The Good, the Bad and the Ugly in Cybersecurity – Week 17

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The Good | U.S. Govt Sends Spyware Abusers, Cybercriminals, and Crypto Launderers to Court

The U.S. government this week took three decisive actions against cyber criminals: a visa ban on thirteen spyware makers and sellers, sanctions against four Iranian nationals for their roles in recent cyberattacks, and an official charge for two cryptomixers.

Following the February announcement to set visa restrictions on commercial spyware developers and vendors, the Department of State has cracked down on the first thirteen individuals and their families. Excluding visa applications in this case effectively bans those who are linked to such operations from entering the U.S. The abuse of spyware has been a rising issue in recent years as adversaries use it to target persons of interest such as journalists, human rights advocates, academics, and government employees.

Two front companies and four individuals were sanctioned by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) for their association to cyber activities supporting the Iranian Islamic Revolutionary Guard Corps Cyber Electronic Command (IRGC-CEC) over the span of five years. Collectively, the identified threat actors have targeted over a dozen U.S. organizations, including the U.S. government and defense contractors through spear phishing and malware attacks, compromising over 200,000 employee accounts.

Responsible for processing more than $2 billion in ill-got funds for various criminal enterprises over nine years, two individuals have been charged by the Department of Justice for money laundering and operating an unlicensed money-transmitting business. Their services ‘Samourai’ and ‘Ricochet’ allowed criminals to sidestep law enforcement and hinder crypto exchanges from tracking the illegal source of the funds. Such services often provide a haven for criminals who require large-scale laundering efforts and evasion from sanctions.

The Bad | Nation-State Actors Breach MITRE Research Center via Ivanti Zero-Days

MITRE Corporation disclosed a breach of their systems this week after threat actors chained two Ivanti zero-day vulnerabilities together in the attack. The breach was discovered in January when suspicious activity was found on MITRE’s unclassified prototyping network, Network Experimentation Research and Virtualization Environment (NERVE). MITRE’s research and development centers employ the nation’s leading scientists and engineers, building digital solutions for military, security, and intelligence organizations across the U.S.

After containing the incident, MITRE stated that affected parties were properly informed and relevant authorities engaged, with current efforts focused on restoring operations. Ongoing investigations show that the core network and partner systems were unaffected by the intrusion.

The threat actors compromised the non-profit’s VPNs by exploiting two Ivanti Connect Secure zero-days: an authentication bypass flaw tracked as CVE-2023-46805 (CVSS 8.2) and CVE-2024-21887 (CVSS 9.1), a command injection flaw. Together, they allowed the attacker to use session hijacking to bypass multi-factor authentication (MFA) measures and move laterally through the network’s VMware infrastructure with an administrative account. Forensics also show the actors employing a combination of webshells and backdoors to establish persistence and harvest credentials.

The breach is suspected to be the work of state-sponsored threat actors and serves as a striking reminder that even cutting edge and highly-funded organizations are not immune from cyber threats. Targets on the level of NERVE, which in this case houses invaluable information on experimental methodologies and technologies, continue to be extremely lucrative for nation-state adversaries looking to either potentially steal or sabotage sensitive resources.

MITRE has released tactics, techniques, and procedures (TTPs) related to the breach in effort to spread lessons learned within the infosec community. CISA has also shared technical details and IoCs in a recent advisory.

Source: MITRE Corporation

The Ugly | GRU-Based APT Exploits Old Windows Flaw with New GooseEgg Tool to Target Government Entities

Despite being patched back in October 2022, a Windows Print Spooler vulnerability tracked as CVE-2022-38028 (CVSS 7.8) has made its way back into headlines this week. This time weaponized by GRU-linked threat group APT28 (aka Forest Blizzard or Strontium), the flaw delivers a previously unknown custom malware dubbed ‘GooseEgg’ to perform a slew of post-compromise activities.

GooseEgg has been leveraged possibly as early as April 2019 and has now been observed in attacks targeting North American, Western European, and Ukrainian governments, non-profit organizations, educational institutions, and transportation entities.

Typically, GooseEgg is deployed with a batch script named either execute.bat and doit.bat, which triggers the executable and sets up persistence in the form of a scheduled task designed to run servtask.bat. The malware tool works by enabling the deployment of a malicious DLL (usually containing wayzgoose) capable of spawning other applications with SYSTEM-level permissions that allow attackers to perform remote code execution (RCE), backdoor installations, and lateral movement.

Source: Microsoft

APT28 is often known to use publicly available exploits alongside this Windows Print Spooler flaw, including CVE-2023-23397 and the PrintNightmare vulnerabilities tracked as CVE-2021-34527 and CVE-2021-1675. Researchers note that APT28 deploys GooseEgg to enable checking exploit success, customer version identification, and privilege escalation – all in support of their main objective to steal credentials and maintain access on the compromised target.

Advanced and well-resourced threat groups like APT28 continually refine their approach, testing new and custom malware and techniques to avoid attribution. CISA has since added CVE-2022-38028 to its KEV catalog and urged federal agencies to identify any systems vulnerable to the flaw and apply the available patch.

Ransomware Evolution | How Cheated Affiliates Are Recycling Victim Data for Profit

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Threat actors consistently alter and develop their schemes in order to further escalate their payoffs. In a new trend, ransomware affiliates are actively re-monetizing stolen data outside of their original RaaS agreements, especially as financial squabbles between threat actors emerge in the ransomware economy. The affiliates in such instances are starting to work with third-parties or external data leak services in order to re-extort victims who have already paid the ransom to the original attackers.

This blog post examines how affiliate attackers are embracing this new third-party extortion method, illustrated most recently by the ostensibly back-to-back cyberattacks on Change Healthcare and the emergence of services like RansomHub and Dispossessor.

ALPHV Exit Scam & Re-Extortion by RansomHub

In February 2024, a subsidiary of healthcare giant UnitedHealth Group (UHG) was forced to take down its IT systems and various services. The root of the disruption was a cyberattack by a BlackCat (aka ALPHV) affiliate on Change Healthcare, a healthcare technology platform used by the subsidiary.

Post-attack, ALPHV ransomware operators reportedly took down their data leak blog, servers, and operation negotiation sites, and failed to pay the affiliate their agreed share of the ransom.

Purportedly, Change Healthcare paid out the $22 million ransom demand, only to be targeted a second time just weeks after recovering from the initial attack. This time around, the ransomware attack was claimed by a threat actor working in conjunction with RansomHub, a new extortion group claiming to hold 4 terabytes of the victim’s sensitive data including personally identifiable information (PII) of active U.S. military personnel, patient records, and payment information.

