The U.S. Justice Department this week indicted seven Chinese nationals for a decade-long hacking spree that targeted more than 100 high-tech and online gaming companies. The government alleges the men used malware-laced phishing emails and “supply chain” attacks to steal data from companies and their customers. One of the alleged hackers was first profiled here in 2012 as the owner of a Chinese antivirus firm.
Charging documents say the seven men are part of a hacking group known variously as “APT41,” “Barium,” “Winnti,” “Wicked Panda,” and “Wicked Spider.” Once inside of a target organization, the hackers stole source code, software code signing certificates, customer account data and other information they could use or resell.
APT41’s activities span from the mid-2000s to the present day. Earlier this year, for example, the group was tied to a particularly aggressive malware campaign that exploited recent vulnerabilities in widely-used networking products, including flaws in Cisco and D-Link routers, as well as Citrix and Pulse VPN appliances. Security firm FireEye dubbed that hacking blitz “one of the broadest campaigns by a Chinese cyber espionage actor we have observed in recent years.”
The government alleges the group monetized its illicit access by deploying ransomware and “cryptojacking” tools (using compromised systems to mine cryptocurrencies like Bitcoin). In addition, the gang targeted video game companies and their customers in a bid to steal digital items of value that could be resold, such as points, powers and other items that could be used to enhance the game-playing experience.
APT41 was known to hide its malware inside fake resumes that were sent to targets. It also deployed more complex supply chain attacks, in which they would hack a software company and modify the code with malware.
“The victim software firm — unaware of the changes to its product, would subsequently distribute the modified software to its third-party customers, who were thereby defrauded into installing malicious software code on their own computers,” the indictments explain.
While the various charging documents released in this case do not mention it per se, it is clear that members of this group also favored another form of supply chain attacks — hiding their malware inside commercial tools they created and advertised as legitimate security software and PC utilities.
One of the men indicted as part of APT41 — now 35-year-old Tan DaiLin — was the subject of a 2012 KrebsOnSecurity story that sought to shed light on a Chinese antivirus product marketed as Anvisoft. At the time, the product had been “whitelisted” or marked as safe by competing, more established antivirus vendors, although the company seemed unresponsive to user complaints and to questions about its leadership and origins.
Anvisoft claimed to be based in California and Canada, but a search on the company’s brand name turned up trademark registration records that put Anvisoft in the high-tech zone of Chengdu in the Sichuan Province of China.
A review of Anvisoft’s website registration records showed the company’s domain originally was created by Tan DaiLin, an infamous Chinese hacker who went by the aliases “Wicked Rose” and “Withered Rose.” At the time of story, DaiLin was 28 years old.
That story cited a 2007 report (PDF) from iDefense, which detailed DaiLin’s role as the leader of a state-sponsored, four-man hacking team called NCPH (short for Network Crack Program Hacker). According to iDefense, in 2006 the group was responsible for crafting a rootkit that took advantage of a zero-day vulnerability in Microsoft Word, and was used in attacks on “a large DoD entity” within the USA.
“Wicked Rose and the NCPH hacking group are implicated in multiple Office based attacks over a two year period,” the iDefense report stated.
When I first scanned Anvisoft at Virustotal.com back in 2012, none of the antivirus products detected it as suspicious or malicious. But in the days that followed, several antivirus products began flagging it for bundling at least two trojan horse programs designed to steal passwords from various online gaming platforms.
Security analysts and U.S. prosecutors say APT41 operated out of a Chinese enterprise called Chengdu 404 that purported to be a network technology company but which served a legal front for the hacking group’s illegal activities, and that Chengdu 404 used its global network of compromised systems as a kind of dragnet for information that might be useful to the Chinese Communist Party.
“CHENGDU 404 developed a ‘big data’ product named ‘SonarX,’ which was described…as an ‘Information Risk Assessment System,'” the government’s indictment reads. “SonarX served as an easily searchable repository for social media data that previously had been obtained by CHENGDU 404.”
The group allegedly used SonarX to search for individuals linked to various Hong Kong democracy and independence movements, and snoop on a U.S.-backed media outlet that ran stories examining the Chinese government’s treatment of Uyghur people living in its Xinjian region.
As noted by TechCrunch, after the indictments were filed prosecutors said they obtained warrants to seize websites, domains and servers associated with the group’s operations, effectively shutting them down and hindering their operations.
“The alleged hackers are still believed to be in China, but the allegations serve as a ‘name and shame’ effort employed by the Justice Department in recent years against state-backed cyber attackers,” wrote TechCrunch’s Zack Whittaker.
U.S. authorities today announced criminal charges and financial sanctions against two Russian men accused of stealing nearly $17 million worth of virtual currencies in a series of phishing attacks throughout 2017 and 2018 that spoofed websites for some of the most popular cryptocurrency exchanges.
The Justice Department unsealed indictments against Russian nationals Danil Potekhin and Dmitirii Karasavidi, alleging the duo was responsible for a sophisticated phishing and money laundering campaign that resulted in the theft of $16.8 million in cryptocurrencies and fiat money from victims.
Separately, the U.S. Treasury Department announced economic sanctions against Potekhin and Karasavidi, effectively freezing all property and interests of these persons (subject to U.S. jurisdiction) and making it a crime to transact with them.
According to the indictments, the two men set up fake websites that spoofed login pages for the currency exchanges Binance, Gemini and Poloniex. Armed with stolen login credentials, the men allegedly stole more than $10 million from 142 Binance victims, $5.24 million from 158 Poloniex users, and $1.17 million from 42 Gemini customers.
Prosecutors say the men then laundered the stolen funds through an array of intermediary cryptocurrency accounts — including compromised and fictitiously created accounts — on the targeted cryptocurrency exchange platforms. In addition, the two are alleged to have artificially inflated the value of their ill-gotten gains by engaging in cryptocurrency price manipulation using some of the stolen funds.
