday in a Telegram chat channel that is frequented by people interested or involved in the DDoS-for-hire industry, where a user by the name Dstatcc broke the news to FlyHosting customers:

“So Flyhosting made a ‘migration’ with it[s] systems to new rooms of the police ;),” the warning read. “Police says: They support ddos attacks, C&C/C2 and stresser a bit too much. We expect the police will take a deeper look into the files, payment logs and IP’s. If you had a server from them and they could find ‘bad things’ connected with you (payed with private paypal) you may ask a lawyer.”

The German authorities said that as a result of the DDoS attacks facilitated by the defendants, the websites of various companies as well as those of the Hesse police have been overloaded in several cases since mid-2021, “so that they could only be operated to a limited extent or no longer at times.”

The statement says police seized mobile phones, laptops, tablets, storage media and handwritten notes from the unnamed defendants, and confiscated servers operated by the suspects in Germany, Finland and the Netherlands.

In response to questions from KrebsOnSecurity, Germany’s Hessen Police confirmed that the seizures were executed against FlyHosting.

The raids on FlyHosting come amid a broader law enforcement crackdown on DDoS-for-hire services internationally. The U.K.’s National Crime Agency announced last week that it’s been busy setting up phony DDoS-for-hire websites that seek to collect information on users, remind them that launching DDoS attacks is illegal, and generally increase the level of paranoia for people looking to hire such services.

In mid-December 2022, the U.S. Department of Justice (DOJ) announced “Operation Power Off,” which seized four-dozen DDoS-for-hire domains responsible for more than 30 million DDoS attacks, and charged six U.S. men with computer crimes related to their alleged ownership of popular DDoS-for-hire services.

Update, April 3, 9:30 a.m. ET: Added confirmation from Hesse Police.

Feds Charge NY Man as BreachForums Boss “Pompompurin”

The U.S. Federal Bureau of Investigation (FBI) this week arrested a New York man on suspicion of running BreachForums, a popular English-language cybercrime forum where some of the world biggest hacked databases routinely show up for sale. The forum’s administrator “Pompompurin” has been a thorn in the side of the FBI for years, and BreachForums is widely considered a reincarnation of RaidForums, a remarkably similar crime forum that the FBI infiltrated and dismantled in 2022.

In an affidavit filed with the District Court for the Southern District of New York, FBI Special Agent John Longmire said that at around 4:30 p.m. on March 15, 2023, he led a team of law enforcement agents that made a probable cause arrest of a Conor Brian Fitzpatrick in Peekskill, NY.

“When I arrested the defendant on March 15, 2023, he stated to me in substance and in part that: a) his name was Conor Brian Fitzpatrick; b) he used the alias ‘pompompurin/’ and c) he was the owner and administrator of ‘BreachForums’ the data breach website referenced in the Complaint,” Longmire wrote.

Pompompurin has been something of a nemesis to the FBI for several years. In November 2021, KrebsOnSecurity broke the news that thousands of fake emails about a cybercrime investigation were blasted out from the FBI’s email systems and Internet addresses.

Pompompurin took credit for that stunt, and said he was able to send the FBI email blast by exploiting a flaw in an FBI portal designed to share information with state and local law enforcement authorities. The FBI later acknowledged that a software misconfiguration allowed someone to send the fake emails.

In December, 2022, KrebsOnSecurity broke the news that hackers active on BreachForums had infiltrated the FBI’s InfraGard program, a vetted FBI program designed to build cyber and physical threat information sharing partnerships with experts in the private sector. The hackers impersonated the CEO of a major financial company, applied for InfraGard membership in the CEO’s name, and were granted admission to the community.

From there, the hackers plundered the InfraGard member database, and proceeded to sell contact information on more than 80,000 InfraGard members in an auction on BreachForums. The FBI responded by disabling the portal for some time, before ultimately forcing all InfraGard members to re-apply for membership.

More recently, BreachForums was the sales forum for data stolen from DC Health Link, a health insurance exchange based in Washington, D.C. that suffered a data breach this month. The sales thread initially said the data included the names, Social Security numbers, dates of birth, health plan and enrollee information and more on 170,000 individuals, although the official notice about the breach says 56,415 people were affected.

In April 2022, U.S. Justice Department seized the servers and domains for RaidForums, an extremely popular English-language cybercrime forum that sold access to more than 10 billion consumer records stolen in some of the world’s largest data breaches since 2015. As part of that operation, the feds also charged the alleged administrator, 21-year-old Diogo Santos Coelho of Portugal, with six criminal counts.

Coelho was arrested in the United Kingdom on Jan. 31, 2022. By that time, the new BreachForums had been live for just under a week, but with a familiar look.

BreachForums remains accessible online, and from reviewing the live chat stream on the site’s home page it appears the forum’s active users are only just becoming aware that their administrator — and the site’s database — is likely now in FBI hands:

“Wait if they arrested pom then doesn’t the FBI have all of our details we’ve registered with?” asked one worried BreachForums member.

“But we all have good VPNs I guess, right…right guys?” another denizen offered.

“Like pom would most likely do a plea bargain and cooperate with the feds as much as possible,” replied another.

Fitzpatrick could not be immediately reached for comment. The FBI declined to comment for this story.

There is only one page to the criminal complaint against Fitzpatrick (PDF), which charges him with one count of conspiracy to commit access device fraud. The affidavit on his arrest is available here (PDF).

Update: Corrected spelling of FBI agent’s last name.

Two U.S. Men Charged in 2022 Hacking of DEA Portal

Two U.S. men have been charged with hacking into a U.S. Drug Enforcement Agency (DEA) online portal that taps into 16 different federal law enforcement databases. Both are alleged to be part of a larger criminal organization that specializes in using fake emergency data requests from compromised police and government email accounts to publicly threaten and extort their victims.

Prosecutors for the Eastern District of New York today unsealed criminal complaints against Sagar Steven Singh — a.k.a “Weep” — a 19-year-old from Pawtucket, Rhode Island; and Nicholas Ceraolo, 25, of Queens, NY, who allegedly went by the handles “Convict” and “Ominus.”

The Justice Department says Singh and Ceraolo belong to a group of cybercriminals known to its members as “ViLE,” who specialize in obtaining personal information about third-party victims, which they then use to harass, threaten or extort the victims, a practice known as “doxing.”

“ViLE is collaborative, and the members routinely share tactics and illicitly obtained information with each other,” prosecutors charged.

The government alleges the defendants and other members of ViLE use various methods to obtain victims’ personal information, including:

-tricking customer service employees;
-submitting fraudulent legal process to social media companies to elicit users’ registration information;
-co-opting and corrupting corporate insiders;
-searching public and private online databases;
-accessing a nonpublic United States government database without authorization
-unlawfully using official email accounts belonging to other countries.

The complaint says once they obtained a victim’s information, Singh and Ceraolo would post the information in an online forum. The government refers to this community only as “Forum-1,” saying that it is administered by the leader of ViLE (referenced in the complaint as “CC-1”).

“Victims are extorted into paying CC-1 to have their information removed from Forum-1,” prosecutors allege. “Singh also uses the threat of revealing personal information to extort victims into giving him access to their social media accounts, which Singh then resells.”

Sources tell KrebsOnSecurity in addition to being members of ViLE, both Weep and Ominous are or were staff members for Doxbin, a highly toxic online community that provides a forum for digging up personal information on people and posting it publicly. This is supported by the Doxbin administrator’s claimed responsibility for a high-profile intrusion at the DEA’s law enforcement data sharing portal last year.

The government alleges that on May 7, 2022, Singh used stolen credentials to log into a U.S. federal government portal without authorization. The complaint doesn’t specify which agency portal was hacked, but it does state that the portal included access to law enforcement databases that track narcotics seizures in the United States.

On May 12, 2022, KrebsOnSecurity broke the news that hackers had gained access to a DEA portal that taps into 16 different federal law enforcement databases. As reported at the time, the inside scoop on how that hack went down came from KT, the current administrator of the Doxbin and the individual referenced in the government’s complaint as “CC-1.”

Indeed, a screenshot of the ViLE group website includes the group’s official roster, which lists KT at the top, followed by Weep and Ominus.

In March 2022, KrebsOnSecurity warned that multiple cybercrime groups were finding success with fraudulent Emergency Data Requests (EDRs), wherein the hackers use compromised police and government email accounts to file warrantless data requests with social media firms and mobile telephony providers, attesting that the information being requested can’t wait for a warrant because it relates to an urgent matter of life and death.

That story showed that the previous owner of the Doxbin also was part of a teenage hacking group that specialized in offering fake EDRs as a service on the dark web.

Prosecutors say they tied Singh to the government portal hack because he connected to it from an Internet address that he’d previously used to access a social media account registered in his name. When they raided Singh’s residence on Sept. 8, 2022 and seized his devices, investigators with Homeland Security found a cellular phone and laptop that allegedly “contained extensive evidence of access to the Portal.”

The complaint alleges that between February 2022 and May 2022, Ceraolo used an official email account belonging to a Bangladeshi police official to pose as a police officer in communication with U.S.-based social media platforms.

“In these communications, Ceraolo requested personal information about users of these platforms, under the false pretense that the users were committing crimes or in life-threatening danger,” the complaint states.

For example, on or about March 13, 2022, Ceraolo allegedly used the Bangladeshi police email account to falsely claim that the target of the EDR had sent bomb threats, distributed child pornography and threatened officials of the Bangladeshi government.

On or about May 9, 2022, the government says, Singh sent a friend screenshots of text messages between himself and someone he had doxed on the Doxbin and was trying to extort for their Instagram handle. The data included the victim’s Social Security number, driver’s license number, cellphone number, and home address.

“Look familiar?” Singh allegedly wrote to the victim. “You’re gonna comply to me if you don’t want anything negative to happen to your parents. . . I have every detail involving your parents . . . allowing me to do whatever I desire to them in malicious ways.”

Neither of the defendants could be immediately reached for comment. KT, the current administrator of Doxbin, declined a request for comment on the charges.

Ceraolo is a self-described security researcher who has been credited in many news stories over the years with discovering security vulnerabilities at AT&T, T-Mobile, Comcast and Cox Communications.

Ceraolo’s stated partner in most of these discoveries — a 30-year-old Connecticut man named Ryan “Phobia” Stevenson — was charged in 2019 with being part of a group that stole millions of dollars worth of cryptocurrencies via SIM-swapping, a crime that involves tricking a mobile provider into routing a target’s calls and text messages to another device.

In 2018, KrebsOnSecurity detailed how Stevenson earned bug bounty rewards and public recognition from top telecom companies for finding and reporting security holes in their websites, all the while secretly peddling those same vulnerabilities to cybercriminals.

