The Hackers from China are at it AGAIN!

I've done several posts about Chinese Hackers going after U.S. Government systems. Today, I read about another example of this on Michael Hoffman's DailyTech blog:

The US BIS has been forced to overhaul its PCs by replacing hundreds of the infected systems.

Chinese hackers allegedly targeted computer systems at the Bureau of Industry and Security, a specialized department within the department of commerce dealing with the export of software and technology designed for military and commercial uses. The online thieves were aiming to access computer accounts of federal employees over a span of time that ranges at least several weeks. Even though several accounts were compromised during the attacks, no sensitive data has been stolen.

Post from Michael Hoffman's blog, here.

Hackers from China seems to be a serious issue, here are some previous posts, I've written on this matter:

Rogue Governments, Terrorists and Organized Criminals Raise the ...

How Dangerous is China

How Dangerous is China

David Perera of GovExec.com wrote an interesting piece deducting that Chinese hackers might be more interested in hacking our logistic systems than more classified systems that the military uses.

David Perera writes:

For Americans today, war evokes images of roadside bombs and hidden snipers in the Middle East. But Defense Department planners who are paid to think about future wars worry about the People's Republic of China. Rising powers long have challenged dominant countries for primacy - it's an old story. And now, nobody is more powerful than the United States.

Logistics information literally is the bread and butter of the military. Track the supply lines of materiel and personnel and you'll know where troops are headed. Disrupt that supply line, and you will have created a barrier to getting there quickly. Amateurs study tactics, professionals study logistics, goes the Pentagon cliché. Yet great chunks of logistics information flow across the unclassified Defense Department system, the Nonsecure Internet Protocol Router Network, or NIPRNet. The Pentagon maintains a separate network for secret information, but the NIPRNet is its daily workhorse.

The world's largest network once was one built from flagstone-paved roads extending 53,000 miles in Roman antiquity. The roads were designed as a tool for policing an empire, and also for trade and communications. Unfortunately for the Romans, barbarians found them equally useful for their own purposes - attacking legionnaires - and eventually the Roman Empire was no more.

Full story, here.

Last November, I wrote about, US Military Hacked, Sober Worm Goes Worldwide, What Next?

"The Chinese (who seem to be behind the most recent attack on the military) have been suspected of selling technology (including nuclear) to governments, who might be dangerous to world peace. All one has to do is read the story of AQ Khan, who developed nuclear weapons for Pakistan and admitted selling secrets to North Korea, Libya and Iran. There is a lot of speculation that he obtained a lot of his knowledge from the Chinese, who were caught stealing nuclear secrets from us during the Clinton Administration, Online NewsHour: Spies Among Us -- June 9, 1999."

There is also a lot of other evidence that the Chinese are heavily involved in cyber-espionage activities. The FBI Computer Crime Survey stated that China was responsible for 23.9% of the cyber attacks in their survey.

Of course, the United States is still the number one source, but one has to consider that the internet is heavily censored in China. This would lead a logical person to come to the conclusion that certain activities are being tolerated by those, who censor it.

In fact, some have dubbed it the "Great Firewall of China."

Another factor to consider is organized criminal activity of Chinese origin:

Chinese Criminal Enterprises - US Department of State

One of the activities, they are actively involved in is "illegal immigration," which could provide a conduit for planting spies in the industrial and financial sectors.

Patrick Devenny of FrontPage.com recently wrote a story, where he quoted Sun Tzu from the Art of War:

Foreknowledge cannot be gotten from ghosts and spirits, cannot be had by analogy, cannot be found out by calculation. It must be obtained from people, people who know the conditions of the enemy.

In his article, he writes:

The list of additional recent Chinese espionage cases is long and disturbing. It includes, among others, the theft of Blackhawk helicopter engines and optical devices by a South Korean man arrested last year. A Chinese-American couple in Wisconsin was arrested in 2004 for sending over $500,000 worth of computer parts to the Chinese government that can be used to improve missile guidance systems.

Statements from officials such as Szady hint that cases like these are just a small sample of the overall secret Chinese war against America. Indeed, in the words of one unnamed senior FBI source, “the Chinese are stealing us blind, the 10 year technological advantage we had is vanishing.”

Daily, we read of the threat from Terrorism. While this isn't an issue to be ignored, we can't afford to ignore what seems to be an ongoing and calculated threat from China.

AND there could be more ominous implications. One of the biggest threats today is the possibility of Iran becoming a nuclear power.

