An Estonian man was sentenced today to more than five years in a U.S. prison for his role in at least 13 ransomware attacks that caused losses of approximately $53 million. Prosecutors say the accused also enjoyed a lengthy career of “cashing out” access to hacked bank accounts worldwide.

Maksim Berezan, 37, is an Estonian national who was arrested nearly two years ago in Latvia. U.S. authorities alleged Berezan was a longtime member of DirectConnection, a closely-guarded Russian cybercriminal forum that existed until 2015. Berezan’s indictment (PDF) says he used his status at DirectConnection to secure cashout jobs from other vetted crooks on the exclusive crime forum.

Berezan specialized in cashouts and “drops.” Cashouts refer to using stolen payment card data to make fraudulent purchases or to withdraw money from bank accounts without authorization. A drop is a location or individual able to securely receive and forward funds or goods obtained through cashouts or other types of fraud. Drops typically are used to make it harder for law enforcement to trace fraudulent transactions and to circumvent fraud detection measures used by banks and credit card companies.

Acting on information from U.S. authorities, in November 2020 Latvian police searched Berezan’s residence there and found a red Porsche Carrera 911, a black Porsche Cayenne, a Ducati motorcycle, and an assortment of jewelry. They also seized $200,000 in currency, and $1.7 million in bitcoin.

After Berezan was extradited to the United States in December 2020, investigators searching his electronic devices said they found “significant evidence of his involvement in ransomware activity.”

“The post-extradition investigation determined that Berezan had participated in at least 13 ransomware attacks, 7 of which were against U.S. victims, and that approximately $11 million in ransom payments flowed into cryptocurrency wallets that he controlled,” reads a statement from the U.S. Department of Justice.

Berezan pleaded guilty in April 2021 to conspiracy to commit wire fraud.

The DirectConnection cybercrime forum, circa 2011.

For many years on DirectConnection and other crime forums, Berezan went by the hacker alias “Albanec.” Investigators close to the case told KrebsOnSecurity that Albanec was involved in multiple so-called “unlimited” cashouts, a highly choreographed, global fraud scheme in which crooks hack a bank or payment card processor and used cloned payment cards at cash machines around the world to fraudulently withdraw millions of dollars in just a few hours.

Berezan joins a growing list of top cybercriminals from DirectConnection who’ve been arrested and convicted of cybercrimes since the forum disappeared years ago. One of Albanec’s business partners on the forum was Sergey “Flycracker” Vovnenko, a Ukrainian man who once ran his own cybercrime forum and who in 2013 executed a plot to have heroin delivered to our home in a bid to get Yours Truly arrested for drug possession. Vovnenko was later arrested, extradited to the United States, pleaded guilty and spent more than three years in prison on botnet-related charges (Vovnenko is now back in Ukraine, trying to fight the Russian invasion with his hacking abilities).

Perhaps the most famous DirectConnection member was its administrator Aleksei Burkov, a Russian hacker thought to be so connected to the Russian cybercriminal scene that he was described as an “asset of extreme importance to Moscow.” Burkov was arrested in Israel in 2015, and the Kremlin arrested an Israeli woman on trumped-up drug charges to force a prisoner swap.

That effort failed. Burkov was extradited to the U.S. in 2019, soon pleaded guilty, and was sentenced to nine years. However, he was recently deported back to Russia prior to serving his full sentence, which has prompted Republican leaders in the House to question why.

Other notable cybercrooks from DirectConnection who’ve been arrested, extradited to the U.S. and sentenced to prison include convicted credit card fraudsters Vladislav “Badb” Horohorin and Sergey “zo0mer” Kozerev, as well as the infamous spammer and botnet master Peter “Severa” Levashov.

At his sentencing today, Berezan was sentenced to 66 months in prison and ordered to pay $36 million in restitution to his victims.

Microsoft and identity management platform Okta both this week disclosed breaches involving LAPSUS$, a relatively new cybercrime group that specializes in stealing data from big companies and threatening to publish it unless a ransom demand is paid. Here’s a closer look at LAPSUS$, and some of the low-tech but high-impact methods the group uses to gain access to targeted organizations.

First surfacing in December 2021 with an extortion demand on Brazil’s Ministry of Health, LAPSUS$ made headlines more recently for posting screenshots of internal tools tied to a number of major corporations, including NVIDIA, Samsung, and Vodafone.

