GoDaddy Employees Used in Attacks on Multiple Cryptocurrency Services

Fraudsters redirected email and web traffic destined for several cryptocurrency trading platforms over the past week. The attacks were facilitated by scams targeting employees at GoDaddy, the world’s largest domain name registrar, KrebsOnSecurity has learned.

The incident is the latest incursion at GoDaddy that relied on tricking employees into transferring ownership and/or control over targeted domains to fraudsters. In March, a voice phishing scam targeting GoDaddy support employees allowed attackers to assume control over at least a half-dozen domain names, including transaction brokering site escrow.com.

And in May of this year, GoDaddy disclosed that 28,000 of its customers’ web hosting accounts were compromised following a security incident in Oct. 2019 that wasn’t discovered until April 2020.

This latest campaign appears to have begun on or around Nov. 13, with an attack on cryptocurrency trading platform liquid.com.

“A domain hosting provider ‘GoDaddy’ that manages one of our core domain names incorrectly transferred control of the account and domain to a malicious actor,” Liquid CEO Mike Kayamori said in a blog post. “This gave the actor the ability to change DNS records and in turn, take control of a number of internal email accounts. In due course, the malicious actor was able to partially compromise our infrastructure, and gain access to document storage.”

In the early morning hours of Nov. 18 Central European Time (CET), cyptocurrency mining service NiceHash disccovered that some of the settings for its domain registration records at GoDaddy were changed without authorization, briefly redirecting email and web traffic for the site. NiceHash froze all customer funds for roughly 24 hours until it was able to verify that its domain settings had been changed back to their original settings.

“At this moment in time, it looks like no emails, passwords, or any personal data were accessed, but we do suggest resetting your password and activate 2FA security,” the company wrote in a blog post.

NiceHash founder Matjaz Skorjanc said the unauthorized changes were made from an Internet address at GoDaddy, and that the attackers tried to use their access to its incoming NiceHash emails to perform password resets on various third-party services, including Slack and Github. But he said GoDaddy was impossible to reach at the time because it was undergoing a widespread system outage in which phone and email systems were unresponsive.

“We detected this almost immediately [and] started to mitigate [the] attack,” Skorjanc said in an email to this author. “Luckily, we fought them off well and they did not gain access to any important service. Nothing was stolen.”

Skorjanc said NiceHash’s email service was redirected to privateemail.com, an email platform run by Namecheap Inc., another large domain name registrar. Using Farsight Security, a service which maps changes to domain name records over time, KrebsOnSecurity instructed the service to show all domains registered at GoDaddy that had alterations to their email records in the past week which pointed them to privateemail.com. Those results were then indexed against the top one million most popular websites according to Alexa.com.

The result shows that several other cryptocurrency platforms also may have been targeted by the same group, including Bibox.com, Celsius.network, and Wirex.app. None of these companies responded to requests for comment.

In response to questions from KrebsOnSecurity, GoDaddy acknowledged that “a small number” of customer domain names had been modified after a “limited” number of GoDaddy employees fell for a social engineering scam. GoDaddy said the outage between 7:00 p.m. and 11:00 p.m. PST on Nov. 17 was not related to a security incident, but rather a technical issue that materialized during planned network maintenance.

“Separately, and unrelated to the outage, a routine audit of account activity identified potential unauthorized changes to a small number of customer domains and/or account information,” GoDaddy spokesperson Dan Race said. “Our security team investigated and confirmed threat actor activity, including social engineering of a limited number of GoDaddy employees.

“We immediately locked down the accounts involved in this incident, reverted any changes that took place to accounts, and assisted affected customers with regaining access to their accounts,” GoDaddy’s statement continued. “As threat actors become increasingly sophisticated and aggressive in their attacks, we are constantly educating employees about new tactics that might be used against them and adopting new security measures to prevent future attacks.”

Race declined to specify how its employees were tricked into making the unauthorized changes, saying the matter was still under investigation. But in the attacks earlier this year that affected escrow.com and several other GoDaddy customer domains, the assailants targeted employees over the phone, and were able to read internal notes that GoDaddy employees had left on customer accounts.

What’s more, the attack on escrow.com redirected the site to an Internet address in Malaysia that hosted fewer than a dozen other domains, including the phishing website servicenow-godaddy.com. This suggests the attackers behind the March incident — and possibly this latest one — succeeded by calling GoDaddy employees and convincing them to use their employee credentials at a fraudulent GoDaddy login page.

In August 2020, KrebsOnSecurity warned about a marked increase in large corporations being targeted in sophisticated voice phishing or “vishing” scams. Experts say the success of these scams has been aided greatly by many employees working remotely thanks to the ongoing Coronavirus pandemic.

A typical vishing scam begins with a series of phone calls to employees working remotely at a targeted organization. The phishers often will explain that they’re calling from the employer’s IT department to help troubleshoot issues with the company’s email or virtual private networking (VPN) technology.

The goal is to convince the target either to divulge their credentials over the phone or to input them manually at a website set up by the attackers that mimics the organization’s corporate email or VPN portal.

On July 15, a number of high-profile Twitter accounts were used to tweet out a bitcoin scam that earned more than $100,000 in a few hours. According to Twitter, that attack succeeded because the perpetrators were able to social engineer several Twitter employees over the phone into giving away access to internal Twitter tools.

An alert issued jointly by the FBI and the Cybersecurity and Infrastructure Security Agency (CISA) says the perpetrators of these vishing attacks compile dossiers on employees at their targeted companies using mass scraping of public profiles on social media platforms, recruiter and marketing tools, publicly available background check services, and open-source research.

The FBI/CISA advisory includes a number of suggestions that companies can implement to help mitigate the threat from vishing attacks, including:

• Restrict VPN connections to managed devices only, using mechanisms like hardware checks or installed certificates, so user input alone is not enough to access the corporate VPN.

• Restrict VPN access hours, where applicable, to mitigate access outside of allowed times.

• Employ domain monitoring to track the creation of, or changes to, corporate, brand-name domains.

• Actively scan and monitor web applications for unauthorized access, modification, and anomalous activities.

• Employ the principle of least privilege and implement software restriction policies or other controls; monitor authorized user accesses and usage.

• Consider using a formalized authentication process for employee-to-employee communications made over the public telephone network where a second factor is used to
authenticate the phone call before sensitive information can be discussed.

• Improve 2FA and OTP messaging to reduce confusion about employee authentication attempts.

• Verify web links do not have misspellings or contain the wrong domain.

• Bookmark the correct corporate VPN URL and do not visit alternative URLs on the sole basis of an inbound phone call.

• Be suspicious of unsolicited phone calls, visits, or email messages from unknown individuals claiming to be from a legitimate organization. Do not provide personal information or information about your organization, including its structure or networks, unless you are certain of a person’s authority to have the information. If possible, try to verify the caller’s identity directly with the company.

• If you receive a vishing call, document the phone number of the caller as well as the domain that the actor tried to send you to and relay this information to law enforcement.

• Limit the amount of personal information you post on social networking sites. The internet is a public resource; only post information you are comfortable with anyone seeing.

• Evaluate your settings: sites may change their options periodically, so review your security and privacy settings regularly to make sure that your choices are still appropriate.

Trump Fires Security Chief Christopher Krebs

President Trump on Tuesday fired his top election security official Christopher Krebs (no relation). The dismissal came via Twitter two weeks to the day after Trump lost an election he baselessly claims was stolen by widespread voting fraud.

Chris Krebs. Image: CISA.

Krebs, 43, is a former Microsoft executive appointed by Trump to head the Cybersecurity and Infrastructure Security Agency (CISA), a division of the U.S. Department of Homeland Security. As part of that role, Krebs organized federal and state efforts to improve election security, and to dispel disinformation about the integrity of the voting process.

Krebs’ dismissal was hardly unexpected. Last week, in the face of repeated statements by Trump that the president was robbed of re-election by buggy voting machines and millions of fraudulently cast ballots, Krebs’ agency rejected the claims as “unfounded,” asserting that “the November 3rd election was the most secure in American history.”

In a statement on Nov. 12, CISA declared “there is no evidence that any voting system deleted or lost votes, changed votes, or was in any way compromised.”

But in a tweet Tuesday evening, Trump called that assessment “highly inaccurate,” alleging there were “massive improprieties and fraud — including dead people voting, Poll watchers not allowed into polling locations, ‘glitches’ in the voting machines that changed votes from Trump to Biden, late voting, and many more.”

Twitter, as it has done with a remarkable number of the president’s tweets lately, flagged the statements as disputed.

By most accounts, Krebs was one of the more competent and transparent leaders in the Trump administration. But that same transparency may have cost him his job: Krebs’ agency earlier this year launched “Rumor Control,” a blog that sought to address many of the conspiracy theories the president has perpetuated in recent days.

Sen. Richard Burr, a Republican from North Carolina, said Krebs had done “a remarkable job during a challenging time,” and that the “creative and innovative campaign CISA developed to promote cybersecurity should serve as a model for other government agencies.”

Sen. Angus King, an Independent from Maine and co-chair of a commission to improve the nation’s cyber defense posture, called Krebs “an incredibly bright, high-performing, and dedicated public servant who has helped build up new cyber capabilities in the face of swiftly-evolving dangers.”

“By firing Mr. Krebs for simply doing his job, President Trump is inflicting severe damage on all Americans – who rely on CISA’s defenses, even if they don’t know it,” King said in a written statement. “If there’s any silver lining in this unjust decision, it’s this: I hope that President-elect Biden will recognize Chris’s contributions, and consult with him as the Biden administration charts the future of this critically important agency.”

KrebsOnSecurity has received more than a few messages these past two weeks from readers who wondered why the much-anticipated threat from Russian or other state-sponsored hackers never appeared to materialize in this election cycle.

That seems a bit like asking why the year 2000 came to pass with very few meaningful disruptions from the Y2K computer date rollover problem. After all, in advance of the new millennium, the federal government organized a series of task forces that helped coordinate readiness for the changeover, and to minimize the impact of any disruptions.

But the question also ignores a key goal of previous foreign election interference attempts leading up to the 2016 U.S. presidential and 2018 mid-term elections. Namely, to sow fear, uncertainty, doubt, distrust and animosity among the electorate about the democratic process and its outcomes.

To that end, it’s difficult to see how anyone has done more to advance that agenda than President Trump himself, who has yet to concede the race and continues to challenge the result in state courts and in his public statements.

Be Very Sparing in Allowing Site Notifications

An increasing number of websites are asking visitors to approve “notifications,” browser modifications that periodically display messages on the user’s mobile or desktop device. In many cases these notifications are benign, but several dodgy firms are paying site owners to install their notification scripts and then selling that communications pathway to scammers and online hucksters.

Notification prompts in Firefox (left) and Google Chrome.

When a website you visit asks permission to send notifications and you approve the request, the resulting messages that pop up appear outside of the browser. For example, on Microsoft Windows systems they typically show up in the bottom right corner of the screen — just above the system clock. These so-called “push notifications” rely on an Internet standard designed to work similarly across different operating systems and web browsers.

But many users may not fully grasp what they are consenting to when they approve notifications, or how to tell the difference between a notification sent by a website and one made to appear like an alert from the operating system or another program that’s already installed on the device.