Guess who has been providing them with technology that could have stolen from us-China (courtesy of NTI).

Chinese Red Cross Site hacked to steal donations!

Whenever a disaster occurs, there are always dishonest people trying to steal the proceeds of charitable contributions.

This is always sad because it takes away from the people, who are in need.

Heike over at the Dark Visitor is reporting that a Red Cross site has been hacked with the intent of "electronically" removing money intended to help the earthquake victims in China:

Verified by the Ministry of Public Security, a section of the official Red Cross website has been illegally hacked. According to the report, criminal elements gained access to the section of the website that held the special accounts for earthquake disaster relief donations.

An individual named Li Bujiu, had opened four fraudulent bank accounts to steal the funding.

Full story with more details from the Dark Visitor Site (Inside the World of Chinese Hackers), here.

Thus far, we haven't seen the flood of phishing, fake charity websites and the like come about as the result of the earthquake in China, or the cyclone in Myanmar reported in the West? Even this story isn't up on Google News yet.

Reuters did recently report that fraud is occurring inside China as a result of the earthquake disaster:

Police issued a warning after a flurry of text messages hit mobile phones, soliciting disaster assistance in emotional appeals, only asking that funds be deposited in private accounts.

The Reuters story -- which does mention that the Red Cross was shut down because of too many vistors (?) and had a page listing bank accounts to contribute to (??) -- can be seen, here.

The story in Reuters references the site, http://www.crcf.org.cn, which as of this writing appears to be up and running.

Not sure why more news on disaster fraud from China isn't being seen? It could be attributed to the "Great Firewall of China," or the fact that hacking and committing fraud carries far more serious consequences in China than it does here in the West.

Generally, if caught, offenses like hacking can mean the death penalty in China. In 2006, China carried out ten times more executions than the next country who still uses captial punishment. Generally, they use one round from an assault rifle (hollow-point) to the back of the head.

Of course, that doesn't mean that there isn't a lot of hacking coming from China. We see stories all the time about Chinese hackers committing corporate and government espionage. The Dark Visitor is an excellent site, run by a former intelligence type, about the mysterious world of hacking in the People's Republic.

I guess the difference on whether you get a bullet in the head, or not depends on whether certain authorities approve of your activity (my opinion). Of course, they are not beyond setting an example from time to time if certain political conditions exist.

Last year, China executed their former food and safety chief (Zheng Xiaoyu) for taking bribes in the wake of all the news stories about defective and dangerous products being exported from China.

With all the humans rights violations, fraud, hacking and deception that occur in the People's Republic, it's amazing that so many companies in the West continue doing business with them.

Sadly enough, some believe this has been at the expense of many people in their own countries. Given the human rights violations, it is also at the expense of a lot of Chinese people, also!

Perhaps, I'm old fashioned, but I sometimes wonder when people will come first?

Sadly enough, greed often gets in the way of this concept.

Who Hacked the Halls of Congress?

Came across an interesting story about the halls of Congress being hacked in October 2006. Although no one knows or is saying, some speculate that the attack can be traced to the Chinese, who seem to get accused of hacking into a lot of government systems (worldwide). Of course, the Chinese officially deny these allegations.

Shane Harris of the National Journal reported the attack was initially discovered in one office, but cyber-investigators eventually traced it to eight members' offices, where one or more computers were infected. Besides this, seven committee offices, including the Commission on China, Ways and Means and the International Relations Committee were identified as having compromised computers in them. The International Relations Committee (now the Foreign Affairs Committee) had 25 infected computers and an infected server found in it.

The virus discovered was a trojan designed to allow malware (malicious software) to invade government machines and steal information. The investigation revealed that the trojan was probably downloaded by an employee, who clicked on a link in a spam e-mail. This method of dropping a virus on a computer is usually referred to as Phishing.

Phishing attacks are normally designed to steal personal and financial information, which is later used to commit financial crimes and identity theft. While most phishing attacks (from a historical perspective) have been financially motivated, we are now seeing more person/position-targeted attacks. This type of phishing is referred to as spear phishing or whaling. In April, there were reports of spear phishing attacks against corporate executives all over the country.

The unidentified hackers used a wide-array of attack methods and the malware was downloaded from random Internet addresses. It's suspected they were using other infected machines to launch the attacks, which makes the activity even harder to trace. In this latest instance, it makes sense; the intent was to steal confidential and sensitive information.