According to the Justice Department, if convicted Ceraolo faces up to 20 years’ imprisonment for conspiracy to commit wire fraud; both Ceraolo and Singh face five years’ imprisonment for conspiracy to commit computer intrusions.

A copy of the complaint against Ceraolo and Singh is here (PDF).

Who’s Behind the NetWire Remote Access Trojan?

A Croatian national has been arrested for allegedly operating NetWire, a Remote Access Trojan (RAT) marketed on cybercrime forums since 2012 as a stealthy way to spy on infected systems and siphon passwords. The arrest coincided with a seizure of the NetWire sales website by the U.S. Federal Bureau of Investigation (FBI). While the defendant in this case hasn’t yet been named publicly, the NetWire website has been leaking information about the likely true identity and location of its owner for the past 11 years.

Typically installed by booby-trapped Microsoft Office documents and distributed via email, NetWire is a multi-platform threat that is capable of targeting not only Microsoft Windows machines but also Android, Linux and Mac systems.

NetWire’s reliability and relatively low cost ($80-$140 depending on features) has made it an extremely popular RAT on the cybercrime forums for years, and NetWire infections consistently rank among the top 10 most active RATs in use.

NetWire has been sold openly on the same website since 2012: worldwiredlabs[.]com. That website now features a seizure notice from the U.S. Department of Justice (DOJ), which says the domain was taken as part of “a coordinated law enforcement action taken against the NetWire Remote Access Trojan.”

“As part of this week’s law enforcement action, authorities in Croatia on Tuesday arrested a Croatian national who allegedly was the administrator of the website,” reads a statement by the DOJ today. “This defendant will be prosecuted by Croatian authorities. Additionally, law enforcement in Switzerland on Tuesday seized the computer server hosting the NetWire RAT infrastructure.”

Neither the DOJ’s statement nor a press release on the operation published by Croatian authorities mentioned the name of the accused. But it’s fairly remarkable that it has taken so long for authorities in the United States and elsewhere to move against NetWire and its alleged proprietor, given that the RAT’s author apparently did very little to hide his real-life identity.

The WorldWiredLabs website first came online in February 2012 using a dedicated host with no other domains. The site’s true WHOIS registration records have always been hidden by privacy protection services, but there are plenty of clues in historical Domain Name System (DNS) records for WorldWiredLabs that point in the same direction.

In October 2012, the WorldWiredLabs domain moved to another dedicated server at the Internet address 198.91.90.7, which was home to just one other domain: printschoolmedia[.]org, also registered in 2012.

According to DomainTools.com, printschoolmedia[.]org was registered to a Mario Zanko in Zapresic, Croatia, and to the email address zankomario@gmail.com. DomainTools further shows this email address was used to register one other domain in 2012: wwlabshosting[.]com, also registered to Mario Zanko from Croatia.

A review of DNS records for both printschoolmedia[.]org and wwlabshosting[.]com shows that while these domains were online they both used the DNS name server ns1.worldwiredlabs[.]com. No other domains have been recorded using that same name server.

DNS records for worldwiredlabs[.]com also show the site forwarded incoming email to the address tommaloney@ruggedinbox.com. Constella Intelligence, a service that indexes information exposed by public database leaks, shows this email address was used to register an account at the clothing retailer romwe.com, using the password “123456xx.”

Running a reverse search on this password in Constella Intelligence shows there are more than 450 email addresses known to have used this credential, and two of those are zankomario@gmail.com and zankomario@yahoo.com.

A search on zankomario@gmail.com in Skype returns three results, including the account name “Netwire” and the username “Dugidox,” and another for a Mario Zanko (username zanko.mario).

Dugidox corresponds to the hacker handle most frequently associated with NetWire sales and support discussion threads on multiple cybercrime forums over the years.

Constella ties dugidox@gmail.com to a number of website registrations, including the Dugidox handle on BlackHatWorld and HackForums, and to IP addresses in Croatia for both. Constella also shows the email address zankomario@gmail.com used the password “dugidox2407.”

In 2010, someone using the email address dugidox@gmail.com registered the domain dugidox[.]com. The WHOIS registration records for that domain list a “Senela Eanko” as the registrant, but the address used was the same street address in Zapresic that appears in the WHOIS records for printschoolmedia[.]org, which is registered in Mr. Zanco’s name.

Prior to the demise of Google+, the email address dugidox@gmail.com mapped to an account with the nickname “Netwire wwl.” The dugidox email also was tied to a Facebook account (mario.zanko3), which featured check-ins and photos from various places in Croatia.

That Facebook profile is no longer active, but back in January 2017, the administrator of WorldWiredLabs posted that he was considering adding certain Android mobile functionality to his service. Three days after that, the Mario.Zank3 profile posted a photo saying he was selected for an Android instruction course — with his dugidox email in the photo, naturally.

Incorporation records from the U.K.’s Companies House show that in 2017 Mr. Zanko became an officer in a company called Godbex Solutions LTD. A Youtube video invoking this corporate name describes Godbex as a “next generation platform” for exchanging gold and cryptocurrencies.

The U.K. Companies House records show Godbex was dissolved in 2020. It also says Mr. Zanko was born in July 1983, and lists his occupation as “electrical engineer.”

Mr. Zanko did not respond to multiple requests for comment.

A statement from the Croatian police about the NetWire takedown is here.

Sued by Meta, Freenom Halts Domain Registrations

The domain name registrar Freenom, whose free domain names have long been a draw for spammers and phishers, has stopped allowing new domain name registrations. The move comes after the Dutch registrar was sued by Meta, which alleges the company ignores abuse complaints about phishing websites while monetizing traffic to those abusive domains.

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

Freenom has always waived the registration fees for domains in these country-code domains, presumably as a way to encourage users to pay for related services, such as registering a .com or .net domain, for which Freenom does charge a fee.

On March 3, 2023, social media giant Meta sued Freenom in a Northern California court, alleging cybersquatting violations and trademark infringement. The lawsuit also seeks information about the identities of 20 different “John Does” — Freenom customers that Meta says have been particularly active in phishing attacks against Facebook, Instagram, and WhatsApp users.

The lawsuit points to a 2021 study (PDF) on the abuse of domains conducted by Interisle Consulting Group, which discovered that those ccTLDs operated by Freenom made up five of the Top Ten TLDs most abused by phishers.

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

Meta further alleges that “Freenom has repeatedly failed to take appropriate steps to investigate and respond appropriately to reports of abuse,” and that it monetizes the traffic from infringing domains by reselling them and by adding “parking pages” that redirect visitors to other commercial websites, websites with pornographic content, and websites used for malicious activity like phishing.

Freenom has not yet responded to requests for comment. But attempts to register a domain through the company’s website as of publication time generated an error message that reads:

“Because of technical issues the Freenom application for new registrations is temporarily out-of-order. Please accept our apologies for the inconvenience. We are working on a solution and hope to resume operations shortly. Thank you for your understanding.”

Although Freenom is based in The Netherlands, some of its other sister companies named as defendants in the lawsuit are incorporated in the United States.

Meta initially filed this lawsuit in December 2022, but it asked the court to seal the case, which would have restricted public access to court documents in the dispute. That request was denied, and Meta amended and re-filed the lawsuit last week.

According to Meta, this isn’t just a case of another domain name registrar ignoring abuse complaints because it’s bad for business. The lawsuit alleges that the owners of Freenom “are part of a web of companies created to facilitate cybersquatting, all for the benefit of Freenom.”

“On information and belief, one or more of the ccTLD Service Providers, ID Shield, Yoursafe, Freedom Registry, Fintag, Cervesia, VTL, Joost Zuurbier Management Services B.V., and Doe Defendants were created to hide assets, ensure unlawful activity including cybersquatting and phishing goes undetected, and to further the goals of Freenom,” Meta charged.

It remains unclear why Freenom has stopped allowing domain registration. In June 2015, ICANN suspended Freenom’s ability to create new domain names or initiate inbound transfers of domain names for 90 days. According to Meta, the suspension was premised on ICANN’s determination that Freenom “has engaged in a pattern and practice of trafficking in or use of domain names identical or confusingly similar to a trademark or service mark of a third party in which the Registered Name Holder has no rights or legitimate interest.”

A spokesperson for ICANN said the organization has no insight as to why Freenom might have stopped registering domain names. But it said Freenom (d/b/a OpenTLD B.V.) also received formal enforcement notices from ICANN in 2017 and 2020 for violating different obligations.

A copy of the amended complaint against Freenom, et. al, is available here (PDF).

March 8, 6:11 p.m. ET: Updated story with response from ICANN. Corrected attribution of the domain abuse report.

When Low-Tech Hacks Cause High-Impact Breaches

Web hosting giant GoDaddy made headlines this month when it disclosed that a multi-year breach allowed intruders to steal company source code, siphon customer and employee login credentials, and foist malware on customer websites. Media coverage understandably focused on GoDaddy’s admission that it suffered three different cyberattacks over as many years at the hands of the same hacking group.  But it’s worth revisiting how this group typically got in to targeted companies: By calling employees and tricking them into navigating to a phishing website.

In a filing with the U.S. Securities and Exchange Commission (SEC), GoDaddy said it determined that the same “sophisticated threat actor group” was responsible for three separate intrusions, including:

-March 2020: A spear-phishing attack on a GoDaddy employee compromised the hosting login credentials of approximately 28,000 GoDaddy customers, as well as login credentials for a small number employees;

-November 2021: A compromised GoDaddy password let attackers steal source code and information tied to 1.2 million customers, including website administrator passwords, sFTP credentials, and private SSL keys;

-December 2022: Hackers gained access to and installed malware on GoDaddy’s cPanel hosting servers that “intermittently redirected random customer websites to malicious sites.”

“Based on our investigation, we believe these incidents are part of a multi-year campaign by a sophisticated threat actor group that, among other things, installed malware on our systems and obtained pieces of code related to some services within GoDaddy,” the company stated in its SEC filing.

What else do we know about the cause of these incidents? We don’t know much about the source of the November 2021 incident, other than GoDaddy’s statement that it involved a compromised password, and that it took about two months for the company to detect the intrusion. GoDaddy has not disclosed the source of the breach in December 2022 that led to malware on some customer websites.

But we do know the March 2020 attack was precipitated by a spear-phishing attack against a GoDaddy employee. GoDaddy described the incident at the time in general terms as a social engineering attack, but one of its customers affected by that March 2020 breach actually spoke to one of the hackers involved.

The hackers were able to change the Domain Name System (DNS) records for the transaction brokering site escrow.com so that it pointed to an address in Malaysia that was host to just a few other domains, including the then brand-new phishing domain servicenow-godaddy[.]com.