For example, investigators alleged Potekhin and Karasavidi used compromised Poloniex accounts to place orders to purchase large volumes of “GAS,” the digital currency token used to pay the cost of executing transactions on the NEO blockchain — China’s first open source blockchain platform.
“Using digital crurency in one victim Poloniex account, they placed an order to purchase approximately 8,000 GAS, thereby immediately increasing the market price of GAS from approximately $18 to $2,400,” the indictment explains.
Potekhin and others then converted the artificially inflated GAS in their own fictitious Poloniex accounts into other cryptocurrencies, including Ethereum (ETH) and Bitcoin (BTC). From the complaint:
“Before the Eight Fictitious Poloniex Accounts were frozen, POTEKHIN and others transferred approximately 759 ETH to nine digital currency addresses. Through a sophisticated and layered manner, the ETH from these nine digital currency addresses was sent through multiple intermediary accounts, before ultimately being deposited into a Bitfinex account controlled by Karasavidi.”
The Treasury’s action today lists several of the cryptocurrency accounts thought to have been used by the defendants. Searching on some of those accounts at various cryptocurrency transaction tracking sites points to a number of phishing victims.
“I would like to blow your bitch ass away, if you even had the balls to show yourself,” exclaimed one victim, posting in a comment on the Etherscan lookup service.
One victim said he contemplated suicide after being robbed of his ETH holdings in a 2017 phishing attack. Another said he’d been relieved of funds needed to pay for his 3-year-old daughter’s medical treatment.
“You and your team will leave a trail and will be found,” wrote one victim, using the handle ‘Illfindyou.’ “You’ll only be able to hide behind the facade for a short while. Go steal from whales you piece of shit.”
There is potentially some good news for victims of these phishing attacks. According to the Treasury Department, millions of dollars in virtual currency and U.S. dollars traced to Karasavidi’s account was seized in a forfeiture action by the United States Secret Service.
Whether any of those funds can be returned to victims of this phishing spree remains to be seen. And assuming that does happen, it could take years. In February 2020, KrebsOnSecurity wrote about being contacted by an Internal Revenue Service investigator seeking to return funds seized seven years earlier as part of the governments 2013 seizure of Liberty Reserve, a virtual currency service that acted as a $6 billion hub for the cybercrime world.
Today’s action is the latest indication that the Treasury Department is increasingly willing to use its authority to restrict the financial resources tied to various cybercrime activities. Earlier this month, the agency’s Office of Foreign Asset Control (OFAC) added three Russian nationals and a host of cryptocurrency addresses to its sanctions lists in a case involving efforts by Russian online troll farms to influence the 2018 mid-term elections.
In June, OFAC took action against six Nigerian nationals suspected of stealing $6 million from U.S. businesses and individuals through Business Email Compromise fraud and romance scams.
And in 2019, OFAC sanctioned 17 members allegedly associated with “Evil Corp.,” an Eastern European cybercrime syndicate that has stolen more than $100 million from small businesses via malicious software over the past decade.
A copy of the indictments against Potekhin and Karasavidi is available here (PDF).
Most of us automatically put our guard up when someone we don’t know promises something too good to be true. But when the too-good-to-be-true thing starts as our idea, sometimes that instinct fails to kick in. Here’s the story of how companies searching for investors to believe in their ideas can run into trouble.
Nick is an investment banker who runs a firm that helps raise capital for its clients (Nick is not his real name, and like other investment brokers interviewed in this story spoke with KrebsOnSecurity on condition of anonymity). Nick’s company works primarily in the mergers and acquisitions space, and his job involves advising clients about which companies and investors might be a good bet.
In one recent engagement, a client of Nick’s said they’d reached out to an investor from Switzerland — The Private Office of John Bernard — whose name was included on a list of angel investors focused on technology startups.
“We ran into a group that one of my junior guys found on a list of data providers that compiled information on investors,” Nick explained. “I told them what we do and said we were working with a couple of companies that were interested in financing, and asked them to send some materials over. The guy had a British accent, claimed to have made his money in tech and in the dot-com boom, and said he’d sold a company to Geocities that was then bought by Yahoo.”
But Nick wasn’t convinced Mr. Bernard’s company was for real. Nick and his colleagues couldn’t locate the company Mr. Bernard claimed to have sold, and while Bernard said he was based in Switzerland, virtually all of his staff were all listed on LinkedIn as residing in Ukraine.
Nick told his clients about his reservations, but each nevertheless was excited that someone was finally interested enough to invest in their ideas.
“The CEO of the client firm said, ‘This is great, someone is willing to believe in our company’,” Nick said. “After one phone call, he made an offer to invest tens of millions of dollars. I advised them not to pursue it, and one of the clients agreed. The other was very gung ho.”
When companies wish to link up with investors, what follows involves a legal process known as “due diligence” wherein each side takes time to research the other’s finances, management, and any lurking legal liabilities or risks associated with the transaction. Typically, each party will cover their own due diligence costs, but sometimes the investor or the company that stands to benefit from the transaction will cover the associated fees for both parties.
Nick said he wasn’t surprised when Mr. Bernard’s office insisted that its due diligence fees of tens of thousands of dollars be paid up front by his client. And he noticed the website for the due diligence firm that Mr. Bernard suggested using — insideknowledge.ch — also was filled with generalities and stock photos, just like John Bernard’s private office website.
“He said we used to use big accounting firms for this but found them to be ineffective,” Nick said. “The company they wanted us to use looked like a real accounting firm, but we couldn’t find any evidence that they were real. Also, we asked to see an investment portfolio. He said he’s invested in over 30 companies, so I would expect to see a document that says, “here’s the various companies we’ve invested in.” But instead, we got two recommendation letters on letterhead saying how great these investors were.”
