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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.
A Google-translated version of Shtazi dot ru. Image: Archive.org.
Private tech companies gather tremendous amounts of user data. These companies can afford to let you use social media platforms free of charge because it’s paid for by your data, attention, and time.
Big tech derives most of its profits by selling your attention to advertisers — a well-known business model. Various documentaries (like Netflix’s “The Social Dilemma”) have attempted to get to the bottom of the complex algorithms that big tech companies employ to mine and analyze user data for the benefit of third-party advertisers.
This article will help you better understand what information is being collected by tech companies, how it’s being used, and how you can protect your privacy online.
Tech companies benefit from personal information by being able to provide personalized ads. When you click “yes” at the end of a terms and conditions agreement found on some web pages, you may be allowing the companies to collect the following data:
For someone unfamiliar with privacy issues, it is important to understand the extent of big tech’s tracking and data collection. Once these companies collect data, all this information can be supplied to third-party businesses or used to improve user experience.
The problem with this is that big tech has blurred the line between collecting customer data and violating user privacy in some cases. While tracking what content you interact with can be justified under the garb of personalizing the content you see, big tech platforms have been known to go too far. Prominent social networks like Facebook and LinkedIn have faced past legal trouble for accessing personal user data like private messages and saved photos.
The information you provide helps build an accurate character profile and turns it into knowledge that gives actionable insights to businesses. Private data usage can be classified into three cases: selling it to data brokers, using it to improve marketing, or enhancing customer experience.
Along with big data, another industry has seen rapid growth: data brokers. Data brokers buy, analyze, and package your data. Companies that collect large amounts of data on their users stand to profit from this service. Selling data to brokers is an important revenue stream for big tech companies.
Advertisers and businesses benefit from increased information on their consumers, creating a high demand for your information. The problem here is that companies like Facebook and Alphabet (Google’s parent company) have been known to mine massive amounts of user data for the sake of their advertisers.
Marketing can be highly personalized thanks to the availability of large amounts of consumer data. Tracking your response to marketing campaigns can help businesses alter or improve certain aspects of their campaign to drive better results.
The problem is that most AI-based algorithms are incapable of assessing when they should stop collecting or using your information. After a point, users run the risk of being constantly subjected to intrusive ads and other unconsented marketing campaigns that pop up frequently.
Analyzing consumer behavior through reviews, feedback, and recommendations can help improve customer experience. Businesses have access to various facets of data that can be analyzed to show them how to meet consumer demands. This could help improve any part of a consumer’s interaction with the company, from designing special offers and discounts to improving customer relationships.
For most social media platforms, the goal is to curate a personalized feed that appeals to the users and allows them to spend more time on the app. When left unmonitored, the powerful algorithms behind these social media platforms can repeatedly subject you to the same kind of content from different creators.
Here are the big tech companies that collect and mine the most user data.
Users need a comprehensive data privacy solution to tackle the rampant, large-scale data mining carried out by big tech platforms. While targeted advertisements and easily found items are beneficial, many of these companies collect and mine user data through several channels simultaneously, exploiting them in many different ways.
It’s important to make sure your personal information is protected. Protection solutions like McAfee’s Personal Data Cleanup feature can help. With this feature, our teams scour the web for traces of your personal information and assist in getting it removed to enhance your online privacy.
McAfee’s Total Protection provides antivirus software for all of your digital devices and a secure VPN connection to avoid exposure to malicious third parties while browsing the internet. Our identity monitoring and personal data removal solutions further remove gaps in your devices’ security systems.
With our airtight data protection and custom guidance (complete with a protection score for each platform and tips to keep you safer), you can be sure that your internet identity is protected.
The post What Personal Data Do Companies Track? appeared first on McAfee Blog.
Elder scams cost seniors in the U.S. some $3 billion annually. And tax season adds a healthy sum to that appalling figure.
What makes seniors such a prime target for tax scams? The Federal Bureau of Investigation (FBI) states several factors. For one, elders are typically trusting and polite. Additionally, many own their own home, have some manner of savings, and enjoy the benefits of good credit—all of which make for an ideal victim profile.
Also according to the FBI, elders may be less able or willing to report being scammed because they may not know the exact way in which they were scammed, or they may feel a sense of shame over it, or even some combination of the two. Moreover, being scammed may instill fear that family members will lose confidence in their ability to look after their own affairs.
If there’s one thing that we can do for our elders, it’s help them raise their critical hackles so they can spot these scams and stop them in their tracks, particularly around tax time. With that, let’s see how crooks target elders, what those scams look and feel like, along with the things we can do to keep ourselves and our loved ones from getting stung.
The phone rings, and an assertive voice admonishes an elder for non-payment of taxes. The readout on the caller ID shows “Internal Revenue Service” or “IRS,” the person cites an IRS badge number, and the victim is told to pay now via a wire transfer or prepaid gift card. The caller even knows the last four digits of their Social Security Number (SSN). This is a scam.
The caller, and the claim of non-payment, are 100 percent bogus. Even with those last four digits of the SSN attempting to add credibility, it’s still bogus. (Chances are, those last four digits were compromised elsewhere and ended up in the hands of the thieves by way of the black market or dark web so that they could use them in scams just like these.)
Some IRS imposter scams take it a step further. Fraudsters will threaten victims with arrest, deportation, or other legal action, like a lien on funds or the suspension of a driver’s license. They’ll make repeated calls as well, sometimes with additional imposters posing as law enforcement as a means of intimidating elders into payment.
The IRS will never threaten you or someone you know in such a way.
