Operation WireWire – ACH Fraud Takedown

Operation WireWire – ACH Fraud Takedown

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“Operation WireWire—which also included the Department of Homeland Security, the Department of the Treasury, and the U.S. Postal Inspection Service—involved a six-month sweep that culminated in over two weeks of intensified law enforcement activity resulting in 74 arrests in the U.S. and overseas, including 42 in the U.S., 29 in Nigeria, and three in Canada, Mauritius, and Poland. The operation also resulted in the seizure of nearly $2.4 million and the disruption and recovery of approximately $14 million in fraudulent wire transfers.” (DOJ.gov)

Business Email Compromise (BEC) is one of the scams aimed at companies that conduct wire transfers and have suppliers abroad.  Corporate or publicly available email accounts of executives and high-level employees related to finance or involved with wire transfer payments are either spoofed or compromised, through keyloggers or phishing attacks, to make fraudulent transfers, resulting in hundreds of thousands of dollars in losses. (Trend Micro).

I’ve seen recent comments in the media about how this DOJ crackdown wouldn’t put a big dent in or even make much of an impact on BEC, given the breadth of fraud associated with this outfit. I’d imagine the analysts in these quotes are looking at aggregate totals from the mile-high perspective and not the close-up, full scale of the damage to small businesses in our country. Companies have gone out of business, and schools have been attacked by these perpetrators. Personally, I don’t agree with or support the position that it’s just another routine arrest and it should be glazed over like it was picking off a few credit card skimmers.

The economies of scale with traditional Credit Card Fraud vs. Business E-mail Compromise cannot be directly compared, given who they impact and the average losses. This issue has never been about mitigating an impact on consumers as the criminals have always been focused on attacking small to medium-sized businesses. Typically, it’s the commercial accounts that are vulnerable to this kind of wire transfer fraud, unlike consumer credit cards that have built-in fraud protection that uses randomly generated numbers and a Visa or MasterCard logo. In these cases, the wires are facilitated directly from the account number being compromised.

Criminals obviously have a lot more to gain from raiding the digital coffers of businesses that handle millions in revenue, given that the average consumer credit card limit hovers around a measly $8,000. The average per-incident loss for a successful BEC scam is around $130,000; in comparison, robbing a bank will rake in about $3,800. The losses for traditional credit card fraud reported per incidence are much lower. Take a look at “23 Frightening Credit Card Fraud Statistics,” and you’ll see that in 2014, the median loss was $300 and the average reported loss was $1,343. If you’d ask someone who was ‘crushed’ by these low numbers to compare them to high-volume fraud numbers, you’d see how it wouldn’t make a dent. The reality, however, is that many BEC scams can net over a million dollars from a single source, something that seems unfathomable to people who are still living in the world of old-fashioned credit card fraud. This isn’t like the time somebody bought a $100 pair of sneakers using my debit card.

Not sure if this is a problem yet? Just ask Google and Facebook, who were both perpetrated almost entirely by a single individual in Lithuania. There are Nigerian men who stole almost 4 million dollars in a short time. If you really want to know, ask Leoni AG, a company that lost 44 million dollars in a single scam just a few years back. Are these extreme examples of BEC? No, many of these scams exceed a million dollars in losses in just a single incident. The collateral damage from ripping off employees’ social security numbers could take a long time to remediate. I don’t need to know the exact figures to make the connection that attackers with minimal sophistication are pulling it off for piles of cash. BEC scammers were operating mostly with impunity before this crackdown effort by the DOJ. If not, how could the losses possibly add up to 3 billion dollars? DOJ has been able to lock up a few here and there, but nothing like the 71 people from the Google/Facebook sweep.

Any law enforcement action would be welcomed, as long as it protects companies from scams and sends this clear message to the criminals abroad: If your activity trends upwards, so will our efforts to capture you. Not to mention that the hands of justice are now orienting themselves on how to efficiently take down these networks, thereby opening the door for streamlined enforcement for this type of crime.