KrebsOnSecurity located two other investment bankers who had similar experiences with Mr. Bernard’s office.
“A number of us have been comparing notes on this guy, and he never actually delivers,” said one investment banker who asked not to be named because he did not have permission from his clients. “In each case, he agreed to invest millions with no push back, the documentation submitted from their end was shabby and unprofessional, and they seem focused on companies that will write a check for due diligence fees. After their fees are paid, the experience has been an ever increasing and inventive number of reasons why the deal can’t close, including health problems and all sorts of excuses.”
Mr. Bernard’s investment firm did not respond to multiple requests for comment. The one technology company this author could tie to Mr. Bernard was secureswissdata.com, a Swiss concern that provides encrypted email and data services. The domain was registered in 2015 by Inside Knowledge. In February 2020, Secure Swiss Data was purchased in an “undisclosed multimillion buyout” by SafeSwiss Secure Communication AG.
SafeSwiss co-CEO and Secure Swiss Data founder David Bruno said he couldn’t imagine that Mr. Bernard would be involved in anything improper.
“I can confirm that I know John Bernard and have always found him very honourable and straight forward in my dealings with him as an investor,” Bruno said. “To be honest with you, I struggle to believe that he would, or would even need to be, involved in the activity you mentioned, and quite frankly I’ve never heard about those things.”DUE DILIGENCE
John Bernard is named in historic WHOIS domain name registration records from 2015 as the owner of the due diligence firm insideknowledge.ch. Another “capital investment” company tied to John Bernard’s Swiss address is liftinvest.ch, which was registered in November 2017.
Curiously, in May 2018, its WHOIS ownership records switched to a new name with the same initials: one “Jonathan Bibi,” with an address in the offshore company haven of Seychelles. Likewise, Mr. Bibi was listed as a onetime owner of the domain for Mr. Bernard’s company —the-private-office.ch — as well as johnbernard.ch.
Running a reverse WHOIS search through domaintools.com [an advertiser on this site] reveals several other interesting domains historically tied to a Jonathan Bibi from the Seychelles. Among those is acheterdubitcoin.org, a business that was blacklisted by French regulators in 2018 for promoting cryptocurrency scams.
Another Seychelles concern tied to Mr. Bibi was effectivebets.com, which in 2017 and 2018 promoted sports betting via cryptocurrencies and offered tips on picking winners.
A Google search on Jonathan Bibi from Seychelles reveals he was listed as a respondent in a lawsuit filed in 2018 by the State of Missouri, which named him as a participant in an unlicensed “binary options” investment scheme that bilked investors out of their money.
Jonathan Bibi from Seychelles also was named as the director of another binary options scheme called the GoldmanOptions scam that was ultimately shut down by regulators in the Czech Republic.
Jason Kane is an attorney with Peiffer Wolf, a litigation firm that focuses on investment fraud. Kane said companies bilked by small-time investment schemes rarely pursue legal action, mainly because the legal fees involved can quickly surpass the losses. What’s more, most victims will likely be too ashamed to come forward.
“These are cases where you might win but you’ll never collect any money,” Kane said. “This seems like an investment twist on those fairly simple scams we all can’t believe people fall for, but as scams go this one is pretty good. Do this a few times a year and you can make a decent living and no one is really going to come after you.”
Microsoft today released updates to remedy nearly 130 security vulnerabilities in its Windows operating system and supported software. None of the flaws are known to be currently under active exploitation, but 23 of them could be exploited by malware or malcontents to seize complete control of Windows computers with little or no help from users.
The majority of the most dangerous or “critical” bugs deal with issues in Microsoft’s various Windows operating systems and its web browsers, Internet Explorer and Edge. September marks the seventh month in a row Microsoft has shipped fixes for more than 100 flaws in its products, and the fourth month in a row that it fixed more than 120.
Among the chief concerns for enterprises this month is CVE-2020-16875, which involves a critical flaw in the email software Microsoft Exchange Server 2016 and 2019. An attacker could leverage the Exchange bug to run code of his choosing just by sending a booby-trapped email to a vulnerable Exchange server.
“That doesn’t quite make it wormable, but it’s about the worst-case scenario for Exchange servers,” said Dustin Childs, of Trend Micro’s Zero Day Initiative. “We have seen the previously patched Exchange bug CVE-2020-0688 used in the wild, and that requires authentication. We’ll likely see this one in the wild soon. This should be your top priority.”
Also not great for companies to have around is CVE-2020-1210, which is a remote code execution flaw in supported versions of Microsoft Sharepoint document management software that bad guys could attack by uploading a file to a vulnerable Sharepoint site. Security firm Tenable notes that this bug is reminiscent of CVE-2019-0604, another Sharepoint problem that’s been exploited for cybercriminal gains since April 2019.
Microsoft fixed at least five other serious bugs in Sharepoint versions 2010 through 2019 that also could be used to compromise systems running this software. And because ransomware purveyors have a history of seizing upon Sharepoint flaws to wreak havoc inside enterprises, companies should definitely prioritize deployment of these fixes, says Alan Liska, senior security architect at Recorded Future.
Todd Schell at Ivanti reminds us that Patch Tuesday isn’t just about Windows updates: Google has shipped a critical update for its Chrome browser that resolves at least five security flaws that are rated high severity. If you use Chrome and notice an icon featuring a small upward-facing arrow inside of a circle to the right of the address bar, it’s time to update. Completely closing out Chrome and restarting it should apply the pending updates.
Once again, there are no security updates available today for Adobe’s Flash Player, although the company did ship a non-security software update for the browser plugin. The last time Flash got a security update was June 2020, which may suggest researchers and/or attackers have stopped looking for flaws in it. Adobe says it will retire the plugin at the end of this year, and Microsoft has said it plans to completely remove the program from all Microsoft browsers via Windows Update by then.