It is believed that after ALPHV reneged on their payment, the affiliate partnered with RansomHub and re-used the data stolen from the initial attack in order to secure a pay off. At the time of writing, Change Healthcare has been removed from RansomHub’s DLS on April, 20, 2024, presumably due to payment and cooperation with the threat actors.

RansomHub and Change Healthcare Posting
RansomHub and Change Healthcare Posting

RansomHub RaaS

RansomHub emerged in early February 2024 with a simple data leak site (DLS). Their focus mirrors other historically well-known operations such as REvil, ALPHV, and Play with regards to their core values and overall mission statements.

Standard RansomHub ransom note
Standard RansomHub ransom note

RansomHub operates as a ransomware-as-a-service (RaaS), partnering with affiliates that work with a variety of ransomware families, including ALPHV and LockBit. Notably, RansomHub works with other threat actors and groups to republish and rebroadcast the availability of victim data. There are multiple, revolving Telegram groups dedicated to amplifying the reach of RansomHub’s leaks. An example of this is the “R3dd1sh_34_E4gl3_D4t4l34ks” channel (aka Reddish Eagle Dataleaks).

RandomHub archive amplified by R3dd1sh_34_E4gl3_D4t4l34ks
RandomHub archive amplified by R3dd1sh_34_E4gl3_D4t4l34ks

This development means that the data leak sites (DLSs) usually associated with a particular threat actor are no longer the only avenue of exposure for ransomware victims. Downstream amplification of these leaks is now common and generally open to all non-private Telegram or Discord groups.

Interestingly, according to RansomHub’s own “rules”, it does not allow:

  • Affiliates to attack entities in the Commonwealth of Independent States (CIS), Cuba, China, Romania, or North Korea,
  • Re-attacks for targeted companies that have already made payment, nor
  • Attacks against non-profit organizations.
Original RansomHub About Page
Original RansomHub About Page

However, given the current situation faced by Change Healthcare, the second bullet in the list above appears to be a gray area, especially if re-extorting ransomware victims constitutes an attack.

Our research indicates that multiple affiliates are now partnering with RansomHub in an effort to regain profitability following the apparent collapse of ALPHV.

Dispossessor Data Leak Blog

Dispossessor emerged in February of 2024, advertising the availability of previously-leaked data for download and potential sale. These announcements were placed across multiple forums and markets, including BreachForums and XSS.

Dispossessor announcement on Breachforums (LockBit data)
Dispossessor announcement on Breachforums (LockBit data)

The X account @ransomfeednews recently posted regarding this new group, presenting their findings that indicated how Dispossessor “is not ransomware, but a group of scoundrels trying to monetize (on nothing) using the claims of other groups.” The group is also active in Telegram, posting similar announcements across well-trafficked Telegram channels.

Dispossessor initially announced the renewed availability of the data from some 330 LockBit victims. This was claimed to be reposted data from previously available LockBit victims, now hosted on Dispossessor’s network and thus not subject to LockBit’s availability restrictions.

Dispossessor Blog
Dispossessor Blog

Dispossessor appears to be reposting data previously associated with other operations with examples ranging from Cl0p, Hunters International, and 8base. We are aware of at least a dozen victims listed on Dispossessor that have also been previously listed by other groups.

In addition, there are apparent links to other aggregate-style operators like Snatch.

Dispossessor Blog with Snatch links highlighted
Dispossessor Blog with Snatch links highlighted

In many cases, the Dispossessor page links to the Dispossessor-Cloud repository. One victim was originally on CL0P’s data leak site in early 2023. Dispossessor’s data is identical to that hosted in the original CL0P magnet links for this and other victims.

Rabbit Hole Data Leak Site (DLS)

A third emerging service with potential to contribute to the expansion of monetization of previously leaked victim data is Rabbit Hole DLS, first observed on March 13, 2024. In an English translation of the site’s About Page, Rabbit Hole is described as a leaks “blog for small and medium-sized teams that do not have their own website”. The site is currently promoted in forums and dark markets.

Translated Rabbit Hole Blog announcement
Translated Rabbit Hole Blog announcement

Original Postings (RU):
блог для малых и средних команд у которых нет своего сайта

кроличья нора не является рансом группой, это общий блог для малых и средних команд. данный блог создан в целях оказания давления на корпорации, за счет большого количества публикаций разных команд — кроличья нора предлагает вам пристанище, где вы можете опубликовать любую утечку [гос учреждения и больницы являются исключением]

Original Postings (EN):
blog for small and medium-sized teams that do not have their own website

rabbit hole is not a ransom group, it is a general blog for small to medium sized teams. this blog was created in order to put pressure on corporations, due to the large number of publications from different teams – the rabbit hole offers you a haven where you can publish any leak [government institutions and hospitals are an exception]

Once a threat actor creates a Rabbit Hole account, victim leaks can be added, updated, and managed through its web portal. Each account manages their leaks through what is referred to as a ‘cabinet’ within the Rabbit Hole blog interface.

Rabbit Hole Blog Account “Cabinet”
Rabbit Hole Blog Account “Cabinet”

When posting leak data, the user is able to supply information including who they are and who the victim is such as the name of the company, URL, company description, publish date/deadline, any associated images, and additional text to be included with the public leak description upon publication. The download URL for associated leaked data is also supplied via this interface.

New Leak creation on Rabbit Hole Blog
New Leak creation on Rabbit Hole Blog

Once all details have been provided, they are submitted to higher level owners and managers of the Rabbit Hole blog. Moderators are then responsible for the ultimate public posting of the leak. The Rabbit Hole platform, ideal for emerging cybercriminals with little to no infrastructure or resources, could easily accommodate multiple small-time actors looking to monetize the same data leaks. We continue to monitor how this site develops.

Conclusion

As larger, established threat groups fold or re-brand, we can expect to see many affiliates cut out of pending payments. Since threat actors will hold onto exfiltrated data, the likelihood of that data being used to re-extort the victims is high and will continue to grow. While it may seem like common sense not to trust threat actors to hold up their end of a deal, the infosec community may continue to witness the fallout that happens when in-fighting and disagreements happen between cybercriminals as well as threat service providers and their affiliates.

The trust model upon which these RaaS agreements are created does not scale well, as most recently highlighted by security researchers monitoring the relationships between threat actors and affiliates in the ecosystem:

“Additionally, we saw a continuation of long-tailed data exfiltration defaults by threat actors in Q1, i.e., posting of information on a leak site after payment or “hostage trading” with other groups or individuals, which adds further evidence to the file on the lack of benefits to pay for suppressing a data leak or any confidence in a criminal actor keeping their word.”

As the ransomware and extortion landscape evolves, criminals will do what they need to do to protect their investments and paydays. Since affiliates carrying out a ransomware attack hold the actual data, they have the option to go elsewhere to monetize the data to collect payment. Organizations continue to be discouraged by global law enforcement agencies from paying ransoms when dealing with a cyberattack and to file a report with the IC3, contributing to greater cyber resilience to potential attacks.

