Mirai

New Charges, Sentencing in Satori IoT Botnet Conspiracy

The U.S. Justice Department today charged a Canadian and a Northern Ireland man for allegedly conspiring to build botnets that enslaved hundreds of thousands of routers and other Internet of Things (IoT) devices for use in large-scale distributed denial-of-service (DDoS) attacks. In addition, a defendant in the United States was sentenced today to drug treatment and 18 months community confinement for his admitted role in the botnet conspiracy.

Indictments unsealed by a federal court in Alaska today allege 20-year-old Aaron Sterritt from Larne, Northern Ireland, and 31-year-old Logan Shwydiuk of Saskatoon, Canada conspired to build, operate and improve their IoT crime machines over several years.

Prosecutors say Sterritt, using the hacker aliases “Vamp” and “Viktor,” was the brains behind the computer code that powered several potent and increasingly complex IoT botnet strains that became known by exotic names such as “Masuta,” “Satori,” “Okiru” and “Fbot.”

Shwydiuk, a.k.a. “Drake,” “Dingle, and “Chickenmelon,” is alleged to have taken the lead in managing sales and customer support for people who leased access to the IoT botnets to conduct their own DDoS attacks.

A third member of the botnet conspiracy — 22-year-old Kenneth Currin Schuchman of Vancouver, Wash. — pleaded guilty in Sept. 2019 to aiding and abetting computer intrusions in September 2019. Schuchman, whose role was to acquire software exploits that could be used to infect new IoT devices, was sentenced today by a judge in Alaska to 18 months of community confinement and drug treatment, followed by three years of supervised release.

Kenneth “Nexus-Zeta” Schuchman, in an undated photo.

The government says the defendants built and maintained their IoT botnets by constantly scanning the Web for insecure devices. That scanning primarily targeted devices that were placed online with weak, factory default settings and/or passwords. But the group also seized upon a series of newly-discovered security vulnerabilities in these IoT systems — commandeering devices that hadn’t yet been updated with the latest software patches.

Some of the IoT botnets enslaved hundreds of thousands of hacked devices. For example, by November 2017, Masuta had infected an estimated 700,000 systems, allegedly allowing the defendants to launch crippling DDoS attacks capable of hurling 100 gigabits of junk data per second at targets — enough firepower to take down many large websites.

In 2015, then 15-year-old Sterritt was involved in the high-profile hack against U.K. telecommunications provider TalkTalk. Sterritt later pleaded guilty to his part in the intrusion, and at his sentencing in 2018 was ordered to complete 50 hours of community service.

The indictments against Sterritt and Shwydiuk (PDF) do not mention specific DDoS attacks thought to have been carried out with the IoT botnets. In an interview today with KrebsOnSecurity, prosecutors in Alaska declined to discuss any of their alleged offenses beyond building, maintaining and selling the above-mentioned IoT botnets.

But multiple sources tell KrebsOnSecuirty Vamp was principally responsible for the 2016 massive denial-of-service attack that swamped Dyn — a company that provides core Internet services for a host of big-name Web sites. On October 21, 2016, an attack by a Mirai-based IoT botnet variant overwhelmed Dyn’s infrastructure, causing outages at a number of top Internet destinations, including Twitter, Spotify, Reddit and others.

In 2018, authorities with the U.K.’s National Crime Agency (NCA) interviewed a suspect in connection with the Dyn attack, but ultimately filed no charges against the youth because all of his digital devices had been encrypted.

“The principal suspect of this investigation is a UK national resident in Northern Ireland,” reads a June 2018 NCA brief on their investigation into the Dyn attack (PDF), dubbed Operation Midmonth. “In 2018 the subject returned for interview, however there was insufficient evidence against him to provide a realistic prospect of conviction.”

The login prompt for Nexus Zeta’s IoT botnet included the message “Masuta is powered and hosted on Brian Kreb’s [sic] 4head.” To be precise, it’s a 5head.

The unsealing of the indictments against Sterritt and Shwydiuk came just minutes after Schuchman was sentenced today. Schuchman has been confined to an Alaskan jail for the past 13 months, and Chief U.S. District Judge Timothy Burgess today ordered the sentence of 18 months community confinement to begin Aug. 1.

Community confinement in Schuchman’s case means he will spend most or all of that time in a drug treatment program. In a memo (PDF) released prior to Schuchman’s sentencing today, prosecutors detailed the defendant’s ongoing struggle with narcotics, noting that on multiple occasions he was discharged from treatment programs after testing positive for Suboxone — which is used to treat opiate addiction and is sometimes abused by addicts — and for possessing drug contraband.