The DOJ is doing a good job, and I don’t see it as a “dog and pony show” to expose these scammers in front of the world. It’s about justice and showing people in other countries that the internet may seem like a free plane ticket to communicate overseas, but you can still get arrested where that connection lands, just like you could in an airport. You’ve got to get started sometime, and today works well for tomorrow’s potential victims.

I think people who work on the ground in Cyber Security know that this day is long overdue, and it’s to be celebrated, not shrugged off as a waste of time. I’d never call it a waste of time – who in my industry would?

So let’s not turn the war on BEC into the war on Credit Card Fraud. Great work out there, folks!

Recent News:

Washinton Post – It’s time to stop laughing at Nigerian scammers — because they’re stealing billions of dollars

Boston Herald – Phishing theft of $93G at clean energy agency went unreported for months

Telstra – A silent cybercrime blitzkrieg as Aussie businesses robbed of millions

IC3 – 2017 Internet Crime Report featuring Business E-mail Compromise

Cyber Insecurity

Cyber Insecurity

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Our society’s infrastructure can no longer function without computers and networks. The sum of the world’s networked computers is a rapidly increasing force multiplier. Today’s businesses are becoming heavily dependent on technology for integration, productivity and organizational scalability.

Data is an increasing fraction of total corporate wealth and needs to remain secure while ensuring confidentiality, availability and integrity.

Increasingly, organizations require communications to provide rapid and agile collaboration, information sharing, and connectivity to data sources. Technology enables employees and partners to work and access systems anywhere, anytime – also placing systems at an increased risk by the same token of availability. The protection of digital assets during transport, and at rest on storage devices is essential to the life cycle of information, as it transcends the border of physical and logical controls.

The world of security is becoming more complex and threatening every day. This increasing complexity embeds dependencies in a manner that may diminish the frequency of surprises; however, the surprises will be all the more unexpected when they inevitably occur.

Security is becoming a means and not an end; modern protection strategies are quickly shifting toward risk absorption rather than risk avoidance. Service orientated architectures and Web 2.0 technologies are fueling the internet revolution while at the same time rapidly deteriorating the security situation. That deterioration compounds when nearly all individuals and businesses are establishing dependencies on computer and communications systems. It is thus obvious that increasing dependence means ever more difficulty in crafting protections against known and unknown threats to systems.

The traditional network barriers that separated trusted from untrusted and “inside” from “outside” are now disappearing. As more applications become directly accessible to remote users and systems, the concept of the network perimeter becomes increasingly vague and more difficult to protect. Attacks are no longer confined to lower areas of the network stack and target widely adopted systems and software programs, having major implications globally, in all sectors.

Threats and risk are chiefly growing amongst the poorly coded applications, and unsophisticated end-users. Modern day security has become architecture of devices, people and software that work towards providing the best possible layered defense against attacks.

We now know that protections need to work together in a concerted effort to reduce risk, and mitigate known these unknown threats to our infrastructure.

Those with either an engineering or management background are aware that one cannot optimize everything at once, and that requirements are balanced by constraints. In engineering, this is said as “Fast, Cheap, Reliable: Choose Two.”. In the public policy arena, we must first remember that the definition of a free country: a place where that which is not forbidden is permitted.

No society needs rules against impossibilities and I believe that we are now faced with “Freedom, Security, Convenience: Choose Two.”

For me, I will take freedom over security and I will take security over convenience, and I will do so because I know that a world without failure is a world without freedom. A world without the possibility of sin is a world without the possibility of righteousness. A world without the possibility of crime is a world where you cannot prove you are not a criminal. A technology that can give you everything you want is a technology that can take away everything that you have.

After 15 years of analyzing the playing field, I am convinced that at some point, in the near future, one of us security geeks will have to say that there comes a point at which safety is not safe.

Key drivers of Hacking/Security:

Emergence of internet based criminal black market

Sophistication of attack tools and methods used by hackers

Markets for Cybercrime Tools and Stolen Data Software

Monocultures facilitating mass hacking and botnet control


A proud member of: The InfraGard program is a public/private cooperative effort dedicated to improving our national security. InfraGard consists of Chapters throughout the United States. The FBI leads the U.S. Government side of InfraGard. Infragard provides a trusted forum for the exchange and channeling of information and subject matter expertise related to the protection of our nation’s critical infrastrcuture from physical and cyber threats.