Indicators

z5jixbfejdu5wtxd2baliu6hwzgcitlspnttr7c2eopl5ccfcjrhkqid[.]onion
ransomxifxwc5eteopdobynonjctkxxvap77yqifu2emfbecgbqdw6qd[.]onion
h6tejafqdkdltppzj7q34enltmfnpxaf7cseslv6djgiukiii573xtid[.]onion

dispossessor[.]com/
dispossessor-cloud[.]com/
205[.]209.102[.]218

tox[:]CE742906B254399832E4ED6EC1DDA50D7942F9A4F3F0FE46C19E1737FF29EF67DDAF3AB87B44
tox[:]36712626ED19B307ECB3E971AFDFAA449607100383DBE4C064CCD5909355D908AECCF6180CDA

actor:DISPOSSESSOR
actor:plzdbmagain1037
actor:ViDoK

Russian FSB Counterintelligence Chief Gets 9 Years in Cybercrime Bribery Scheme

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The head of counterintelligence for a division of the Russian Federal Security Service (FSB) was sentenced last week to nine years in a penal colony for accepting a USD $1.7 million bribe to ignore the activities of a prolific Russian cybercrime group that hacked thousands of e-commerce websites. The protection scheme was exposed in 2022 when Russian authorities arrested six members of the group, which sold millions of stolen payment cards at flashy online shops like Trump’s Dumps.

A now-defunct carding shop that sold stolen credit cards and invoked 45’s likeness and name.

As reported by The Record, a Russian court last week sentenced former FSB officer Grigory Tsaregorodtsev for taking a $1.7 million bribe from a cybercriminal group that was seeking a “roof,” a well-placed, corrupt law enforcement official who could be counted on to both disregard their illegal hacking activities and run interference with authorities in the event of their arrest.

Tsaregorodtsev was head of the counterintelligence department for a division of the FSB based in Perm, Russia. In February 2022, Russian authorities arrested six men in the Perm region accused of selling stolen payment card data. They also seized multiple carding shops run by the gang, including Ferum Shop, Sky-Fraud, and Trump’s Dumps, a popular fraud store that invoked the 45th president’s likeness and promised to “make credit card fraud great again.”

All of the domains seized in that raid were registered by an IT consulting company in Perm called Get-net LLC, which was owned in part by Artem Zaitsev — one of the six men arrested. Zaitsev reportedly was a well-known programmer whose company supplied services and leasing to the local FSB field office.

The message for Trump’s Dumps users left behind by Russian authorities that seized the domain in 2022.

Russian news sites report that Internal Affairs officials with the FSB grew suspicious when Tsaregorodtsev became a little too interested in the case following the hacking group’s arrests. The former FSB agent had reportedly assured the hackers he could have their case transferred and that they would soon be free.

But when that promised freedom didn’t materialize, four the of the defendants pulled the walls down on the scheme and brought down their own roof. The FSB arrested Tsaregorodtsev, and seized $154,000 in cash, 100 gold bars, real estate and expensive cars.

At Tsaregorodtsev’s trial, his lawyers argued that their client wasn’t guilty of bribery per se, but that he did admit to fraud because he was ultimately unable to fully perform the services for which he’d been hired.

The Russian news outlet Kommersant reports that all four of those who cooperated were released with probation or correctional labor. Zaitsev received a sentence of 3.5 years in prison, and defendant Alexander Kovalev got four years.

In 2017, KrebsOnSecurity profiled Trump’s Dumps, and found the contact address listed on the site was tied to an email address used to register more than a dozen domains that were made to look like legitimate Javascript calls many e-commerce sites routinely make to process transactions — such as “js-link[dot]su,” “js-stat[dot]su,” and “js-mod[dot]su.”

Searching on those malicious domains revealed a 2016 report from RiskIQ, which shows the domains featured prominently in a series of hacking campaigns against e-commerce websites. According to RiskIQ, the attacks targeted online stores running outdated and unpatched versions of shopping cart software from Magento, Powerfront and OpenCart.

Those shopping cart flaws allowed the crooks to install “web skimmers,” malicious Javascript used to steal credit card details and other information from payment forms on the checkout pages of vulnerable e-commerce sites. The stolen customer payment card details were then sold on sites like Trump’s Dumps and Sky-Fraud.

PinnacleOne ExecBrief | Aviation Cybersecurity

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Last week, PinnacleOne reviewed escalation dynamics in the Middle East.

This week, we turn our attention to domestic critical infrastructure with a look at recent developments in aviation cybersecurity.

Please subscribe to read future issues — and forward this newsletter to interested colleagues.

Contact us directly with any comments or questions: pinnacleone-info@sentinelone.com

Insight Focus | Aviation Cybersecurity

The aviation sector continues to face a complex and evolving cybersecurity threat landscape with nation-state actors, cybercriminal groups, and hacktivists targeting critical infrastructure. Last week, the FAA issued a ground stop order on Alaska Airlines for one hour due to an “upgrade issue with flight software that calculates weight and balance.” This follows a similar hour-long nationwide ground stop last year caused by a software update at United Airlines, a network-wide outage at WestJet caused by a service provider, and a ransomware breach at Sabre.

Most concerningly, on Friday, the Department of Homeland Security (DHS) published an official notice stating that the Transportation Security Oversight Board (TSOB) has recommended to the Transportation Security Administration (TSA) that a cybersecurity emergency exists, warranting the expedited implementation of critical cyber mitigation measures through emergency regulatory authority.

The TSOB – including the Secretaries of Homeland Security, Transportation, Defense, and the Treasury, the Attorney General, the Director of National Intelligence, and a National Security Council representative — convened a meeting to review TSA’s transportation security plans for cybersecurity in the aviation sector and provide a recommendation regarding TSA’s emergency determination to issue Joint Emergency Amendment (EA) 23-01.

During the classified briefing, the TSOB was presented with sensitive security information and intelligence regarding the severe cyber threat to the aviation transportation system. The board discussed the circumstances leading to TSA’s issuance of Joint EA 23-01, which requires performance-based cybersecurity measures to prevent the disruption and degradation of critical systems. The TSOB’s recommendation endorsed the need for TSA to proceed with these critical mitigation measures on an emergency basis.

This development came in the context of a September 2023 advisory from the Cybersecurity and Infrastructure Security Agency (CISA), which identified indicators of compromise at an Aeronautical Sector organization as early as January 2023. Nation-state advanced persistent threat (APT) actors exploited vulnerabilities in a public-facing application (Zoho ManageEngine ServiceDesk Plus) and a firewall device to gain unauthorized access, establish persistence, and move laterally through the network. CISA warned that “additional APT actors were also observed exploiting CVE-2022-42475 to establish presence on the organization’s firewall device.” APT interest in critical infrastructure means that such exploitation happens on other devices and software, too, not just the Zoho product in this particular alert.