This is evident by the apparent scale of the infrastructure behind a relatively new company based in Montenegro called PushWelcome, which advertises the ability for site owners to monetize traffic from their visitors. The company’s site currently is ranked by Alexa.com as among the top 2,000 sites in terms of Internet traffic globally.

Website publishers who sign up with PushWelcome are asked to include a small script on their page which prompts visitors to approve notifications. In many cases, the notification approval requests themselves are deceptive — disguised as prompts to click “OK” to view video material, or as “CAPTCHA” requests designed to distinguish automated bot traffic from real visitors.

An ad from PushWelcome touting the money that websites can make for embedding their dodgy push notifications scripts.

Approving notifications from a site that uses PushWelcome allows any of the company’s advertising partners to display whatever messages they choose, whenever they wish to, and in real-time. And almost invariably, those messages include misleading notifications about security risks on the user’s system, prompts to install other software, ads for dating sites, erectile disfunction medications, and dubious investment opportunities.

That’s according to a deep analysis of the PushWelcome network compiled by Indelible LLC, a cybersecurity firm based in Portland, Ore. Frank Angiolelli, vice president of security at Indelible, said rogue notifications can be abused for credential phishing, as well as foisting malware and other unwanted applications on users.

“This method is currently being used to deliver something akin to adware or click fraud type activity,” Angiolelli said. “The concerning aspect of this is that it is so very undetected by endpoint security programs, and there is a real risk this activity can be used for much more nefarious purposes.”

Sites affiliated with PushWelcome often use misleading messaging to trick people into approving notifications.

Angiolelli said the external Internet addresses, browser user agents and other telemetry tied to people who’ve accepted notifications is known to PushWelcome, which could give them the ability to target individual organizations and users with any number of fake system prompts.

Indelible also found browser modifications enabled by PushWelcome are poorly detected by antivirus and security products, although he noted Malwarebytes reliably flags as dangerous publisher sites that are associated with the notifications.

Indeed, Malwarebytes’ Pieter Arntz warned about malicious browser push notifications in a January 2019 blog post. That post includes detailed instructions on how to tell which sites you’ve allowed to send notifications, and how to remove them.

KrebsOnSecurity installed PushWelcome’s notifications on a brand new Windows test machine, and found that very soon after the system was peppered with alerts about malware threats supposedly found on the system. One notification was an ad for Norton antivirus; the other was for McAfee. Clicking either ultimately led to “buy now” pages at either Norton.com or McAfee.com.

Clicking on the PushWelcome notification in the bottom right corner of the screen opened a Web site claiming my brand new test system was infected with 5 viruses.

It seems likely that PushWelcome and/or some of its advertisers are trying to generate commissions for referring customers to purchase antivirus products at these companies. McAfee has not yet responded to requests for comment. Norton issued the following statement:

“We do not believe this actor to be an affiliate of NortonLifeLock. We are continuing to investigate this matter. NortonLifeLock takes affiliate fraud and abuse seriously and monitors ongoing compliance. When an affiliate partner abuses its responsibilities and violates our agreements, we take necessary action to remove these affiliate partners from the program and swiftly terminate our relationships. Additionally, any potential commissions earned as a result of abuse are not paid. Furthermore, NortonLifeLock sends notification to all of our affiliate partner networks about the affiliate’s abuse to ensure the affiliate is not eligible to participate in any NortonLifeLock programs in the future.”

Requests for comment sent to PushWelcome via email were returned as undeliverable. Requests submitted through the contact form on the company’s website also failed to send.

While scammy notifications may not be the most urgent threat facing Internet users today, most people are probably unaware of how this communications pathway can be abused.

What’s more, dodgy notification networks could be used for less conspicuous and sneakier purposes, including spreading fake news and malware masquerading as update notices from the user’s operating system. I hope it’s clear that regardless of which browser, device or operating system you use, it’s a good idea to be judicious about which sites you allow to serve notifications.

If you’d like to prevent sites from ever presenting notification requests, check out this guide, which has instructions for disabling notification prompts in Chrome, Firefox and Safari. Doing this for any devices you manage on behalf of friends, colleagues or family members might end up saving everyone a lot of headache down the road.

Why Paying to Delete Stolen Data is Bonkers

Companies hit by ransomware often face a dual threat: Even if they avoid paying the ransom and can restore things from scratch, about half the time the attackers also threaten to release sensitive stolen data unless the victim pays for a promise to have the data deleted. Leaving aside the notion that victims might have any real expectation the attackers will actually destroy the stolen data, new research suggests a fair number of victims who do pay up may see some or all of the stolen data published anyway.

The findings come in a report today from Coveware, a company that specializes in helping firms recover from ransomware attacks. Coveware says nearly half of all ransomware cases now include the threat to release exfiltrated data.

“Previously, when a victim of ransomware had adequate backups, they would just restore and go on with life; there was zero reason to even engage with the threat actor,” the report observes. “Now, when a threat actor steals data, a company with perfectly restorable backups is often compelled to at least engage with the threat actor to determine what data was taken.”

Coveware said it has seen ample evidence of victims seeing some or all of their stolen data published after paying to have it deleted; in other cases, the data gets published online before the victim is even given a chance to negotiate a data deletion agreement.

“Unlike negotiating for a decryption key, negotiating for the suppression of stolen data has no finite end,” the report continues. “Once a victim receives a decryption key, it can’t be taken away and does not degrade with time. With stolen data, a threat actor can return for a second payment at any point in the future. The track records are too short and evidence that defaults are selectively occurring is already collecting.”

Image: Coveware Q3 2020 report.

The company said it advises clients never to pay a data deletion ransom, but rather to engage competent privacy attorneys, perform an investigation into what data was stolen, and notify any affected customers according to the advice of counsel and application data breach notification laws.

Fabian Wosar, chief technology officer at computer security firm Emsisoft, said ransomware victims often acquiesce to data publication extortion demands when they are trying to prevent the public from learning about the breach.

“The bottom line is, ransomware is a business of hope,” Wosar said. “The company doesn’t want the data to be dumped or sold. So they pay for it hoping the threat actor deletes the data. Technically speaking, whether they delete the data or not doesn’t matter from a legal point of view. The data was lost at the point when it was exfiltrated.”

Ransomware victims who pay for a digital key to unlock servers and desktop systems encrypted by the malware also are relying on hope, Wosar said, because it’s also not uncommon that a decryption key fails to unlock some or all of the infected machines.

“When you look at a lot of ransom notes, you can actually see groups address this very directly and have texts that say stuff along the lines of, Yeah, you are fucked now. But if you pay us, everything can go back to before we fucked you.’”

Google Mending Another Crack in Widevine

For the second time in as many years, Google is working to fix a weakness in its Widevine digital rights management (DRM) technology used by online streaming sites like Disney, Hulu and Netflix to prevent their content from being pirated.

The latest cracks in Widevine concern the encryption technology’s protection for L3 streams, which is used for low-quality video and audio streams only. Google says the weakness does not affect L1 and L2 streams, which encompass more high-definition video and audio content.

“As code protection is always evolving to address new threats, we are currently working to update our Widevine software DRM with the latest advancements in code protection to address this issue,” Google said in a written statement provided to KrebsOnSecurity.

In January 2019, researcher David Buchanan tweeted about the L3 weakness he found, but didn’t release any proof-of-concept code that others could use to exploit it before Google fixed the problem.

This latest Widevine hack, however, has been made into an extension for Microsoft Windows users of the Google Chrome web browser and posted for download on the software development platform Github.

Tomer Hadad, the researcher who developed the browser extension, said his proof-of-concept code “was done to further show that code obfuscation, anti-debugging tricks, whitebox cryptography algorithms and other methods of security-by-obscurity will eventually by defeated anyway, and are, in a way, pointless.”

Google called the weakness a circumvention that would be fixed. But Hadad took issue with that characterization.

“It’s not a bug but an inevitable flaw because of the use of software, which is also why L3 does not offer the best quality,” Hadad wrote in an email. “L3 is usually used on desktops because of the lack of hardware trusted zones.”

Media companies that stream video online using Widevine can select different levels of protection for delivering their content, depending on the capabilities of the device requesting access. Most modern smartphones and mobile devices support much more robust L1 and L2 Widevine protections that do not rely on L3.

Further reading: Breaking Content Protection on Streaming Websites

The Now-Defunct Firms Behind 8chan, QAnon

Some of the world’s largest Internet firms have taken steps to crack down on disinformation spread by QAnon conspiracy theorists and the hate-filled anonymous message board 8chan. But according to a California-based security researcher, those seeking to de-platform these communities may have overlooked a simple legal solution to that end: Both the Nevada-based web hosting company owned by 8chan’s current figurehead and the California firm that provides its sole connection to the Internet are defunct businesses in the eyes of their respective state regulators.

In practical terms, what this means is that the legal contracts which granted these companies temporary control over large swaths of Internet address space are now null and void, and American Internet regulators would be well within their rights to cancel those contracts and reclaim the space.

The IP address ranges in the upper-left portion of this map of QAnon and 8kun-related sites — some 21,000 IP addresses beginning in “206.” and “207.” — are assigned to N.T. Technology Inc. Image source: twitter.com/Redrum_of_Crows

That idea was floated by Ron Guilmette, a longtime anti-spam crusader who recently turned his attention to disrupting the online presence of QAnon and 8chan (recently renamed “8kun”).

On Sunday, 8chan and a host of other sites related to QAnon conspiracy theories were briefly knocked offline after Guilmette called 8chan’s anti-DDoS provider and convinced them to stop protecting the site from crippling online attacks (8Chan is now protected by an anti-DDoS provider in St. Petersburg, Russia).

The public face of 8chan is Jim Watkins, a pig farmer in the Philippines who many experts believe is also the person behind the shadowy persona of “Q” at the center of the conspiracy theory movement.

Watkin owns and operates a Reno, Nev.-based hosting firm called N.T. Technology Inc. That company has a legal contract with the American Registry for Internet Numbers (ARIN), the non-profit which administers IP addresses for entities based in North America.

ARIN’s contract with N.T. Technology gives the latter the right to use more than 21,500 IP addresses. But as Guilmette discovered recently, N.T. Technology is listed in Nevada Secretary of State records as under an “administrative hold,” which according to Nevada statute is a “terminated” status indicator meaning the company no longer has the right to transact business in the state.

N.T. Technology’s listing in the Nevada Secretary of State records. Click to Enlarge.

The same is true for Centauri Communications, a Freemont, Calif.-based Internet Service Provider that serves as N.T. Technology’s colocation provider and sole connection to the larger Internet. Centauri was granted more than 4,000 IPv4 addresses by ARIN more than a decade ago.

According to the California Secretary of State, Centauri’s status as a business in the state is “suspended.” It appears that Centauri hasn’t filed any business records with the state since 2009, and the state subsequently suspended the company’s license to do business in Aug. 2012. Separately, the California State Franchise Tax Board (FTB) suspended this company as of April 1, 2014.

Centauri Communications’ listing with the California Secretary of State’s office.

Neither Centauri Communications nor N.T. Technology responded to repeated requests for comment.

KrebsOnSecurity shared Guilmette’s findings with ARIN, which said it would investigate the matter.

“ARIN has received a fraud report from you and is evaluating it,” a spokesperson for ARIN said. “We do not comment on such reports publicly.”

