“BriansClub,” one of the largest underground stores for buying stolen credit card data, has itself been hacked. The data stolen from BriansClub encompasses more than 26 million credit and debit card records taken from hacked online and brick-and-mortar retailers over the past four years, including almost eight million records uploaded to the shop in 2019 alone.

Last month, KrebsOnSecurity was contacted by a source who shared a plain text file containing what was claimed to be the full database of cards for sale both currently and historically through BriansClub[.]at, a thriving fraud bazaar named after this author. Imitating my site, likeness and namesake, BriansClub even dubiously claims a copyright with a reference at the bottom of each page: “© 2019 Crabs on Security.”

Multiple people who reviewed the database shared by my source confirmed that the same credit card records also could be found in a more redacted form simply by searching the BriansClub Web site with a valid, properly-funded account.

All of the card data stolen from BriansClub was shared with multiple sources who work closely with financial institutions to identify and monitor or reissue cards that show up for sale in the cybercrime underground.

The leaked data shows that in 2015, BriansClub added just 1.7 million card records for sale. But business would pick up in each of the years that followed: In 2016, BriansClub uploaded 2.89 million stolen cards; 2017 saw some 4.9 million cards added; 2018 brought in 9.2 million more.

Between January and August 2019 (when this database snapshot was apparently taken), BriansClub added roughly 7.6 million cards.

Most of what’s on offer at BriansClub are “dumps,” strings of ones and zeros that — when encoded onto anything with a magnetic stripe the size of a credit card — can be used by thieves to purchase electronics, gift cards and other high-priced items at big box stores.

As shown in the table below (taken from this story), many federal hacking prosecutions involving stolen credit cards will for sentencing purposes value each stolen card record at $500, which is intended to represent the average loss per compromised cardholder.

STOLEN BACK FAIR AND SQUARE

An extensive analysis of the database indicates BriansClub holds approximately $414 million worth of stolen credit cards for sale, based on the pricing tiers listed on the site. That’s according to an analysis by Flashpoint, a security intelligence firm based in New York City.

Allison Nixon, the company’s director of security research, said the data suggests that between 2015 and August 2019, BriansClub sold roughly 9.1 million stolen credit cards, earning the site $126 million in sales (all sales are transacted in bitcoin).

If we take just the 9.1 million cards that were confirmed sold through BriansClub, we’re talking about more than $4 billion in likely losses at the $500 average loss per card figure from the Justice Department.

Also, it seems likely the total number of stolen credit cards for sale on BriansClub and related sites vastly exceeds the number of criminals who will buy such data. Shame on them for not investing more in marketing!

There’s no easy way to tell how many of the 26 million or so cards for sale at BriansClub are still valid, but the closest approximation of that — how many unsold cards have expiration dates in the future — indicates more than 14 million of them could still be valid.

The archive also reveals the proprietor(s) of BriansClub frequently uploaded new batches of stolen cards — some just a few thousand records, and others tens of thousands.

That’s because like many other carding sites, BriansClub mostly resells cards stolen by other cybercriminals — known as resellers or affiliates — who earn a percentage from each sale. It’s not yet clear how that revenue is shared in this case, but perhaps this information will be revealed in further analysis of the purloined database.

BRIANS CHAT

In a message titled “Your site is hacked,’ KrebsOnSecurity requested comment from BriansClub via the “Support Tickets” page on the carding shop’s site, informing its operators that all of their card data had been shared with the card-issuing banks.

I was surprised and delighted to receive a polite reply a few hours later from the site’s administrator (“admin”):

“No. I’m the real Brian Krebs here

Correct subject would be the data center was hacked.

Will get in touch with you on jabber. Should I mention that all information affected by the data-center breach has been since taken off sales, so no worries about the issuing banks.”

Flashpoint’s Nixon said a spot check comparison between the stolen card database and the card data advertised at BriansClub suggests the administrator is not being truthful in his claims of having removed the leaked stolen card data from his online shop.

The admin hasn’t yet responded to follow-up questions, such as why BriansClub chose to use my name and likeness to peddle millions of stolen credit cards.