Aviation Cybersecurity Risks

Leaks of intelligence documents in 2023 from Russia indicated a specific interest in targeting operational aviation systems. Further, Chinese threat actors are known to be targeting US critical infrastructure firms (including the aviation sector) given their military doctrine that sees disrupting civilian systems as a means of deterring or coercing US political decision-makers in a time of conflict.

Participants in the USAF Civil Reserve Air Fleet should also expect to be targeted for their role supporting contingency airlift requirements for the Department of Defense, something likely to be activated in a Taiwan crisis situation.

Against this geopolitical backdrop, aviation CISOs face a complex technology and cybersecurity risk environment, resulting from:

  • Growing integration of new tech into legacy systems, including new connectivity interfaces and e-Enabled aircraft;
  • Increasing federal cyber regulations and compliance requirements;
  • Constrained security budgets that limit focus to catastrophic risks and compliance;
  • Security cultures that often silo cyber/IT from the broader organization and create obstacles to effective enterprise engagement and operational collaboration;
  • Tactically oriented people, processes, and tooling aimed at immediate triage, not strategic risk;
  • Complex global supply chains that increase upstream risk exposure; and
  • Increasing third-party risks from the economy-wide move to, and dependency on, cloud-enabled services and the associated shift in risk management responsibilities.

While the geopolitical threats to aviation cybersecurity grow, aviation faces the technical difficulty of defending complex legacy and modern systems. The industry must protect a uniquely broad range of vulnerable elements from its airport and online systems and data to vendor supply chains and airplane electronics. Despite all this, aviation cybersecurity’s resources and incentives lag the threat environment.

Corporate executives must recognize that the aviation industry remains at the frontlines of emerging geopolitical risk, and cybersecurity threats have the potential to cause significant operational, financial, and reputational damage. The TSOB’s recommendation and the CISA advisory underscore the urgency of the situation and the need for high-level, enterprise-wide engagement to address these risks effectively.

Investing in a comprehensive cybersecurity strategy, aligning technical and security stacks, and fostering collaboration between corporate and cybersecurity leadership is essential to mitigate the risk of a catastrophic event. As the DHS notice and CISA advisory demonstrate, the stakes are high, and failure to act decisively could result in severe consequences for the aviation industry and national security.

The aviation sector must consider modern, more expansive risk models to navigate a strategic environment at the nexus of emerging cyber and geopolitical threats. Even when the risks are clear and the gaps manifest, tight budgets and other business priorities can get in the way of building an effective security organization. This requires high-level, executive engagement across the enterprise to help leadership understand how these risks impact operational reliability, customer relations, corporate liability, shareholder value, passenger safety, and national security.

The combination of legacy IT/OT with new connectivity interfaces, sprawling third-party dependencies and digital supply chains, strained corporate balance sheets and infosec budgets, increasing regulatory mandates, highly visible industry stumbles, and aggressive nation-state threats indicate major turbulence ahead.

The Good, the Bad and the Ugly in Cybersecurity – Week 16

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The Good | DoJ Indicts Cryptojacking Criminal and Botnet Operator Supporting Ransomware Actors

The DoJ doled out two indictments this week: the first announcing the arrest of Charles O. Parks III for his role in an elaborate cryptojacking scheme, the second, charging Alexander Lefterov, owner and operator of a major botnet.

Parks was charged with wire fraud, money laundering, and illegal transactions, tallying up to a maximum of 30 years in prison. According to the DoJ, the basis of Parks’ scheme was renting $3.5 million worth of cloud servers through a number of fake LLCs in order to mine nearly $1 million in cryptocurrency.

After tricking the cloud service providers (CSPs) into escalating his privileges, Parks was given access to services equipped with powerful graphics cards that were then used to mine Monero, Litecoin, and Ether. The mined funds were laundered through purchasing NFTs and converting them through traditional banks and various crypto exchanges to fund a lavish lifestyle.

Lefterov was indicted by a federal grand jury for aggravated identity theft, computer fraud, and conspiracy to commit wire fraud. Through the large-scale botnet he maintained, the Moldovan national and his associates have been linked to thousands of compromised computers across the U.S.

Source: FBI

Using credentials harvested from the infected computers, Lefterov and his co-conspirators targeted victims’ financial accounts across banking, payment processing, and retail platforms to steal money. In tandem, Lefterov allegedly leased his botnet to other cybercriminals for ransomware distribution, later receiving a share of the profits from successful attacks.

Following both of these indictments, U.S. law enforcement reiterates their commitment to cyber defense, stating that the FBI and its partners will continue to investigate and pursue those involved in malicious activities both domestically and internationally.

The Bad | Researchers Link Russian-Based Sandworm APT to Attacks on Water Supply Systems

GRU-linked APT known as Sandworm has recently taken a behind-the-scenes approach, conducting covert attacks through various online personas and posing as hacktivist groups to mask their activities. In a new report, cybersecurity researchers identified Sandworm’s presence in at least three Telegram channels created to conduct disruptive operations and amplify pro-Russian narratives.

Sandworm has operated since 2009 under Unit 74455 of the Main Intelligence Directorate of the Russian Federation (GRU). Known to employ adaptive and diverse methods for initial access and exploit supply chain vulnerabilities, Sandworm is thought by researchers to be one of Russia’s foremost “cyber sabotage units” as well as a “formidable” threat globally.

Most recently, Sandworm has begun using online personas to execute disruptive operations and enhance the image of the GRU’s cyber capabilities. The report tracks the APT groups’ activity across three Telegram channels: XakNet Team, CyberArmyofRussia_Reborn, and Solntsepek. While most of the activity centers around targeting Ukrainian entities, one of the channels this week claimed attacks on critical water supply centers in the U.S. and Poland, and a hydroelectric facility in France. The posted videos showed fake images of attackers manipulating the controls of water suppliers in Texas.

While Sandworm’s focus has shifted towards espionage and influence operations, it continues to conduct disruptive attacks, targeting electoral systems, conducting intelligence gathering, stealing credentials, and retaliating against perceived adversaries. Cyber defenders continue to warn of potential interference in upcoming national elections and political events across the world, with Ukraine remaining a primary target amid ongoing conflict.

The Ugly | Suspected Nation-State Actors Exploit Zero-Day Flaw in Palo Alto Network Firewalls

Over the weekend, state-sponsored threat actors were suspected of exploiting a zero-day vulnerability in Palo Alto Networks’ PAN-OS firewall software. Though the vulnerability was quickly disclosed and patched by the Californian cybersecurity company, exploit code has since emerged this week and is already being used in attacks. Despite earlier mitigations provided during initial discovery, Palo Alto Networks is now urging users to upgrade their software immediately as the most reliable solution.