Guilmette said apart from reclaiming the Internet address space from Centauri and NT Technology, ARIN could simply remove each company’s listings from the global WHOIS routing records. Such a move, he said, would likely result in most ISPs blocking access to those IP addresses.

“If ARIN were to remove these records from the WHOIS database, it would serve to de-legitimize the use of these IP blocks by the parties involved,” he said. “And globally, it would make it more difficult for the parties to find people willing to route packets to and from those blocks of addresses.”

QAnon/8Chan Sites Briefly Knocked Offline

A phone call to an Internet provider in Oregon on Sunday evening was all it took to briefly sideline multiple websites related to 8chan/8kun — a controversial online image board linked to several mass shootings — and QAnon, the far-right conspiracy theory which holds that a cabal of Satanic pedophiles is running a global child sex-trafficking ring and plotting against President Donald Trump. Following a brief disruption, the sites have come back online with the help of an Internet company based in St. Petersburg, Russia.

The IP address range in the upper-right portion of this map of QAnon and 8kun-related sites — 203.28.246.0/24 — is assigned to VanwaTech and briefly went offline this evening. Source: twitter.com/Redrum_of_Crows.

A large number of 8kun and QAnon-related sites (see map above) are connected to the Web via a single Internet provider in Vancouver, Wash. called VanwaTech (a.k.a. “OrcaTech“). Previous appeals to VanwaTech to disconnect these sites have fallen on deaf ears, as the company’s owner Nick Lim reportedly has been working with 8kun’s administrators to keep the sites online in the name of protecting free speech.

But VanwaTech also had a single point of failure on its end: The swath of Internet addresses serving the various 8kun/QAnon sites were being protected from otherwise crippling and incessant distributed-denial-of-service (DDoS) attacks by Hillsboro, Ore. based CNServers LLC.

On Sunday evening, security researcher Ron Guilmette placed a phone call to CNServers’ owner, who professed to be shocked by revelations that his company was helping QAnon and 8kun keep the lights on.

Within minutes of that call, CNServers told its customer — Spartan Host Ltd., which is registered in Belfast, Northern Ireland — that it would no longer be providing DDoS protection for the set of 254 Internet addresses that Spartan Host was routing on behalf of VanwaTech.

Contacted by KrebsOnSecurity, the person who answered the phone at CNServers asked not to be named in this story for fear of possible reprisals from the 8kun/QAnon crowd. But they confirmed that CNServers had indeed terminated its service with Spartan Host. That person added they weren’t a fan of either 8kun or QAnon, and said they would not self-describe as a Trump supporter.

CNServers said that shortly after it withdrew its DDoS protection services, Spartan Host changed its settings so that VanwaTech’s Internet addresses were protected from attacks by ddos-guard[.]net, a company based in St. Petersburg, Russia.

Spartan Host’s founder, 25-year-old Ryan McCully, confirmed CNServers’ report. McCully declined to say for how long VanwaTech had been a customer, or whether Spartan Host had experienced any attacks as a result of CNServers’ action.

McCully said while he personally doesn’t subscribe to the beliefs espoused by QAnon or 8kun, he intends to keep VanwaTech as a customer going forward.

“We follow the ‘law of the land’ when deciding what we allow to be hosted with us, with some exceptions to things that may cause resource issues etc.,” McCully said in a conversation over instant message. “Just because we host something, it doesn’t say anything about we do and don’t support, our opinions don’t come into hosted content decisions.”

But according to Guilmette, Spartan Host’s relationship with VanwaTech wasn’t widely known previously because Spartan Host had set up what’s known as a “private peering” agreement with VanwaTech. That is to say, the two companies had a confidential business arrangement by which their mutual connections were not explicitly stated or obvious to other Internet providers on the global Internet.

Guilmette said private peering relationships often play a significant role in a good deal of behind-the-scenes-mischief when the parties involved do not want anyone else to know about their relationship.

“These arrangements are business agreements that are confidential between two parties, and no one knows about them, unless you start asking questions,” Guilmette said. “It certainly appears that a private peering arrangement was used in this instance in order to hide the direct involvement of Spartan Host in providing connectivity to VanwaTech and thus to 8kun. Perhaps Mr. McCully was not eager to have his involvement known.”

8chan, which rebranded last year as 8kun, has been linked to white supremacism, neo-Nazism, antisemitism, multiple mass shootings, and is known for hosting child pornography. After three mass shootings in 2019 revealed the perpetrators had spread their manifestos on 8chan and even streamed their killings live there, 8chan was ostracized by one Internet provider after another.

The FBI last year identified QAnon as a potential domestic terror threat, noting that some of its followers have been linked to violent incidents motivated by fringe beliefs.

Further reading:

What Is QAnon?

QAnon: A Timeline of Violent Linked to the Conspiracy Theory

Amid an Embarrassment of Riches, Ransom Gangs Increasingly Outsource Their Work

There’s an old adage in information security: “Every company gets penetration tested, whether or not they pay someone for the pleasure.” Many organizations that do hire professionals to test their network security posture unfortunately tend to focus on fixing vulnerabilities hackers could use to break in. But judging from the proliferation of help-wanted ads for offensive pentesters in the cybercrime underground, today’s attackers have exactly zero trouble gaining that initial intrusion: The real challenge seems to be hiring enough people to help everyone profit from the access already gained.

One of the most common ways such access is monetized these days is through ransomware, which holds a victim’s data and/or computers hostage unless and until an extortion payment is made. But in most cases, there is a yawning gap of days, weeks or months between the initial intrusion and the deployment of ransomware within a victim organization.

That’s because it usually takes time and a good deal of effort for intruders to get from a single infected PC to seizing control over enough resources within the victim organization where it makes sense to launch the ransomware.

This includes pivoting from or converting a single compromised Microsoft Windows user account to an administrator account with greater privileges on the target network; the ability to sidestep and/or disable any security software; and gaining the access needed to disrupt or corrupt any data backup systems the victim firm may have.

Each day, millions of malware-laced emails are blasted out containing booby-trapped attachments. If the attachment is opened, the malicious document proceeds to quietly download additional malware and hacking tools to the victim machine (here’s one video example of a malicious Microsoft Office attachment from the malware sandbox service any.run). From there, the infected system will report home to a malware control server operated by the spammers who sent the missive.

At that point, control over the victim machine may be transferred or sold multiple times between different cybercriminals who specialize in exploiting such access. These folks are very often contractors who work with established ransomware groups, and who are paid a set percentage of any eventual ransom payments made by a victim company.

THE DOCTOR IS IN

Enter subcontractors like “Dr. Samuil,” a cybercriminal who has maintained a presence on more than a dozen top Russian-language cybercrime forums over the past 15 years. In a series of recent advertisements, Dr. Samuil says he’s eagerly hiring experienced people who are familiar with tools used by legitimate pentesters for exploiting access once inside of a target company — specifically, post-exploit frameworks like the closely-guarded Cobalt Strike.

“You will be regularly provided select accesses which were audited (these are about 10-15 accesses out of 100) and are worth a try,” Dr. Samuil wrote in one such help-wanted ad. “This helps everyone involved to save time. We also have private software that bypasses protection and provides for smooth performance.”

From other classified ads he posted in August and September 2020, it seems clear Dr. Samuil’s team has some kind of privileged access to financial data on targeted companies that gives them a better idea of how much cash the victim firm may have on hand to pay a ransom demand. To wit:

“There is huge insider information on the companies which we target, including information if there are tape drives and clouds (for example, Datto that is built to last, etc.), which significantly affects the scale of the conversion rate.

Requirements:
– experience with cloud storage, ESXi.
– experience with Active Directory.
– privilege escalation on accounts with limited rights.

* Serious level of insider information on the companies with which we work. There are proofs of large payments, but only for verified LEADs.
* There is also a private MEGA INSIDE , which I will not write about here in public, and it is only for experienced LEADs with their teams.
* We do not look at REVENUE / NET INCOME / Accountant reports, this is our MEGA INSIDE, in which we know exactly how much to confidently squeeze to the maximum in total.

According to cybersecurity firm Intel 471, Dr. Samuil’s ad is hardly unique, and there are several other seasoned cybercriminals who are customers of popular ransomware-as-a-service offerings that are hiring sub-contractors to farm out some of the grunt work.

“Within the cybercriminal underground, compromised accesses to organizations are readily bought, sold and traded,” Intel 471 CEO Mark Arena said. “A number of security professionals have previously sought to downplay the business impact cybercriminals can have to their organizations.”

“But because of the rapidly growing market for compromised accesses and the fact that these could be sold to anyone, organizations need to focus more on efforts to understand, detect and quickly respond to network compromises,” Arena continued. “That covers faster patching of the vulnerabilities that matter, ongoing detection and monitoring for criminal malware, and understanding the malware you are seeing in your environment, how it got there, and what it has or could have dropped subsequently.”

WHO IS DR. SAMUIL?

In conducting research for this story, KrebsOnSecurity learned that Dr. Samuil is the handle used by the proprietor of multi-vpn[.]biz, a long-running virtual private networking (VPN) service marketed to cybercriminals who are looking to anonymize and encrypt their online traffic by bouncing it through multiple servers around the globe.

Have a Coke and a Molotov cocktail. Image: twitter.com/multivpn

MultiVPN is the product of a company called Ruskod Networks Solutions (a.k.a. ruskod[.]net), which variously claims to be based in the offshore company havens of Belize and the Seychelles, but which appears to be run by a guy living in Russia.

The domain registration records for ruskod[.]net were long ago hidden by WHOIS privacy services. But according to Domaintools.com [an advertiser on this site], the original WHOIS records for the site from the mid-2000s indicate the domain was registered by a Sergey Rakityansky.

This is not an uncommon name in Russia or in many surrounding Eastern European nations. But a former business partner of MultiVPN who had a rather public falling out with Dr. Samuil in the cybercrime underground told KrebsOnSecurity that Rakityansky is indeed Dr. Samuil’s real surname, and that he is a 32- or 33-year-old currently living in Bryansk, a city located approximately 200 miles southwest of Moscow.

Neither Dr. Samuil nor MultiVPN have responded to requests for comment.

Promising Infusions of Cash, Fake Investor John Bernard Walked Away With $30M

September featured two stories on a phony tech investor named John Bernard, a pseudonym used by a convicted thief named John Clifton Davies who’s fleeced dozens of technology companies out of an estimated $30 million with the promise of lucrative investments. Those stories prompted a flood of tips from Davies’ victims that paints a much clearer picture of this serial con man and his cohorts, including allegations of hacking, smuggling, bank fraud and murder.

KrebsOnSecurity interviewed more than a dozen of Davies’ victims over the past five years, none of whom wished to be quoted here out of fear of reprisals from a man they say runs with mercenaries and has connections to organized crime.

As described in Part II of this series, John Bernard is in fact John Clifton Davies, a 59-year-old U.K. citizen who absconded from justice before being convicted on multiple counts of fraud in 2015. Prior to his conviction, Davies served 16 months in jail before being cleared of murdering his third wife on their honeymoon in India.

The scam artist John Bernard (left) in a recent Zoom call, and a photo of John Clifton Davies from 2015.

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

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

Bernard found a constant stream of new marks by offering extraordinarily generous finders fees to investment brokers who could introduce him to companies seeking an infusion of cash. When it came time for companies to sign legal documents, Bernard’s victims interacted with a 40-something Inside Knowledge employee named “Katherine Miller,” who claimed to be his lawyer.