Almost certainly, at least part of the appeal is that my surname means “crab” (or cancer), and crab is Russian hacker slang for “carder,” a person who engages in credit card fraud.

HACKING BACK?

Nixon said breaches of criminal website databases often lead not just to prevented cybercrimes, but also to arrests and prosecutions.

“When people talk about ‘hacking back,’ they’re talking about stuff like this,” Nixon said. “As long as our government is hacking into all these foreign government resources, they should be hacking into these carding sites as well. There’s a lot of attention being paid to this data now and people are remediating and working on it.”

By way of example on hacking back, she pointed to the 2016 breach of vDOS — at the time the largest and most powerful service for knocking Web sites offline in large-scale cyberattacks.

Soon after vDOS’s database was stolen and leaked to this author, its two main proprietors were arrested. Also, the database added to evidence of criminal activity for several other individuals who were persons of interest in unrelated cybercrime investigations, Nixon said.

“When vDOS got breached, that basically reopened cases that were cold because [the leak of the vDOS database] supplied the final piece of evidence needed,” she said.

THE TARGET BREACH OF THE UNDERGROUND?

After many hours spent poring over this data, it became clear I needed some perspective on the scope and impact of this breach. As a major event in the cybercrime underground, was it somehow the reverse analog of the Target breach — which negatively impacted tens of millions of consumers and greatly enriched a large number of bad guys? Or was it more prosaic, like a Jimmy Johns-sized debacle?

For that insight, I spoke with Gemini Advisory, a New York-based company that works with financial institutions to monitor dozens of underground markets trafficking in stolen card data.

Andrei Barysevich, co-founder and CEO at Gemini, said the breach at BriansClub is certainly significant, given that Gemini currently tracks a total of 87 million credit and debit card records for sale across the cybercrime underground.

Gemini is monitoring most underground stores that peddle stolen card data — including such heavy hitters as Joker’s Stash, Trump’s Dumps, and BriansDump.

Contrary to popular belief, when these shops sell a stolen credit card record, that record is then removed from the inventory of items for sale. This allows companies like Gemini to determine roughly how many new cards are put up for sale and how many have sold.

Barysevich said the loss of so many valid cards may well impact how other carding stores compete and price their products.

“With over 78% of the illicit trade of stolen cards attributed to only a dozen of dark web markets, a breach of this magnitude will undoubtedly disturb the underground trade in the short term,” he said. “However, since the demand for stolen credit cards is on the rise, other vendors will undoubtedly attempt to capitalize on the disappearance of the top player.”

Liked this story and want to learn more about how carding shops operate? Check out Peek Inside a Professional Carding Shop.

A Slovenian man convicted of authoring the destructive and once-prolific Mariposa botnet and running the infamous Darkode cybercrime forum has been arrested in Germany on request from prosecutors in the United States, who’ve recently re-indicted him on related charges.

The Slovenian Press Agency reported today that German police arrested Matjaž “Iserdo” Škorjanc last week, in response to a U.S.-issued international arrest warrant for his extradition.

In December 2013, a Slovenian court sentenced Škorjanc to four years and ten months in prison for creating the malware that powered the ‘Mariposa‘ botnet. Spanish for “Butterfly,” Mariposa was a potent crime machine first spotted in 2008. Very soon after its inception, Mariposa was estimated to have infected more than 1 million hacked computers — making it one of the largest botnets ever created.

Škorjanc and his hacker handle Iserdo were initially named in a Justice Department indictment from 2011 (PDF) along with two other men who allegedly wrote and sold the Mariposa botnet code. But in June 2019, the DOJ unsealed an updated indictment (PDF) naming Škorjanc, the original two other defendants, and a fourth man (from the United States) in a conspiracy to make and market Mariposa and to run the Darkode crime forum.

More recently, Škorjanc served as chief technology officer at NiceHash, a Slovenian company that lets users sell their computing power to help others mine virtual currencies like bitcoin. In December 2017, approximately USD $52 million worth of bitcoin mysteriously disappeared from the coffers of NiceHash. Slovenian police are reportedly still investigating that incident.