Tracked as CVE-2024-3400, the maximum severity flaw enables unauthenticated remote code execution (RCE) via command injection in low-complexity attacks that do not require user interaction. It affects PAN-OS 10.2, PAN-OS 11.0, and PAN-OS 11.1 firewalls configured with GlobalProtect, both gateway or portal. Palo Alto Networks’ advisory confirms that Cloud NGFW, Panorama appliances, and Prisma Access are not impacted by this vulnerability.

Researchers that initially detected the flaw found that the threat actor was focused on exporting configuration data from compromised devices before leveraging them to move laterally into victim organizations. Noting the level of tradecraft and speed of the attacks, the report suggests that the threat actor is highly capable with a clear playbook – indications of a state-backed attack. Along with warnings to secure vulnerable devices, CISA has added the vulnerability to its Known Exploited Vulnerabilities catalog.

Malware workflow (Source: Volexity)

Internet-connected network devices are often running on outdated, unpatched firmware which makes them vulnerable to exploitation. This, along with the key role they play in network infrastructure, means such devices are considered low-hanging fruit to attackers looking for a way in. To mitigate risks, companies should prioritize regular patches, enforce robust access controls, and practice network segmentation to safeguard their networks against intrusion.

Insuring Cyber Health | Chubb’s Insight via SentinelOne Telemetry

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In an expanding collaboration between Chubb, one of the largest publicly traded property and casualty insurance companies, and SentinelOne, a cybersecurity leader, clients of SentinelOne who are also Chubb policyholders can now share their enterprise cyber health assessment data with Chubb. This facilitates a more efficient and precise underwriting process.

With the increasing emphasis on cybersecurity investment, insurance carriers are seeking greater transparency into their insureds’ cybersecurity health. The collaboration not only offers policyholders streamlined access to SentinelOne’s cybersecurity solutions, but also enhances transparency into policyholders’ cyber health investments through SentinelOne’s Vital Signs Report.

This post captures a Q&A between Craig Guiliano, SVP of Threat Intelligence and Policyholder Services at Chubb, and Bridget Mead, Senior Manager of IR Cyber Risk at SentinelOne, as they address some frequently asked questions about the Vital Signs Report.

Q: What is the Vital Signs Report?

Chubb/Guiliano: The Vital Signs Report (VSR) is an assessment of our policyholders’ cybersecurity posture. This report is going to be a game changer for not only how we, as the carrier, assess our individual policyholder’s cybersecurity health, but for our ability to assess our portfolio exposure as one of the world’s largest insurance companies. Our underwriters are quickly moving away from checkboxes on a questionnaire and moving towards data-driven policy renewal decisions.

SentinelOne/Mead: The VSR is based on a collection of internal signals that we mapped to the Center for Internet Security’s (CIS) Critical Security Controls (CIS Controls) CIS18 framework. We make the report available to all SentinelOne clients at no charge. It displays the strength of a client’s digital environment in areas important to cyber security and the cyber insurance underwriting process. The graphic below shows the major categories included.

Q: How do clients access this report?

SentinelOne/Mead: We’ve made it easy for Chubb policyholders to share this report with Chubb. It’s just a few clicks away. Clients can access the VSR report by going to the Singularity Marketplace page and selecting the Cyber Insurance menu item. From the Cyber Insurance menu, they can select Chubb and consent to the sharing via an End-User License Agreement (EULA). Chubb will be notified on their end that the report has been shared.

Chubb/Guiliano: Once we receive the VSR on our end, our policyholders will be able to view the report with their insurance brokers and Chubb underwriters. We’re expecting more transparent and robust conversations around loss control strategies with our policyholders that share this data with us. In addition, participating policyholders may enjoy incentivized policy pricing, subject to applicable insurance laws and regulations, and more efficient underwriting.

Q: What happens after the SentinelOne client clicks through the EULA?

SentinelOne/Mead: From a technical perspective, once the SentinelOne client does the EULA click through, the VSR examines the client’s SentinelOne console, collects the appropriate data signals, and populates the report.

Chubb/Guiliano: The VSR will be available to view by Chubb in near real-time, allowing efficient and timely feedback to policyholders, brokers, and underwriters. Chubb and SentinelOne have also worked to minimize  the sensitivity of the data being shared with Chubb. We omit any sensitive information, including IP addresses associated with identified vulnerabilities.

Q: How can the VSR help organizations with risk transfer?

Chubb/Guiliano: Traditionally, our underwriters use a series of questions and attack surface information to evaluate a policyholder’s risk. They might also pull historical data from claims that the policyholder has submitted. However, this kind of risk assessment doesn’t give us the full picture and could include false positives. The VSR provides a clearer and more accurate and efficient mechanism for our policyholder’s Security Teams to communicate information and controls to our underwriting teams.

The report will reduce the time and overhead that our policyholder’s spend. Additionally, it gives the policyholder a chance to think critically about their cybersecurity through access to Chubb’s expertise on risk of loss indicators, such as known vulnerabilities and common attack vectors – expertise that is based on 20+ years of actual loss data.

SentinelOne/Mead: The VSR helps organizations with their risk transfer by bringing visibility to their telemetry. SentinelOne has configured and crafted the VSR to identify vulnerabilities, configurations, and asset management controls with Chubb’s review to help policyholders proactively identify exposures. The information provided by the VSR will enable the policyholders to remedy elements that may need improvement, enhance their cybersecurity posture, and ultimately lower risk profiles. The VSR allows policyholders to discuss renewals more confidently with Chubb and brings more transparency to those conversations.

Q: What benefits may accrue from participating in the VSR Program?

SentinelOne/Mead: From a technical perspective, the VSR is an accurate and efficient way to assess a company’s cyber security posture. Current SentinelOne clients can look at the VSR and craft clear action items to enhance their use of our tools.

Chubb/Guiliano: Any benefit to our policyholder’s risk profile is a benefit to Chubb at-large and we’re eager to see our policyholders develop greater insight into their cyber risk profile and thus gain more informed negotiating power within the cyber insurance marketplace and possible premium savings.

Learn More

On May 2, 2024 at 1:00PM ET, join SentinelOne, Chubb, Aon, and CyberAcuView for a webinar discussion on data-driven underwriting. Panelists will discuss how data has transformed underwriting and insurability assessments as businesses work with their carriers and brokers to improve their risk profiles.

Data Sharing in Cyber Insurance
Having the right telemetry streamlines underwriting and renewals, leading to benefits for the policyholders.