The general manager of Escrow.com found himself on the phone with one of the GoDaddy hackers, after someone who claimed they worked at GoDaddy called and said they needed him to authorize some changes to the account.

In reality, the caller had just tricked a GoDaddy employee into giving away their credentials, and he could see from the employee’s account that Escrow.com required a specific security procedure to complete a domain transfer.

The general manager of Escrow.com said he suspected the call was a scam, but decided to play along for about an hour — all the while recording the call and coaxing information out of the scammer.

“This guy had access to the notes, and knew the number to call,” to make changes to the account, the CEO of Escrow.com told KrebsOnSecurity. “He was literally reading off the tickets to the notes of the admin panel inside GoDaddy.”

About halfway through this conversation — after being called out by the general manager as an imposter — the hacker admitted that he was not a GoDaddy employee, and that he was in fact part of a group that enjoyed repeated success with social engineering employees at targeted companies over the phone.

Absent from GoDaddy’s SEC statement is another spate of attacks in November 2020, in which unknown intruders redirected email and web traffic for multiple cryptocurrency services that used GoDaddy in some capacity.

It is possible this incident was not mentioned because it was the work of yet another group of intruders. But in response to questions from KrebsOnSecurity at the time, GoDaddy said that incident also stemmed from a “limited” number of GoDaddy employees falling for a sophisticated social engineering scam.

“As threat actors become increasingly sophisticated and aggressive in their attacks, we are constantly educating employees about new tactics that might be used against them and adopting new security measures to prevent future attacks,” GoDaddy said in a written statement back in 2020.

Voice phishing or “vishing” attacks typically target employees who work remotely. The phishers will usually claim that they’re calling from the employer’s IT department, supposedly to help troubleshoot some issue. The goal is to convince the target to enter their credentials at a website set up by the attackers that mimics the organization’s corporate email or VPN portal.

Experts interviewed for an August 2020 story on a steep rise in successful voice phishing attacks said there are generally at least two people involved in each vishing scam: One who is social engineering the target over the phone, and another co-conspirator who takes any credentials entered at the phishing page — including multi-factor authentication codes shared by the victim — and quickly uses them to log in to the company’s website.

The attackers are usually careful to do nothing with the phishing domain until they are ready to initiate a vishing call to a potential victim. And when the attack or call is complete, they disable the website tied to the domain.

This is key because many domain registrars will only respond to external requests to take down a phishing website if the site is live at the time of the abuse complaint. This tactic also can stymie efforts by companies that focus on identifying newly-registered phishing domains before they can be used for fraud.

GoDaddy’s latest SEC filing indicates the company had nearly 7,000 employees as of December 2022. In addition, GoDaddy contracts with another 3,000 people who work full-time for the company via business process outsourcing companies based primarily in India, the Philippines and Colombia.

Many companies now require employees to supply a one-time password — such as one sent via SMS or produced by a mobile authenticator app — in addition to their username and password when logging in to company assets online. But both SMS and app-based codes can be undermined by phishing attacks that simply request this information in addition to the user’s password.

One multifactor option — physical security keys — appears to be immune to these advanced scams. The most commonly used security keys are inexpensive USB-based devices. A security key implements a form of multi-factor authentication known as Universal 2nd Factor (U2F), which allows the user to complete the login process simply by inserting the USB device and pressing a button on the device. The key works without the need for any special software drivers.

The allure of U2F devices for multi-factor authentication is that even if an employee who has enrolled a security key for authentication tries to log in at an impostor site, the company’s systems simply refuse to request the security key if the user isn’t on their employer’s legitimate website, and the login attempt fails. Thus, the second factor cannot be phished, either over the phone or Internet.

In July 2018, Google disclosed that it had not had any of its 85,000+ employees successfully phished on their work-related accounts since early 2017, when it began requiring all employees to use physical security keys in place of one-time codes.

Who’s Behind the Botnet-Based Service BHProxies?

A security firm has discovered that a six-year-old crafty botnet known as Mylobot appears to be powering a residential proxy service called BHProxies, which offers paying customers the ability to route their web traffic anonymously through compromised computers. Here’s a closer look at Mylobot, and a deep dive into who may be responsible for operating the BHProxies service.

First identified in 2017 by the security firm Deep Instinct, Mylobot employs a number of fairly sophisticated methods to remain undetected on infected hosts, such as running exclusively in the computer’s temporary memory, and waiting 14 days before attempting to contact the botnet’s command and control servers.

Last year, researchers at Minerva Labs spotted the botnet being used to blast out sextortion scams. But according to a new report from BitSight, the Mylobot botnet’s main functionality has always been about transforming the infected system into a proxy.

The Mylobot malware includes more than 1,000 hard-coded and encrypted domain names, any one of which can be registered and used as control networks for the infected hosts. BitSight researchers found significant overlap in the Internet addresses used by those domains and a domain called BHproxies[.]com.

BHProxies sells access to “residential proxy” networks, which allow someone to rent a residential IP address to use as a relay for their Internet communications, providing anonymity and the advantage of being perceived as a residential user surfing the web. The service is currently advertising access to more than 150,000 devices globally.

“At this point, we cannot prove that BHProxies is linked to Mylobot, but we have a strong suspicion,” wrote BitSight’s Stanislas Arnoud.

To test their hypothesis, BitSight obtained 50 proxies from BHProxies. The researchers were able to use 48 of those 50 proxies to browse to a website they controlled — allowing them to record the true IP addresses of each proxy device.

“Among these 48 recovered residential proxies IP addresses, 28 (58.3%) of those were already present in our sinkhole systems, associated with the Mylobot malware family,” Arnoud continued. “This number is probably higher, but we don’t have a full visibility of the botnet. This gave us clear evidence that Mylobot infected computers are used by the BHProxies service.”

BitSight said it is currently seeing more than 50,000 unique Mylobot infected systems every day, and that India appears to be the most targeted country, followed by the United States, Indonesia and Iran.

“We believe we are only seeing part of the full botnet, which may lead to more than 150,000 infected computers as advertised by BHProxies’ operators,” Arnoud wrote.

WHO’S BEHIND BHPROXIES?

The website BHProxies[.]com has been advertised for nearly a decade on the forum Black Hat World by the user BHProxies. BHProxies has authored 129 posts on Black Hat World since 2012, and their last post on the forum was in December 2022.

BHProxies initially was fairly active on Black Hat World between May and November 2012, after which it suddenly ceased all activity. The account didn’t resume posting on the forum until April 2014.

According to cyber intelligence firm Intel 471, the user BHProxies also used the handle “hassan_isabad_subar” and marketed various software tools, including “Subar’s free email creator” and “Subar’s free proxy scraper.”

Intel 471’s data shows that hassan_isabad_subar registered on the forum using the email address jesus.fn.christ@gmail.com. In a June 2012 private message exchange with a website developer on Black Hat World, hassan_isabad_subar confided that they were working at the time to develop two websites, including the now-defunct customscrabblejewelry.com.

DomainTools.com reports that customscrabblejewelry.com was registered in 2012 to a Teresa Shotliff in Chesterland, Ohio. A search on jesus.fn.christ@gmail.com at Constella Intelligence, a company that tracks compromised databases, shows this email address is tied to an account at the fundraising platform omaze.com, for a Brian Shotliff from Chesterland, Ohio.

Reached via LinkedIn, Mr. Shotliff said he sold his BHProxies account to another Black Hat World forum user from Egypt back in 2014. Shotliff shared an April 2014 password reset email from Black Hat World, which shows he forwarded the plaintext password to the email address legendboy2050@yahoo.com. He also shared a PayPal receipt and snippets of Facebook Messenger logs showing conversations in March 2014 with legendboy2050@yahoo.com.

Constella Intelligence confirmed that legendboy2050@yahoo.com was indeed another email address tied to the hassan_isabad_subar/BHProxies identity on Black Hat World. Constella also connects legendboy2050 to Facebook and Instagram accounts for one Abdala Tawfik from Cairo. This user’s Facebook page says Tawfik also uses the name Abdalla Khafagy.

Tawfik’s Instagram account says he is a former operations manager at the social media network TikTok, as well as a former director at Crypto.com.

Abdalla Khafagy’s LinkedIn profile says he was “global director of community” at Crypto.com for about a year ending in January 2022. Before that, the resume says he was operations manager of TikTok’s Middle East and North Africa region for approximately seven months ending in April 2020.

Khafagy’s LinkedIn profile says he is currently founder of LewkLabs, a Dubai-based “blockchain-powered, SocialFi content monetization platform” that last year reported funding of $3.26 million from private investors.

The only experience listed for Khafagy prior to the TikTok job is labeled “Marketing” at “Confidential,” from February 2014 to October 2019.

Reached via LinkedIn, Mr. Khafagy told KrebsOnSecurity that he had a Black Hat World account at some point, but that he didn’t recall ever having used an account by the name BHProxies or hassan_isabad_subar. Khafagy said he couldn’t remember the name of the account he had on the forum.

“I had an account that was simply hacked from me shortly after and I never bothered about it because it wasn’t mine in the first place,” he explained.

Khafagy declined to elaborate on the five-year stint in his resume marked “Confidential.” When asked directly whether he had ever been associated with the BHProxies service, Mr. Khafagy said no.

That Confidential job listing is interesting because its start date lines up with the creation of BHproxies[.]com. Archive.org indexed its first copy of BHProxies[.]com on Mar. 5, 2014, but historic DNS records show BHproxies[.]com first came online Feb. 25, 2014.

Shortly after that conversation with Mr. Khafagy, Mr. Shotliff shared a Facebook/Meta message he received that indicated Mr. Khafagy wanted him to support the claim that the BHProxies account had somehow gone missing.

“Hey mate, it’s been a long time. Hope you are doing well. Someone from Krebs on Security reached out to me about the account I got from you on BHW,” Khafagy’s Meta account wrote. “Didn’t we try to retrieve this account? I remember mentioning to you that it got stolen and I was never able to retrieve it.”

Mr. Shotliff said Khafagy’s sudden message this week was the first time he’d heard that claim.

“He bought the account,” Shotliff said. “He might have lost the account or had it stolen, but it’s not something I remember.”

If you liked this story, you may also enjoy these other investigations into botnet-based proxy services:

A Deep Dive Into the Residential Proxy Service ‘911’
911 Proxy Service Implodes After Disclosing Breach
Meet the Administrators of the RSOCKS Proxy Botnet
The Link Between AWM Proxy & the Glupteba Botnet
15-Year-Old Malware Proxy Network VIP72 Goes Dark
Who’s Behind the TDSS Botnet?