On Tuesday, LAPSUS$ announced via its Telegram channel it was releasing source code stolen from Microsoft. In a blog post published Mar. 22, Microsoft said it interrupted the LAPSUS$ group’s source code download before it could finish, and that it was able to do so because LAPSUS$ publicly discussed their illicit access on their Telegram channel before the download could complete.

One of the LAPSUS$ group members admitted on their Telegram channel that the Microsoft source code download had been interrupted.

“This public disclosure escalated our action allowing our team to intervene and interrupt the actor mid-operation, limiting broader impact,” Microsoft wrote. “No customer code or data was involved in the observed activities. Our investigation has found a single account had been compromised, granting limited access. Microsoft does not rely on the secrecy of code as a security measure and viewing source code does not lead to elevation of risk.”

While it may be tempting to dismiss LAPSUS$ as an immature and fame-seeking group, their tactics should make anyone in charge of corporate security sit up and take notice. Microsoft says LAPSUS$ — which it boringly calls “DEV-0537” — mostly gains illicit access to targets via “social engineering.” This involves bribing or tricking employees at the target organization or at its myriad partners, such as customer support call centers and help desks.

“Microsoft found instances where the group successfully gained access to target organizations through recruited employees (or employees of their suppliers or business partners),” Microsoft wrote. The post continues:

“DEV-0537 advertised that they wanted to buy credentials for their targets to entice employees or contractors to take part in its operation. For a fee, the willing accomplice must provide their credentials and approve the MFA prompt or have the user install AnyDesk or other remote management software on a corporate workstation allowing the actor to take control of an authenticated system. Such a tactic was just one of the ways DEV-0537 took advantage of the security access and business relationships their target organizations have with their service providers and supply chains.”

The LAPSUS$ Telegram channel has grown to more than 45,000 subscribers, and Microsoft points to an ad LAPSUS$ posted there offering to recruit insiders at major mobile phone providers, large software and gaming companies, hosting firms and call centers.

Sources tell KrebsOnSecurity that LAPSUS$ has been recruiting insiders via multiple social media platforms since at least November 2021. One of the core LAPSUS$ members who used the nicknames “Oklaqq” and “WhiteDoxbin” posted recruitment messages to Reddit last year, offering employees at AT&T, T-Mobile and Verizon up to $20,000 a week to perform “inside jobs.”

LAPSUS$ leader Oklaqq a.k.a. “WhiteDoxbin” offering to pay $20,000 a week to corrupt employees at major mobile providers.

Many of LAPSUS$’s recruitment ads are written in both English and Portuguese. According to cyber intelligence firm Flashpoint, the bulk of the group’s victims (15 of them) have been in Latin America and Portugal.

“LAPSUS$ currently does not operate a clearnet or darknet leak site or traditional social media accounts—it operates solely via Telegram and email,” Flashpoint wrote in an analysis of the group. “LAPSUS$ appears to be highly sophisticated, carrying out increasingly high-profile data breaches. The group has claimed it is not state-sponsored. The individuals behind the group are likely experienced and have demonstrated in-depth technical knowledge and abilities.”

Microsoft said LAPSUS$ has been known to target the personal email accounts of employees at organizations they wish to hack, knowing that most employees these days use some sort of VPN to remotely access their employer’s network.

“In some cases, [LAPSUS$] first targeted and compromised an individual’s personal or private (non-work-related) accounts giving them access to then look for additional credentials that could be used to gain access to corporate systems,” Microsoft wrote. “Given that employees typically use these personal accounts or numbers as their second-factor authentication or password recovery, the group would often use this access to reset passwords and complete account recovery actions.”

In other cases, Microsoft said, LAPSUS$ has been seen calling a target organization’s help desk and attempting to convince support personnel to reset a privileged account’s credentials.

“The group used the previously gathered information (for example, profile pictures) and had a native-English-sounding caller speak with the help desk personnel to enhance their social engineering lure,” Microsoft explained. “Observed actions have included DEV-0537 answering common recovery prompts such as “first street you lived on” or “mother’s maiden name” to convince help desk personnel of authenticity. Since many organizations outsource their help desk support, this tactic attempts to exploit those supply chain relationships, especially where organizations give their help desk personnel the ability to elevate privileges.”

LAPSUS$ recruiting insiders via its Telegram channel.

SIM-SWAPPING PAST SECURITY

Microsoft said LAPSUS$ also has used “SIM swapping” to gain access to key accounts at target organizations. In a fraudulent SIM swap, the attackers bribe or trick mobile company employees into transferring a target’s mobile phone number to their device. From there, the attackers can intercept any one-time passwords sent to the victim via SMS or phone call. They can also then reset the password for any online account that allows password resets via a link sent over SMS.