FBI Memo: Hackers Breached Heating System via Backdoor

FBI Memo: Hackers Breached Heating System via Backdoor

Tridium ICS diagram of HVAC network.Tridium ICS diagram of HVAC network.

Hackers broke into the industrial control system of a New Jersey air conditioning company earlier this year, using a backdoor vulnerability in the system, according to an FBI memo made public this week.

The intruders first breached the company’s ICS network through a backdoor in its Niagara AX ICS system, made by Tridium. This gave them access to the mechanism controlling the company’s own heating and air conditioning, according to a memo prepared by the FBI’s office in Newark (.pdf), which was published on Saturday by the website Public Intelligence. News about the memo was first reported by Ars Technica.

The breach occurred in February and March of this year, several weeks after someone using the Twitter moniker @ntisec posted a message online indicating that hackers were targeting SCADA systems, and that something had to be done to address SCADA vulnerabilities.

The individual had used the Shodan search engine to locate Tridium Niagara systems that were connected to the internet and posted a list of URLs for the systems online. One of the IP addresses posted led to the New Jersey company’s heating and air conditioning control system.

The company used the Niagara system not only for its own HVAC system, but also installed it for customers, which included banking institutions and other commercial entities, the memo noted. An IT contractor who worked for the company told the FBI that the company had installed its own control system directly connected to the internet with no firewall in place to protect it.

Although the system was password protected in general, the backdoor through the IP address apparently required no password and allowed direct access to the control system. “[Th]e published backdoor URL provided the same level of access to the company’s control system as the password-protected administrator login,” said the memo.

The backdoor URL gave access to a Graphical User Interface (GUI), “which provided a floor plan layout of the office, with control fields and feedback for each office and shop area,” according to the FBI. “All areas of the office were clearly labeled with employee names or area names.”

Forensic logs showed that intruders had gained access to the system from multiple IP addresses in and outside the U.S. The memo does not indicate if the intruders manipulated the system after obtaining access to it.

Five months after the breaches first began, Tridium and the Department of Homeland Security’s ICS-CERT division published alerts disclosing a directory traversal and weak credential storage vulnerability (.pdf) in the Niagara AX Framework system. Security researchers Billy Rios and Terry McCorkle were credited with disclosing the vulnerability to ICS-CERT.

More than 300,000 Tridium Niagara AX Framework systems are installed worldwide, according to the Tridium web site, and are used in energy management, building automation, telecommunications, security automation and lighting control.

According to Ars Technica, a search of Shodan earlier this year by Rios uncovered more than 20,000 of the Niagara systems connected to the internet.


Dexter Malware attacks POS

POS Malware Dexter

Dexter Malware attacks POS

Dexter Malware (POS Systems Attack)


In an article titled “Dexter – Draining blood out of Point of Sales” an Israel-based security firm Seculert has identified Malware programmed to attack POS systems. The targeting of POS systems appears to help attackers extract card data from aggregation points versus targeting end-user machines or physically installing a skimmer.

Dexter has reportedly targeted systems in 40 countries over the past 2-3 months.

According to Spiderlabs, a team of ethical hackers working for security-software analysis firm Trustwave, Dexter has an unusual nature. Spiderlabs blogger Josh Grunzweig noted: “I can’t remember the last time I saw a piece of malware that targeted Point of Sale systems that had a nice C&C structure to it.”

Bank Fraud had evolved to a billion dollar industry world wide and Dexter is just another example of how attackers are choosing the targets with the most lucrative cyber bounty.

Digital bank robbers make off with $6.7 million

Digital bank robbers make off with $6.7 million

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During the holidays cybercriminals kept themselves busy, hacking websites and stealing all the data they could find. South African Postbank, a financial institution owned by SA Post Office, is one of the victims.


South African bank Postbank was robbed of $6.7 million earlier this month. But the thieves didn’t need masks and guns to pull off the job — just computers.