U.S., U.K. Sanction 7 Men Tied to Trickbot Hacking Group

Authorities in the United States and United Kingdom today levied financial sanctions against seven men accused of operating “Trickbot,” a cybercrime-as-a-service platform based in Russia that has enabled countless ransomware attacks and bank account takeovers since its debut in 2016. The U.S. Department of the Treasury says the Trickbot group is associated with Russian intelligence services, and that this alliance led to the targeting of many U.S. companies and government entities.

Initially a stealthy trojan horse program delivered via email and used to steal passwords, Trickbot evolved into “a highly modular malware suite that provides the Trickbot Group with the ability to conduct a variety of illegal cyber activities, including ransomware attacks,” the Treasury Department said.

“During the height of the COVID-19 pandemic in 2020, Trickbot targeted hospitals and healthcare centers, launching a wave of ransomware attacks against hospitals across the United States,” the sanctions notice continued. “In one of these attacks, the Trickbot Group deployed ransomware against three Minnesota medical facilities, disrupting their computer networks and telephones, and causing a diversion of ambulances. Members of the Trickbot Group publicly gloated over the ease of targeting the medical facilities and the speed with which the ransoms were paid to the group.”

Only one of the men sanctioned today is known to have been criminally charged in connection with hacking activity. According to the Treasury Department, the alleged senior leader of the Trickbot group is 34-year-old Russian national Vitaly “Bentley” Kovalev.

A New Jersey grand jury indicted Kovalev in 2012 after an investigation by the U.S. Secret Service determined that he ran a massive “money mule” scheme, which used phony job offers to trick people into laundering money stolen from hacked small to mid-sized businesses in the United States. The 2012 indictment against Kovalev relates to cybercrimes he allegedly perpetrated prior to the creation of Trickbot.

BOTNET, THE MOVIE

In 2015, Kovalev reportedly began filming a movie in Russia about cybercrime called “Botnet.” According to a 2016 story from Forbes.ru, Botnet’s opening scene was to depict the plight of Christina Svechinskaya, a Russian student arrested by FBI agents in September 2010.

Svechinskaya was one of Bentley’s money mules, most of whom were young Russian students on temporary travel visas in the United States. She was among 37 alleged mules charged with aiding an international cybercrime operation — basically, setting up phony corporate bank accounts for the sole purpose of laundering stolen funds.

Although she possessed no real hacking skills, Svechinskaya’s mugshot and social media photos went viral online and she was quickly dubbed “the world’s sexiest computer hacker” by the tabloids.

Kovalev’s Botnet film project was disrupted after Russian authorities raided the film production company’s offices as part of a cybercrime investigation. In February 2016, Reuters reported that the raid was connected to a crackdown on “Dyre,” a sophisticated trojan that U.S. federal investigators say was the precursor to the Trickbot malware. The Forbes.ru article cited sources close to the investigation who said the film studio was operating as a money-laundering front for the cybercrooks behind Dyre.

TREASON

But shifting political winds in Russia would soon bring high treason charges against three of the Russian cybercrime investigators tied to the investigation into the film studio. In a major shakeup in 2017, the Kremlin levied treason charges against Sergey Mikhaylov, then deputy chief of Russia’s top anti-cybercrime unit.

Also charged with treason was Ruslan Stoyanov, then a senior employee at Russian security firm Kaspersky Lab [the Forbes.ru report from 2016 said investigators from Mikhaylov’s unit and Kaspersky Lab were present at the film company raid].

Russian media outlets have speculated that the men were accused of treason for helping American cybercrime investigators pursue top Russian hackers. However, the charges against both men were classified and have never been officially revealed. After their brief, closed trial, both men were convicted of treason. Mikhaylov was given a 22 year prison sentence; Stoyanov was sentenced to 14 years in prison.

In September 2021, the Kremlin issued treason charges against Ilya Sachkov, formerly head of the cybersecurity firm Group-IB. According to Reuters, Sachkov and his company were hired by the film studio “to advise the Botnet director and writers on the finer points of cybercrime.” Sachkov remains imprisoned in Russia pending his treason trial.

A WELL-OILED CYBERCRIME MACHINE

Trickbot was heavily used by Conti and Ryuk, two of Russia’s most ruthless and successful ransomware groups. Blockchain analysis firm Chainalysis estimates that in 2021 alone, Conti extorted more than USD $100 million from its hacking victims; Chainalysis estimates Ryuk extorted more than USD $150 million from its ransomware victims.

The U.S. cybersecurity firm CrowdStrike has long tracked the activities of Trickbot, Ryuk and Conti under the same moniker — “Wizard Spider” — which CrowdStrike describes as “a Russia-nexus cybercriminal group behind the core development and distribution of a sophisticated arsenal of criminal tools, that allow them to run multiple different types of operations.”

“CrowdStrike Intelligence has observed WIZARD SPIDER targeting multiple countries and industries such as academia, energy, financial services, government, and more,” said Adam Meyers, head of intelligence at CrowdStrike.

This is not the U.S. government’s first swipe at the Trickbot group. In early October 2020, KrebsOnSecurity broke the news that someone had launched a series of coordinated attacks designed to disrupt the Trickbot botnet. A week later, The Washington Post ran a story saying the attack on Trickbot was the work of U.S. Cyber Command, a branch of the Department of Defense headed by the director of the U.S. National Security Agency (NSA).

Days after Russia invaded Ukraine in February 2022, a Ukrainian researcher leaked several years of internal chat logs from the Conti ransomware gang. Those candid conversations offer a fascinating view into the challenges of running a sprawling criminal enterprise with more than 100 salaried employees. They also showed that Conti enjoyed protection from prosecution by Russian authorities, as long as the hacker group took care not to target Russian organizations.

In addition, the leaked Conti chats confirmed there was considerable overlap in the operation and leadership of Conti, Trickbot and Ryuk.

Michael DeBolt, chief intelligence officer at cybersecurity firm Intel 471, said the leaked Conti chats showed Bentley oversaw a team of coders tasked with ensuring that the Trickbot and Conti malware remained undetected by the different antivirus and security software vendors.

In the years prior to the emergence of Trickbot in 2016, Bentley worked closely on the Gameover ZeuS trojan, a peer-to-peer malware threat that infected between 500,000 and a million computers with an automated ransomware strain called Cryptolocker, DeBolt said.

The FBI has a standing $3 million bounty offered for the capture of Evgeny “Slavik” Bogachev, the alleged author of the Zeus trojan. And there are indications that Bentley worked directly with Bogachev. DeBolt pointed to an October 2014 discussion on the exclusive Russian hacking forum Mazafaka that included a complaint by a Russian hosting firm against a forum user by the name “Ferrari” who had failed to pay a $30,000 hosting bill.

In that discussion thread, it emerged that the hosting company thought it was filing a complaint against Slavik. But the Mazafaka member who vouched for Ferrari’s membership on the forum said they knew Ferrari as Bentley the mule handler, and at some point Slavik and Bentley must have been sharing the Ferrari user account.

“It is likely that Slavik (aka. Bogachev) and Bentley (aka. Kovalev) shared the same ‘Ferrari’ handle on the Mazafaka forum circa 2014, which suggests the two had a working relationship at that time, and supports the recent US and UK Government announcements regarding Kovalev’s past involvement in cybercrime predating Dyre or the Trickbot Group,” DeBolt said.

CrowdStrike’s Meyers said while Wizard Spider operations have significantly reduced following the demise of Conti in June 2022, today’s sanctions will likely cause temporary disruptions for the cybercriminal group while they look for ways to circumvent the financial restrictions — which make it illegal to transact with or hold the assets of sanctioned persons or entities.

“Often, when cybercriminal groups are disrupted, they will go dark for a time only to rebrand under a new name,” Meyers said.

The prosecution of Kovalev is being handled by the U.S. Attorney’s Office in New Jersey. A copy of the now-unsealed 2012 indictment of Kovalev is here (PDF).

Finland’s Most-Wanted Hacker Nabbed in France

Julius “Zeekill” Kivimäki, a 25-year-old Finnish man charged with extorting a local online psychotherapy practice and leaking therapy notes for more than 22,000 patients online, was arrested this week in France. A notorious hacker convicted of perpetrating tens of thousands of cybercrimes, Kivimäki had been in hiding since October 2022, when he failed to show up in court and Finland issued an international warrant for his arrest.

In late October 2022, Kivimäki was charged (and “arrested in absentia,” according to the Finns) with attempting to extort money from the Vastaamo Psychotherapy Center. In that breach, which occurred in October 2020, a hacker using the handle “Ransom Man” threatened to publish patient psychotherapy notes if Vastaamo did not pay a six-figure ransom demand.

Vastaamo refused, so Ransom Man shifted to extorting individual patients — sending them targeted emails threatening to publish their therapy notes unless paid a 500-euro ransom.

When Ransom Man found little success extorting patients directly, they uploaded to the dark web a large compressed file containing all of the stolen Vastaamo patient records.

But as documented by KrebsOnSecurity in November 2022, security experts soon discovered Ransom Man had mistakenly included an entire copy of their home folder, where investigators found many clues pointing to Kivimäki’s involvement. From that story:

“Among those who grabbed a copy of the database was Antti Kurittu, a team lead at Nixu Corporation and a former criminal investigator. In 2013, Kurittu worked on an investigation involving Kivimäki’s use of the Zbot botnet, among other activities Kivimäki engaged in as a member of the hacker group Hack the Planet (HTP).”

“It was a huge opsec [operational security] fail, because they had a lot of stuff in there — including the user’s private SSH folder, and a lot of known hosts that we could take a very good look at,” Kurittu told KrebsOnSecurity, declining to discuss specifics of the evidence investigators seized. “There were also other projects and databases.”

According to the French news site actu.fr, Kivimäki was arrested around 7 a.m. on Feb. 3, after authorities in Courbevoie responded to a domestic violence report. Kivimäki had been out earlier with a woman at a local nightclub, and later the two returned to her home but reportedly got into a heated argument.

Police responding to the scene were admitted by another woman — possibly a roommate — and found the man inside still sleeping off a long night. When they roused him and asked for identification, the 6′ 3″ blonde, green-eyed man presented an ID that stated he was of Romanian nationality.

The French police were doubtful. After consulting records on most-wanted criminals, they quickly identified the man as Kivimäki and took him into custody.

Kivimäki initially gained notoriety as a self-professed member of the Lizard Squad, a mainly low-skilled hacker group that specialized in DDoS attacks. But American and Finnish investigators say Kivimäki’s involvement in cybercrime dates back to at least 2008, when he was introduced to a founding member of what would soon become HTP.

Finnish police said Kivimäki also used the nicknames “Ryan”, “RyanC” and “Ryan Cleary” (Ryan Cleary was actually a member of a rival hacker group — LulzSec — who was sentenced to prison for hacking).