“Their tactics include phone-based social engineering; SIM-swapping to facilitate account takeover; accessing personal email accounts of employees at target organizations; paying employees, suppliers, or business partners of target organizations for access to credentials and multifactor authentication (MFA) approval; and intruding in the ongoing crisis-communication calls of their targets,” Microsoft wrote.

Allison Nixon is chief research officer at Unit 221B, a cybersecurity consultancy based in New York that closely tracks cybercriminals involved in SIM-swapping. Working with researchers at security firm Palo Alto Networks, Nixon has been tracking individual members of LAPSUS$ prior to their forming the group, and says the social engineering techniques adopted by the group have long been abused to target employees and contractors working for the major mobile phone companies.

“LAPSUS$ may be the first to make it extremely obvious to the rest of the world that there are a lot of soft targets that are not telcos,” Nixon said. “The world is full of targets that are not used to being targeted this way.”

Microsoft says LAPSUS$ also has been known to gain access to victim organizations by deploying the “Redline” password-stealing malware, searching public code repositories for exposed passwords, and purchasing credentials and session tokens from criminal forums.

That last bit is interesting because Nixon said it appears at least one member of LAPSUS$ also was involved in the intrusion at game maker Electronic Arts (EA) last year, in which extortionists demanded payment in exchange for a promise not to publish 780 GB worth of source code. In an interview with Motherboard, the hackers claimed to have gained access to EA’s data after purchasing authentication cookies for an EA Slack channel from a dark web marketplace called Genesis.

“The hackers said they used the authentication cookies to mimic an already-logged-in EA employee’s account and access EA’s Slack channel and then trick an EA IT support staffer into granting them access to the company’s internal network,” wrote Catalin Cimpanu for The Record.

Why is Nixon convinced LAPSUS$ was behind the EA attack? The “WhiteDoxbin/Oklaqq” identity referenced in the first insider recruitment screenshot above appears to be the group’s leader, and it has used multiple nicknames across many Telegram channels. However, Telegram lumps all aliases for an account into the same Telegram ID number.

Back in May 2021, WhiteDoxbin’s Telegram ID was used to create an account on a Telegram-based service for launching distributed denial-of-service (DDoS) attacks, where they introduced themself as “@breachbase.” News of EA’s hack last year was first posted to the cybercriminal underground by the user “Breachbase” on the English-language hacker community RaidForums, which was recently seized by the FBI.

WHO IS LAPSUS$?

Nixon said WhiteDoxbin — LAPSUS$’s apparent ringleader — is the same individual who last year purchased the Doxbin, a long-running, text-based website where anyone can post the personal information of a target, or find personal data on hundreds of thousands who have already been “doxed.”

Apparently, Doxbin’s new owner failed to keep the site functioning smoothly, because top Doxbin members had no problems telling WhiteDoxbin how unhappy they were with his stewardship.

“He wasn’t a good administrator, and couldn’t keep the website running properly,” Nixon said. “The Doxbin community was pretty upset, so they started targeting him and harassing him.”

Nixon said that in January 2022, WhiteDoxbin reluctantly agreed to relinquish control over Doxbin, selling the forum back to its previous owner at a considerable loss. However, just before giving up the forum, WhiteDoxbin leaked the entire Doxbin data set (including private doxes that had remained unpublished on the site as drafts) to the public via Telegram.

The Doxbin community responded ferociously, posting on WhiteDoxbin perhaps the most thorough dox the community had ever produced, including videos supposedly shot at night outside his home in the United Kingdom.

According to the denizens of Doxbin, WhiteDoxbin started out in the business of buying and selling zero-day vulnerabilities, security flaws in popular software and hardware that even the makers of those products don’t yet know about.

“[He] slowly began making money to further expand his exploit collection,” reads his Doxbin entry. “After a few years his net worth accumulated to well over 300BTC (close to $14 mil).”

WhiteDoxbin’s Breachbase identity on RaidForums at one point in 2020 said they had a budget of $100,000 in bitcoin with which to buy zero-day flaws in Github, Gitlab, Twitter, Snapchat, Cisco VPN, Pulse VPN and other remote access or collaboration tools.

“My budget is $100000 in BTC,” Breachbase told Raidforums in October 2020. “Person who directs me to someone will get $10000 BTC. Reply to thread if you know anyone or anywhere selling this stuff. NOTE: The 0day must have high/critical impact.”