It turns out that Katherine Miller is a onetime Moldovan attorney who was previously known as Ecaterina “Katya” Dudorenko. She is listed as a Romanian lawyer in the U.K. Companies House records for several companies tied to John Bernard, including Inside Knowledge Solutions Ltd., Docklands Enterprise Ltd., and Secure Swiss Data Ltd (more on Secure Swiss data in a moment).

Another of Bernard’s associates listed as a director at Docklands Enterprise Ltd. is Sergey Valentinov Pankov. This is notable because in 2018, Pankov and Dudorenko were convicted of cigarette smuggling in the United Kingdom.

Sergey Pankov and Ecaterina Dudorenco, in undated photos. Source: Mynewsdesk.com

According to the Organized Crime and Corruption Reporting Project, “illicit trafficking of tobacco is a multibillion-dollar business today, fueling organized crime and corruption [and] robbing governments of needed tax money. So profitable is the trade that tobacco is the world’s most widely smuggled legal substance. This booming business now stretches from counterfeiters in China and renegade factories in Russia to Indian reservations in New York and warlords in Pakistan and North Africa.”

Like their erstwhile boss Mr. Davies, both Pankov and Dudorenko disappeared before their convictions in the U.K. They were sentenced in absentia to two and a half years in prison.

Incidentally, Davies was detained by Ukrainian authorities in 2018, although he is not mentioned by name in this story from the Ukrainian daily Pravda. The story notes that the suspect moved to Kiev in 2014 and lived in a rented apartment with his Ukrainian wife.

John’s fourth wife, Iryna Davies, is listed as a director of one of the insolvency consulting businesses in the U.K. that was part of John Davies’ 2015 fraud conviction. Pravda reported that in order to confuse the Ukrainian police and hide from them, Mr. Davies constantly changed their place of residence.

John Clifton Davies, a.k.a. John Bernard. Image: Ukrainian National Police.

The Pravda story says Ukrainian authorities were working with the U.K. government to secure Davies’ extradition, but he appears to have slipped away once again. That’s according to one investment broker who’s been tracking Davies’ trail of fraud since 2015.

According to that source — who we’ll call “Ben” — Inside Knowledge and The Private Office of John Bernard have fleeced dozens of companies out of nearly USD $30 million in due diligence fees over the years, with one company reportedly paying over $1 million.

Ben said he figured out that Bernard was Davies through a random occurrence. Ben said he’d been told by a reliable source that Bernard traveled everywhere in Kiev with several armed guards, and that his entourage rode in a convoy that escorted Davies’ high-end Bentley. Ben said Davies’ crew was even able to stop traffic in the downtown area in what was described as a quasi military maneuver so that Davies’ vehicle could proceed unobstructed (and presumably without someone following his car).

Ben said he’s spoken to several victims of Bernard who saw phony invoices for payments to be made to banks in Eastern Europe appear to come from people within their own organization shortly after cutting off contact with Bernard and his team.

While Ben allowed that these invoices could have come from another source, it’s worth noting that by virtue of participating in the due diligence process, the companies targeted by these schemes would have already given Bernard’s office detailed information about their finances, bank accounts and security processes.

In some cases, the victims had agreed to use Bernard’s Secure Swiss Data software and services to store documents for the due diligence process. Secure Swiss Data is one of several firms founded by Davies/Inside Knowledge and run by Dudorenko, and it advertised itself as a Swiss company that provides encrypted email and data storage services. In February 2020, Secure Swiss Data was purchased in an “undisclosed multimillion buyout” by SafeSwiss Secure Communication AG.

Shortly after the first story on John Bernard was published here, virtually all of the employee profiles tied to Bernard’s office removed him from their work experience as listed on their LinkedIn resumes — or else deleted their profiles altogether. Also, John Bernard’s main website — the-private-office.ch — replaced the content on its homepage with a note saying it was closing up shop.

Incredibly, even after the first two stories ran, Bernard/Davies and his crew continued to ply their scam with companies that had already agreed to make due diligence payments, or that had made one or all of several installment payments.

One of those firms actually issued a press release in August saying it had been promised an infusion of millions in cash from John Bernard’s Private Office. They declined to be quoted here, and continue to hold onto hope that Mr. Bernard is not the crook that he plainly is.

Who’s Behind Monday’s 14-State 911 Outage?

Emergency 911 systems were down for more than an hour on Monday in towns and cities across 14 U.S. states. The outages led many news outlets to speculate the problem was related to Microsoft‘s Azure web services platform, which also was struggling with a widespread outage at the time. However, multiple sources tell KrebsOnSecurity the 911 issues stemmed from some kind of technical snafu involving Intrado and Lumen, two companies that together handle 911 calls for a broad swath of the United States.

Image: West.com

On the afternoon of Monday, Sept. 28, several states including Arizona, California, Colorado, Delaware, Florida, Illinois, Indiana, Minnesota, Nevada, North Carolina, North Dakota, Ohio, Pennsylvania and Washington reported 911 outages in various cities and localities.

Multiple news reports suggested the outages might have been related to an ongoing service disruption at Microsoft. But a spokesperson for the software giant told KrebsOnSecurity, “we’ve seen no indication that the multi-state 911 outage was a result of yesterday’s Azure service disruption.”

Inquiries made with emergency dispatch centers at several of the towns and cities hit by the 911 outage pointed to a different source: Omaha, Neb.-based Intrado — until last year known as West Safety Communications — a provider of 911 and emergency communications infrastructure, systems and services to telecommunications companies and public safety agencies throughout the country.

Intrado did not respond to multiple requests for comment. But according to officials in Henderson County, NC, which experienced its own 911 failures yesterday, Intrado said the outage was the result of a problem with an unspecified service provider.

“On September 28, 2020, at 4:30pm MT, our 911 Service Provider observed conditions internal to their network that resulted in impacts to 911 call delivery,” reads a statement Intrado provided to county officials. “The impact was mitigated, and service was restored and confirmed to be functional by 5:47PM MT.  Our service provider is currently working to determine root cause.”

The service provider referenced in Intrado’s statement appears to be Lumen, a communications firm and 911 provider that until very recently was known as CenturyLink Inc. A look at the company’s status page indicates multiple Lumen systems experienced total or partial service disruptions on Monday, including its private and internal cloud networks and its control systems network.

Lumen’s status page indicates the company’s private and internal cloud and control system networks had outages or service disruptions on Monday.

In a statement provided to KrebsOnSecurity, Lumen blamed the issue on Intrado.

“At approximately 4:30 p.m. MT, some Lumen customers were affected by a vendor partner event that impacted 911 services in AZ, CO, NC, ND, MN, SD, and UT,” the statement reads. “Service was restored in less than an hour and all 911 traffic is routing properly at this time. The vendor partner is in the process of investigating the event.”

It may be no accident that both of these companies are now operating under new names, as this would hardly be the first time a problem between the two of them has disrupted 911 access for a large number of Americans.

In 2019, Intrado/West and CenturyLink agreed to pay $575,000 to settle an investigation by the Federal Communications Commission (FCC) into an Aug. 2018 outage that lasted 65 minutes. The FCC found that incident was the result of a West Safety technician bungling a configuration change to the company’s 911 routing network.

On April 6, 2014, some 11 million people across the United States were disconnected from 911 services for eight hours thanks to an “entirely preventable” software error tied to Intrado’s systems. The incident affected 81 call dispatch centers, rendering emergency services inoperable in all of Washington and parts of North Carolina, South Carolina, Pennsylvania, California, Minnesota and Florida.

According to a 2014 Washington Post story about a subsequent investigation and report released by the FCC, that issue involved a problem with the way Intrado’s automated system assigns a unique identifying code to each incoming call before passing it on to the appropriate “public safety answering point,” or PSAP.

“On April 9, the software responsible for assigning the codes maxed out at a pre-set limit,” The Post explained. “The counter literally stopped counting at 40 million calls. As a result, the routing system stopped accepting new calls, leading to a bottleneck and a series of cascading failures elsewhere in the 911 infrastructure.”

Compounding the length of the 2014 outage, the FCC found, was that the Intrado server responsible for categorizing and keeping track of service interruptions classified them as “low level” incidents that were never flagged for manual review by human beings.

The FCC ultimately fined Intrado and CenturyLink $17.4 million for the multi-state 2014 outage. An FCC spokesperson declined to comment on Monday’s outage, but said the agency was investigating the incident.

Who is Tech Investor John Bernard?

John Bernard, the subject of a story here last week about a self-proclaimed millionaire investor who has bilked countless tech startups, appears to be a pseudonym for John Clifton Davies, a U.K. man who absconded from justice before being convicted on multiple counts of fraud in 2015. Prior to his conviction, Davies served 16 months in jail before being cleared of murdering his wife on their honeymoon in India.

The Private Office of John Bernard, which advertises itself as a capital investment firm based in Switzerland, has for years been listed on multiple investment sites as the home of a millionaire who made his fortunes in the dot-com boom 20 years ago and who has oodles of cash to invest in tech startups.

But as last week’s story noted, Bernard’s investment company is a bit like a bad slot machine that never pays out. KrebsOnSecurity interviewed multiple investment brokers who all told the same story: After promising to invest millions after one or two phone calls and with little or no pushback, Bernard would insist that companies pay tens of thousands of dollars worth of due diligence fees up front.

However, the due diligence company he insisted on using — another Swiss firm called Inside Knowledge — also was secretly owned by Bernard, who would invariably pull out of the deal after receiving the due diligence money.

Neither Mr. Bernard nor anyone from his various companies responded to multiple requests for comment over the past few weeks. What’s more, virtually all of the employee profiles tied to Bernard’s office have since last week removed those firms from their work experience as listed on their LinkedIn resumes — or else deleted their profiles altogether.

Sometime on Thursday John Bernard’s main website — the-private-office.ch — replaced the content on its homepage with a note saying it was closing up shop.

“We are pleased to announce that we are currently closing The Private Office fund as we have reached our intended investment level and that we now plan to focus on helping those companies we have invested into to grow and succeed,” the message reads.

As noted in last week’s story, the beauty of a scam like the one multiple investment brokers said was being run by Mr. Bernard is that 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.

Also, John Bernard’s office typically did not reach out to investment brokers directly. Rather, he had his firm included on a list of angel investors focused on technology companies, so those seeking investments usually came to him.

Finally, multiple sources interviewed for this story said Bernard’s office offered a finders fee for any investment leads that brokers brought his way. While such commissions are not unusual, the amount promised — five percent of the total investment in a given firm that signed an agreement — is extremely generous. However, none of the investment brokers who spoke to KrebsOnSecurity were able to collect those fees, because Bernard’s office never actually consummated any of the deals they referred to him.

PAY NO ATTENTION TO THE EMPTY BOOKSHELVES

After last week’s story ran, KrebsOnSecurity heard from a number of other investment brokers who had near identical experiences with Bernard. Several said they at one point spoke with him via phone or Zoom conference calls, and that he had a distinctive British accent.

When questioned about why his staff was virtually all based in Ukraine when his companies were supposedly in Switzerland, Bernard replied that his wife was Ukrainian and that they were living there to be closer to her family.