Kivimaki and other HTP members were involved in mass-compromising web servers using known vulnerabilities, and by 2012 Kivimäki’s alias Ryan Cleary was selling access to those servers in the form of a DDoS-for-hire service. Kivimäki was 15 years old at the time.

In 2013, investigators going through devices seized from Kivimäki found computer code that had been used to crack more than 60,000 web servers using a previously unknown vulnerability in Adobe’s ColdFusion software.

KrebsOnSecurity detailed the work of HTP in September 2013, after the group compromised servers inside data brokers LexisNexis, Kroll, and Dun & Bradstreet.

The group used the same ColdFusion flaws to break into the National White Collar Crime Center (NWC3), a non-profit that provides research and investigative support to the U.S. Federal Bureau of Investigation (FBI).

As KrebsOnSecurity reported at the time, this small ColdFusion botnet of data broker servers was being controlled by the same cybercriminals who’d assumed control over ssndob[.]ms, which operated one of the underground’s most reliable services for obtaining Social Security Number, dates of birth and credit file information on U.S. residents.

Multiple law enforcement sources told KrebsOnSecurity that Kivimäki was responsible for making an August 2014 bomb threat against former Sony Online Entertainment President John Smedley that grounded an American Airlines plane. That incident was widely reported to have started with a tweet from the Lizard Squad, but Smedley and others said it started with a call from Kivimäki.

Kivimäki also was involved in calling in multiple fake bomb threats and “swatting” incidents — reporting fake hostage situations at an address to prompt a heavily armed police response to that location.

Kivimäki’s apparent indifference to hiding his tracks drew the interest of Finnish and American cybercrime investigators, and soon Finnish prosecutors charged him with an array of cybercrime violations. At trial, prosecutors presented evidence showing he’d used stolen credit cards to buy luxury goods and shop vouchers, and participated in a money laundering scheme that he used to fund a trip to Mexico.

Kivimäki was ultimately convicted of orchestrating more than 50,000 cybercrimes. But largely because he was still a minor at the time (17) , he was given a 2-year suspended sentence and ordered to forfeit EUR 6,558.

As I wrote in 2015 following Kivimäki’s trial:

“The danger in such a decision is that it emboldens young malicious hackers by reinforcing the already popular notion that there are no consequences for cybercrimes committed by individuals under the age of 18.

Kivimäki is now crowing about the sentence; He’s changed the description on his Twitter profile to “Untouchable hacker god.” The Twitter account for the Lizard Squad tweeted the news of Kivimäki’s non-sentencing triumphantly: “All the people that said we would rot in prison don’t want to comprehend what we’ve been saying since the beginning, we have free passes.”

Something tells me Kivimäki won’t get off so easily this time, assuming he is successfully extradited back to Finland. A statement by the Finnish police says they are seeking Kivimäki’s extradition and that they expect the process to go smoothly.

Kivimäki could not be reached for comment. But he has been discussing his case on Reddit using his legal first name — Aleksanteri (he stopped using his middle name Julius when he moved abroad several years ago). In a post dated Jan. 31, 2022, Kivimäki responded to another Finnish-speaking Reddit user who said they were a fugitive from justice.

“Same thing,” Kivimäki replied. “Shall we start some kind of club? A support organization for wanted persons?”

Administrator of RSOCKS Proxy Botnet Pleads Guilty

Denis Emelyantsev, a 36-year-old Russian man accused of running a massive botnet called RSOCKS that stitched malware into millions of devices worldwide, pleaded guilty to two counts of computer crime violations in a California courtroom this week. The plea comes just months after Emelyantsev was extradited from Bulgaria, where he told investigators, “America is looking for me because I have enormous information and they need it.”

First advertised in the cybercrime underground in 2014, RSOCKS was the web-based storefront for hacked computers that were sold as “proxies” to cybercriminals looking for ways to route their Web traffic through someone else’s device.

Customers could pay to rent access to a pool of proxies for a specified period, with costs ranging from $30 per day for access to 2,000 proxies, to $200 daily for up to 90,000 proxies.

Many of the infected systems were Internet of Things (IoT) devices, including industrial control systems, time clocks, routers, audio/video streaming devices, and smart garage door openers. Later in its existence, the RSOCKS botnet expanded into compromising Android devices and conventional computers.

In June 2022, authorities in the United States, Germany, the Netherlands and the United Kingdom announced a joint operation to dismantle the RSOCKS botnet. But that action did not name any defendants.

Inspired by that takedown, KrebsOnSecurity followed clues from the RSOCKS botnet master’s identity on the cybercrime forums to Emelyantsev’s personal blog, where he went by the name Denis Kloster. The blog featured musings on the challenges of running a company that sells “security and anonymity services to customers around the world,” and even included a group photo of RSOCKS employees.

“Thanks to you, we are now developing in the field of information security and anonymity!,” Kloster’s blog enthused. “We make products that are used by thousands of people around the world, and this is very cool! And this is just the beginning!!! We don’t just work together and we’re not just friends, we’re Family.”

But by the time that investigation was published, Emelyantsev had already been captured by Bulgarian authorities responding to an American arrest warrant. At his extradition hearing, Emelyantsev claimed he would prove his innocence in an U.S. courtroom.

“I have hired a lawyer there and I want you to send me as quickly as possible to clear these baseless charges,” Emelyantsev told the Bulgarian court. “I am not a criminal and I will prove it in an American court.”

Emelyantsev was far more than just an administrator of a large botnet. Behind the facade of his Internet advertising company based in Omsk, Russia, the RSOCKS botmaster was a major player in the Russian email spam industry for more than a decade.

Some of the top Russian cybercrime forums have been hacked over the years, and leaked private messages from those forums show the RSOCKS administrator claimed ownership of the RUSdot spam forum. RUSdot is the successor forum to Spamdot, a far more secretive and restricted community where most of the world’s top spammers, virus writers and cybercriminals collaborated for years before the forum imploded in 2010.

Indeed, the very first mentions of RSOCKS on any Russian-language cybercrime forums refer to the service by its full name as the “RUSdot Socks Server.”

Email spam — and in particular malicious email sent via compromised computers — is still one of the biggest sources of malware infections that lead to data breaches and ransomware attacks. So it stands to reason that as administrator of Russia’s most well-known forum for spammers, Emelyantsev probably knows quite a bit about other top players in the botnet spam and malware community.

It remains unclear whether Emelyantsev made good on his promise to spill that knowledge to American investigators as part of his plea deal. The case is being prosecuted by the U.S. Attorney’s Office for the Southern District of California, which has not responded to a request for comment.

Emelyantsev pleaded guilty on Monday to two counts, including damage to protected computers and conspiracy to damage protected computers. He faces a maximum of 20 years in prison, and is currently scheduled to be sentenced on April 27, 2023.

Thinking of Hiring or Running a Booter Service? Think Again.

Most people who operate DDoS-for-hire businesses attempt to hide their true identities and location. Proprietors of these so-called “booter” or “stresser” services — designed to knock websites and users offline — have long operated in a legally murky area of cybercrime law. But until recently, their biggest concern wasn’t avoiding capture or shutdown by the feds: It was minimizing harassment from unhappy customers or victims, and insulating themselves against incessant attacks from competing DDoS-for-hire services.

And then there are booter store operators like John Dobbs, a 32-year-old computer science graduate student living in Honolulu, Hawaii. For at least a decade until late last year, Dobbs openly operated IPStresser[.]com, a popular and powerful attack-for-hire service that he registered with the state of Hawaii using his real name and address. Likewise, the domain was registered in Dobbs’s name and hometown in Pennsylvania.

The only work experience Dobbs listed on his resume was as a freelance developer from 2013 to the present day. Dobbs’s resume doesn’t name his booter service, but in it he brags about maintaining websites with half a million page views daily, and “designing server deployments for performance, high-availability and security.”

In December 2022, the U.S. Department of Justice seized Dobbs’s IPStresser website and charged him with one count of aiding and abetting computer intrusions. Prosecutors say his service attracted more than two million registered users, and was responsible for launching a staggering 30 million distinct DDoS attacks.

The government seized four-dozen booter domains, and criminally charged Dobbs and five other U.S. men for allegedly operating stresser services. This was the Justice Department’s second such mass takedown targeting DDoS-for-hire services and their accused operators. In 2018, the feds seized 15 stresser sites, and levied cybercrime charges against three men for their operation of booter services.

Many accused stresser site operators have pleaded guilty over the years after being hit with federal criminal charges. But the government’s core claim — that operating a booter site is a violation of U.S. computer crime laws — wasn’t properly tested in the courts until September 2021.

That was when a jury handed down a guilty verdict against Matthew Gatrel, a then 32-year-old St. Charles, Ill. man charged in the government’s first 2018 mass booter bust-up. Despite admitting to FBI agents that he ran two booter services (and turning over plenty of incriminating evidence in the process), Gatrel opted to take his case to trial, defended the entire time by court-appointed attorneys.

Prosecutors said Gatrel’s booter services — downthem[.]org and ampnode[.]com — helped some 2,000 paying customers launch debilitating digital assaults on more than 20,000 targets, including many government, banking, university and gaming websites.

Gatrel was convicted on all three charges of violating the Computer Fraud and Abuse Act, including conspiracy to commit unauthorized impairment of a protected computer, conspiracy to commit wire fraud, and unauthorized impairment of a protected computer. He was sentenced to two years in prison.

Now, it appears Dobbs is also planning to take his chances with a jury. On Jan. 4, Dobbs entered a plea of not guilty. Neither Dobbs nor his court-appointed attorney responded to requests for comment.

But as it happens, Dobbs himself provided some perspective on his thinking in an email exchange with KrebsOnSecurity back in 2020. I’d reached out to Dobbs because it was obvious he didn’t mind if people knew he operated one of the world’s most popular DDoS-for-hire sites, and I was genuinely curious why he was so unafraid of getting raided by the feds.

“Yes, I am the owner of the domain you listed, however you are not authorized to post an article containing said domain name, my name or this email address without my prior written permission,” Dobbs replied to my initial outreach on March 10, 2020 using his email address from the University of Hawaii at Manoa.

A few hours later, I received more strident instructions from Dobbs, this time via his official email address at ipstresser[.]com.

“I will state again for absolute clarity, you are not authorized to post an article containing ipstresser.com, my name, my GitHub profile and/or my hawaii.edu email address,” Dobbs wrote, as if taking dictation from a lawyer who doesn’t understand how the media works.

When pressed for particulars on his business, Dobbs replied that the number of IPStresser customers was “privileged information,” and said he didn’t even advertise the service. When asked whether he was concerned that many of his competitors were by then serving jail time for operating similar booter services, Dobbs maintained that the way he’d set up the business insulated him from any liability.