KrebsOnSecurity is not publishing WhiteDoxbin’s alleged real name because he is a minor (currently aged 17), and because this person has not officially been accused of a crime. Also, the Doxbin entry for this individual includes personal information on his family members.

Nixon said that prior to launching LAPSUS$, WhiteDoxbin was a founding member of a cybercriminal group calling itself the “Recursion Team.” According to the group’s now-defunct website, they mostly specialized in SIM swapping targets of interest and participating in “swatting” attacks, wherein fake bomb threats, hostage situations and other violent scenarios are phoned in to police as part of a scheme to trick them into visiting potentially deadly force on a target’s address.

“The team is made up of Cyber-enthusiasts who major in skills including security penetration, software development, and botting,” reads the now-defunct Recursion Team website. “We plan to have a bright future, and we hope you do too!”

Pavel Vrublevsky, founder of the Russian payment technology firm ChronoPay and the antagonist in my 2014 book “Spam Nation,” was arrested in Moscow this month and charged with fraud. Russian authorities allege Vrublevsky operated several fraudulent SMS-based payment schemes, and facilitated money laundering for Hydra, the largest Russian darknet market. But according to information obtained by KrebsOnSecurity, it is equally likely Vrublevsky was arrested thanks to his propensity for carefully documenting the links between Russia’s state security services and the cybercriminal underground.

An undated photo of Vrublevsky at his ChronoPay office in Moscow.

ChronoPay specializes in providing access to the global credit card networks for “high risk” merchants — businesses involved in selling services online that tend to generate an unusually large number of chargebacks and reports of fraud, and hence have a higher risk of failure.

When I first began writing about Vrublevsky in 2009 as a reporter for The Washington Post, ChronoPay and its sister firm Red & Partners (RNP) were earning millions setting up payment infrastructure for fake antivirus peddlers and spammers pimping male enhancement drugs.

Using the hacker alias “RedEye,” the ChronoPay CEO oversaw a burgeoning pharmacy spam affiliate program called Rx-Promotion, which paid some of Russia’s most talented spammers and virus writers to bombard the world with junk email promoting Rx-Promotion’s pill shops. RedEye also was the administrator of Crutop, a Russian language forum and affiliate program that catered to thousands of adult webmasters.

In 2013, Vrublevsky was sentenced to 2.5 years in a Russian penal colony for convincing one of his top affiliates to launch a distributed denial-of-service (DDoS) attack against a competitor that shut down the ticketing system for the state-owned Aeroflot airline.

Following his release from jail, Vrublevsky began working on a new digital payments platform based in Hong Kong called HPay Ltd (a.k.a. Hong Kong Processing Corporation). HPay appears to have had a great number of clients that were running schemes which bamboozled people with fake lotteries and prize contests.

According to Russian prosecutors, the scam went like this: Consumers would receive an SMS with links to sites that falsely claimed a number of well-known companies were sponsoring drawings and lotteries for people who enrolled or agreed to answer surveys. All who responded were told they were winners, but also that they had to pay a commission to pick up the prize. That scheme allegedly stole 500 million rubles (~ USD $4.5 million) from over 100,000 consumers.

There are scant public records that show a connection between ChronoPay and HPay, apart from the fact that the latter’s website — hpay[.]io — was originally hosted on the same server (185.180.196.74) along with a handful of other domains, including Vrublevsky’s personal website rnp[.]com.

But then earlier this month, KrebsOnSecurity received a large amount of information that was stolen from ChronoPay recently when hackers managed to compromise the company’s Confluence server. Confluence is a web-based corporate wiki platform, and ChronoPay used their Confluence installation to document in exquisite detail how it creatively distributes the risk associated with high-risk processing by routing transactions through a myriad of shell companies and third-party processors.

A Google-translated snippet of the hacked ChronoPay Confluence installation. Click to enlarge.

Incredibly, Vrublevsky himself appears to have used ChronoPay’s Confluence wiki to document his entire 20+ years of personal and professional history in the high-risk payments space, including the company’s most recent forays with HPay. The latest document in the hacked archive is dated April 2021.

These diary entries, interspersed between highly technical how-tos, are all written in Russian and in the third person. But they are unmistakably Vrublevsky’s words: Some of the elaborate stories in the wiki were identical to theories that Vrublevsky himself espoused to me throughout hundreds of hours of phone interviews. Also, in some of the entries the narrator switches from “he” to “I” when describing the actions of Vrublevsky.