Register for the Webinar

Chubb Disclosure: Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at www.chubb.com. Insurance provided by ACE American Insurance Company and its U.S. based Chubb underwriting company affiliates. All products may not be available in all states. This material contains product summaries only. Coverage is subject to the language of the policies as actually issued. Surplus lines insurance sold only through licensed surplus lines producers. The material presented herein is advisory in nature and is offered as a resource to be used together with your professional insurance advisors in maintaining a loss prevention program. It is not intended as a substitute for legal, insurance, or other professional advice, but rather is presented for general information only. You should consult knowledgeable legal counsel or other knowledgeable experts as to any legal or technical questions you may have. Chubb, 202 Hall’s Mill Road, Whitehouse Station, NJ 08889-1600

PinnacleOne ExecBrief | Navigating International Conflict and Escalation Dynamics

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Last week, PinnacleOne detailed how firms can navigate the era of AI in cybersecurity and emerging tools to keep pace with advancing threats.

This week, we focus on recent escalation dynamics in the ongoing conflict in the Middle East.

Please subscribe to read future issues — and forward this newsletter to interested colleagues.

Contact us directly with any comments or questions: pinnacleone-info@sentinelone.com

Insight Focus | Navigating International Conflict and Escalation Dynamics

Summary of Recent Events

Conflict between Israel and Iran simmered for decades before the most recent spike in tensions. The proximate cause for Iran’s assault on Israel this weekend was the result of that country violating well-established norms. Israel bombed an Iranian diplomatic facility adjacent to the main embassy in Syria killing senior Iranian generals. Embassies and their compounds are considered the sovereign land of the country that they represent – in the U.S., law enforcement agencies (like local police) are prohibited from stepping foot within their walls.

Israel’s decision to strike (without prior notice to the U.S.) Iran’s diplomatic facilities in Syria to kill multiple important Iranian military officers crossed that established red line. In response, Iran crossed a line in its relationship with Israel not seen in the last four decades. Missiles and swarms of drones from Iraq, Yemen, Syria, and Iran attacked Israel over the weekend.

The Iranian attack echoes the combined drone, cruise missile, and ballistic missile barrages that Russia uses against Ukraine. The attack even used the same Iranian drones and missiles. An Israeli military spokesman reported that the weekend attack involved more than 170 drones, 30 cruise missiles, and at least 110 ballistic missiles.

However, U.S. officials reported that about half of these ballistic missiles were successfully intercepted (by combined U.S., Israeli, French, British, and even Jordanian systems), and most of the remaining failed to launch or crashed – only a handful reached their targets, causing mostly cosmetic damage to Israeli military bases. This failure may be attributed to a combination of joint air defense systems, which were prepositioned in theater given strong intelligence on the telegraphed Iranian attack.

Iran’s April 13 barrage was larger than any single similar Russian strike on Ukraine, but the tactic was similar. Source: The Institute for the Study of War and the Critical Threats Project

While a bit of a sideshow, the night of the attack an Iranian affiliated hacking group known as the “CyberAv3ngers” claimed to have disrupted power infrastructure in Tel Aviv. While this was quickly disputed and no evidence of such a disruption materialized, a number of high profile accounts on X amplified the claims, which served to inject uncertainty into the already unsettled information environment.

It should be noted that the U.S. and Israeli governments last year attributed to the IRGC-affiliated CyberAv3ngers persona compromises of Unitronics Vision Series programmable logic controls used in water and wastewater and other industries. While no critical infrastructure was compromised in this weekend’s attack, that shouldn’t induce false confidence that Iranian threat actors lack the intent or capability to do so in the future.

U.S. Urges Restraint

The U.S. is reportedly urging Israel to not respond in-kind and has stated that the US military would not support offensive operations against Iranian territory. Analysts point to the defensibility, and frankly – widely telegraphed response that Iran’s assault constituted – as reason to not escalate further. Iran’s attacks were aimed at Israeli government facilities, overnight and on a weekend, to minimize the potential for significant casualties. Multiple U.S. and British assets engaged incoming Iranian missiles and drones, alongside Israeli defensive equipment. On the whole, Iran’s actions could have been more damaging and more deadly. After concluding their attacks, Iran’s mission to the United Nations stated that the matter had been resolved.

Domestic Politics and Escalation Pathways

Unfortunately, domestic politics in Israel offer potential incentives for escalation. The current Prime Minister Benjamin Netanyahu is unpopular and, before the Hamas attacks that led to the current conflict, was facing mass protests, government resignations, and opposition by other political parties. Owing to ongoing legal issues and based on his past strategies to benefit politically from conflict with Hamas, the current PM may decide that escalating further with Iran is likely to extend his time in power. Opposition politicians are calling for early elections in the fall of this year as the governing coalition is falling apart.

Netanyahu has strong incentives to hold onto power as long as possible, however. He is the defendant in an ongoing, long-delayed, and widespread corruption case. The current conflict has slowed down the prosecution. Netanyahu hopes that he cannot be convicted or sentenced while he is still in office. Extending the war and escalating with Iran into protracted conflict may be in his political interest. However, as the Israeli War Cabinet meets to deliberate on a response, Netanyahu is now facing intense pressure by G7 leaders to refrain or tightly calibrate any reaction, warning publicly that it could provoke an “uncontrollable regional escalation” and likely privately threatening to withhold financial and political support.

Israeli sources told CNN that plans to conduct a ground offensive in Rafah this week are on hold pending a decision on Iran: “Among the military options that are being considered, the war cabinet is considering an attack on an Iranian facility that would send a message, but would avoid causing casualties, one Israeli official said.”

Security Posture Recommendations

There are two key scenarios enterprises need to consider: 1) de-escalation to status quo ante and 2) tit-for-tat escalation.

In the first scenario, executives should maintain a heightened state of alert, with a tight loop between risk professionals and organization leaders in the region. In particular, executives should know that staff in Israel are well-acquainted with the realities of war. Many participated in mandatory military service in their youth and some may have been recently deployed for operations in Gaza. As a result, local staff are best equipped to determine their own safety protocols.

  • During the coming weeks, the company should exercise work from home flexibility as requested by employees.
  • Non-Israeli citizens in the country should be afforded the opportunity to leave if they have not already been offered such accommodations.
  • The company should closely monitor Israel’s announcements and changes in diplomatic security posture.

In the second scenario, the prospects for a more intense and destructive regional conflict (e.g., involving direct and large-scale Hezbollah-IDF engagements) become a primary concern. To prepare for this, executives with staff and/or business interests in the region should:

  • Expect significant disruptions to their workforce (e.g., call-up, family support, loss of life) and in-country operations (e.g., cascading impacts from attacks on Israeli infrastructure).
  • Re-examine business continuity plans and crisis response playbooks.
  • Prepare for large commercial spillovers to regional trade and energy markets.