“I have been aware of the recent law enforcement actions against other operators of stress testing services,” Dobbs explained. “I cannot speak to the actions of these other services, but we take proactive measures to prevent misuse of our service and we work with law enforcement agencies regarding any reported abuse of our service.”

What were those proactive measures? In a 2015 interview with ZDNet France, Dobbs asserted that he was immune from liability because his clients all had to submit a digital signature attesting that they wouldn’t use the site for illegal purposes.

“Our terms of use are a legal document that protects us, among other things, from certain legal consequences,” Dobbs told ZDNet. “Most other sites are satisfied with a simple checkbox, but we ask for a digital signature in order to imply real consent from our customers.”

Dobbs told KrebsOnSecurity his service didn’t generate much of a profit, but rather that he was motivated by “filling a legitimate need.”

“My reason for offering the service is to provide the ability to test network security measures before someone with malicious intent attacks said network and causes downtime,” he said. “Sure, some people see only the negatives, but there is a long list of companies I have worked with over the years who would say my service is a godsend and has helped them prevent tens of thousands of dollars in downtime resulting from a malicious attack.”

“I do not believe that providing such a service is illegal, assuming proper due diligence to prevent malicious use of the service, as is the case for IPstresser[.]com,” Dobbs continued. “Someone using such a service to conduct unauthorized testing is illegal in many countries, however, the legal liability is that of the user, not of the service provider.”

Dobbs’s profile on GitHub includes more of his ideas about his work, including a curious piece on “software engineering ethics.” In his January 2020 treatise “My Software Engineering Journey,” Dobbs laments that nothing in his formal education prepared him for the reality that a great deal of his work would be so tedious and repetitive (this tracks closely with a 2020 piece here called Career Choice Tip: Cybercrime is Mostly Boring).

“One area of software engineering that I think should be covered more in university classes is maintenance,” Dobbs wrote. “Projects are often worked on for at most a few months, and students do not experience the maintenance aspect of software engineering until they reach the workplace. Let’s face it, ongoing maintenance of a project is boring; there is nothing like the euphoria of completing a project you have been working on for months and releasing it to the world, but I would say that half of my professional career has been related to maintenance.”

Allison Nixon is chief research officer at the New York-based cybersecurity firm Unit 221B. Nixon is part of a small group of researchers who have been closely tracking the DDoS-for-hire industry for years, and she said Dobbs’s claim that what he’s doing is legal makes sense given that it took years for the government to recognize the size of the problem.

“These guys are arguing that their services are legal because for a long time nothing happened to them,” Nixon said. “It’s difficult to argue something is illegal if no one has ever been arrested for it before.”

Nixon says the government’s fight against the booter services — and by extension other types of cybercrimes — is hampered by a legal system that often takes years to cycle through cybercrime cases.

“With cybercrime, the cycle between the crime and investigation and arrest can often take a year or more, and that’s for a really fast case,” Nixon said. “If someone robbed a store, we’d expect a police response within a few minutes. If someone robs a bank’s website, there might be some indication of police activity within a year.”

Nixon praised the 2022 and 2018 booter takedown operations as “huge steps forward,” but added that “there need to be more of them, and faster.”

“This time lag is part of the reason it’s so difficult to shut down the pipeline of new talent going into cybercrime,” she said. “They think what they’re doing is legal because nothing has happened, and because of the amount of time it takes to shut these things down. And it’s really a big problem, where we see a lot of people becoming criminals on the basis that what they’re doing isn’t really illegal because the cops won’t do anything.”

In December 2020, Dobbs filed an application with the state of Hawaii to withdraw IP Stresser Inc. from its roster of active companies. But according to prosecutors, Dobbs would continue to operate his DDoS-for-hire site until at least November 2022.

Two months after our 2020 email interview, Dobbs would earn his second bachelor’s degree (in computer science; his resume says he earned a bachelor’s in civil engineering from Drexel University in 2013). The federal charges against Dobbs came just as he was preparing to enter his final semester toward a master’s degree in computer science at the University of Hawaii.

Nixon says she has a message for anyone involved in operating a DDoS-for-hire service.

“Unless you are verifying that the target owns the infrastructure you’re targeting, there is no legal way to operate a DDoS-for-hire service,” she said. “There is no Terms of Service you could put on the site that would somehow make it legal.”

And her message to the customers of those booter services? It’s a compelling one to ponder, particularly now that investigators in the United States, U.K. and elsewhere have started going after booter service customers.

“When a booter service claims they don’t share logs, they’re lying because logs are legal leverage for when the booter service operator gets arrested,” Nixon said. “And when they do, you’re going to be the first people they throw under the bus.”

Identity Thieves Bypassed Experian Security to View Credit Reports

Identity thieves have been exploiting a glaring security weakness in the website of Experian, one of the big three consumer credit reporting bureaus. Normally, Experian requires that those seeking a copy of their credit report successfully answer several multiple choice questions about their financial history. But until the end of 2022, Experian’s website allowed anyone to bypass these questions and go straight to the consumer’s report. All that was needed was the person’s name, address, birthday and Social Security number.

In December, KrebsOnSecurity heard from Jenya Kushnir, a security researcher living in Ukraine who said he discovered the method being used by identity thieves after spending time on Telegram chat channels dedicated to the cashing out of compromised identities.

“I want to try and help to put a stop to it and make it more difficult for [ID thieves] to access, since [Experian is] not doing shit and regular people struggle,” Kushnir wrote in an email to KrebsOnSecurity explaining his motivations for reaching out. “If somehow I can make small change and help to improve this, inside myself I can feel that I did something that actually matters and helped others.”

Kushnir said the crooks learned they could trick Experian into giving them access to anyone’s credit report, just by editing the address displayed in the browser URL bar at a specific point in Experian’s identity verification process.

Following Kushnir’s instructions, I sought a copy of my credit report from Experian via annualcreditreport.com — a website that is required to provide all Americans with a free copy of their credit report from each of the three major reporting bureaus, once per year.

Annualcreditreport.com begins by asking for your name, address, SSN and birthday. After I supplied that and told Annualcreditreport.com I wanted my report from Experian, I was taken to Experian.com to complete the identity verification process.

Normally at this point, Experian’s website would present four or five multiple-guess questions, such as “Which of the following addresses have you lived at?”

Kushnir told me that when the questions page loads, you simply change the last part of the URL from “/acr/oow/” to “/acr/report,” and the site would display the consumer’s full credit report.

But when I tried to get my report from Experian via annualcreditreport.com, Experian’s website said it didn’t have enough information to validate my identity. It wouldn’t even show me the four multiple-guess questions. Experian said I had three options for a free credit report at this point: Mail a request along with identity documents, call a phone number for Experian, or upload proof of identity via the website.

But that didn’t stop Experian from showing me my full credit report after I changed the Experian URL as Kushnir had instructed — modifying the error page’s trailing URL from “/acr/OcwError” to simply “/acr/report”.

Experian’s website then immediately displayed my entire credit file.

Even though Experian said it couldn’t tell that I was actually me, it still coughed up my report. And thank goodness it did. The report contains so many errors that it’s probably going to take a good deal of effort on my part to straighten out.

Now I know why Experian has NEVER let me view my own file via their website. For example, there were four phone numbers on my Experian credit file: Only one of them was mine, and that one hasn’t been mine for ages.

I was so dumbfounded by Experian’s incompetence that I asked a close friend and trusted security source to try the method on her identity file at Experian. Sure enough, when she got to the part where Experian asked questions, changing the last part of the URL in her address bar to “/report” bypassed the questions and immediately displayed her full credit report. Her report also was replete with errors.

KrebsOnSecurity shared Kushnir’s findings with Experian on Dec. 23, 2022. On Dec. 27, 2022, Experian’s PR team acknowledged receipt of my Dec. 23 notification, but the company has so far ignored multiple requests for comment or clarification.

By the time Experian confirmed receipt of my report, the “exploit” Kushnir said he learned from the identity thieves on Telegram had been patched and no longer worked. But it remains unclear how long Experian’s website was making it so easy to access anyone’s credit report.

In response to information shared by KrebsOnSecurity, Senator Ron Wyden (D-Ore.) said he was disappointed — but not at all surprised — to hear about yet another cybersecurity lapse at Experian.

“The credit bureaus are poorly regulated, act as if they are above the law and have thumbed their noses at Congressional oversight,” Wyden said in a written statement. “Just last year, Experian ignored repeated briefing requests from my office after you revealed another cybersecurity lapse the company.”

Sen. Wyden’s quote above references a story published here in July 2022, which broke the news that identity thieves were hijacking consumer accounts at Experian.com just by signing up as them at Experian once more, supplying the target’s static, personal information (name, DoB/SSN, address) but a different email address.

From interviews with multiple victims who contacted KrebsOnSecurity after that story, it emerged that Experian’s own customer support representatives were actually telling consumers who got locked out of their Experian accounts to recreate their accounts using their personal information and a new email address. This was Experian’s advice even for people who’d just explained that this method was what identity thieves had used to lock them in out in the first place.

Clearly, Experian found it simpler to respond this way, rather than acknowledging the problem and addressing the root causes (lazy authentication and abhorrent account recovery practices). It’s also worth mentioning that reports of hijacked Experian.com accounts persisted into late 2022. That screw-up has since prompted a class action lawsuit against Experian.

Sen. Wyden said the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) need to do much more to protect Americans from screw-ups by the credit bureaus.

“If they don’t believe they have the authority to do so, they should endorse legislation like my Mind Your Own Business Act, which gives the FTC power to set tough mandatory cybersecurity standards for companies like Experian,” Wyden said.

Sadly, none of this is terribly shocking behavior for Experian, which has shown itself a completely negligent custodian of obscene amounts of highly sensitive consumer information.

In April 2021, KrebsOnSecurity revealed how identity thieves were exploiting lax authentication on Experian’s PIN retrieval page to unfreeze consumer credit files. In those cases, Experian failed to send any notice via email when a freeze PIN was retrieved, nor did it require the PIN to be sent to an email address already associated with the consumer’s account.

A few days after that April 2021 story, KrebsOnSecurity broke the news that an Experian API was exposing the credit scores of most Americans.

It’s bad enough that we can’t really opt out of companies like Experian making $2.6 billion each quarter collecting and selling gobs of our personal and financial information. But there has to be some meaningful accountability when these monopolistic companies engage in negligent and reckless behavior with the very same consumer data that feeds their quarterly profits. Or when security and privacy shortcuts are found to be intentional, like for cost-saving reasons.

And as we saw with Equifax’s consolidated class-action settlement in response to letting state-sponsored hackers from China steal data on nearly 150 million Americans back in 2017, class-actions and more laughable “free credit monitoring” services from the very same companies that created the problem aren’t going to cut it.