One investment broker who recently got into a deal with Bernard shared a screen shot from a recent Zoom call with him. That screen shot shows Bernard bears a striking resemblance to one John Clifton Davies, a 59-year-old from Milton Keynes, a large town in Buckinghamshire, England about 50 miles (80 km) northwest of London.

John Bernard (left) in a recent Zoom call, and a photo of John Clifton Davies from 2015.

In 2015, Mr. Davies was convicted of stealing more than GBP 750,000 from struggling companies looking to restructure their debt. For at least seven years, Davies ran multiple scam businesses that claimed to provide insolvency consulting to distressed companies, even though he was not licensed to do so.

“After gaining the firm’s trust, he took control of their assets and would later pocket the cash intended for creditors,” according to a U.K. news report from 2015. “After snatching the cash, Davies proceeded to spend the stolen money on a life of luxury, purchasing a new upmarket home fitted with a high-tech cinema system and new kitchen.”

Davies disappeared before he was convicted of fraud in 2015. Two years before that, Davies was released from prison after being held in custody for 16 months on suspicion of murdering his new bride in 2004 on their honeymoon in India.

Davies’ former wife Colette Davies, 39, died after falling 80 feet from a viewing point at a steep gorge in the Himachal Pradesh region of India. Mr. Davies was charged with murder and fraud after he attempted to collect GBP 132,000 in her life insurance payout, but British prosecutors ultimately conceded they did not have enough evidence to convict him.

THE SWISS AND UKRAINE CONNECTIONS

While the photos above are similar, there are other clues that suggest the two identities may be the same person. A review of business records tied to Davies’ phony insolvency consulting businesses between 2007 and 2013 provides some additional pointers.

John Clifton Davies’ former listing at the official U.K. business registrar Companies House show his company was registered at the address 26 Dean Forest Way, Broughton, Milton Keynes.

A search on that street address at 4iq.com turns up several interesting results, including a listing for senecaequities.com registered to a John Davies at the email address [email protected].

A Companies House official record for Seneca Equities puts it at John Davies’ old U.K. address at 26 Dean Forest Way and lists 46-year-old Iryna Davies as a director. “Iryna” is a uniquely Ukrainian spelling of the name Irene (the Russian equivalent is typically “Irina”).

A search on John Clifton Davies and Iryna turned up this 2013 story from The Daily Mirror which says Iryna is John C. Davies’ fourth wife, and that the two were married in 2010.

KrebsOnSecurity sought comment from both the U.K. police district that prosecuted Davies’ case and the U.K.’s National Crime Agency (NCA). Neither wished to comment on the findings. “We can neither confirm nor deny the existence of an investigation or subjects of interest,” a spokesperson for the NCA said.

Due Diligence That Money Can’t Buy

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 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.”

Sendgrid Under Siege from Hacked Accounts

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.

Image: Wikipedia

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 to 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.”

Confessions of an ID Theft Kingpin, Part II

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.

Hieu Minh Ngo, 29, in a recent photo.

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.”

Ngo’s former ID theft service usearching[.]info.

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.”

Confessions of an ID Theft Kingpin, Part I

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.

Hieu Minh Ngo, in his teens.

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.

Ngo’s former identity theft service, superget[.]info

“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.

Ngo’s former ID theft service usearching[.]info.

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.

Microsoft Put Off Fixing Zero Day for 2 Years

A security flaw in the way Microsoft Windows guards users against malicious files was actively exploited in malware attacks for two years before last week, when Microsoft finally issued a software update to correct the problem.

One of the 120 security holes Microsoft fixed on Aug. 11’s Patch Tuesday was CVE-2020-1464, a problem with the way every supported version of Windows validates digital signatures for computer programs.

Code signing is the method of using a certificate-based digital signature to sign executable files and scripts in order to verify the author’s identity and ensure that the code has not been changed or corrupted since it was signed by the author.

Microsoft said an attacker could use this “spoofing vulnerability” to bypass security features intended to prevent improperly signed files from being loaded. Microsoft’s advisory makes no mention of security researchers having told the company about the flaw, which Microsoft acknowledged was actively being exploited.

In fact, CVE-2020-1464 was first spotted in attacks used in the wild back in August 2018. And several researchers informed Microsoft about the weakness over the past 18 months.

Bernardo Quintero is the manager at VirusTotal, a service owned by Google that scans any submitted files against dozens of antivirus services and displays the results. On Jan. 15, 2019, Quintero published a blog post outlining how Windows keeps the Authenticode signature valid after appending any content to the end of Windows Installer files (those ending in .MSI) signed by any software developer.

Quintero said this weakness would particularly acute if an attacker were to use it to hide a malicious Java file (.jar). And, he said, this exact attack vector was indeed detected in a malware sample sent to VirusTotal.

“In short, an attacker can append a malicious JAR to a MSI file signed by a trusted software developer (like Microsoft Corporation, Google Inc. or any other well-known developer), and the resulting file can be renamed with the .jar extension and will have a valid signature according Microsoft Windows,” Quintero wrote.

But according to Quintero, while Microsoft’s security team validated his findings, the company chose not to address the problem at the time.

“Microsoft has decided that it will not be fixing this issue in the current versions of Windows and agreed we are able to blog about this case and our findings publicly,” his blog post concluded.

Tal Be’ery, founder of Zengo, and Peleg Hadar, senior security researcher at SafeBreach Labs, penned a blog post on Sunday that pointed to a file uploaded to VirusTotal in August 2018 that abused the spoofing weakness, which has been dubbed GlueBall. The last time that August 2018 file was scanned at VirusTotal (Aug 14, 2020), it was detected as a malicious Java trojan by 28 of 59 antivirus programs.

More recently, others would likewise call attention to malware that abused the security weakness, including this post in June 2020 from the Security-in-bits blog.

Image: Securityinbits.com

Be’ery said the way Microsoft has handled the vulnerability report seems rather strange.

“It was very clear to everyone involved, Microsoft included, that GlueBall is indeed a valid vulnerability exploited in the wild,” he wrote. “Therefore, it is not clear why it was only patched now and not two years ago.”

Asked to comment on why it waited two years to patch a flaw that was actively being exploited to compromise the security of Windows computers, Microsoft dodged the question, saying Windows users who have applied the latest security updates are protected from this attack.

“A security update was released in August,” Microsoft said in a written statement sent to KrebsOnSecurity. “Customers who apply the update, or have automatic updates enabled, will be protected. We continue to encourage customers to turn on automatic updates to help ensure they are protected.”

Update, 12:45 a.m. ET: Corrected attribution on the June 2020 blog article about GlueBall exploits in the wild.

Porn Clip Disrupts Virtual Court Hearing for Alleged Twitter Hacker

Perhaps fittingly, a Web-streamed court hearing for the 17-year-old alleged mastermind of the July 15 mass hack against Twitter was cut short this morning after mischief makers injected a pornographic video clip into the proceeding.

17-year-old Graham Clark of Tampa, Fla. was among those charged in the July 15 Twitter hack. Image: Hillsborough County Sheriff’s Office.

The incident occurred at a bond hearing held via the videoconferencing service Zoom by the Hillsborough County, Fla. criminal court in the case of Graham Clark. The 17-year-old from Tampa was arrested earlier this month on suspicion of social engineering his way into Twitter’s internal computer systems and tweeting out a bitcoin scam through the accounts of high-profile Twitter users.

Notice of the hearing was available via public records filed with the Florida state attorney’s office. The notice specified the Zoom meeting time and ID number, essentially allowing anyone to participate in the proceeding.

Even before the hearing officially began it was clear that the event would likely be “zoom bombed.” That’s because while participants were muted by default, they were free to unmute their microphones and transmit their own video streams to the channel.

Sure enough, less than a minute had passed before one attendee not party to the case interrupted a discussion between Clark’s attorney and the judge by streaming a live video of himself adjusting his face mask. Just a few minutes later, someone began interjecting loud music.

It became clear that presiding Judge Christopher C. Nash was personally in charge of administering the video hearing when, after roughly 15 seconds worth of random chatter interrupted the prosecution’s response, Nash told participants he was removing the troublemakers as quickly as he could.

Judge Nash, visibly annoyed immediately after one of the many disruptions to today’s hearing.

What transpired a minute later was almost inevitable given the permissive settings of this particular Zoom conference call: Someone streamed a graphic video clip from Pornhub for approximately 15 seconds before Judge Nash abruptly terminated the broadcast.

With the ongoing pestilence that is the COVID-19 pandemic, the nation’s state and federal courts have largely been forced to conduct proceedings remotely via videoconferencing services. While Zoom and others do offer settings that can prevent participants from injecting their own audio and video into the stream unless invited to do so, those settings evidently were not enabled in today’s meeting.

At issue before the court today was a defense motion to modify the amount of the defendant’s bond, which has been set at $750,000. The prosecution had argued that Clark should be required to show that any funds used toward securing that bond were gained lawfully, and were not merely the proceeds from his alleged participation in the Twitter bitcoin scam or some other form of cybercrime.

Florida State Attorney Andrew Warren’s reaction as a Pornhub clip began streaming to everyone in today’s Zoom proceeding.

Mr. Clark’s attorneys disagreed, and spent most of the uninterrupted time in today’s hearing explaining why their client could safely be released under a much smaller bond and close supervision restrictions.

On Sunday, The New York Times published an in-depth look into Clark’s wayward path from a small-time cheater and hustler in online games like Minecraft to big-boy schemes involving SIM swapping, a form of fraud that involves social engineering employees at mobile phone companies to gain control over a target’s phone number and any financial, email and social media accounts associated with that number.

According to The Times, Clark was suspected of being involved in a 2019 SIM swapping incident which led to the theft of 164 bitcoins from Gregg Bennett, a tech investor in the Seattle area. That theft would have been worth around $856,000 at the time; these days 164 bitcoins is worth approximately $1.8 million.

The Times said that soon after the theft, Bennett received an extortion note signed by Scrim, one of the hacker handles alleged to have been used by Clark. From that story:

“We just want the remainder of the funds in the Bittrex,” Scrim wrote, referring to the Bitcoin exchange from which the coins had been taken. “We are always one step ahead and this is your easiest option.”

In April, the Secret Service seized 100 Bitcoins from Mr. Clark, according to government forfeiture documents. A few weeks later, Mr. Bennett received a letter from the Secret Service saying they had recovered 100 of his Bitcoins, citing the same code that was assigned to the coins seized from Mr. Clark.

Florida prosecutor Darrell Dirks was in the middle of explaining to the judge that investigators are still in the process of discovering the extent of Clark’s alleged illegal hacking activities since the Secret Service returned the 100 bitcoin when the porn clip was injected into the Zoom conference.

Ultimately, Judge Nash decided to keep the bond amount as is, but to remove the condition that Clark prove the source of the funds.

Clark has been charged with 30 felony counts and is being tried as an adult. Federal prosecutors also have charged two other young men suspected of playing roles in the Twitter hack, including a 22-year-old from Orlando, Fla. and a 19-year-old from the United Kingdom.

Robocall Legal Advocate Leaks Customer Data

A California company that helps telemarketing firms avoid getting sued for violating a federal law that seeks to curb robocalls has leaked the phone numbers, email addresses and passwords of all its customers, as well as the mobile phone numbers and other data on people who have hired lawyers to go after telemarketers.