In fact, the IRS will never call you to demand payment. Nor will the IRS ever ask you to wire funds or pay with a gift card or prepaid debit card. And if the IRS claims you do owe funds, you will be notified of your rights as a taxpayer and be given the opportunity to make an appeal. If there’s any question about making payments to the IRS, the IRS has specific guidelines as to how to make a payment properly and safely on their official website.
It’s also helpful to know what the IRS will do in the event you owe taxes. In fact, they have an entire page that spells out how to know it’s really the IRS calling or knocking at your door. It’s a quick read and a worthwhile one at that.
In all, the IRS will contact you by mail or in person. Should you get one of these calls, hang up. Then, report it. I’ll include a list of ways you can file a report at the end of the article.
Whether it’s a disembodied voice generated by a computer or a scripted message that’s been recorded by a person, robocalls provide scammers with another favorite avenue of attack. The approach is often quite like the phone scam outlined above, albeit less personalized because the attack is a canned robocall. However, robocalls allow crooks to cast a much larger net in the hopes of illegally wresting money away from victims. In effect, they can spam hundreds or thousands of people with one message in the hopes of landing a bite.
While perhaps not as personalized as other imposter scams, they can still create that innate sense of unease of being contacted by the IRS and harangue a victim into dialing a phony call center where they are further pressured into paying by wire or with a prepaid card, just like in other imposter scams. As above, your course of action here is to simply hang up and report it.
Here’s another popular attack. An elder gets an unsolicited email from what appears to be the IRS, yet isn’t. The phony email asks them to update or verify their personal or financial information for a payment or refund. The email may also contain an attachment which they are instructed to click and open. Again, all of these are scams.
Going back to what we talked about earlier, that’s not how the IRS will contact you. These are phishing attacks aimed at grifting prized personal and financial information that scammers can use to commit acts of theft or embezzlement. In the case of the attachment, it very well may contain malware that can do further harm to their device, finances, or personal information.
If you receive one of these emails, don’t open it. And certainly don’t open any attachments—which holds true for any unsolicited email you receive with an attachment.
Beyond simply knowing how to spot a possible attack, you can do several things to prevent one from happening in the first place.
First let’s start with some good, old-fashioned physical security. You may also want to look into purchasing a locking mailbox. Mail and porch theft are still prevalent, and it’s not uncommon for thieves to harvest personal and financial information by simply lifting it from your mailbox.
Another cornerstone of physical security is shredding paper correspondence that contains personal or financial information, such as bills, medical documents, bank statements and so forth. I suggest investing a few dollars on an actual paper shredder, which are typically inexpensive if you look for a home model. If you have sensitive paper documents in bulk, such as old tax records that you no longer need to save, consider calling upon a professional service that can drive up to your home and do that high volume of shredding for you.
Likewise, consider the physical security of your digital devices. Make sure you lock your smartphones, tablets, and computers with a PIN or password. Losing a device is a terrible strain enough, let alone knowing that the personal and financial information on them could end up in the hands of a crook. Also see if tracking is available on your device. That way, enabling device tracking can help you locate a lost or stolen item.
There are plenty of things you can do to protect yourself on the digital front too. Step one is installing comprehensive security software on your devices. This will safeguard you in several ways, such as email filters that will protect you from phishing attacks, features that will warn you of sketchy links and downloads, plus further protection for your identity and privacy—in addition to overall protection from viruses, malware, and other cyberattacks.
Additional features in comprehensive security software that can protect you from tax scams include:
And here’s one item that certainly bears mentioning: dispose of your old technology securely. What’s on that old hard drive of yours? That old computer may contain loads of precious personal and financial info on it. Look into the e-waste disposal options in your community. There are services that will dispose of and recycle old technology while doing it in a secure manner so the data and info on your device doesn’t see the light of day again.
As said earlier, don’t let a bad deed go unreported. The IRS offers the following avenues of communication to report scams.
In all, learning to recognize the scams that crooks aim at elders and putting some strong security measures in place can help prevent these crimes from happening to you or a loved one. Take a moment to act. It’s vital, because your personal information has a hefty price tag associated with it—both at tax time and any time.
To stay updated on all things McAfee and on top of the latest consumer and mobile security threats, follow @McAfee_Home on Twitter, subscribe to our email, listen to our podcast Hackable?, and ‘Like’ us on Facebook.
The post How to Spot, and Prevent, the Tax Scams That Target Elders appeared first on McAfee Blogs.
Introduction In modern networks, security is not an afterthought. You need to know how to build secure networks from the outset. Security has to be woven into the very fabric of the network. The 200-301 CCNA exam covers security fundamentals among a broad range of networking topics. This article describes what you need to know […]
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What percentage of the exam focuses on network fundamentals? The network fundamentals section is 20% of the CCNA 200-301’s topics. It’s neither the largest nor the smallest. The fact that the percentage increased from 15% in the previous version indicates that Cisco has emphasized the importance of having a strong base in this topic, on […]
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Introduction To understand Network Security, it’s imperative that we understand networking fundamentals and networking basics. In this post, we will be learning about networking basics and fundamentals to get started with Network Security. We cannot cover whole networking in a single post so we will be focusing only on core networking concepts needed for network […]
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Introduction: Knowing the Notions Industrial Internet of Things (IIoT) incorporates technologies such as machine learning, machine-to-machine (M2M) communication, sensor data, Big Data, etc. This article will focus predominantly on the consumer Internet of Things (IoT) and how it relates to Operational Technology (OT). Operational Technology (OT) is a term that defines a specific category of […]
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Introduction to hash functions Hash functions are one of the most extensively-used cryptographic algorithms in blockchain technology. They are cryptographic (but not encryption) algorithms that are designed to protect data integrity. In a nutshell, a hash algorithm is a mathematical function that transforms any input into a fixed size output. To be cryptographically secure — […]
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