WHAT CAN YOU DO?

It is easy to adopt a defeatist attitude with the credit bureaus, who often foul things up royally even for consumers who are quite diligent about watching their consumer credit files and disputing any inaccuracies.

But there are some concrete steps that everyone can take which will dramatically lower the risk that identity thieves will ruin your financial future. And happily, most of these steps have the side benefit of costing the credit bureaus money, or at least causing the data they collect about you to become less valuable over time.

The first step is awareness. Find out what these companies are saying about you behind your back. Keep in mind that — fair or not — your credit score as collectively determined by these bureaus can affect whether you get that loan, apartment, or job. In that context, even small, unintentional errors that are unrelated to identity theft can have outsized consequences for consumers down the road.

Each bureau is required to provide a free copy of your credit report every year. The easiest way to get yours is through annualcreditreport.com.

Some consumers report that this site never works for them, and that each bureau will insist they don’t have enough information to provide a report. I am definitely in this camp. Thankfully, a financial institution that I already have a relationship with offers the ability to view your credit file through them. Your mileage on this front may vary, and you may end up having to send copies of your identity documents through the mail or website.

When you get your report, look for anything that isn’t yours, and then document and file a dispute with the corresponding credit bureau. And after you’ve reviewed your report, set a calendar reminder to recur every four months, reminding you it’s time to get another free copy of your credit file.

If you haven’t already done so, consider making 2023 the year that you freeze your credit files at the three major reporting bureaus, including Experian, Equifax and TransUnion. It is now free to people in all 50 U.S. states to place a security freeze on their credit files. It is also free to do this for your partner and/or your dependents.

Freezing your credit means no one who doesn’t already have a financial relationship with you can view your credit file, making it unlikely that potential creditors will grant new lines of credit in your name to identity thieves. Freezing your credit file also means Experian and its brethren can no longer sell peeks at your credit history to others.

Anytime you wish to apply for new credit or a new job, or open an account at a utility or communications provider, you can quickly thaw a freeze on your credit file, and set it to freeze automatically again after a specified length of time.

Please don’t confuse a credit freeze (a.k.a. “security freeze”) with the alternative that the bureaus will likely steer you towards when you ask for a freeze: “Credit lock” services.

The bureaus pitch these credit lock services as a way for consumers to easily toggle their credit file availability with push of a button on a mobile app, but they do little to prevent the bureaus from continuing to sell your information to others.

My advice: Ignore the lock services, and just freeze your credit files already.

One final note. Frequent readers here will have noticed that I’ve criticized these so-called “knowledge-based authentication” or KBA questions that Experian’s website failed to ask as part of its consumer verification process.

KrebsOnSecurity has long assailed KBA as weak authentication because the questions and answers are drawn largely from consumer records that are public and easily accessible to organized identity theft groups.

That said, given that these KBA questions appear to be the ONLY thing standing between me and my Experian credit report, it seems like maybe they should at least take care to ensure that those questions actually get asked.

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.

Six Charged in Mass Takedown of DDoS-for-Hire Sites

The U.S. Department of Justice (DOJ) today seized four-dozen domains that sold “booter” or “stresser” services — businesses that make it easy and cheap for even non-technical users to launch powerful Distributed Denial of Service (DDoS) attacks designed knock targets offline. The DOJ also charged six U.S. men with computer crimes related to their alleged ownership of the popular DDoS-for-hire services.

The DOJ said the 48 domains it seized helped paying customers launch millions of digital sieges capable of knocking Web sites and even entire network providers offline.

Booter services are advertised through a variety of methods, including Dark Web forums, chat platforms and even youtube.com. They accept payment via PayPal, Google Wallet, and/or cryptocurrencies, and subscriptions can range in price from just a few dollars to several hundred per month. The services are generally priced according to the volume of traffic to be hurled at the target, the duration of each attack, and the number of concurrent attacks allowed.

Prosecutors in Los Angeles say the booter sites supremesecurityteam[.]com and royalstresser[.]com were the brainchild of Jeremiah Sam Evans Miller, a.k.a. “John the Dev,” a 23-year-old from San Antonio, Texas. Miller was charged this week with conspiracy and violations of the Computer Fraud and Abuse Act (CFAA). The complaint against Miller alleges Royalstresser launched nearly 200,000 DDoS attacks between November 2021 and February 2022.

Defendant Angel Manuel Colon Jr., a.k.a Anonghost720 and Anonghost1337, is a 37-year-old from Belleview, Fla. Colon is suspected of running the booter service securityteam[.]io. He was also charged with conspiracy and CFAA violations. The feds say the SecurityTeam stresser service conducted 1.3 million attacks between 2018 and 2022, and attracted some 50,000 registered users.

Charged with conspiracy were Corey Anthony Palmer, 22, of Lauderhill, Fla, for his alleged ownership of booter[.]sx; and Shamar Shattock, 19, of Margate, Fla., for allegedly operating the booter service astrostress[.]com, which had more than 30,000 users and blasted out some 700,000 attacks.

Two other alleged booter site operators were charged in Alaska. John M. Dobbs, 32, of Honolulu, HI is charged with aiding and abetting violations of the CFAA related to the operation of IPStresser[.]com, which he allegedly ran for nearly 13 years until last month. During that time, IPstresser launched approximately 30 million DDoS attacks and garnered more than two million registered users.

Joshua Laing, 32, of Liverpool, NY, also was charged with CFAA infractions tied to his alleged ownership of the booter service TrueSecurityServices[.]io, which prosecutors say had 18,000 users and conducted over 1.2 million attacks between 2018 and 2022.

Purveyors of stressers and booters claim they are not responsible for how customers use their services, and that they aren’t breaking the law because — like most security tools — stresser services can be used for good or bad purposes. For example, all of the above-mentioned booter sites contained wordy “terms of use” agreements that required customers to agree they will only stress-test their own networks — and that they won’t use the service to attack others.

Dobbs, the alleged administrator of IPStresser, gave an interview to ZDNet France in 2015, in which he asserted that he was immune from liability because his clients all had to submit a digital signature attesting that they wouldn’t use the site for illegal purposes.

“Our terms of use are a legal document that protects us, among other things, from certain legal consequences,” Dobbs told ZDNet. “Most other sites are satisfied with a simple checkbox, but we ask for a digital signature in order to imply real consent from our customers.”

But the DOJ says these disclaimers usually ignore the fact that most booter services are heavily reliant on constantly scanning the Internet to commandeer misconfigured devices that are critical for maximizing the size and impact of DDoS attacks.

“None of these sites ever required the FBI to confirm that it owned, operated, or had any property right to the computer that the FBI attacked during its testing (as would be appropriate if the attacks were for a legitimate or authorized purpose),” reads an affidavit (PDF) filed by Elliott Peterson, a special agent in the FBI’s Anchorage field office.

“Analysis of data related to the FBI-initiated attacks revealed that the attacks launched by the SUBJECT DOMAINS involved the extensive misuse of third-party services,” Peterson continued. “All of the tested services offered ‘amplification’ attacks, where the attack traffic is amplified through unwitting third-party servers in order to increase the overall attack size, and to shift the financial burden of generating and transmitting all of that data away from the booter site administrator(s) and onto third parties.”

According to U.S. federal prosecutors, the use of booter and stresser services to conduct attacks is punishable under both wire fraud laws and the Computer Fraud and Abuse Act (18 U.S.C. § 1030), and may result in arrest and prosecution, the seizure of computers or other electronics, as well as prison sentences and a penalty or fine.

The charges unsealed today stemmed from investigations launched by the FBI’s field offices in Los Angeles and Alaska, which spent months purchasing and testing attack services offered by the booter sites.

A similar investigation initiating from the FBI’s Alaska field office in 2018 culminated in a takedown and arrest operation that targeted 15 DDoS-for-hire sites, as well as three booter store defendants who later pleaded guilty.

The Justice Department says its trying to impress upon people that even buying attacks from DDoS-for-hire services can land Internet users in legal jeopardy.

“Whether a criminal launches an attack independently or pays a skilled contractor to carry one out, the FBI will work with victims and use the considerable tools at our disposal to identify the person or group responsible,” said Donald Alway, the assistant director in charge of the FBI’s Los Angeles field office.

“Potential users and administrators should think twice before buying or selling these illegal services,” said Special Agent Antony Jung of the FBI Anchorage field office. “The FBI and our international law enforcement partners continue to intensify efforts in combatting DDoS attacks, which will have serious consequences for offenders.”

The United Kingdom, which has been battling its fair share of domestic booter bosses, in 2020 started running online ads aimed at young people who search the Web for booter services. And in Europe, prosecutors have even gone after booter customers.

In conjunction with today’s law enforcement action, the FBI and the Netherlands Police joined authorities in the U.K. in announcing they are now running targeted placement ads to steer those searching for booter services toward a website detailing the potential legal risks of hiring an online attack.

“The purpose of the ads is to deter potential cyber criminals searching for DDoS services in the United States and around the globe, as well as to educate the public on the illegality of DDoS activities,” the DOJ said in a press release.

Here is the full list of booter site domains seized (or in the process of being seized) by the DOJ:

api-sky[.]xyz
astrostress[.]com
blackstresser[.]net
booter[.]sx
booter[.]vip
bootyou[.]net
brrsecurity[.]org
buuter[.]cc
cyberstress[.]us
defconpro[.]net
dragonstresser[.]com
dreams-stresser[.]io
exotic-booter[.]com
freestresser[.]so
instant-stresser[.]com
ipstress[.]org
ipstress[.]vip
ipstresser[.]com
ipstresser[.]us
ipstresser[.]wtf
ipstresser[.]xyz
kraysec[.]com
mcstorm[.]io
nightmarestresser[.]com
orphicsecurityteam[.]com
ovhstresser[.]com
quantum-stresser[.]net
redstresser[.]cc
royalstresser[.]com
securityteam[.]io
shock-stresser[.]com
silentstress[.]net
stresser[.]app
stresser[.]best
stresser[.]gg
stresser[.]is
stresser[.]net/stresser[.]org
stresser[.]one
stresser[.]shop
stresser[.]so
stresser[.]top
stresserai[.]com
sunstresser[.]com
supremesecurityteam[.]com
truesecurityservices[.]io
vdos-s[.]co
zerostresser[.]com

Judge Orders U.S. Lawyer in Russian Botnet Case to Pay Google

In December 2021, Google filed a civil lawsuit against two Russian men thought to be responsible for operating Glupteba, one of the Internet’s largest and oldest botnets. The defendants, who initially pursued a strategy of counter suing Google for interfering in their sprawling cybercrime business, later brazenly offered to dismantle the botnet in exchange for payment from Google. The judge in the case was not amused, found for the plaintiff, and ordered the defendants and their U.S. attorney to pay Google’s legal fees.