The government’s sentencing memo also says Schuchman on multiple occasions absconded from pretrial supervision, and went right back to committing the botnet crimes for which he’d been arrested — even communicating with Sterritt about the details of the ongoing FBI investigation.

“Defendant’s performance on pretrial supervision has been spectacularly poor,” prosecutors explained. “Even after being interviewed by the FBI and put on restrictions, he continued to create and operate a DDoS botnet.”

Prosecutors told the judge that when he was ultimately re-arrested by U.S. Marshals, Schuchman was found at a computer in violation of the terms of his release. In that incident, Schuchman allegedly told his dad to trash his computer, before successfully encrypting his hard drive (which the Marshals service is still trying to decrypt). According to the memo, the defendant admitted to marshals that he had received and viewed videos of “juveniles engaged in sex acts with other juveniles.”

“The circumstances surrounding the defendant’s most recent re-arrest are troubling,” the memo recounts. “The management staff at the defendant’s father’s apartment complex, where the defendant was residing while on abscond status, reported numerous complaints against the defendant, including invitations to underage children to swim naked in the pool.”

Adam Alexander, assistant US attorney for the district of Alaska, declined to say whether the DOJ would seek extradition of Sterritt and Shwydiuk. Alexander said the success of these prosecutions is highly dependent on the assistance of domestic and international law enforcement partners, as well as a list of private and public entities named at the conclusion of the DOJ’s press release on the Schuchman sentencing (PDF).

However, a DOJ motion (PDF) to seal the case records filed back in September 2019 says the government is in fact seeking to extradite the defendants.

Chief Judge Burgess was the same magistrate who presided over the 2018 sentencing of the co-authors of Mirai, a highly disruptive IoT botnet strain whose source code was leaked online in 2016 and was built upon by the defendants in this case. Both Mirai co-authors were sentenced to community service and home confinement thanks to their considerable cooperation with the government’s ongoing IoT botnet investigations.

Asked whether he was satisfied with the sentence handed down against Schuchman, Alexander maintained it was more than just another slap on the wrist, noting that Schuchman has waived his right to appeal the conviction and faces additional confinement of two years if he absconds again or fails to complete his treatment.

“In every case the statutory factors have to do with the history of the defendants, who in these crimes tend to be extremely youthful offenders,” Alexander said. “In this case, we had a young man who struggles with mental health and really pronounced substance abuse issues. Contrary to what many people might think, the goal of the DOJ in cases like this is not to put people in jail for as long as possible but to try to achieve the best balance of safeguarding communities and affording the defendant the best possible chance of rehabilitation.”

William Walton, supervisory special agent for the FBI’s cybercrime investigation division in Anchorage, Ala., said he hopes today’s indictments and sentencing send a clear message to what he described as a relatively insular and small group of individuals who are still building, running and leasing IoT-based botnets to further a range of cybercrimes.

“One of the things we hope in our efforts here and in our partnerships with our international partners is when we identify these people, we want very much to hold them to account in a just but appropriate way,” Walton said. “Hopefully, any associates who are aspiring to fill the vacuum once we take some players off the board realize that there are going to be real consequences for doing that.”

Owners of DDoS-for-Hire Service vDOS Get 6 Months Community Service

The co-owners of vDOS, a now-defunct service that for four years helped paying customers launch more than two million distributed denial-of-service (DDoS) attacks that knocked countless Internet users and websites offline, each have been sentenced to six months of community service by an Israeli court.

vDOS as it existed on Sept. 8, 2016.

A judge in Israel handed down the sentences plus fines and probation against Yarden Bidani and Itay Huri, both Israeli citizens arrested in 2016 at age 18 in connection with an FBI investigation into vDOS.

Until it was shuttered in 2016, vDOS was by far the most reliable and powerful DDoS-for-hire or “booter” service on the market, allowing even completely unskilled Internet users to launch crippling assaults capable of knocking most websites offline.

vDOS advertised the ability to launch attacks at up to 50 gigabits of data per second (Gbps) — well more than enough to take out any site that isn’t fortified with expensive anti-DDoS protection services.

The Hebrew-language sentencing memorandum (PDF) has redacted the names of the defendants, but there are more than enough clues in the document to ascertain the identities of the accused. For example, it says the two men earned a little more than $600,000 running vDOS, a fact first reported by this site in September 2016 just prior to their arrest, when vDOS was hacked and KrebsOnSecurity obtained a copy of its user database.