The article points out that there is a lot of evidence that the Chinese have "penetrated deeply" into both government and corporate systems.

Just hours before the Olympics, Joel Brenner, the top U.S. counterintelligence official, warned Americans to leave their smart phones and other wireless computer devices at home. He told CBS News that the public security services in China can turn on a cell phone and activate its microphone when the owner thinks it's off. In July, Senator Sam Brownback also warned that China was planning to mount a massive espionage operation on guests staying at major hotels during the Olympics.

Last year there was speculation in the press that Commerce Secretary Carlos Gutierrez's laptop was hacked during a visit to China and the information was used to hack into government computers. Even scarier, rumors abound that Chinese hackers have already attacked power grids and that they are developing a cyber-warfare capability.

The article's conclusion points to a just released Report of the CSIS Commission on Cybersecurity for the 44th Presidency. The study recommends that President Elect Obama establish a Cyber-Security Directorate in the NSC, who would direct a National Office for Cyberspace.

As a mere observer of all of this, I think President Elect Obama needs to take this report seriously. We need to remember (especially while a financial crisis is going on) that besides being a threat to National security, hacking also threatens our financial stability. Although this post points to the Chinese, they certainly aren't the only players in the International hacking game, and the problem it presents isn't going away. Sadly, some believe the problem is getting worse.

There is little doubt that change is needed in the way we address this problem and hopefully this is what will occur.

U.S. China Commission Report reveals serious issues that need to be dealt with!

Reports of the Chinese hacking into government systems are nothing new. Along with the constant reports of substandard products being put on our shelves, there is little doubt that the Chinese pose a threat to our safety in a LOT of different ways.

The U.S. China Commission has just released a disturbing report, which indicates some alarming evidence that the Chinese might be a threat to our National security.

The first concern is what appears to be a growing capability to target satellites. I got the following directly from the report, which was provided to Congress:

The hearing was timely, coming only three months after a successful direct-ascent anti satellite test by China that destroyed one of its own aging weather satellites in low-earth orbit. This test was only the third of its kind by any nation in history and served as a useful reference point during the hearing to illustrate not only China’s advances in military capabilities, but also the extent to which China’s decision making process is still very much opaque. This incident raises questions about Chinese intentions in space. The Commission will address these questions as it continues to monitor developments.

In the same realm, it appears that China is actively developing capabilities to conduct "irregular warfare." It should be noted that in addition to this report there have been regular reports of hackers from China specifically targeting government systems.

This is what the current report concluded:

Several experts testified that if China were to find itself in an armed conflict with the United States and its allies such as that resulting from a Taiwan dispute, China is likely to employ an array of irregular warfare strategies against its adversaries. According to Michael Vickers, Senior Vice President for Strategic Studies at the Center for Strategic and Budgetary Assessments, a Chinese attack on Taiwan could entail special operations and cyber attacks on U.S. regional bases in Japan and South Korea, and might even include cyber attacks on the U.S. homeland that target the U.S. financial, economic, energy, and communications infrastructure.

Also covered in the report are previously documented cyber-intrusions into U.S. Government systems:

As evidenced by the trajectory of its military modernization, Chinese defense planners are seeking to accomplish the goal of undermining the U.S. military’s technological edgethrough a variety of disruptive means. Among these is cyber warfare. USSTRATCOM Commander General Cartwright testified before the Commission that China is actively engaging in cyber reconnaissance by probing the computer networks of U.S. government agencies as well as private companies. The data collected from these computer reconnaissance campaigns can be used for myriad purposes, including identifying weak points in the networks, understanding how leaders in the United States think, discovering the communication patterns of American government agencies and private companies, and attaining valuable information stored throughout the networks. General Cartwright testified that this information is akin to that which in times past had to be gathered by human intelligence over a much longer period of time. He went on to say that in today’s information environment, the exfiltration that once took years can be accomplished in a matter of minutes in one download session.

The report also concludes that the Chinese have been building up their more traditional military capabilities since 1992.