The Blacklist Alliance provides technologies and services to marketing firms concerned about lawsuits under the Telephone Consumer Protection Act (TCPA), a 1991 law that restricts the making of telemarketing calls through the use of automatic telephone dialing systems and artificial or prerecorded voice messages. The TCPA prohibits contact with consumers — even via text messages — unless the company has “prior express consent” to contact the consumer.

With statutory damages of $500 to $1,500 per call, the TCPA has prompted a flood of lawsuits over the years. From the telemarketer’s perspective, the TCPA can present something of a legal minefield in certain situations, such as when a phone number belonging to someone who’d previously given consent gets reassigned to another subscriber.

Enter The Blacklist Alliance, which promises to help marketers avoid TCPA legal snares set by “professional plaintiffs and class action attorneys seeking to cash in on the TCPA.” According to the Blacklist, one of the “dirty tricks” used by TCPA “frequent filers” includes “phone flipping,” or registering multiple prepaid cell phone numbers to receive calls intended for the person to whom a number was previously registered.

Lawyers representing TCPA claimants typically redact their clients’ personal information from legal filings to protect them from retaliation and to keep their contact information private. The Blacklist Alliance researches TCPA cases to uncover the phone numbers of plaintiffs and sells this data in the form of list-scrubbing services to telemarketers.

“TCPA predators operate like malware,” The Blacklist explains on its website. “Our Litigation Firewall isolates the infection and protects you from harm. Scrub against active plaintiffs, pre litigation complainers, active attorneys, attorney associates, and more. Use our robust API to seamlessly scrub these high-risk numbers from your outbound campaigns and inbound calls, or adjust your suppression settings to fit your individual requirements and appetite for risk.”

Unfortunately for the Blacklist paying customers and for people represented by attorneys filing TCPA lawsuits, the Blacklist’s own Web site until late last week leaked reams of data to anyone with a Web browser. Thousands of documents, emails, spreadsheets, images and the names tied to countless mobile phone numbers all could be viewed or downloaded without authentication from the domain theblacklist.click.

The directory also included all 388 Blacklist customer API keys, as well as each customer’s phone number, employer, username and password (scrambled with the relatively weak MD5 password hashing algorithm).

The leaked Blacklist customer database points to various companies you might expect to see using automated calling systems to generate business, including real estate and life insurance providers, credit repair companies and a long list of online advertising firms and individual digital marketing specialists.

The very first account in the leaked Blacklist user database corresponds to its CEO Seth Heyman, an attorney in southern California. Mr. Heyman did not respond to multiple requests for comment, although The Blacklist stopped leaking its database not long after that contact request.

Two other accounts marked as administrators were among the third and sixth registered users in the database; those correspond to two individuals at Riip Digital, a California-based email marketing concern that serves a diverse range of clients in the lead generation business, from debt relief and timeshare companies, to real estate firms and CBD vendors.

Riip Digital did not respond to requests for comment. But According to Spamhaus, an anti-spam group relied upon by many Internet service providers (ISPs) to block unsolicited junk email, the company has a storied history of so-called “snowshoe spamming,” which involves junk email purveyors who try to avoid spam filters and blacklists by spreading their spam-sending systems across a broad swath of domains and Internet addresses.

The irony of this data leak is that marketers who constantly scrape the Web for consumer contact data may not realize the source of the information, and end up feeding it into automated systems that peddle dubious wares and services via automated phone calls and text messages. To the extent this data is used to generate sales leads that are then sold to others, such a leak could end up causing more legal problems for The Blacklist’s customers.

The Blacklist and their clients talk a lot about technologies that they say separate automated telephonic communications from dime-a-dozen robocalls, such as software that delivers recorded statements that are manually selected by a live agent. But for your average person, this is likely a distinction without a difference.

Robocalls are permitted for political candidates, but beyond that if the recording is a sales message and you haven’t given your written permission to get calls from the company on the other end, the call is illegal. According to the Federal Trade Commission (FTC), companies are using auto-dialers to send out thousands of phone calls every minute for an incredibly low cost.

In fiscal year 2019, the FTC received 3.78 million complaints about robocalls. Readers may be able to avoid some marketing calls by registering their mobile number with the Do Not Call registry, but the list appears to do little to deter all automated calls — particularly scam calls that spoof their real number. If and when you do receive robocalls, consider reporting them to the FTC.

Some wireless providers now offer additional services and features to help block automated calls. For example, AT&T offers wireless customers its free Call Protect app, which screens incoming calls and flags those that are likely spam calls. See the FCC’s robocall resource page for links to resources at your mobile provider. In addition, there are a number of third-party mobile apps designed to block spammy calls, such as Nomorobo and TrueCaller.

Obviously, not all telemarketing is spammy or scammy. I have friends and relatives who’ve worked at non-profits that rely a great deal on fundraising over the phone. Nevertheless, readers who are fed up with telemarketing calls may find some catharsis in the Jolly Roger Telephone Company, which offers subscribers a choice of automated bots that keep telemarketers engaged for several minutes. The service lets subscribers choose which callers should get the bot treatment, and then records the result.

For my part, the volume of automated calls hitting my mobile number got so bad that I recently enabled a setting on my smart phone to simply send to voicemail all calls from numbers that aren’t already in my contacts list. This may not be a solution for everyone, but since then I haven’t received a single spammy jingle.

Here’s Why Credit Card Fraud is Still a Thing

Most of the civilized world years ago shifted to requiring computer chips in payment cards that make it far more expensive and difficult for thieves to clone and use them for fraud. One notable exception is the United States, which is still lurching toward this goal. Here’s a look at the havoc that lag has wrought, as seen through the purchasing patterns at one of the underground’s biggest stolen card shops that was hacked last year.

In October 2019, someone hacked BriansClub, a popular stolen card bazaar that uses this author’s likeness and name in its marketing. Whoever compromised the shop siphoned data on millions of card accounts that were acquired over four years through various illicit means from legitimate, hacked businesses around the globe — but mostly from U.S. merchants. That database was leaked to KrebsOnSecurity, which in turn shared it with multiple sources that help fight payment card fraud.

An ad for BriansClub has been using my name and likeness for years to peddle millions of stolen credit cards.

Among the recipients was Damon McCoy, an associate professor at New York University’s Tandon School of Engineering [full disclosure: NYU has been a longtime advertiser on this blog]. McCoy’s work in probing the credit card systems used by some of the world’s biggest purveyors of junk email greatly enriched the data that informed my 2014 book Spam Nation, and I wanted to make sure he and his colleagues had a crack at the BriansClub data as well.

McCoy and fellow NYU researchers found BriansClub earned close to $104 million in gross revenue from 2015 to early 2019, and listed over 19 million unique card numbers for sale. Around 97% of the inventory was stolen magnetic stripe data, commonly used to produce counterfeit cards for in-person payments.

“What surprised me most was there are still a lot of people swiping their cards for transactions here,” McCoy said.

In 2015, the major credit card associations instituted new rules that made it riskier and potentially more expensive for U.S. merchants to continue allowing customers to swipe the stripe instead of dip the chip. Complicating this transition was the fact that many card-issuing U.S. banks took years to replace their customer card stocks with chip-enabled cards, and countless retailers dragged their feet in updating their payment terminals to accept chip-based cards.

Indeed, three years later the U.S. Federal Reserve estimated (PDF) that 43.3 percent of in-person card payments were still being processed by reading the magnetic stripe instead of the chip. This might not have been such a big deal if payment terminals at many of those merchants weren’t also compromised with malicious software that copied the data when customers swiped their cards.

Following the 2015 liability shift, more than 84 percent of the non-chip cards advertised by BriansClub were sold, versus just 35 percent of chip-based cards during the same time period.

“All cards without a chip were in much higher demand,” McCoy said.

Perhaps surprisingly, McCoy and his fellow NYU researchers found BriansClub customers purchased only 40% of its overall inventory. But what they did buy supports the notion that crooks generally gravitate toward cards issued by financial institutions that are perceived as having fewer or more lax protections against fraud.

Source: NYU.

While the top 10 largest card issuers in the United States accounted for nearly half of the accounts put up for sale at BriansClub, only 32 percent of those accounts were sold — and at a roughly half the median price of those issued by small- and medium-sized institutions.

In contrast, more than half of the stolen cards issued by small and medium-sized institutions were purchased from the fraud shop. This was true even though by the end of 2018, 91 percent of cards for sale from medium-sized institutions were chip-based, and 89 percent from smaller banks and credit unions. Nearly all cards issued by the top ten largest U.S. card issuers (98 percent) were chip-enabled by that time.

REGION LOCK

The researchers found BriansClub customers strongly preferred cards issued by financial institutions in specific regions of the United States, specifically Colorado, Nevada, and South Carolina.

“For whatever reason, those regions were perceived as having lower anti-fraud systems or those that were not as effective,” McCoy said.

Cards compromised from merchants in South Carolina were in especially high demand, with fraudsters willing to spend twice as much on those cards per capita than any other state — roughly $1 per resident.

That sales trend also was reflected in the support tickets filed by BriansClub customers, who frequently were informed that cards tied to the southeastern United States were less likely to be restricted for use outside of the region.

Image: NYU.

McCoy said the lack of region locking also made stolen cards issued by banks in China something of a hot commodity, even though these cards demanded much higher prices (often more than $100 per account): The NYU researchers found virtually all available Chinese cards were sold soon after they were put up for sale. Ditto for the relatively few corporate and business cards for sale.

A lack of region locks may also have caused card thieves to gravitate toward buying up as many cards as they could from USAA, a savings bank that caters to active and former military service members and their immediate families. More than 83 percent of the available USAA cards were sold between 2015 and 2019, the researchers found.

Although Visa cards made up more than half of accounts put up for sale (12.1 million), just 36 percent were sold. MasterCards were the second most-plentiful (3.72 million), and yet more than 54 percent of them sold.

American Express and Discover, which unlike Visa and MasterCard are so-called “closed loop” networks that do not rely on third-party financial institutions to issue cards and manage fraud on them, saw 28.8 percent and 33 percent of their stolen cards purchased, respectively.

PREPAIDS

Some people concerned about the scourge of debit and credit card fraud opt to purchase prepaid cards, which generally enjoy the same cardholder protections against fraudulent transactions. But the NYU team found compromised prepaid accounts were purchased at a far higher rate than regular debit and credit cards.

Several factors may be at play here. For starters, relatively few prepaid cards for sale were chip-based. McCoy said there was some data to suggest many of these prepaids were issued to people collecting government benefits such as unemployment and food assistance. Specifically, the “service code” information associated with these prepaid cards indicated that many were restricted for use at places like liquor stores and casinos.

“This was a pretty sad finding, because if you don’t have a bank this is probably how you get your wages,” McCoy said. “These cards were disproportionately targeted. The unfortunate and striking thing was the sheer demand and lack of [chip] support for prepaid cards. Also, these cards were likely more attractive to fraudsters because [the issuer’s] anti-fraud countermeasures weren’t up to par, possibly because they know less about their customers and their typical purchase history.”

PROFITS

The NYU researchers estimate BriansClub pulled in approximately $24 million in profit over four years. They calculated this number by taking the more than $100 million in total sales and subtracting commissions paid to card thieves who supplied the shop with fresh goods, as well as the price of cards that were refunded to buyers. BriansClub, like many other stolen card shops, offers refunds on certain purchases if the buyer can demonstrate the cards were no longer active at the time of purchase.