It will be interesting to see what happens with the fourth and sole U.S.-based defendant added in the latest DOJ charges — Thomas K. McCormick, a.k.a “fubar” — allegedly one of the last administrators of Darkode. Prosecutors say McCormick also was a reseller of the Mariposa botnet, the ZeuS banking trojan, and a bot malware he allegedly helped create called “Ngrbot.”

Between 2010 and 2013, Fubar would randomly chat me up on instant messenger apropos of nothing to trade information about the latest goings-on in the malware and cybercrime forum scene.

Fubar frequently knew before anyone else about upcoming improvements to or new features of ZeuS, and discussed at length his interactions with Iserdo/Škorjanc. Every so often, I would reach out to Fubar to see if he could convince one of his forum members to call off an attack against KrebsOnSecurity.com, an activity that had become something of a rite of passage for new Darkode members.

On Dec. 5, 2013, federal investigators visited McCormick at his University of Massachusetts dorm room. According to a memo filed by FBI agents investigating the case, in that interview McCormick acknowledged using the “fubar” identity on Darkode, but said he’d quit the whole forum scene years ago, and that he’d even interned at Microsoft for several summers and at Cisco for one summer.

A subsequent search warrant executed on his dorm room revealed multiple removable drives that held tens of thousands of stolen credit card records. For whatever reason, however, McCormick wasn’t arrested or charged until December 2018.

According to the FBI, back in that December 2013 interview McCormick voluntarily told them a great deal about his various businesses and online personas. He also apparently told investigators he talked with KrebsOnSecurity quite a bit, and that he’d tipped me off to some important developments in the malware scene. For example:

“TM had found the email address of the Spyeye author in an old fake antivirus affiliate program database and that TM was able to find the true name of the Spyeye author from searching online for an individual that used the email address,” the memo states. “TM passed this information on to Brian Krebs.”

Read more of the FBI’s interview with McCormick here (PDF).

News of Škorjanc’s arrest comes amid other cybercrime takedowns in Germany this past week. On Friday, German authorities announced they’d arrested seven people and were investigating six more in connection with the raid of a Dark Web hosting operation that allegedly supported multiple child porn, cybercrime and drug markets with hundreds of servers buried inside a heavily fortified military bunker.

Earlier this month, employees at more than 1,000 companies saw one or two paycheck’s worth of funds deducted from their bank accounts after the CEO of their cloud payroll provider absconded with $35 million in payroll and tax deposits from customers. On Monday, the CEO was arrested and allegedly confessed that the diversion was the last desperate gasp of a financial shell game that earned him $70 million over several years.

Michael T. Mann, the 49-year-old CEO of Clifton Park, NY-based MyPayrollHR, was arrested this week and charged with bank fraud. In court filings, FBI investigators said Mann admitted under questioning that in early September — on the eve of a big payroll day — he diverted to his own bank account some $35 million in funds sent by his clients to cover their employee payroll deposits and tax withholdings.

After that stunt, two different banks that work with Mann’s various companies froze those corporate accounts to keep the funds from being moved or withdrawn. That action set off a chain of events that led another financial institution that helps MyPayrollHR process payments to briefly pull almost $26 million out of checking accounts belonging to employees at more than 1,000 companies that use MyPayrollHR.

At the same time, MyPayrollHR sent a message (see screenshot above) to clients saying it was shutting down and that customers should find alternative methods for paying employees and for processing payroll going forward.

In the criminal complaint against Mann (PDF), a New York FBI agent said the CEO admitted that starting in 2010 or 2011 he began borrowing large sums of money from banks and financing companies under false pretenses.

“While stating that MyPayroll was legitimate, he admitted to creating other companies that had no purpose other than to be used in the fraud; fraudulently representing to banks and financing companies that his fake businesses had certain receivables that they did not have; and obtaining loans and lines of credit by borrowing against these non-existent receivables.”

“Mann estimated that he fraudulently obtained about $70 million that he has not paid back. He claimed that he committed the fraud in response to business and financial pressures, and that he used almost all of the fraudulently obtained funds to sustain certain businesses, and purchase and start new ones. He also admitted to kiting checks between Bank of America and Pioneer [Savings Bank], as part of the fraudulent scheme.”