In addition, the document says the defendants were initially apprehended on September 8, 2016, arrests which were documented here two days later.

Also, the sentencing mentions the supporting role of a U.S. resident named only as “Jesse.” This likely refers to 23-year-old Jesse Wu, who KrebsOnSecurity noted in October 2016 pseudonymously registered the U.K. shell company used by vDOS, and ran a tiny domain name registrar called NameCentral that vDOS and many other booter services employed.

Israeli prosecutors say Wu also set up their payment infrastructure, and received 15 percent of vDOS’s total revenue for his trouble. NameCentral no longer appears to be in business, and Wu could not be reached for comment.

Although it is clear Bidani and Huri are defendants in this case, it is less clear which is referenced as Defendant #1 or Defendant #2. Both were convicted of “corrupting/disturbing a computer or computer material,” charges that the judge said had little precedent in Israeli courts, noting that “cases of this kind have not been discussed in court so far.” Defendant #1 also was convicted of sharing nude pictures of a 14 year old girl.

vDOS also sold API access to their backend attack infrastructure to other booter services to further monetize their excess firepower, including Vstress, Ustress, and PoodleStresser and LizardStresser.

Yarden Bidani. Image: Facebook.

Both defendants received the lowest possible sentence (the maximum was two years in prison) — six months of community service under the watch of the Israeli prison service — mainly because the accused were minors during the bulk of their offenses. The judge also imposed small fines on each, noting that more than $175,000 dollars worth of profits had already been seized from their booter business.

The judge observed that while Defendant #2 had shown remorse for his crimes and an understanding of how his actions affected others — even sobbing throughout one court proceeding — Defendant #1 failed to participate in the therapy sessions previously ordered by the court, and that he has “a clear and daunting boundary for recurrence of further offenses in the future.”

Boaz Dolev, CEO of ClearSky Cyber Security, said he’s disappointed in the lightness of the sentences given how much damage the young men caused.

“I think that such an operation that caused big damage to so many companies should have been dealt differently by the Israeli justice system,” Dolev said. “The fact that they were under 18 when committing their crimes saved them from much harder sentences.”

While DDoS attacks typically target a single website or Internet host, they often result in widespread collateral Internet disruption. Less than two weeks after the 2016 arrest of Bidani and Huri, KrebsOnSecurity.com suffered a three-day outage as a result of a record 620 Gbps attack that was alleged to have been purchased in retribution for my reporting on vDOS. That attack caused stability issues for other companies using the same DDoS protection firm my site enjoyed at the time, so much so that the provider terminated my service with them shortly thereafter.

To say that vDOS was responsible for a majority of the DDoS attacks clogging up the Internet between 2012 and 2016 would be an understatement. The various subscription packages for the service were sold based in part on how many seconds the denial-of-service attack would last. And in just four months between April and July 2016, vDOS was responsible for launching more than 277 million seconds of attack time, or approximately 8.81 years worth of attack traffic.

It seems likely vDOS was responsible for several decades worth of DDoS years, but it’s impossible to say for sure because vDOS’s owners routinely wiped attack data from their servers.

Prosecutors in the United States and United Kingdom have in recent years sought tough sentences for those convicted of running booter services. While a number of  current charges against alleged offenders have not yet been fully adjudicated, only a handful of defendants in these cases have seen real jail time.

The two men responsible for creating and unleashing the Mirai botnet (the same duo responsible for building the massive crime machine that knocked my site offline in 2016) each avoided jail time thanks to their considerable cooperation with the FBI.

Likewise, Pennsylvania resident David Bukoski recently got five years probation and six months of “community confinement” after pleading guilty to running the Quantum Stresser booter service. Lizard Squad member and PoodleStresser operator Zachary Buchta was sentenced to three months in prison and ordered to pay $350,000 in restitution for his role in running various booter services.

On the other end of the spectrum, last November 21-year-old Illinois resident Sergiy Usatyuk was sentenced to 13 months in jail for running multiple booter services that launched millions of attacks over several years. And a 20-year-old U.K. resident in 2017 got two years in prison for operating the Titanium Stresser service.

For their part, authorities in the U.K. have sought to discourage would-be customers of these booter services by purchasing Google ads warning that such services are illegal. The goal is to steer customers away from committing further offenses that could land them in jail, and toward more productive uses of their skills and/or curiosity about cybersecurity.