On average, BriansClub paid suppliers commissions ranging from 50-60 percent of the total value of the cards sold. Card-not-present (CNP) accounts — or those stolen from online retailers and purchased by fraudsters principally for use in defrauding other online merchants — fetched a much steeper supplier commission of 80 percent, but mainly because these cards were in such high demand and low supply.

The NYU team found card-not-present sales accounted for just 7 percent of all revenue, even though card thieves clearly now have much higher incentives to target online merchants.

A story here last year observed that this exact supply and demand tug-of-war had helped to significantly increase prices for card-not-present accounts across multiple stolen credit card shops in the underground. Not long ago, the price of CNP accounts was less than half that of card-present accounts. These days, those prices are roughly equivalent.

One likely reason for that shift is the United States is the last of the G20 nations to fully transition to more secure chip-based payment cards. In every other country that long ago made the chip card transition, they saw the same dynamic: As they made it harder for thieves to counterfeit physical cards, the fraud didn’t go away but instead shifted to online merchants.

The same progression is happening now in the United States, only the demand for stolen CNP data still far outstrips supply. Which might explain why we’ve seen such a huge uptick over the past few years in e-commerce sites getting hacked.

“Everyone points to this displacement effect from card-present to card-not-present fraud,” McCoy said. “But if the supply isn’t there, there’s only so much room for that displacement to occur.”

No doubt the epidemic of card fraud has benefited mightily from hacked retail chains — particularly restaurants — that still allow customers to swipe chip-based cards. But as we’ll see in a post to be published tomorrow, new research suggests thieves are starting to deploy ingenious methods for converting card data from certain compromised chip-based transactions into physical counterfeit cards.

A copy of the NYU research paper is available here (PDF).

Twitter Hacking for Profit and the LoLs

The New York Times last week ran an interview with several young men who claimed to have had direct contact with those involved in last week’s epic hack against Twitter. These individuals said they were only customers of the person who had access to Twitter’s internal employee tools, and were not responsible for the actual intrusion or bitcoin scams that took place that day. But new information suggests that at least two of them operated a service that resold access to Twitter employees for the purposes of modifying or seizing control of prized Twitter profiles.

As first reported here on July 16, prior to bitcoin scam messages being blasted out from such high-profile Twitter accounts @barackobama, @joebiden, @elonmusk and @billgates, several highly desirable short-character Twitter account names changed hands, including @L, @6 and @W.

A screenshot of a Discord discussion between the key Twitter hacker “Kirk” and several people seeking to hijack high-value Twitter accounts.

Known as “original gangster” or “OG” accounts, short-character profile names confer a measure of status and wealth in certain online communities, and such accounts can often fetch thousands of dollars when resold in the underground.

The people involved in obtaining those OG accounts on July 15 said they got them from a person identified only as “Kirk,” who claimed to be a Twitter employee. According to The Times, Kirk first reached out to the group through a hacker who used the screen name “lol” on OGusers, a forum dedicated to helping users hijack and resell OG accounts from Twitter and other social media platforms. From The Times’s story:

“The hacker ‘lol’ and another one he worked with, who went by the screen name ‘ever so anxious,’ told The Times that they wanted to talk about their work with Kirk in order to prove that they had only facilitated the purchases and takeovers of lesser-known Twitter addresses early in the day. They said they had not continued to work with Kirk once he began more high-profile attacks around 3:30 p.m. Eastern time on Wednesday.

‘lol’ did not confirm his real-world identity, but said he lived on the West Coast and was in his 20s. “ever so anxious” said he was 19 and lived in the south of England with his mother.

Kirk connected with “lol” late Tuesday and then “ever so anxious” on Discord early on Wednesday, and asked if they wanted to be his middlemen, selling Twitter accounts to the online underworld where they were known. They would take a cut from each transaction.”

Twice in the past year, the OGUsers forum was hacked, and both times its database of usernames, email addresses and private messages was leaked online. A review of the private messages for “lol” on OGUsers provides a glimpse into the vibrant market for the resale of prized OG accounts.

On OGUsers, lol was known to other members as someone who had a direct connection to one or more people working at Twitter who could be used to help fellow members gain access to Twitter profiles, including those that had been suspended for one reason or another. In fact, this was how lol introduced himself to the OGUsers community when he first joined.

“I have a twitter contact who I can get users from (to an extent) and I believe I can get verification from,” lol explained.

In a direct message exchange on OGUsers from November 2019, lol is asked for help from another OGUser member whose Twitter account had been suspended for abuse.

“hello saw u talking about a twitter rep could you please ask if she would be able to help unsus [unsuspend] my main and my friends business account will pay 800-1k for each,” the OGUusers profile inquires of lol.

Lol says he can’t promise anything but will look into it. “I sent her that, not sure if I will get a reply today bc its the weekend but ill let u know,” Lol says.

In another exchange, an OGUser denizen quizzes lol about his Twitter hookup.

“Does she charge for escalations? And how do you know her/what is her department/job. How do you connect with them if I may ask?”

“They are in the Client success team,” lol replies. “No they don’t charge, and I know them through a connection.”

As for how he got access to the Twitter employee, lol declines to elaborate, saying it’s a private method. “It’s a lil method, sorry I cant say.”

In another direct message, lol asks a fellow OGUser member to edit a comment in a forum discussion which included the Twitter account “@tankska,” saying it was his IRL (in real life) Twitter account and that he didn’t want to risk it getting found out or suspended (Twitter says this account doesn’t exist, but a simple text search on Twitter shows the profile was active until late 2019).

“can u edit that comment out, @tankska is a gaming twitter of mine and i dont want it to be on ogu :D’,” lol wrote. “just dont want my irl getting sus[pended].”

Still another OGUser member would post lol’s identifying information into a forum thread, calling lol by his first name — “Josh” — in a post asking lol what he might offer in an auction for a specific OG name.

“Put me down for 100, but don’t note my name in the thread please,” lol wrote.

WHO IS LOL?

The information in lol’s OGUsers registration profile indicates he was probably being truthful with The Times about his location. The hacked forum database shows a user “tankska” registered on OGUsers back in July 2018, but only made one post asking about the price of an older Twitter account for sale.

The person who registered the tankska account on OGUsers did so with the email address [email protected], and from an Internet address tied to the San Ramon Unified School District in Danville, Calif.

According to 4iq.com, a service that indexes account details like usernames and passwords exposed in Web site data breaches, the jperry94526 email address was used to register accounts at several other sites over the years, including one at the apparel store Stockx.com under the profile name Josh Perry.

Tankska was active only briefly on OGUsers, but the hacked OGUsers database shows that “lol” changed his username three times over the years. Initially, it was “freej0sh,” followed by just “j0sh.”

lol did not respond to requests for comment sent to email addresses tied to his various OGU profiles and Instagram accounts.

ALWAYS IN DISCORD

Last week’s story on the Twitter compromise noted that just before the bitcoin scam tweets went out, several OG usernames changed hands. The story traced screenshots of Twitter tools posted online back to a moniker that is well-known in the OGUsers circle: PlugWalkJoe, a 21-year-old from the United Kingdom.

Speaking with The Times, PlugWalkJoe — whose real name is Joseph O’Connor — said while he acquired a single OG Twitter account (@6) through one of the hackers in direct communication with Kirk, he was otherwise not involved in the conversation.

“I don’t care,” O’Connor told The Times. “They can come arrest me. I would laugh at them. I haven’t done anything.”

In an interview with KrebsOnSecurity, O’Connor likewise asserted his innocence, suggesting at least a half dozen other hacker handles that may have been Kirk or someone who worked with Kirk on July 15, including “Voku,” “Crim/Criminal,” “Promo,” and “Aqua.”

“That twit screenshot was the first time in a while I joke[d], and evidently I shouldn’t have,” he said. “Joking is what got me into this mess.”

O’Connor shared a number of screenshots from a Discord chat conversation on the day of the Twitter hack between Kirk and two others: “Alive,” which is another handle used by lol, and “Ever So Anxious.” Both were described by The Times as middlemen who sought to resell OG Twitter names obtained from Kirk. O’Connor is referenced in these screenshots as both “PWJ” and by his Discord handle, “Beyond Insane.”

The negotiations over highly-prized OG Twitter usernames took place just prior to the hijacked celebrity accounts tweeting out bitcoin scams.

Ever So Anxious told Kirk his OGU nickname was “Chaewon,” which corresponds to a user in the United Kingdom. Just prior to the Twitter compromise, Chaewon advertised a service on the forum that could change the email address tied to any Twitter account for around $250 worth of bitcoin. O’Connor said Chaewon also operates under the hacker alias “Mason.”

“Ever So Anxious” tells Kirk his OGUsers handle is “Chaewon,” and asks Kirk to modify the display names of different OG Twitter handles to read “lol” and “PWJ”.

At one point in the conversation, Kirk tells Alive and Ever So Anxious to send funds for any OG usernames they want to this bitcoin address. The payment history of that address shows that it indeed also received approximately $180,000 worth of bitcoin from the wallet address tied to the scam messages tweeted out on July 15 by the compromised celebrity accounts.

The Twitter hacker “Kirk” telling lol/Alive and Chaewon/Mason/Ever So Anxious where to send the funds for the OG Twitter accounts they wanted.

SWIMPING

My July 15 story observed there were strong indications that the people involved in the Twitter hack have connections to SIM swapping, an increasingly rampant form of crime that involves bribing, hacking or coercing employees at mobile phone and social media companies into providing access to a target’s account.

The account “@shinji,” a.k.a. “PlugWalkJoe,” tweeting a screenshot of Twitter’s internal tools interface.

SIM swapping was thought to be behind the hijacking of Twitter CEO Jack Dorsey‘s Twitter account last year. As recounted by Wired.com, @jack was hijacked after the attackers conducted a SIM swap attack against AT&T, the mobile provider for the phone number tied to Dorsey’s Twitter account.

Immediately after Jack Dorsey’s Twitter handle was hijacked, the hackers tweeted out several shout-outs, including one to @PlugWalkJoe. O’Connor told KrebsOnSecurity he has never been involved in SIM swapping, although that statement was contradicted by two law enforcement sources who closely track such crimes.

However, Chaewon’s private messages on OGusers indicate that he very much was involved in SIM swapping. Use of the term “SIM swapping” was not allowed on OGusers, and the forum administrators created an automated script that would watch for anyone trying to post the term into a private message or discussion thread.

The script would replace the term with “I do not condone illegal activities.” Hence, a portmanteau was sometimes used: “Swimping.”

“Are you still swimping?” one OGUser member asks of Chaewon on Mar. 24, 2020. “If so and got targs lmk your discord.” Chaewon responds in the affirmative, and asks the other user to share his account name on Wickr, an encrypted online messaging app that automatically deletes messages after a few days.

Chaewon/Ever So Anxious/Mason did not respond to requests for comment.

O’Connor told KrebsOnSecurity that one of the individuals thought to be associated with the July 15 Twitter hack — a young man who goes by the nickname “Voku” — is still actively involved in SIM-swapping, particularly against customers of AT&T and Verizon.

Voku is one of several hacker handles used by a Canton, Mich. youth whose mom turned him in to the local police in February 2018 when she overheard him talking on the phone and pretending to be an AT&T employee. Officers responding to the report searched the residence and found multiple cell phones and SIM cards, as well as files on the kid’s computer that included “an extensive list of names and phone numbers of people from around the world.”