Before you update with this month’s patch batch, please make sure you have backed up your system and/or important files. It’s not uncommon for Windows updates to hose one’s system or prevent it from booting properly, and some updates even have known to erase or corrupt files.
So do yourself a favor and backup before installing any patches. Windows 10 even has some built-in tools to help you do that, either on a per-file/folder basis or by making a complete and bootable copy of your hard drive all at once.
And if you wish to ensure Windows has been set to pause updating so you can back up your files and/or system before the operating system decides to reboot and install patches on its own schedule, see this guide.
As always, if you experience glitches or problems installing any of these patches this month, please consider leaving a comment about it below; there’s a better-than-even chance other readers have experienced the same and may chime in here with some helpful tips.
When you own a short email address at a popular email provider, you are bound to get gobs of spam, and more than a few alerts about random people trying to seize control over the account. If your account name is short and desirable enough, this kind of activity can make the account less reliable for day-to-day communications because it tends to bury emails you do want to receive. But there is also a puzzling side to all this noise: Random people tend to use your account as if it were theirs, and often for some fairly sensitive services online.
About 16 years ago — back when you actually had to be invited by an existing Google Mail user in order to open a new Gmail account — I was able to get hold of a very short email address on the service that hadn’t yet been reserved. Naming the address here would only invite more spam and account hijack attempts, but let’s just say the account name has something to do with computer hacking.
Because it’s a relatively short username, it is what’s known as an “OG” or “original gangster” account. These account names tend to be highly prized among certain communities, who busy themselves with trying to hack them for personal use or resale. Hence, the constant account takeover requests.
What is endlessly fascinating is how many people think it’s a good idea to sign up for important accounts online using my email address. Naturally, my account has been signed up involuntarily for nearly every dating and porn website there is. That is to be expected, I suppose.
But what still blows me away is the number of financial and other sensitive accounts I could access if I were of a devious mind. This particular email address has accounts that I never asked for at H&R Block, Turbotax, TaxAct, iTunes, LastPass, Dashlane, MyPCBackup, and Credit Karma, to name just a few. I’ve lost count of the number of active bank, ISP and web hosting accounts I can tap into.
I’m perpetually amazed by how many other Gmail users and people on similarly-sized webmail providers have opted to pick my account as a backup address if they should ever lose access to their inbox. Almost certainly, these users just lazily picked my account name at random when asked for a backup email — apparently without fully realizing the potential ramifications of doing so. At last check, my account is listed as the backup for more than three dozen Yahoo, Microsoft and other Gmail accounts and their associated file-sharing services.
If for some reason I ever needed to order pet food or medications online, my phantom accounts at Chewy, Coupaw and Petco have me covered. If any of my Weber grill parts ever fail, I’m set for life on that front. The Weber emails I periodically receive remind me of a piece I wrote many years ago for The Washington Post, about companies sending email from [companynamehere]@donotreply.com, without considering that someone might own that domain. Someone did, and the results were often hilarious.
It’s probably a good thing I’m not massively into computer games, because the online gaming (and gambling) profiles tied to my old Gmail account are innumerable.
For several years until recently, I was receiving the monthly statements intended for an older gentleman in India who had the bright idea of using my Gmail account to manage his substantial retirement holdings. Thankfully, after reaching out to him he finally removed my address from his profile, although he never responded to questions about how this might have happened.
On balance, I’ve learned it’s better just not to ask. On multiple occasions, I’d spend a few minutes trying to figure out if the email addresses using my Gmail as a backup were created by real people or just spam bots of some sort. And then I’d send a polite note to those that fell into the former camp, explaining why this was a bad idea and ask what motivated them to do so.
Perhaps because my Gmail account name includes a hacking term, the few responses I’ve received have been less than cheerful. Despite my including detailed instructions on how to undo what she’d done, one woman in Florida screamed in an ALL CAPS reply that I was trying to phish her and that her husband was a police officer who would soon hunt me down. Alas, I still get notifications anytime she logs into her Yahoo account.
Probably for the same reason the Florida lady assumed I was a malicious hacker, my account constantly gets requests from random people who wish to hire me to hack into someone else’s account. I never respond to those either, although I’ll admit that sometimes when I’m procrastinating over something the temptation arises.
Losing access to your inbox can open you up to a cascading nightmare of other problems. Having a backup email address tied to your inbox is a good idea, but obviously only if you also control that backup address.
More importantly, make sure you’re availing yourself of the most secure form of multi-factor authentication offered by the provider. These may range from authentication options like one-time codes sent via email, phone calls, SMS or mobile app, to more robust, true “2-factor authentication” or 2FA options (something you have and something you know), such as security keys or push-based 2FA such as Duo Security (an advertiser on this site and a service I have used for years).
Email, SMS and app-based one-time codes are considered less robust from a security perspective because they can be undermined by a variety of well-established attack scenarios, from SIM-swapping to mobile-based malware. So it makes sense to secure your accounts with the strongest form of MFA available. But please bear in mind that if the only added authentication options offered by a site you frequent are SMS and/or phone calls, this is still better than simply relying on a password to secure your account.
Maybe you’ve put off enabling multi-factor authentication for your important accounts, and if that describes you, please take a moment to visit twofactorauth.org and see whether you can harden your various accounts.
As I noted in June’s story, Turn on MFA Before Crooks Do It For You, people who don’t take advantage of these added safeguards may find it far more difficult to regain access when their account gets hacked, because increasingly thieves will enable multi-factor options and tie the account to a device they control.
Are you in possession of an OG email account? Feel free to sound off in the comments below about some of the more gonzo stuff that winds up in your inbox.
Email service provider Sendgrid is grappling with an unusually large number of customer accounts whose passwords have been cracked, sold to spammers, and abused for sending phishing and email malware attacks. Sendgrid’s parent company Twilio says it is working on a plan to require multi-factor authentication for all of its customers, but that solution may not come fast enough for organizations having trouble dealing with the fallout in the meantime.