Glupteba is a rootkit that steals passwords and other access credentials, disables security software, and tries to compromise other devices on the victim network — such as Internet routers and media storage servers — for use in relaying spam or other malicious traffic.

Collectively, the tens of thousands of systems infected with Glupteba on any given day feed into a number of major cybercriminal businesses: The botnet’s proprietors sell the credential data they steal, use the botnet to place disruptive ads on the infected computers, and mine cryptocurrencies. Glupteba also rents out infected systems as “proxies,” directing third-party traffic through the infected devices to disguise the origin of the traffic.

In June 2022, KrebsOnSecurity showed how the malware proxy services RSOCKS and AWMProxy were entirely dependent on the Glupteba botnet for fresh proxies, and that the founder of AWMProxy was Dmitry Starovikov — one of the Russian men named in Google’s lawsuit.

Google sued Starovikov and 15 other “John Doe” defendants, alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), the Computer Fraud and Abuse Act, trademark and unfair competition law, and unjust enrichment.

In June, Google and the named defendants agreed that the case would proceed as a nonjury action because Google had withdrawn its claim for damages — seeking only injunctive relief to halt the operations of the botnet.

The defendants, who worked for a Russian firm called “Valtron” that was also named in the lawsuit, told Google that they were interested in settling. The defendants said they could potentially help Google by taking the botnet offline.

But the court expressed frustration that the defendants were unwilling to consent to a permanent injunction, and at the same time were unable to articulate why an injunction forbidding them from engaging in unlawful activities would pose a problem.

“The Defendants insisted that they were not engaged in criminal activity, and that any alleged activity in which they were engaged was legitimate,” U.S. District Court Judge Denise Cote wrote. “Nevertheless, the Defendants resisted entry of a permanent injunction, asserting that Google’s use of the preliminary injunction had disrupted their normal business operations.”

While the defendants represented that they had the ability to dismantle the Glupteba botnet, when it came time for discovery — the stage in a lawsuit where both parties can compel the production of documents and other information pertinent to their case — the attorney for the defendants told the court his clients had been fired by Valtron in late 2021, and thus no longer had access to their work laptops or the botnet.

The lawyer for the defendants — New York-based cybercrime defense attorney Igor Litvak — told the court he first learned about his clients’ termination from Valtron on May 20, a fact Judge Cote said she found “troubling” given statements he made to the court after that date representing that his clients still had access to the botnet.

The court ultimately suspended the discovery process against Google, saying there was reason to believe the defendants sought discovery only “to learn whether they could circumvent the steps Google has taken to block the malware.”

On September 6, Litvak emailed Google that his clients were willing to discuss settlement.

“The parties held a call on September 8, at which Litvak explained that the Defendants would be willing to provide Google with the private keys for Bitcoin addresses associated with the Glupteba botnet, and that they would promise not to engage in their alleged criminal activity in the future (without any admission of wrongdoing),” the judge wrote.

“In exchange, the Defendants would receive Google’s agreement not to report them to law enforcement, and a payment of $1 million per defendant, plus $110,000 in attorney’s fees,” Judge Cote continued. “The Defendants stated that, although they do not currently have access to the private keys, Valtron would be willing to provide them with the private keys if the case were settled. The Defendants also stated that they believe these keys would help Google shut down the Glupteba botnet.”

Google rejected the defendants’ offer as extortionate, and reported it to law enforcement. Judge Cote also found Litvak was complicit in the defendants’ efforts to mislead the court, and ordered him to join his clients in paying Google’s legal fees.

“It is now clear that the Defendants appeared in this Court not to proceed in good faith to defend against Google’s claims but with the intent to abuse the court system and discovery rules to reap a profit from Google,” Judge Cote wrote.

Litvak has filed a motion to reconsider (PDF), asking the court to vacate the sanctions against him. He said his goal is to get the case back into court.

“The judge was completely wrong to issue sanctions,” Litvak said in an interview with KrebsOnSecurity. “From the beginning of the case, she acted as if she needed to protect Google from something. If the court does not decide to vacate the sanctions, we will have to go to the Second Circuit (Court of Appeals) and get justice there.”

In a statement on the court’s decision, Google said it will have significant ramifications for online crime, and that since its technical and legal attacks on the botnet last year, Google has observed a 78 percent reduction in the number of hosts infected by Glupteba.

“While Glupteba operators have resumed activity on some non-Google platforms and IoT devices, shining a legal spotlight on the group makes it less appealing for other criminal operations to work with them,” reads a blog post from Google’s General Counsel Halimah DeLaine Prado and vice president of engineering Royal Hansen. “And the steps [Google] took last year to disrupt their operations have already had significant impact.”

Disneyland Malware Team: It’s a Puny World After All

A financial cybercrime group calling itself the Disneyland Team has been making liberal use of visually confusing phishing domains that spoof popular bank brands using Punycode, an Internet standard that allows web browsers to render domain names with non-Latin alphabets like Cyrillic.

The Disneyland Team uses common misspellings for top bank brands in its domains. For example, one domain the gang has used since March 2022 is ushank[.]com — which was created to phish U.S. Bank customers.

But this group also usually makes use of Punycode to make their phony bank domains look more legit. The U.S. financial services firm Ameriprise uses the domain ameriprise.com; the Disneyland Team’s domain for Ameriprise customers is https://www.xn--meripris-mx0doj[.]com [brackets added to defang the domain], which displays in the browser URL bar as ạmeriprisẹ[.]com.

Look carefully, and you’ll notice small dots beneath the “a” and the second “e”. You could be forgiven if you mistook one or both of those dots for a spec of dust on your computer screen or mobile device.

This candid view inside the Disneyland Team comes from Alex Holden, founder of the Milwaukee-based cybersecurity consulting firm Hold Security. Holden’s analysts gained access to a Web-based control panel the crime group has been using to keep track of victim credentials (see screenshot above). The panel reveals the gang has been operating dozens of Punycode-based phishing domains for the better part of 2022.

Have a look at the Punycode in this Disneyland Team phishing domain: https://login2.xn--mirtesnbd-276drj[.]com, which shows up in the browser URL bar as login2.ẹmirạtesnbd[.]com, a domain targeting users of Emirates NBD Bank in Dubai.

Here’s another domain registered this year by the Disneyland Team: https://xn--clientchwb-zxd5678f[.]com, which spoofs the login page of financial advisor Charles Schwab with the landing page of cliẹntșchwab[.]com. Again, notice the dots under the letters “e” and “s”.  Another Punycode domain of theirs sends would-be victims to cliẹrtschwạb[.]com, which combines a brand misspelling with Punycode.

We see the same dynamic with the Disneyland Team Punycode domain https://singlepoint.xn--bamk-pxb5435b[.]com, which translates to singlepoint.ụșbamk[.]com — again phishing U.S. Bank customers.

What’s going on here? Holden says the Disneyland Team is Russian-speaking — if not also based in Russia —  but it is not a phishing gang per se. Rather, this group uses the phony bank domains in conjunction with malicious software that is already secretly installed on a victim’s computer.

Holden said the Disneyland Team domains were made to help the group steal money from victims infected with a powerful strain of Microsoft Windows-based banking malware known as Gozi 2.0/Ursnif. Gozi specializes in collecting credentials, and is mainly used for attacks on client-side online banking to facilitate fraudulent bank transfers. Gozi also allows the attackers to connect to a bank’s website using the victim’s computer.

In years past, crooks like these would use custom-made “web injects” to manipulate what Gozi victims see in their Web browser when they visit their bank’s site. These web injects allowed malware to rewrite the bank’s HTML code on the fly, and copy and/or intercept any data users would enter into a web-based form, such as a username and password.

Most Web browser makers, however, have spent years adding security protections to block such nefarious activity. As a result, the Disneyland Team simply tries to make their domains look as much like the real thing as possible, and then funnel victims toward interacting with those imposter sites.

“The reason that it is infeasible for them to use in-browser injects include browser and OS protection measures, and difficulties manipulating dynamic pages for banks that require multi-factor authentication,” Holden said.

In reality, the fake bank website overlaid by the Disneyland Team’s malware relays the victim’s browser activity through to the real bank website, while allowing the attackers to forward any secondary login requests from the bank, such as secret questions or multi-factor authentication challenges.

The Disneyland Team included instructions for its users, noting that when the victim enters their login credentials, he sees a 10-second spinning wheel, and then the message, “Awaiting back office approval for your request. Please don’t close this window.”

The “SKIP” button in the screenshot above sends the user to the real bank login page, “in case the account is not interesting to us,” the manual explains. “Also, this redirect works if none of our operators are working at the time.”

The “TAKE” button in the Disneyland Team control panel allows users or affiliates to claim ownership over a specific infected machine or bot, which then excludes other users from interacting with that victim.

In the event that it somehow takes a long time to get the victim (bot) connected to the Disneyland Team control panel, or if it is necessary to delay a transaction, users can push a button that prompts the following message to appear on the victim’s screen:

“Your case ID number is 875472. An online banking support representative will get in touch shortly. Please provide your case ID number, and DO NOT close this page.”

The Disneyland user manual explains that the panel can be used to force the victim to log in again if they transmit invalid credentials. It also has other options for stalling victims whilst their accounts are drained. Another fake prompt the panel can produce shows the victim a message saying, “We are currently working on updating our security system. You should be able to log in once the countdown timer expires.”

The user manual says this option blocks the user from accessing their account for two hours. “It is possible to block for an hour with this button, in this case they get less frustrated, within the hours ddos will kill their network.”

Cybercrime groups will sometimes launch distributed denial-of-service (DDoS) attacks on the servers of the companies they’re trying to rob — which is usually intended to distract victims from their fleecing, although Holden said it’s unclear if the Disneyland Team employs this tactic as well.

For many years, KrebsOnSecurity tracked the day-to-day activities of a similar malware crew that used web injects and bots to steal tens of millions of dollars from small- to mid-sized businesses across the United States.

At the end of each story, I would close with a recommendation that anyone concerned about malware snarfing their banking information should strongly consider doing their online banking from a dedicated, security-hardened system which is only used for that purpose. Of course, the dedicated system approach works only if you always use that dedicated system for managing your account online.

Those stories also observed that since the vast majority of the malicious software used in cyberheists is designed to run only on Microsoft Windows computers, it made sense to pick a non-Windows computer for that dedicated banking system, such as a Mac or even a version of Linux. I still stand by this advice.

In case anyone is interested, here (PDF) is a list of all phishing domains currently and previously used by the Disneyland Team.