The following month, Michigan authorities found the same individual accessing personal consumer data via public Wi-Fi at a local library, and seized 45 SIM cards, a laptop and a Trezor wallet — a hardware device designed to store crytpocurrency account data. In April 2018, Voku’s mom again called the cops on her son — identified only as confidential source #1 (“CS1”) in the criminal complaint against him — saying he’d obtained yet another mobile phone.

Voku’s cooperation with authorities led them to bust up a conspiracy involving at least nine individuals who stole millions of dollars worth of cryptocurrency and other items of value from their targets.

CONSPIRACY

Samy Tarazi, an investigator with the Santa Clara County District Attorney’s Office, has spent hundreds of hours tracking young hackers during his tenure with REACT, a task force set up to combat SIM swapping and bring SIM swappers to justice.

According to Tarazi, multiple actors in the cybercrime underground are constantly targeting people who work in key roles at major social media and online gaming platforms, from Twitter and Instagram to Sony, Playstation and Xbox.

Tarazi said some people engaged in this activity seek to woo their targets, sometimes offering them bribes in exchange for the occasional request to unban or change the ownership of specific accounts.

All too often, however, employees at these social media and gaming platforms find themselves the object of extremely hostile and persistent personal attacks that threaten them and their families unless and until they give in to demands.

“In some cases, they’re just hitting up employees saying, ‘Hey, I’ve got a business opportunity for you, do you want to make some money?’” Tarazi explained. “In other cases, they’ve done everything from SIM swapping and swatting the victim many times to posting their personal details online or extorting the victims to give up access.”

Allison Nixon is chief research officer at Unit 221B, a cyber investigations company based in New York. Nixon says she doesn’t buy the idea that PlugWalkJoe, lol, and Ever So Anxious are somehow less culpable in the Twitter compromise, even if their claims of not being involved in the July 15 Twitter bitcoin scam are accurate.

“You have the hackers like Kirk who can get the goods, and the money people who can help them profit — the buyers and the resellers,” Nixon said. “Without the buyers and the resellers, there is no incentive to hack into all these social media and gaming companies.”

Mark Rasch, Unit 221B’s general counsel and a former U.S. federal prosecutor, said all of the players involved in the Twitter compromise of July 15 can be charged with conspiracy, a legal concept in the criminal statute which holds that any co-conspirators are liable for the acts of any other co-conspirator in furtherance of the crime, even if they don’t know who those other people are in real life or what else they may have been doing at the time.

“Conspiracy has been called the prosecutor’s friend because it makes the agreement the crime,” Rasch said. “It’s a separate crime in addition to the underlying crime, whether it be breaking in to a network, data theft or account takeover. The ‘I just bought some usernames and gave or sold them to someone else’ excuse is wrong because it’s a conspiracy and these people obviously don’t realize that.”

In a statement on its ongoing investigation into the July 15 incident, Twitter said it resulted from a small number of employees being manipulated through a social engineering scheme. Twitter said at least 130 accounts were targeted by the attackers, who succeeded in sending out unauthorized tweets from 45 of them and may have been able to view additional information about those accounts, such as direct messages.

On eight of the compromised accounts, Twitter said, the attackers managed to download the account history using the Your Twitter Data tool. Twitter added that it is working with law enforcement and is rolling out additional company-wide training to guard against social engineering tactics.

Who’s Behind Wednesday’s Epic Twitter Hack?

Twitter was thrown into chaos on Wednesday after accounts for some of the world’s most recognizable public figures, executives and celebrities starting tweeting out links to bitcoin scams. Twitter says the attack happened because someone tricked or coerced an employee into providing access to internal Twitter administrative tools. This post is an attempt to lay out some of the timeline of the attack, and point to clues about who may have been behind it.

The first public signs of the intrusion came around 3 PM EDT, when the Twitter account for the cryptocurrency exchange Binance tweeted a message saying it had partnered with “CryptoForHealth” to give back 5000 bitcoin to the community, with a link where people could donate or send money.

Minutes after that, similar tweets went out from the accounts of other cryptocurrency exchanges, and from the Twitter accounts for democratic presidential candidate Joe Biden, Amazon CEO Jeff Bezos, President Barack Obama, Tesla CEO Elon Musk, former New York Mayor Michael Bloomberg and investment mogul Warren Buffett.

While it may sound ridiculous that anyone would be fooled into sending bitcoin in response to these tweets, an analysis of the BTC wallet promoted by many of the hacked Twitter profiles shows that over the past 24 hours the account has processed 383 transactions and received almost 13 bitcoin — or approximately USD $117,000.

Twitter issued a statement saying it detected “a coordinated social engineering attack by people who successfully targeted some of our employees with access to internal systems and tools. We know they used this access to take control of many highly-visible (including verified) accounts and Tweet on their behalf. We’re looking into what other malicious activity they may have conducted or information they may have accessed and will share more here as we have it.”

There are strong indications that this attack was perpetrated by individuals who’ve traditionally specialized in hijacking social media accounts via “SIM swapping,” an increasingly rampant form of crime that involves bribing, hacking or coercing employees at mobile phone and social media companies into providing access to a target’s account.

People within the SIM swapping community are obsessed with hijacking so-called “OG” social media accounts. Short for “original gangster,” OG accounts typically are those with short profile names (such as @B or @joe). Possession of these OG accounts confers a measure of status and perceived influence and wealth in SIM swapping circles, as such accounts can often fetch thousands of dollars when resold in the underground.

In the days leading up to Wednesday’s attack on Twitter, there were signs that some actors in the SIM swapping community were selling the ability to change an email address tied to any Twitter account. In a post on OGusers — a forum dedicated to account hijacking — a user named “Chaewon” advertised they could change email address tied to any Twitter account for $250, and provide direct access to accounts for between $2,000 and $3,000 apiece.

The OGUsers forum user “Chaewon” taking requests to modify the email address tied to any twitter account.

“This is NOT a method, you will be given a full refund if for any reason you aren’t given the email/@, however if it is revered/suspended I will not be held accountable,” Chaewon wrote in their sales thread, which was titled “Pulling email for any Twitter/Taking Requests.”

Hours before any of the Twitter accounts for cryptocurrency platforms or public figures began blasting out bitcoin scams on Wednesday, the attackers appear to have focused their attention on hijacking a handful of OG accounts, including “@6.

That Twitter account was formerly owned by Adrian Lamo — the now-deceased “homeless hacker” perhaps best known for breaking into the New York Times’s network and for reporting Chelsea Manning‘s theft of classified documents. @6 is now controlled by Lamo’s longtime friend, a security researcher and phone phreaker who asked to be identified in this story only by his Twitter nickname, “Lucky225.”

Lucky225 said that just before 2 p.m. EDT on Wednesday, he received a password reset confirmation code via Google Voice for the @6 Twitter account. Lucky said he’d previously disabled SMS notifications as a means of receiving multi-factor codes from Twitter, opting instead to have one-time codes generated by a mobile authentication app.

But because the attackers were able to change the email address tied to the @6 account and disable multi-factor authentication, the one-time authentication code was sent to both his Google Voice account and to the new email address added by the attackers.

“The way the attack worked was that within Twitter’s admin tools, apparently you can update the email address of any Twitter user, and it does this without sending any kind of notification to the user,” Lucky told KrebsOnSecurity. “So [the attackers] could avoid detection by updating the email address on the account first, and then turning off 2FA.”

Lucky said he hasn’t been able to review whether any tweets were sent from his account during the time it was hijacked because he still doesn’t have access to it (he has put together a breakdown of the entire episode at this Medium post).

But around the same time @6 was hijacked, another OG account – @B — was swiped. Someone then began tweeting out pictures of Twitter’s internal tools panel showing the @B account.

A screenshot of the hijacked OG Twitter account “@B,” shows the hijackers logged in to Twitter’s internal account tools interface.

Twitter responded by removing any tweets across its platform that included screenshots of its internal tools, and in some cases temporarily suspended the ability of those accounts to tweet further.

Another Twitter account — @shinji — also was tweeting out screenshots of Twitter’s internal tools. Minutes before Twitter terminated the @shinji account, it was seen publishing a tweet saying “follow @6,” referring to the account hijacked from Lucky225.

The account “@shinji” tweeting a screenshot of Twitter’s internal tools interface.

Cached copies of @Shinji’s tweets prior to Wednesday’s attack on Twitter are available here and here from the Internet Archive. Those caches show Shinji claims ownership of two OG accounts on Instagram — “j0e” and “dead.”

KrebsOnSecurity heard from a source who works in security at one of the largest U.S.-based mobile carriers, who said the “j0e” and “dead” Instagram accounts are tied to a notorious SIM swapper who goes by the nickname “PlugWalkJoe.” Investigators have been tracking PlugWalkJoe because he is thought to have been involved in multiple SIM swapping attacks over the years that preceded high-dollar bitcoin heists.

Archived copies of the @Shinji account on twitter shows one of Joe’s OG Instagram accounts, “Dead.”

Now look at the profile image in the other Archive.org index of the @shinji Twitter account (pictured below). It is the same image as the one included in the @Shinji screenshot above from Wednesday in which Joseph/@Shinji was tweeting out pictures of Twitter’s internal tools.

Image: Archive.org

This individual, the source said, was a key participant in a group of SIM swappers that adopted the nickname “ChucklingSquad,” and was thought to be behind the hijacking of Twitter CEO Jack Dorsey‘s Twitter account last year. As Wired.com recounted, @jack was hijacked after the attackers conducted a SIM swap attack against AT&T, the mobile provider for the phone number tied to Dorsey’s Twitter account.

A tweet sent out from Twitter CEO Jack Dorsey’s account while it was hijacked shouted out to PlugWalkJoe and other Chuckling Squad members.

The mobile industry security source told KrebsOnSecurity that PlugWalkJoe in real life is a 21-year-old from Liverpool, U.K. named Joseph James Connor. The source said PlugWalkJoe is in Spain where he was attending a university until earlier this year. He added that PlugWalkJoe has been unable to return home on account of travel restrictions due to the COVID-19 pandemic.

The mobile industry source said PlugWalkJoe was the subject of an investigation in which a female investigator was hired to strike up a conversation with PlugWalkJoe and convince him to agree to a video chat. The source further explained that a video which they recorded of that chat showed a distinctive swimming pool in the background.

According to that same source, the pool pictured on PlugWalkJoe’s Instagram account (instagram.com/j0e) is the same one they saw in their video chat with him.

If PlugWalkJoe was in fact pivotal to this Twitter compromise, it’s perhaps fitting that he was identified in part via social engineering. Maybe we should all be grateful the perpetrators of this attack on Twitter did not set their sights on more ambitious aims, such as disrupting an election or the stock market, or attempting to start a war by issuing false, inflammatory tweets from world leaders.

Also, it seems clear that this Twitter hack could have let the attackers view the direct messages of anyone on Twitter, information that is difficult to put a price on but which nevertheless would be of great interest to a variety of parties, from nation states to corporate spies and blackmailers.

This is a fast-moving story. There were multiple people involved in the Twitter heist. Please stay tuned for further updates. KrebsOnSecurity would like to thank Unit 221B for their assistance in connecting some of the dots in this story.