Many companies use Sendgrid to communicate with their customers via email, or else pay marketing firms to do that on their behalf using Sendgrid’s systems. Sendgrid takes steps to validate that new customers are legitimate businesses, and that emails sent through its platform carry the proper digital signatures that other companies can use to validate that the messages have been authorized by its customers.
But this also means when a Sendgrid customer account gets hacked and used to send malware or phishing scams, the threat is particularly acute because a large number of organizations allow email from Sendgrid’s systems to sail through their spam-filtering systems.
To make matters worse, links included in emails sent through Sendgrid are obfuscated (mainly for tracking deliverability and other metrics), so it is not immediately clear to recipients where on the Internet they will be taken when they click.
Dealing with compromised customer accounts is a constant challenge for any organization doing business online today, and certainly Sendgrid is not the only email marketing platform dealing with this problem. But according to multiple emails from readers, recent threads on several anti-spam discussion lists, and interviews with people in the anti-spam community, over the past few months there has been a marked increase in malicious, phishous and outright spammy email being blasted out via Sendgrid’s servers.
Rob McEwen is CEO of Invaluement.com, an anti-spam firm whose data on junk email trends are used to improve the spam-blocking technologies deployed by several Fortune 100 companies. McEwen said no other email service provider has come close to generating the volume of spam that’s been emanating from Sendgrid accounts lately.
“As far as the nasty criminal phishes and viruses, I think there’s not even a close second in terms of how bad it’s been with Sendgrid over the past few months,” he said.
Trying to filter out bad emails coming from a major email provider that so many legitimate companies rely upon to reach their customers can be a dicey business. If you filter the emails too aggressively you end up with an unacceptable number of “false positives,” i.e., benign or even desirable emails that get flagged as spam and sent to the junk folder or blocked altogether.
But McEwen said the incidence of malicious spam coming from Sendgrid has gotten so bad that he recently launched a new anti-spam block list specifically to filter out email from Sendgrid accounts that have been known to be blasting large volumes of junk or malicious email.
“Before I implemented this in my own filtering system a week ago, I was getting three to four phone calls or stern emails a week from angry customers wondering why these malicious emails were getting through to their inboxes,” McEwen said. “And I just am not seeing anything this egregious in terms of viruses and spams from the other email service providers.”
In an interview with KrebsOnSecurity, Sendgrid parent firm Twilio acknowledged the company had recently seen an increase in compromised customer accounts being abused for spam. While Sendgrid does allow customers to use multi-factor authentication (also known as two-factor authentication or 2FA), this protection is not mandatory.
But Twilio Chief Security Officer Steve Pugh said the company is working on changes that would require customers to use some form of 2FA in addition to usernames and passwords.
“Twilio believes that requiring 2FA for customer accounts is the right thing to do, and we’re working towards that end,” Pugh said. “2FA has proven to be a powerful tool in securing communications channels. This is part of the reason we acquired Authy and created a line of account security products and services. Twilio, like other platforms, is forming a plan on how to better secure our customers’ accounts through native technologies such as Authy and additional account level controls to mitigate known attack vectors.”
Requiring customers to use some form of 2FA would go a long way toward neutralizing the underground market for compromised Sendgrid accounts, which are sold by a variety of cybercriminals who specialize in gaining access to accounts by targeting users who re-use the same passwords across multiple websites.
One such individual, who goes by the handle “Kromatix” on several forums, is currently selling access to more than 400 compromised Sendgrid user accounts. The pricing attached to each account is based on volume of email it can send in a given month. Accounts that can send up to 40,000 emails a month go for $15, whereas those capable of blasting 10 million missives a month sell for $400.
“I have a large supply of cracked Sendgrid accounts that can be used to generate an API key which you can then plug into your mailer of choice and send massive amounts of emails with ensured delivery,” Kromatix wrote in an Aug. 23 sales thread. “Sendgrid servers maintain a very good reputation with [email service providers] so your content becomes much more likely to get into the inbox so long as your setup is correct.”
Neil Schwartzman, executive director of the anti-spam group CAUCE, said Sendgrid’s 2FA plans are long overdue, noting that the company bought Authy back in 2015.
“Single-factor authentication for a company like this in 2020 is just ludicrous given the potential damage and malicious content we’re seeing,” Schwartzman said.
“I understand that it’s a task to invoke 2FA, and given the volume of customers Sendgrid has that’s something to consider because there’s going to be a lot of customer overhead involved,” he continued. “But it’s not like your bank, social media account, email and plenty of other places online don’t already insist on it.”
Schwartzman said if Twilio doesn’t act quickly enough to fix the problem on its end, the major email providers of the world (think Google, Microsoft and Apple) — and their various machine-learning anti-spam algorithms — may do it for them.
“There is a tipping point after which receiving firms start to lose patience and start more aggressively filter this stuff,” he said. “If seeing a Sendgrid email according to machine learning becomes a sign of abuse, trust me the machines will make the decisions even if the people don’t.”
Yesterday’s piece told the tale of Hieu Minh Ngo, a hacker the U.S. Secret Service described as someone who caused more material financial harm to more Americans than any other convicted cybercriminal. Ngo was recently deported back to his home country after serving more than seven years in prison for running multiple identity theft services. He now says he wants to use his experience to convince other cybercriminals to use their skills for good. Here’s a look at what happened after he got busted.
Part I of this series ended with Ngo in handcuffs after disembarking a flight from his native Vietnam to Guam, where he believed he was going to meet another cybercriminal who’d promised to hook him up with the mother of all consumer data caches.
Ngo had been making more than $125,000 a month reselling ill-gotten access to some of the biggest data brokers on the planet. But the Secret Service discovered his various accounts at these data brokers and had them shut down one by one. Ngo became obsessed with restarting his business and maintaining his previous income. By this time, his ID theft services had earned roughly USD $3 million.