Our current assessment is that the former scenario is more likely than the latter, but prudent executives should ask their teams: What is the plan if the situation deteriorates?

S Ventures Invests in Guardz to Revolutionize Cybersecurity for SMBs

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We are thrilled to announce our latest S Ventures investment in Guardz, a unified cybersecurity platform built to empower MSPs to secure and insure small to medium-sized businesses (SMBs).

A Modern Approach to Cybersecurity for SMBs

SMBs today face a unique set of challenges when it comes to protecting against the evolving cybersecurity threat landscape. With cloud and SaaS adoption, SMBs’ IT infrastructures are becoming increasingly complex to manage. This is coupled with limited budgets and staff, making it difficult for SMBs to acquire and deploy best-in-class cybersecurity solutions. With 88% of the SMB market turning to Managed Service Providers (MSPs) for cybersecurity protection, there is a critical need to build a scalable, easy-to-use cybersecurity platform that is specifically tailored to the needs of MSPs and their SMB customers.

In comes Guardz – addressing this gap head-on and developing a modern approach for SMB cybersecurity. The Guardz platform combines a robust cybersecurity technology and deep insurance expertise that ensures MSPs and their SMB customers can proactively safeguard their digital assets against a myriad of cyber threats, mitigate cybersecurity risks, and prevent the next cybersecurity attack.

“Guardz offers a modern approach to protect the underserved SMB market, developing a  unified cybersecurity solution that is built for MSPs from day one. This investment underscores SentinelOne’s unwavering commitment to pioneering cybersecurity solutions and amplifies our partner-first philosophy.”

Ken Marks, Vice President, Worldwide Channels & MSSP

The Guardz platform is uniquely designed specifically for MSPs protecting their SMB customers. Instead of offering traditional point solutions that are hard to manage and deploy, Guardz offers a unified SaaS-based multi-tenant platform that integrates, collects, analyzes, and provides insights on top of a variety of security tools, ranging from email, endpoint, identity, browser filtering, cloud security and awareness and training programs.

Purpose-Built, Proactive Cybersecurity Supporting SMB Customers

With 43% of cyber attacks targeting SMBs and 61% of SMBs failing to get adequate cybersecurity insurance, the demand for a new approach specifically tailored to the needs of SMBs is stronger than ever. As a result, there is an increasing number of MSPs turning to provide cybersecurity solutions for their SMB customers. Cybersecurity spending for SMBs is going to reach $109B in 2026, accounting for 60% of the total spending on cyber security worldwide.

Powered by AI, Guardz is equipped with automated detection and response capabilities that enable MSPs to take a proactive approach to securing SMBs’ digital assets across emails, devices, data, and cloud applications. It is a cost-effective solution, offering full-stack cybersecurity from a single pane of glass.

With a low-touch, self-serve model, MSPs can now easily onboard their end users and attract new customers by leveraging the Guardz’s efficient prospecting capabilities, accurate reporting, and complete coverage insurance.

Why We Invested in Guardz

From day one of its inception, SentinelOne recognized the importance of supporting SMBs and our partners in their quest for cybersecurity resilience. Our investment in Guardz reflects our dedication to always being partner-first. By aligning with Guardz, we’re not only investing in a company, we’re championing a safer digital ecosystem for SMBs worldwide. Guardz’s market approach resonates with our vision of democratizing access to cutting-edge cybersecurity technologies, ensuring businesses of all sizes can defend themselves with the same level of sophistication and efficacy as larger enterprises.

Led by an experienced team with a track record building and scaling businesses for SMBs and MSPs, Guardz is well poised to set a new standard for SMB cybersecurity and we at S Ventures are excited to back such an important mission. As we embark on this journey together, our focus remains steadfast on innovating, empowering, and protecting businesses worldwide. Together, we look forward to a future where every SMB can operate with confidence.

S Ventures
Investing in the next generation of category-defining security and data companies.

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Crickets from Chirp Systems in Smart Lock Key Leak

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The U.S. government is warning that “smart locks” securing entry to an estimated 50,000 dwellings nationwide contain hard-coded credentials that can be used to remotely open any of the locks. The lock’s maker Chirp Systems remains unresponsive, even though it was first notified about the critical weakness in March 2021. Meanwhile, Chirp’s parent company, RealPage, Inc., is being sued by multiple U.S. states for allegedly colluding with landlords to illegally raise rents.

On March 7, 2024, the U.S. Cybersecurity & Infrastructure Security Agency (CISA) warned about a remotely exploitable vulnerability with “low attack complexity” in Chirp Systems smart locks.

“Chirp Access improperly stores credentials within its source code, potentially exposing sensitive information to unauthorized access,” CISA’s alert warned, assigning the bug a CVSS (badness) rating of 9.1 (out of a possible 10). “Chirp Systems has not responded to requests to work with CISA to mitigate this vulnerability.”

Matt Brown, the researcher CISA credits with reporting the flaw, is a senior systems development engineer at Amazon Web Services. Brown said he discovered the weakness and reported it to Chirp in March 2021, after the company that manages his apartment building started using Chirp smart locks and told everyone to install Chirp’s app to get in and out of their apartments.

“I use Android, which has a pretty simple workflow for downloading and decompiling the APK apps,” Brown told KrebsOnSecurity. “Given that I am pretty picky about what I trust on my devices, I downloaded Chirp and after decompiling, found that they were storing passwords and private key strings in a file.”

Using those hard-coded credentials, Brown found an attacker could then connect to an application programming interface (API) that Chirp uses which is managed by smart lock vendor August.com, and use that to enumerate and remotely lock or unlock any door in any building that uses the technology.

Brown said when he complained to his leasing office, they sold him a small $50 key fob that uses Near-Field Communications (NFC) to toggle the lock when he brings the fob close to his front door. But he said the fob doesn’t eliminate the ability for anyone to remotely unlock his front door using the exposed credentials and the Chirp mobile app.

A smart lock enabled with Chirp. Image: Camdenliving.com

Also, the fobs pass the credentials to his front door over the air in plain text, meaning someone could clone the fob just by bumping against him with a smartphone app made to read and write NFC tags.

Neither August nor Chirp Systems responded to requests for comment. It’s unclear exactly how many apartments and other residences are using the vulnerable Chirp locks, but multiple articles about the company from 2020 state that approximately 50,000 units use Chirp smart locks with August’s API.

Roughly a year before Brown reported the flaw to Chirp Systems, the company was bought by RealPage, a firm founded in 1998 as a developer of multifamily property management and data analytics software. In 2021, RealPage was acquired by the private equity giant Thoma Bravo.

Brown said the exposure he found in Chirp’s products is “an obvious flaw that is super easy to fix.”