Check-kiting is the illegal act of writing a check from a bank account without sufficient funds and depositing it into another bank account, explains MagnifyMoney.com. “Then, you withdraw the money from that second account before the original check has been cleared.”

Kiting also is known as taking advantage of the “float,” which is the amount of time between when an individual submits a check as payment and when the individual’s bank is instructed to move the funds from the account.

Magnify Money explains more:

“Say, for example, that you write yourself a check for $500 from checking account A, and deposit that check into checking account B — but the balance in checking account A is only $75. Then, you promptly withdraw the $500 from checking account B. This is check-kiting, a form of check fraud that uses non-existent funds in a checking account or other type of bank account. Some check-kiting schemes use multiple accounts at a single bank, and more complicated schemes involve multiple financial institutions.”

“In a more complex scenario, a person could open checking accounts at bank A and bank B, at first depositing $500 into bank A and nothing in bank B. Then, they could write a check for $10,000 with account A and deposit it into account B. Bank B immediately credits the account, and in the time it might take for bank B to clear the check (generally about three business days), the scammer writes a $10,000 check with bank B, which gets deposited into bank A to cover the first check. This could keep going, with someone writing checks between banks where there’s no actual funds, yet the bank believes the money is real and continues to credit the accounts.”

The government alleges Mann was kiting millions of dollars in checks between his accounts at Bank of American and Pioneer from Aug. 1, 2019 to Aug. 30, 2019.

For more than a decade, MyPayrollHR worked with California-based Cachet Financial Services to process payroll deposits for MyPayrollHR client employees. Every other week, MyPayrollHR’s customers would deposit their payroll funds into a holding account run by Cachet, which would then disburse the payments into MyPayrollHR client employee bank accounts.

But when Mann diverted $26 million in client payroll deposits from Cachet to his account at Pioneer Bank, Cachet’s emptied holding account was debited for the payroll payments. Cachet quickly reversed those deposits, causing one or two pay periods worth of salary to be deducted from bank accounts for employees of companies that used MyPayrollHR.

That action caused so much uproar from affected companies and their employees that Cachet ultimately decided to cancel all of those reversals and absorb that $26 million hit, which it is now trying to recover through the courts.

According to prosecutors in New York, Pioneer was Mann’s largest creditor.

“Mann stated that the payroll issue was precipitated by his decision to route MyPayroll’s clients’ payroll payments to an account at Pioneer instead of directly to Cachet,” wrote FBI Special Agent Matthew J. Wabby. “He did this in order to temporarily reduce the amount of money he owed to Pioneer. When Pioneer froze Mann’s accounts, it’s also (inadvertently) stopped movement of MyPayroll’s clients’ payroll payments to Cachet.”

Approximately $9 million of the $35 million diverted by Mann was supposed to go to accounts at the National Payment Corporation (NatPay) — the Florida-based firm which handles tax withholdings for MyPayrollHR clients. NatPay said its insurance should help cover the losses it incurred when MyPayrollHR’s banks froze the company’s accounts.

Court records indicate Mann hasn’t yet entered a plea, but that he was ordered to be released today under a $200,000 bond secured by a family home and two vehicles. His passport also was seized.

A reader forwarded what he briefly imagined might be a bold, if potentially costly, innovation on the old Nigerian prince scam that asks for help squirreling away millions in unclaimed fortune: It was sent via the U.S. Postal Service, with a postmarked stamp and everything.

In truth these old fashioned “advance fee” or “419” scams predate email and have circulated via postal mail in various forms and countries over the years.

The recent one pictured below asks for help in laundering some $11.6 million from an important dead person that anyway has access to a secret stash of cash. Any suckers who bite are strung along for weeks while imaginary extortionists or crooked employees at these bureaucratic institutions demand licenses, bribes or other payments before disbursing any funds. Those funds never arrive, no matter how much money the sucker gives up.

It’s easy to laugh at this letter, because it’s sometimes funny when scammers try so hard. But then again, maybe the joke’s on us because sending these scams via USPS makes them even more appealing to the people most vulnerable: Older individuals with access to cash but maybe not all their marbles. 

Sure, the lure costs $.55 up front. But a handful of successful responses to thousands of mailers could net fortunes for these guys phishing it old school.