As this was going on, Secret Service agents used an intermediary to trick Ngo into thinking he’d trodden on the turf of another cybercriminal. From Part I:
The Secret Service contacted Ngo through an intermediary in the United Kingdom — a known, convicted cybercriminal who agreed to play along. The U.K.-based collaborator told Ngo he had personally shut down Ngo’s access to Experian because he had been there first and Ngo was interfering with his business.
“The U.K. guy told Ngo, ‘Hey, you’re treading on my turf, and I decided to lock you out. But as long as you’re paying a vig through me, your access won’t go away’,” the Secret Service’s Matt O’Neill recalled.
After several months of conversing with his apparent U.K.-based tormentor, Ngo agreed to meet him in Guam to finalize the deal. But immediately after stepping off of the plane in Guam, he was apprehended by Secret Service agents.
“One of the names of his identity theft services was findget[.]me,” O’Neill said. “We took that seriously, and we did like he asked.”
In an interview with KrebsOnSecurity, Ngo said he spent about two months in a Guam jail awaiting transfer to the United States. A month passed before he was allowed a 10 minute phone call to his family and explain what he’d gotten himself into.
“This was a very tough time,” Ngo said. “They were so sad and they were crying a lot.”
First stop on his prosecution tour was New Jersey, where he ultimately pleaded guilty to hacking into MicroBilt, the first of several data brokers whose consumer databases would power different iterations of his identity theft service over the years.
Next came New Hampshire, where another guilty plea forced him to testify in three different trials against identity thieves who had used his services for years. Among them was Lance Ealy, a serial ID thief from Dayton, Ohio who used Ngo’s service to purchase more than 350 “fullz” — a term used to describe a package of everything one would need to steal someone’s identity, including their Social Security number, mother’s maiden name, birth date, address, phone number, email address, bank account information and passwords.
Ealy used Ngo’s service primarily to conduct tax refund fraud with the U.S. Internal Revenue Service (IRS), claiming huge refunds in the names of ID theft victims who first learned of the fraud when they went to file their taxes and found someone else had beat them to it.
Ngo’s cooperation with the government ultimately led to 20 arrests, with a dozen of those defendants lured into the open by O’Neill and other Secret Service agents posing as Ngo.
The Secret Service had difficulty pinning down the exact amount of financial damage inflicted by Ngo’s various ID theft services over the years, primarily because those services only kept records of what customers searched for — not which records they purchased.
But based on the records they did have, the government estimated that Ngo’s service enabled approximately $1.1 billion in new account fraud at banks and retailers throughout the United States, and roughly $64 million in tax refund fraud with the states and the IRS.
“We interviewed a number of Ngo’s customers, who were pretty open about why they were using his services,” O’Neill said. “Many of them told us the same thing: Buying identities was so much better for them than stolen payment card data, because card data could be used once or twice before it was no good to them anymore. But identities could be used over and over again for years.”
O’Neill said he still marvels at the fact that Ngo’s name is practically unknown when compared to the world’s most infamous credit card thieves, some of whom were responsible for stealing hundreds of millions of cards from big box retail merchants.
“I don’t know of anyone who has come close to causing more material harm than Ngo did to the average American,” O’Neill said. “But most people have probably never heard of him.”
Ngo said he wasn’t surprised that his services were responsible for so much financial damage. But he was utterly unprepared to hear about the human toll. Throughout the court proceedings, Ngo sat through story after dreadful story of how his work had ruined the financial lives of people harmed by his services.
“When I was running the service, I didn’t really care because I didn’t know my customers and I didn’t know much about what they were doing with it,” Ngo said. “But during my case, the federal court received like 13,000 letters from victims who complained they lost their houses, jobs, or could no longer afford to buy a home or maintain their financial life because of me. That made me feel really bad, and I realized I’d been a terrible person.”
Even as he bounced from one federal detention facility to the next, Ngo always seemed to encounter ID theft victims wherever he went, including prison guards, healthcare workers and counselors.
“When I was in jail at Beaumont, Texas I talked to one of the correctional officers there who shared with me a story about her friend who lost her identity and then lost everything after that,” Ngo recalled. “Her whole life fell apart. I don’t know if that lady was one of my victims, but that story made me feel sick. I know now that was I was doing was just evil.”
The Vietnamese hacker was released from prison a few months ago, and is now finishing up a mandatory three-week COVID-19 quarantine in a government-run facility near Ho Chi Minh city. In the final months of his detention, Ngo started reading everything he could get his hands on about computer and Internet security, and even authored a lengthy guide written for the average Internet user with advice about how to avoid getting hacked or becoming the victim of identity theft.
Ngo said while he would like to one day get a job working in some cybersecurity role, he’s in no hurry to do so. He’s already had at least one job offer in Vietnam, but he turned it down. He says he’s not ready to work yet, but is looking forward to spending time with his family — and specifically with his dad, who was recently diagnosed with Stage 4 cancer.
Longer term, Ngo says, he wants to mentor young people and help guide them on the right path, and away from cybercrime. He’s been brutally honest about his crimes and the destruction he’s caused. His LinkedIn profile states up front that he’s a convicted cybercriminal.
“I hope my work can help to change the minds of somebody, and if at least one person can change and turn to do good, I’m happy,” Ngo said. “It’s time for me to do something right, to give back to the world, because I know I can do something like this.”
Still, the recidivism rate among cybercriminals tends to be extremely high, and it would be easy for him to slip back into his old ways. After all, few people know as well as he does how best to exploit access to identity data.
O’Neill said he believes Ngo probably will keep his nose clean. But he added that Ngo’s service if it existed today probably would be even more successful and lucrative given the sheer number of scammers involved in using stolen identity data to defraud states and the federal government out of pandemic assistance loans and unemployment insurance benefits.