To pull off the heist, the hackers created a backdoor into one of the bank’s computers. From that hacked computer, they were able to access the rest of the network and issue the commands to distribute the $6.7 million to different accounts owned by the thieves. Those accounts were promptly emptied via ATM visits. Preliminary reports revealed that the cybercrime ring responsible for the theft opened a number of Postbank accounts all across the country and then, in the period between January 1 and January 3, they managed to access a Post Office employee’s computer from where they deposited money from other accounts into their own.

Since the crime didn’t raise any red flags with its automated fraud-detection programs, bank employees failed to notice the money was missing until the bank re-opened after the New Year’s holiday.

The irony is that 3 years ago the institution invested a large amount of money in their anti-fraud systems. However, as we can clearly see, anti-fraud systems aren’t worth much if the company doesn’t have a strict policy for the way their employees handle computers.

If the reports are true, then it is very likely that an employee with privileged rights must have fallen victim to a scam email designed to spread a malicious Trojan.

Fin24 reports that the National Intelligence Agency, which offers assistance when a government institution is compromised, has launched an investigation to precisely determine the causes that allowed for the incident to occur.

Bank representatives state that none of their customers are affected by the breach, but security experts believe that Postbank’s systems desperately need an upgrade.

Crooks don’t necessarily have to hack into a bank’s systems to gain access as it may be much easier to manipulate someone into handing over some information that can be utilized to just waltz in without being detected.

Lately, we’re presented with many cases in which a little bit of social engineering can perform much more efficiently than even the most sophisticated piece of malware. Take the thieves who stole 9 million dollars from payroll debit cards issued by RBS Worldpay.

AT&T iPad site hacker to fight on in court

AT&T iPad site hacker to fight on in court



A hacker facing trial on charges that he and a cohort conspired to break into an AT&T Web site for 3G iPad users told CNET today that he will fight the charges “to the end.”

Andrew “Escher” Auernheimer, 26, was indicted several months ago on one count of conspiracy to gain unauthorized access to computers and one count of identity theft. He faces up to 10 years in prison and $500,000 in fines. Co-defendant Daniel Spitler pleaded guilty in June and a judge put the case on hold, reportedly because of plea negotiations.

But Auernheimer, whose hacker handle is “weev,” says he’s not going to cop a plea.

“I did not fold the two previous times when the FBI tried to frame me as a terrorist” for allegedly calling in a bomb threat to a synagogue, which he denies, he said in an e-mail. “I will not fold now when they try to libel me as a thief. My indictment conveys a message that I am some sort of identity thief.”

In a follow-up phone interview, Auernheimer said he has done “nothing ethically wrong” and is being persecuted for “telling the truth” by exposing a security hole in AT&T’s Web site that was leaking e-mail addresses and unique device numbers for about 120,000 3G iPad users last year, including government and high-profile corporate customers.


Andrew Auernheimer, aka “Weev,” in a photo from earlier this year.(Credit: Anonymous)

“I contend there is no crime in telling the truth or using AT&T’s, or anybody’s, publicly accessible data, to cite it to talk about how they made people’s data public,” he said. “There’s a continuance until January. There may be a trial then…I just want to fight this thing to the end.”

A Department of Justice spokesman declined to comment because the court case is pending.

Asked his thoughts on Spitler’s guilty plea, Auernheimer said he was sure that Spitler would “cooperate in some way.” “I don’t blame him. He’s a good guy,” he said of his former hacking partner. “It’s probably terrifying for most people to go through this process. I’ve been fighting ‘The Man’ for years.”

Spitler wrote a script called the “iPad 3G Account Slurper” and used it against AT&T servers to harvest the iPad user data. The Justice Department contends that he and Auernheimer plotted on how to take advantage of the security hole for profit, but Auernheimer claims they were merely trying to protect consumers and waited until AT&T knew about the hole and fixed it before allowing Gawker to publish the details.