“It’s just a matter of them being motivated to do it,” he said. “But they’re part of a private equity company now, so they’re not answerable to anybody. It’s too bad, because it’s not like residents of [the affected] properties have another choice. It’s either agree to use the app or move.”

In October 2022, an investigation by ProPublica examined RealPage’s dominance in the rent-setting software market, and that it found “uses a mysterious algorithm to help landlords push the highest possible rents on tenants.”

“For tenants, the system upends the practice of negotiating with apartment building staff,” ProPublica found. “RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money. One of the algorithm’s developers told ProPublica that leasing agents had ‘too much empathy’ compared to computer generated pricing.”

Last year, the U.S. Department of Justice threw its weight behind a massive lawsuit filed by dozens of tenants who are accusing the $9 billion apartment software company of helping landlords collude to inflate rents.

In February 2024, attorneys general for Arizona and the District of Columbia sued RealPage, alleging RealPage’s software helped create a rental monopoly.

Who Stole 3.6M Tax Records from South Carolina?

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For nearly a dozen years, residents of South Carolina have been kept in the dark by state and federal investigators over who was responsible for hacking into the state’s revenue department in 2012 and stealing tax and bank account information for 3.6 million people. The answer may no longer be a mystery: KrebsOnSecurity found compelling clues suggesting the intrusion was carried out by the same Russian hacking crew that stole of millions of payment card records from big box retailers like Home Depot and Target in the years that followed.

Questions about who stole tax and financial data on roughly three quarters of all South Carolina residents came to the fore last week at the confirmation hearing of Mark Keel, who was appointed in 2011 by Gov. Nikki Haley to head the state’s law enforcement division. If approved, this would be Keel’s third six-year term in that role.

The Associated Press reports that Keel was careful not to release many details about the breach at his hearing, telling lawmakers he knows who did it but that he wasn’t ready to name anyone.

“I think the fact that we didn’t come up with a whole lot of people’s information that got breached is a testament to the work that people have done on this case,” Keel asserted.

A ten-year retrospective published in 2022 by The Post and Courier in Columbia, S.C. said investigators determined the breach began on Aug. 13, 2012, after a state IT contractor clicked a malicious link in an email. State officials said they found out about the hack from federal law enforcement on October 10, 2012.

KrebsOnSecurity examined posts across dozens of cybercrime forums around that time, and found only one instance of someone selling large volumes of tax data in the year surrounding the breach date.

On Oct. 7, 2012 — three days before South Carolina officials say they first learned of the intrusion — a notorious cybercriminal who goes by the handle “Rescator” advertised the sale of “a database of the tax department of one of the states.”

“Bank account information, SSN and all other information,” Rescator’s sales thread on the Russian-language crime forum Embargo read. “If you purchase the entire database, I will give you access to it.”

A week later, Rescator posted a similar offer on the exclusive Russian forum Mazafaka, saying he was selling information from a U.S. state tax database, without naming the state. Rescator said the data exposed included Social Security Number (SSN), employer, name, address, phone, taxable income, tax refund amount, and bank account number.

“There is a lot of information, I am ready to sell the entire database, with access to the database, and in parts,” Rescator told Mazafaka members. “There is also information on corporate taxpayers.”

On Oct. 26, 2012, the state announced the breach publicly. State officials said they were working with investigators from the U.S. Secret Service and digital forensics experts from Mandiant, which produced an incident report (PDF) that was later published by South Carolina Dept. of Revenue. KrebsOnSecurity sought comment from the Secret Service, South Carolina prosecutors, and Mr. Keel’s office. This story will be updated if any of them respond.

On Nov. 18, 2012, Rescator told fellow denizens of the forum Verified he was selling a database of 65,000 records with bank account information from several smaller, regional financial institutions. Rescator’s sales thread on Verified listed more than a dozen database fields, including account number, name, address, phone, tax ID, date of birth, employer and occupation.

Asked to provide more context about the database for sale, Rescator told forum members the database included financial records related to tax filings of a U.S. state. Rescator added that there was a second database of around 80,000 corporations that included social security numbers, names and addresses, but no financial information.

The AP says South Carolina paid $12 million to Experian for identity theft protection and credit monitoring for its residents after the breach.

“At the time, it was one of the largest breaches in U.S. history but has since been surpassed greatly by hacks to Equifax, Yahoo, Home Depot, Target and PlayStation,” the AP’s Jeffrey Collins wrote.

As it happens, Rescator’s criminal hacking crew was directly responsible for the 2013 breach at Target and the 2014 hack of Home Depot. The Target intrusion saw Rescator’s cybercrime shops selling roughly 40 million stolen payment cards, and 56 million cards from Home Depot customers.

Who is Rescator? On Dec. 14, 2023, KrebsOnSecurity published the results of a 10-year investigation into the identity of Rescator, a.k.a. Mikhail Borisovich Shefel, a 36-year-old who lives in Moscow and who recently changed his last name to Lenin.

Mr. Keel’s assertion that somehow the efforts of South Carolina officials following the breach may have lessened its impact on citizens seems unlikely. The stolen tax and financial data appears to have been sold openly on cybercrime forums by one of the Russian underground’s most aggressive and successful hacking crews.

While there are no indications from reviewing forum posts that Rescator ever sold the data, his sales threads came at a time when the incidence of tax refund fraud was skyrocketing.

Tax-related identity theft occurs when someone uses a stolen identity and SSN to file a tax return in that person’s name claiming a fraudulent refund. Victims usually first learn of the crime after having their returns rejected because scammers beat them to it. Even those who are not required to file a return can be victims of refund fraud, as can those who are not actually owed a refund from the U.S. Internal Revenue Service (IRS).

According to a 2013 report from the Treasury Inspector General’s office, the IRS issued nearly $4 billion in bogus tax refunds in 2012, and more than $5.8 billion in 2013. The money largely was sent to people who stole SSNs and other information on U.S. citizens, and then filed fraudulent tax returns on those individuals claiming a large refund but at a different address.

It remains unclear why Shefel has never been officially implicated in the breaches at Target, Home Depot, or in South Carolina. It may be that Shefel has been indicted, and that those indictments remain sealed for some reason. Perhaps prosecutors were hoping Shefel would decide to leave Russia, at which point it would be easier to apprehend him if he believed no one was looking for him.

But all signs are that Shefel is deeply rooted in Russia, and has no plans to leave. In January 2024, authorities in Australia, the United States and the U.K. levied financial sanctions against 33-year-old Russian man Aleksandr Ermakov for allegedly stealing data on 10 million customers of the Australian health insurance giant Medibank.

A week after those sanctions were put in place, KrebsOnSecurity published a deep dive on Ermakov, which found that he co-ran a Moscow-based IT security consulting business along with Mikhail Shefel called Shtazi-IT.

A Google-translated version of Shtazi dot ru. Image: Archive.org.