Zyxel Flaw Powers New Mirai IoT Botnet Strain

In February, hardware maker Zyxel fixed a zero-day vulnerability in its routers and VPN firewall products after KrebsOnSecurity told the company the flaw was being abused by attackers to break into devices. This week, security researchers said they spotted that same vulnerability being exploited by a new variant of Mirai, a malware strain that targets vulnerable Internet of Things (IoT) devices for use in large-scale attacks and as proxies for other cybercrime activity.

Security experts at Palo Alto Networks said Thursday their sensors detected the new Mirai variant — dubbed Mukashi — on Mar. 12. The new Mirai strain targets CVE-2020-9054, a critical flaw that exists in many VPN firewalls and network attached storage (NAS) devices made by Taiwanese vendor Zyxel Communication Corp., which boasts some 100 million devices deployed worldwide.

Like other Mirai variants, Mukashi constantly scans the Internet for vulnerable IoT devices like security cameras and digital video recorders (DVRs), looking for a range of machines protected only by factory-default credentials or commonly-picked passwords.

Palo Alto said IoT systems infected by Mukashi then report back to a control server, which can be used to disseminate new instructions — such as downloading additional software or launching distributed denial of service (DDoS) attacks.

The commands Mukashi botmasters can send to infected devices include scanning for and exploiting other systems, and launching DDoS attacks. Image: Palo Alto Networks.

Zyxel issued a patch for the flaw on Feb. 24, but the update did not fix the problem on many older Zyxel devices which are no longer being supported by the company. For those devices, Zyxel’s advice was not to leave them connected to the Internet.

A joint advisory on CVE-2020-9054 from the U.S. Department of Homeland Security and the CERT Coordination Center rates this vulnerability at a “10” — the most severe kind of flaw. The DHS/CERT advisory also includes sample code to test if a Zyxel product is vulnerable to the flaw.

My advice? If you can’t patch it, pitch it, as Mukashi is not the only thing interested in this Zyxel bug: Recent activity suggests attackers known for deploying ransomware have been actively working to test it for use against targets.

DDoS Mitigation Firm Founder Admits to DDoS

A Georgia man who co-founded a service designed to protect companies from crippling distributed denial-of-service (DDoS) attacks has pleaded to paying a DDoS-for-hire service to launch attacks against others.

Tucker Preston, 22, of Macon, Ga., pleaded guilty last week in a New Jersey court to one count of damaging protected computers by transmission of a program, code or command. DDoS attacks involve flooding a target Web site with so much junk Internet traffic that it can no longer accommodate legitimate visitors.

Preston was featured in the 2016 KrebsOnSecurity story DDoS Mitigation Firm Has History of Hijacks, which detailed how the company he co-founded — BackConnect Security LLC — had developed the unusual habit of hijacking Internet address space it didn’t own in a bid to protect clients from attacks.

Preston’s guilty plea agreement (PDF) doesn’t specify who he admitted attacking, and refers to the target only as “Victim 1.” Preston declined to comment for this story.

But that 2016 story came on the heels of an exclusive about the hacking of vDOS — at the time the world’s most popular and powerful DDoS-for-hire service.

KrebsOnSecurity exposed the co-administrators of vDOS and obtained a copy of the entire vDOS database, including its registered users and a record of the attacks those users had paid vDOS to launch on their behalf.

Those records showed that several email addresses tied to a domain registered by then 19-year-old Preston had been used to create a vDOS account that was active in attacking a large number of targets, including multiple assaults on networks belonging to the Free Software Foundation (FSF).

The 2016 story on BackConnect featured an interview with a former system administrator at FSF who said the nonprofit briefly considered working with BackConnect, and that the attacks started almost immediately after FSF told the company’s owners they would need to look elsewhere for DDoS protection.

Perhaps having fun at the expense of the FSF was something of a meme that the accused and his associates seized upon, but it’s interesting to note that the name of the FSF’s founder — Richard Stallmanwas used as a nickname by the co-author of Mirai, a potent malware strain that was created for the purposes of enslaving Internet of Things (IoT) devices for large-scale DDoS attacks.

Ultimately, it was the Mirai co-author’s use of this nickname that contributed to him getting caught, arrested, and prosecuted for releasing Mirai and its source code (as well as for facilitating a record-setting DDoS against this Web site in 2016).

According to a statement from the U.S. Justice Department, the count to which he pleaded guilty is punishable by a maximum of 10 years in prison and a fine of up to $250,000, or twice the gross gain or loss from the offense. He is slated to be sentenced on May 7.