“I’ve never once made a dime off embarrassing a large corporation. I’ve never attempted to make a dime and AT&T is basically a public figure that is open to criticism. I think it’s fair,” he said. “Embarrassing somebody by telling the truth is not malice. It’s necessary speech.”

The Justice Department has released excerpts of Internet Relay Chat (IRC) logs in which the hackers discussed selling the e-mail addresses to spammers, shorting AT&T stock before releasing details of the breach, and destroying evidence.

In one exchange, Auernheimer writes: “This could be like, a future massive phishing operation serious like this is valuable data we have a list a potential complete list of AT&T iphone subscriber emails,” to which Spitler responds: “ipad but yeah.” Asked to comment about statements from the logs that would appear to be damaging to his case, Auernheimer said “It’s easy to misconstrue a true statement as evidence of malice…our acts reveal no malice. I went straight to the press and I told exactly what needed to be told.”

When asked why he didn’t go directly to AT&T first, he said: “AT&T has a commercial interest in not having their negligence with consumer data spoken about, ever…I used the press as a proxy and I waited for (AT&T) to patch before going public.”

Auernheimer, 26, said he is barred from using IRC, communicating with anyone in his hacking group or any potential witnesses or co-defendants, and doing random Web browsing, but can use the Internet for “commerce.”

He was forced to leave his Fayetteville, Ark., home because of a bail condition requiring him to stay in the jurisdiction, he added, and as a result, he is living in Jersey City, N.J. (Meanwhile, drug charges he was arrested on last year after an FBI sweep of his home in the AT&T case have been dropped, he said.)

He has a public defender and has raised about $10,000 for his legal defense fund, he said. While he waits for trial, he is learning the Erlang programming language and is “open to security work.”

“I definitely have a habit of pissing people off. I’m not apologetic for that,” said the self-described Internet “troll.” “I think that the people that get pissed off probably deserve it. It serves a social function.”

I have known and spoken with Andrew over a number of years in the hacking scene. Hopefully this one works out for him!

Read more:

Anti-Sec is not a cause, it’s an excuse.

Anti-Sec is not a cause, it’s an excuse.

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The Antisec Movement

In a move clearly inspired by LulzSec, an Italian hacker recently uploaded a torrent containing personal information of thousands of Italian university students. This information was stolen from a slew of Italian university websites. According to the press release posted by Lulzstorm this was done “to tell every Italian student how little secure their personal data are”. I can think of better ways…

The spate of recent data thefts and subsequent publication, in the name of Anonymous, Lulz Sec, LulzStorm or the umbrella movement Anti-Sec has had a tangible impact on the safety and security of thousands of innocent internet users.

While there may be sympathy in some quarters for attacks on security contractors such as HB Gary and Infraguard or government websites in oppressive states; that sympathy rapidly evaporates when the result of publishing stolen material endangers the lives of serving police officers. Or when it compromises the privacy and safety of hundreds of thousands of innocent customers of online portals or gaming services.

The call to arms to the disparate hacker community that is represented by Operation AntiSec might read like something from a cyberpunk novel but in reality it is being used by far too many to lay a thin veneer of altruism over something entirely selfish. At least LulzSec had the decency to be honest in their manifesto, they were simply courting chaos.

The truth is that the majority of people now assembling under the Anti-Sec banner are doing this simply because they can. The convenience of having a “cause” somehow making it laudable. It is true that there are far too many poorly secured and configured web-sites out there. It is also true that the customers of those websites deserve a higher degree of care than they currently receive. It is manifestly not true to say that the interests of those people are best served by pasting their personal data all over the internet.

In the ultimate irony, the original AntiSec manifesto from back in 2001 was all about the irresponsibility of full disclosure. That same manifesto was reposted when Imageshack was compromised 8 years later. The manifesto criticised the “security industry” for using full-disclosure to develop “scare tactics” to convince people into by security. Are you listening Operation AntiSec?

This is a call for responsible disclosure in the Anti-Sec community, find the flaws, publish your successes if you must, but have the decency to spare the innocent victims of your crimes.

Obscure personal data before you publish; otherwise you are considerably worse than those you are attempting to shame.