Going into the reasons why China has been able to accomplish this, the report states:

China’s policies of market liberalization have resulted in rapid export-led economic growth prompting increased foreign investment; development of China’s manufacturing capabilities; and integration into the global supply chain. China’s abundant and inexpensive labor supply has made that country an obvious place for multinational companies to expand their production. However, as Dr. Peter Navarro, Professor of Business at the University of California, Irvine, observed in his testimony, five of eight factors identified as major drivers of China’s comparative advantage—i.e., its ability to undercut the prices of global competitors—are considered unfair trading practices. These include its undervalued currency, counterfeiting and piracy, export industry subsidies, and lax health, safety, and environmental regulations. These practices violate China’s WTO commitments, especially regarding workers’ rights, market access, currency manipulation, subsidies, and the protection of intellectual property rights. These violations and unfair practices also contribute to a growing U.S. trade deficit with China, one that U.S. Census Bureau statistics confirm increased 177 percent in the past six years from $83.8 billion in 2000 to $232.5 billion in 2006.

Granting China a "Permanent Normal Trading Relationship" six years ago was sold to the American public as a means of making China a better place (more democratic) place for it's people.

Instead, we have seen a lot of questionable government activity, which includes a variety of criminal enterprises when we consider all the hacking, counterfeiting and piracy that can be directly traced back to that country.

The lack of safe manufacturing practices and counterfeiting also poses a threat to our safety. It should be noted that according to International Anticounterfeiting Coalition, counterfeiting is a $600 billion a year problem, worldwide.

There are no figures on how much of this comes from China, although most experts on this subject speculate a lot of it does. Additionally, there is a lot of evidence that a lot of counterfeit merchandise is present in our supply chain. This evidence would include products of a consumable nature such as drugs, also.

The FDA estimates that 10 percent of the drugs in our supply system are counterfeit.

A lot of this probably tied into another phenomenon traced to the Chinese known as corporate (industrial) espionage. Of course, there is probably less of a need for the Chinese to plant spies in our industrial complexes anymore. With the amount of outsourcing going on, they probably never have to set foot out of China to steal a lot of secrets from us.

According to the Washington Post, American companies are even outsourcing the manufacture of military parts:

The Pentagon is increasingly buying planes, weapons and military vehicles from private contractors that outsource the manufacturing to plants in China and elsewhere in Asia, the report said. But when questioned by the commission, defense officials admitted that they do not have the ability to track where the components of military equipment are made.

To me, given all the recent implications of Chinese intentions, this makes the least sense!

All of these factors have led to a loss of jobs within our country as corporations take advantage of cheap labor, which is often the greatest expense in any business.

This translates into record profits for the Chinese and a select few people in the West.

Given the safety, National security and economic implications, continuing down this road doesn't seem to be in the best interests of the average person.

The full report from the U.S. China Commission can be viewed, here.

Chinese Hacker(s?) steal data on 18 million people in South Korea

Data breaches aren't just a problem in North America and Western Europe. In fact, it's probably safe to say that that the problem has become International in nature.

In the era of the global economy and with outsourcing, saavy hackers can probably get their hands on North American and European information outside those geographical areas fairly easily. IT is (also) probably less likely that anyone will be forced to be transparent about a data compromise in many of the areas information is currently being outsourced to.

That isn't to say that everything is 100 percent transparent when a data compromise occurs in the West, either.

Found this interesting blog post on The Dark Visitor (Inside the World of Chinese Hackers):

According to Hackbase.com, South Korea’s oldest and largest online shopping site (Auction.co.kr) has claimed it was attacked by a Chinese hacker who made off with the user information on 18 million members and a large amount of financial data. It is further claimed that Auction.co.kr delayed 20 hours after the attack before confirming the loss of information. Korean users rebuked the website for being too slow to act. It was confirmed that the attack was launched through China’s internet.

The post speculates (probably very accurately) that the site was compromised by phishing the staff at Hackbase.com (interesting name), who more than likely gave up their log on credentials to the hacker. This is normally accomplished by dropping malicious software containing a keylogger that steals all sorts of personal information from a compromised system. The same thing often occurs with social engineering techniques, where someone is tricked into giving up information they shouldn't have.

It is amazing how many employees fall for phishing attempts. I recently pointed to examples of this in North America, where the IRS and the employees of a Nuclear facility were successfully phished.

There is no doubt that part of any internal due diligence process should include training employees on social engineering, spam and phishing.

Full post from the Dark Visitor (interesting site), here.

Here are two posts, I recently did about employees getting phished for information:

Human beings are the reason for most security breaches!

IRS audit reveals that the human factor is one the greatest threats to information (computer) security

Millions of Potentially Sensitive Records from the Clinton Era Gone Missing!

A computer hard drive which contained huge amounts of personal and sensitive information from the Clinton administration is missing. Some of this information includes Social Security numbers, personal addresses and even scarier, Secret Service and White House operational procedures.