“It doesn’t appear he’s looking to get back into that life of crime,” O’Neill said. “But I firmly believe the people doing fraudulent small business loans and unemployment claims cut their teeth on his website. He was definitely the new coin of the realm.”
Ngo maintains he has zero interest in doing anything that might send him back to prison.
“Prison is a difficult place, but it gave me time to think about my life and my choices,” he said. “I am committing myself to do good and be better every day. I now know that money is just a part of life. It’s not everything and it can’t bring you true happiness. I hope those cybercriminals out there can learn from my experience. I hope they stop what they are doing and instead use their skills to help make the world better.”
At the height of his cybercriminal career, the hacker known as “Hieupc” was earning $125,000 a month running a bustling identity theft service that siphoned consumer dossiers from some of the world’s top data brokers. That is, until his greed and ambition played straight into an elaborate snare set by the U.S. Secret Service. Now, after more than seven years in prison Hieupc is back in his home country and hoping to convince other would-be cybercrooks to use their computer skills for good.
For several years beginning around 2010, a lone teenager in Vietnam named Hieu Minh Ngo ran one of the Internet’s most profitable and popular services for selling “fullz,” stolen identity records that included a consumer’s name, date of birth, Social Security number and email and physical address.
Ngo got his treasure trove of consumer data by hacking and social engineering his way into a string of major data brokers. By the time the Secret Service caught up with him in 2013, he’d made over $3 million selling fullz data to identity thieves and organized crime rings operating throughout the United States.
Matt O’Neill is the Secret Service agent who in February 2013 successfully executed a scheme to lure Ngo out of Vietnam and into Guam, where the young hacker was arrested and sent to the mainland U.S. to face prosecution. O’Neill now heads the agency’s Global Investigative Operations Center, which supports investigations into transnational organized criminal groups.
O’Neill said he opened the investigation into Ngo’s identity theft business after reading about it in a 2011 KrebsOnSecurity story, “How Much is Your Identity Worth?” According to O’Neill, what’s remarkable about Ngo is that to this day his name is virtually unknown among the pantheon of infamous convicted cybercriminals, the majority of whom were busted for trafficking in huge quantities of stolen credit cards.
Ngo’s businesses enabled an entire generation of cybercriminals to commit an estimated $1 billion worth of new account fraud, and to sully the credit histories of countless Americans in the process.
“I don’t know of any other cybercriminal who has caused more material financial harm to more Americans than Ngo,” O’Neill told KrebsOnSecurity. “He was selling the personal information on more than 200 million Americans and allowing anyone to buy it for pennies apiece.”
Freshly released from the U.S. prison system and deported back to Vietnam, Ngo is currently finishing up a mandatory three-week COVID-19 quarantine at a government-run facility. He contacted KrebsOnSecurity from inside this facility with the stated aim of telling his little-known story, and to warn others away from following in his footsteps.BEGINNINGS
Ten years ago, then 19-year-old hacker Ngo was a regular on the Vietnamese-language computer hacking forums. Ngo says he came from a middle-class family that owned an electronics store, and that his parents bought him a computer when he was around 12 years old. From then on out, he was hooked.
In his late teens, he traveled to New Zealand to study English at a university there. By that time, he was already an administrator of several dark web hacker forums, and between his studies he discovered a vulnerability in the school’s network that exposed payment card data.
“I did contact the IT technician there to fix it, but nobody cared so I hacked the whole system,” Ngo recalled. “Then I used the same vulnerability to hack other websites. I was stealing lots of credit cards.”
Ngo said he decided to use the card data to buy concert and event tickets from Ticketmaster, and then sell the tickets at a New Zealand auction site called TradeMe. The university later learned of the intrusion and Ngo’s role in it, and the Auckland police got involved. Ngo’s travel visa was not renewed after his first semester ended, and in retribution he attacked the university’s site, shutting it down for at least two days.
Ngo said he started taking classes again back in Vietnam, but soon found he was spending most of his time on cybercrime forums.
“I went from hacking for fun to hacking for profits when I saw how easy it was to make money stealing customer databases,” Ngo said. “I was hanging out with some of my friends from the underground forums and we talked about planning a new criminal activity.”
“My friends said doing credit cards and bank information is very dangerous, so I started thinking about selling identities,” Ngo continued. “At first I thought well, it’s just information, maybe it’s not that bad because it’s not related to bank accounts directly. But I was wrong, and the money I started making very fast just blinded me to a lot of things.”MICROBILT
His first big target was a consumer credit reporting company in New Jersey called MicroBilt.
“I was hacking into their platform and stealing their customer database so I could use their customer logins to access their [consumer] databases,” Ngo said. “I was in their systems for almost a year without them knowing.”
Very soon after gaining access to MicroBilt, Ngo says, he stood up Superget[.]info, a website that advertised the sale of individual consumer records. Ngo said initially his service was quite manual, requiring customers to request specific states or consumers they wanted information on, and he would conduct the lookups by hand.
“I was trying to get more records at once, but the speed of our Internet in Vietnam then was very slow,” Ngo recalled. “I couldn’t download it because the database was so huge. So I just manually search for whoever need identities.”
But Ngo would soon work out how to use more powerful servers in the United States to automate the collection of larger amounts of consumer data from MicroBilt’s systems, and from other data brokers. As I wrote of Ngo’s service back in November 2011:
“Superget lets users search for specific individuals by name, city, and state. Each “credit” costs USD$1, and a successful hit on a Social Security number or date of birth costs 3 credits each. The more credits you buy, the cheaper the searches are per credit: Six credits cost $4.99; 35 credits cost $20.99, and $100.99 buys you 230 credits. Customers with special needs can avail themselves of the “reseller plan,” which promises 1,500 credits for $500.99, and 3,500 credits for $1000.99.