Vrublevsky’s memoire/wiki invokes the nicknames and real names of Russian hackers who worked with the protection of corrupt officials in the Russian Federal Security Service (FSB), the successor agency to the Soviet KGB. In several diary entries, Vrublevsky writes about various cybercriminals and Russian law enforcement officials involved in processing credit card payments tied to online gambling sites.

Russian banks are prohibited from processing payments for online gambling, and as a result many online gaming sites catering to Russian speakers have chosen to process credit card payments through Ukrainian financial institutions.

That’s according to Vladislav “BadB” Horohorin, the convicted cybercriminal who shared the ChronoPay Confluence data with KrebsOnSecurity. In February 2017, Horohorin was released after serving four years in a U.S. prison for his role in the 2009 theft of more than $9 million from RBS Worldpay.

Horohorin said Vrublevsky has been using his knowledge of the card processing networks to extort people in the online gambling industry who may run afoul of Russian laws.

“Russia has strict regulations against processing for the gambling business,” Horohorin said. “While Russian banks can’t do it, Ukrainian ones can, so we have Ukrainian banks processing gambling and casinos, which mostly Russian gamblers use. What Pavel does is he blackmails those Ukrainian banks using his connections and knowledge. Some pay, some don’t. But some people are not very tolerant of that kind of abuse.”

A native of Donetsk, Ukraine, Horohorin told KrebsOnSecurity he hacked and shared the ChronoPay Confluence installation because Vrublevsky had threatened a family member. Horohorin believes Vrublevsky secretly operated the “bad bank” channel on Telegram, which calls attention to online gambling operations that are violating Visa and MasterCard regulations (violations that can bring the violator hundreds of thousands of dollars in fines).

“Pavel scrupulously wrote his diary for a long time, and there is a lot of information on the people he knows,” Horohorin told KrebsOnSecurity. “My understanding is he wrote this in order to blackmail people later. There is a lot of interesting stuff, a lot of names and a lot of very intimate info about Russian card processing market, as well as Pavel’s own escapades.”

ChronoPay’s hacked Confluence server contains many diary entries about major players in the Russian online gambling and bookmaking industries.

Among the escapades recounted in the ChronoPay founder’s diaries are multiple stories involving the self-proclaimed “King of Fraud!” Aleksandr “Nastra” Zhukov, a Russian national who ran an advertising fraud network dubbed “Methbot” that stole $7 million from publishers through bots made to look like humans watching videos online.

The journal explains that Zhukov lived with a ChronoPay employee and had a great deal of interaction with ChronoPay’s high-risk department, so much so that Zhukov at one point gave Vrublevsky a $100,000 jeweled watch as a gift. Zukhov was arrested in Bulgaria in 2018 and extradited to the United States. Following a jury trial in New York that ended last year, Zhukov was sentenced to 10 years in prison.

According to the Russian news outlet Kommersant, Vrublevsky and company operated “Inferno Pay,” a payments portal that worked with Hydra, the largest Russian darknet market for illicit goods, including drug trafficking, malware, and counterfeit money and documents.

Inferno Pay, a cryptocurrency and payment API allegedly operated by the ChronoPay CEO.

“The services of Inferno Pay, whose commission came to 30% of the transaction, were actively used by online casinos,” Kommersant wrote on Mar. 12.

The drama surrounding Vrublevsky’s most recent arrest is reminiscent of events leading up to his imprisonment nearly a decade ago, when several years’ worth of ChronoPay internal emails were leaked online.

Kommersant said Russian authorities also searched the dwelling of Dmitry Artimovich, a former ChronoPay director who along with his brother Igor was responsible for running the Festi botnet, the same spam botnet that was used for years to pump out junk emails promoting Vrublevsky’s pharmacy affiliate websites. Festi also was the botnet used in the DDoS attack that sent Vrubelvsky to prison for two years in 2013.

Artimovich says he had a falling out with Vrublevsky roughly five years ago, and he’s been suing the company ever since. In a message to KrebsOnSecurity, Artimovich said while Vrublevsky was involved in a lot of shady activities, he doubts Vrublevksy’s arrest was really about SMS payment scams as the government claims.

“I do not think that it was a reason for his arrest,” Artimovich said. “Our law enforcement usually don’t give a shit about sites like this. And I don’t think that Vrublevsky made much money there. I believe he angered some high-ranking person. Because the scale of the case is much larger than Aeroflot. Police made search of 22 people. Illegal seizure of money, computers.”

The Hydra darknet market. Image: bitcoin.com