The losses from these types of scams are sometimes hard to track because so many go unreported. But they are often perpetrated by the same people involved in romance scams online and in so-called ‘business email compromise” or BEC fraud, wherein the scammers try to spoof the boss at a major company in a bid to get wire payment for an “urgent” (read: fraudulent) invoice.

These scam letters are sometimes called 419 scams in reference to the penal code for dealing with such crimes in Nigeria, a perennial source of 419 letter schemes. A recent bust of a Nigerian gang targeted by the FBI gives some perspective on the money-making abilities of a $10 million ring that was running these scams all day long.

Reportedly, in the first seven months of 2019 alone the FBI received nearly 14,000 complaints reporting BEC scams with a total loss of around $1.1 billion—a figure that nearly matches losses reported for all of 2018.

Microsoft today issued security updates to plug some 80 security holes in various flavors of its Windows operating systems and related software. The software giant assigned a “critical” rating to almost a quarter of those vulnerabilities, meaning they could be used by malware or miscreants to hijack vulnerable systems with little or no interaction on the part of the user.

Two of the bugs quashed in this month’s patch batch (CVE-2019-1214 and CVE-2019-1215) involve vulnerabilities in all supported versions of Windows that have already been exploited in the wild. Both are known as “privilege escalation” flaws in that they allow an attacker to assume the all-powerful administrator status on a targeted system. Exploits for these types of weaknesses are often deployed along with other attacks that don’t require administrative rights.

September also marks the fourth time this year Microsoft has fixed critical bugs in its Remote Desktop Protocol (RDP) feature, with four critical flaws being patched in the service. According to security vendor Qualys, these Remote Desktop flaws were discovered in a code review by Microsoft, and in order to exploit them an attacker would have to trick a user into connecting to a malicious or hacked RDP server.

Microsoft also fixed another critical vulnerability in the way Windows handles link files ending in “.lnk” that could be used to launch malware on a vulnerable system if a user were to open a removable drive or access a shared folder with a booby-trapped .lnk file on it.

Shortcut files — or those ending in the “.lnk” extension — are Windows files that link easy-to-recognize icons to specific executable programs, and are typically placed on the user’s Desktop or Start Menu. It’s perhaps worth noting that poisoned .lnk files were one of the four known exploits bundled with Stuxnet, a multi-million dollar cyber weapon that American and Israeli intelligence services used to derail Iran’s nuclear enrichment plans roughly a decade ago.

In last month’s Microsoft patch dispatch, I ruefully lamented the utter hose job inflicted on my Windows 10 system by the July round of security updates from Redmond. Many readers responded by saying one or another updates released by Microsoft in August similarly caused reboot loops or issues with Windows repeatedly crashing.

As there do not appear to be any patch-now-or-be-compromised-tomorrow flaws in the September patch rollup, it’s probably safe to say most Windows end-users would benefit from waiting a few days to apply these fixes. 

Very often fixes released on Patch Tuesday have glitches that cause problems for an indeterminate number of Windows systems. When this happens, Microsoft then patches their patches to minimize the same problems for users who haven’t yet applied the updates, but it sometimes takes a few days for Redmond to iron out the kinks.

The trouble is, Windows 10 by default will install patches and reboot your computer whenever it likes. Here’s a tutorial on how to undo that. For all other Windows OS users, if you’d rather be alerted to new updates when they’re available so you can choose when to install them, there’s a setting for that in Windows Update.

Most importantly, please have some kind of system for backing up your files before applying any updates. You can use third-party software to do this, or just rely on the options built into Windows 10. At some level, it doesn’t matter. Just make sure you’re backing up your files, preferably following the 3-2-1 backup rule.

Finally, Adobe fixed two critical bugs in its Flash Player browser plugin, which is bundled in Microsoft’s IE/Edge and Chrome (although now hobbled by default in Chrome). Firefox forces users with the Flash add-on installed to click in order to play Flash content; instructions for disabling or removing Flash from Firefox are here. Adobe will stop supporting Flash at the end of 2020.

As always, if you experience any problems installing any of these patches this month, please feel free to leave a comment about it below; there’s a good chance other readers have experienced the same and may even chime in here with some helpful tips.