“Our Databases are updated EVERY DAY,” the site’s owner enthuses. “About 99% nearly 100% US people could be found, more than any sites on the internet now.”
Ngo’s intrusion into MicroBilt eventually was detected, and the company kicked him out of their systems. But he says he got back in using another vulnerability.
“I was hacking them and it was back and forth for months,” Ngo said. “They would discover [my accounts] and fix it, and I would discover a new vulnerability and hack them again.”COURT (AD)VENTURES, AND EXPERIAN
This game of cat and mouse continued until Ngo found a much more reliable and stable source of consumer data: A U.S. based company called Court Ventures, which aggregated public records from court documents. Ngo wasn’t interested in the data collected by Court Ventures, but rather in its data sharing agreement with a third-party data broker called U.S. Info Search, which had access to far more sensitive consumer records.
Using forged documents and more than a few lies, Ngo was able to convince Court Ventures that he was a private investigator based in the United States.
“At first [when] I sign up they asked for some documents to verify,” Ngo said. “So I just used some skill about social engineering and went through the security check.”
Then, in March 2012, something even more remarkable happened: Court Ventures was purchased by Experian, one of the big three major consumer credit bureaus in the United States. And for nine months after the acquisition, Ngo was able to maintain his access.
“After that, the database was under control by Experian,” he said. “I was paying Experian good money, thousands of dollars a month.”
Whether anyone at Experian ever performed due diligence on the accounts grandfathered in from Court Ventures is unclear. But it wouldn’t have taken a rocket surgeon to figure out that this particular customer was up to something fishy.
For one thing, Ngo paid the monthly invoices for his customers’ data requests using wire transfers from a multitude of banks around the world, but mostly from new accounts at financial institutions in China, Malaysia and Singapore.
O’Neill said Ngo’s identity theft website generated tens of thousands of queries each month. For example, the first invoice Court Ventures sent Ngo in December 2010 was for 60,000 queries. By the time Experian acquired the company, Ngo’s service had attracted more than 1,400 regular customers, and was averaging 160,000 monthly queries.
More importantly, Ngo’s profit margins were enormous.
“His service was quite the racket,” he said. “Court Ventures charged him 14 cents per lookup, but he charged his customers about $1 for each query.”
By this time, O’Neill and his fellow Secret Service agents had served dozens of subpoenas tied to Ngo’s identity theft service, including one that granted them access to the email account he used to communicate with customers and administer his site. The agents discovered several emails from Ngo instructing an accomplice to pay Experian using wire transfers from different Asian banks.TLO
Working with the Secret Service, Experian quickly zeroed in on Ngo’s accounts and shut them down. Aware of an opportunity here, the Secret Service contacted Ngo through an intermediary in the United Kingdom — a known, convicted cybercriminal who agreed to play along. The U.K.-based collaborator told Ngo he had personally shut down Ngo’s access to Experian because he had been there first and Ngo was interfering with his business.
“The U.K. guy told Ngo, ‘Hey, you’re treading on my turf, and I decided to lock you out. But as long as you’re paying a vig through me, your access won’t go away’,” O’Neill recalled.
The U.K. cybercriminal, acting at the behest of the Secret Service and U.K. authorities, told Ngo that if he wanted to maintain his access, he could agree to meet up in person. But Ngo didn’t immediately bite on the offer.
Instead, he weaseled his way into another huge data store. In much the same way he’d gained access to Court Ventures, Ngo got an account at a company called TLO, another data broker that sells access to extremely detailed and sensitive information on most Americans.
TLO’s service is accessible to law enforcement agencies and to a limited number of vetted professionals who can demonstrate they have a lawful reason to access such information. In 2014, TLO was acquired by Trans Union, one of the other three big U.S. consumer credit reporting bureaus.
And for a short time, Ngo used his access to TLO to power a new iteration of his business — an identity theft service rebranded as usearching[.]info. This site also pulled consumer data from a payday loan company that Ngo hacked into, as documented in my Sept. 2012 story, ID Theft Service Tied to Payday Loan Sites. Ngo said the hacked payday loans site gave him instant access to roughly 1,000 new fullz records each day.BLINDED BY GREED
By this time, Ngo was a multi-millionaire: His various sites and reselling agreements with three Russian-language cybercriminal stores online had earned him more than USD $3 million. He told his parents his money came from helping companies develop websites, and even used some of his ill-gotten gains to pay off the family’s debts (its electronics business had gone belly up, and a family member had borrowed but never paid back a significant sum of money).
But mostly, Ngo said, he spent his money on frivolous things, although he says he’s never touched drugs or alcohol.
“I spent it on vacations and cars and a lot of other stupid stuff,” he said.
When TLO locked Ngo out of his account there, the Secret Service used it as another opportunity for their cybercriminal mouthpiece in the U.K. to turn the screws on Ngo yet again.
“He told Ngo he’d locked him out again, and the he could do this all day long,” O’Neill said. “And if he truly wanted lasting access to all of these places he used to have access to, he would agree to meet and form a more secure partnership.”
After several months of conversing with his apparent U.K.-based tormentor, Ngo agreed to meet him in Guam to finalize the deal. Ngo says he understood at the time that Guam is an unincorporated territory of the United States, but that he discounted the chances that this was all some kind of elaborate law enforcement sting operation.
“I was so desperate to have a stable database, and I got blinded by greed and started acting crazy without thinking,” Ngo said. “Lots of people told me ‘Don’t go!,’ but I told them I have to try and see what’s going on.”
But immediately after stepping off of the plane in Guam, he was apprehended by Secret Service agents.
“One of the names of his identity theft services was findget[.]me,” O’Neill said. “We took that seriously, and we did like he asked.”
This is Part I of a multi-part series. Check back tomorrow (Aug. 27) for Part II, which will examine what investigators learned following Ngo’s arrest, and delve into his more recent effort to right the wrongs he’s done.