Yesterday, government officials were briefed about the compromise, which was originally discovered in April. The hard drive held a terabyte of computer data that could contain millions of individual records. A terabyte of data would be enough to fill millions of books, according to this article published by the AP.

The media is reporting that the personal information of one of Al Gore's three daughters was one of the millions of records gone missing – although it is not clear which daughter's information was compromised. Given the amount of information stolen, it's likely a lot of other notable as well as ordinary people have been compromised, too. According to articles I read, authorities are still trying to figure out exactly what was on the hard drive.

The drive was lost sometime between March 2008 and April 2009 from the National Archives and Administrations in College Park, MD, which is a Washington suburb near the University of Maryland.

The drive was left out, unsecured, in a room that is frequently left unlocked for ventilation. According to an unidentified source, a researcher who was converting the information to a digital records system left the hard drive on a shelf for an unknown period of time. When the researcher tried to resume work on the project, it was discovered to be missing.

According to Rep. Edolphus Towns, Democrat-N.Y., chairman of the House Oversight and Government Reform Committee, they are seeking more information on the breach, and the FBI is investigating.

The FBI will have a lot of suspects in this case. One hundred badge holders had access to the area. Additionally,the point of compromise is an area where workers, interns and even visitors pass on their way to the restroom.

This information would normally be stored in a secure area. Thus far, officials are quick to point out that it is unknown whether the hard drive was stolen or accidentally lost, and if any sensitive security information was lost.

At this time, either it isn't clear, or no one is saying, whether or not the data was encrypted. Encrypting data is considered a "safe and sane" security practice when dealing with data in transit and has become a legal requirement in many situations.

The House Oversight and Government Reform Committee have pointed to a problem with government agencies being compromised in the past. In a report released in 2006, the Committee came to the conclusion that the problem with agencies being compromised was government-wide. Other findings in the report include: agencies do not always know what was lost, physical security of data is essential and contractors are responsible for many of the breaches.

The report covers from 2003 to 2006 and, in light of this latest occurrence, it appears the problem still exists.

More recently, President Obama has pointed to another problem which does have national security implications and which involves protecting cyberspace from the threats that exist today. Thus far, a study has been conducted, and is being reviewed. Stories in the media have pointed to a concern with cyber warfare and with hackers from foreign countries (notably China and Russia), who have been suspected of targeting government systems.

If you are interested in learning more about Chinese hackers, there is a well written blog on the subject titled "The Dark Visitor (Information on Chinese Hacking". Another non-government source which covers data breaches in general is the Open Security Foundation.

While the implications of this latest issue have yet to be determined, it is not good news from the standpoint of how easily the information was compromised. Of course, this is merely one incident, and if you follow the news, we get bad news about data compromises all the time.

Update 5/20/09: It has now been confirmed that the missing hard drive had no encryption and a $50,000 reward is being offered for information leading to it's recovery. Source: CNet.

US Military Hacked, Sober Worm Goes Worldwide, What Next?

Military installations being attacked from China in what is being called; The new Trojan war, Chinese hackers breach US military defenses. The worst computer worm of the year is being spread by bogus e-mails from the FBI and CIA, Computer Worm Poses as E-Mail From FBI, CIA. Meanwhile, there are stories of the military removing word documents from the internet after it was discovered that sensitive information had been compromised, US military security defeated by copy and paste CNET News.com.

If this were fiction, it would be the makings of a best selling thriller.

Reading all these stories in the past few days and considering the implications made me consider how high the stakes in internet crime really are. At this point, it is unknown, specifically who the attackers are (at least to the general public). Organized criminals, unfriendly governments and even terrorists could theoretically be the culprits.

The Chinese (who seem to be behind the most recent attack on the military) have been suspected of selling technology (including nuclear) to governments, who might be dangerous to world peace. All one has to do is read the story of AQ Khan, who developed nuclear weapons for Pakistan and admitted selling secrets to North Korea, Libya and Iran. There is a lot of speculation that he obtained a lot of his knowledge from the Chinese, who were caught stealing nuclear secrets from us during the Clinton Administration, Online NewsHour: Spies Among Us -- June 9, 1999.

Meanwhile, the worm attack dubbed as "Sober X" has spread so far and fast that both the CIA and FBI have placed prominent warnings on their websites.

Besides attacks throughout the United States, there have been similar attacks in Europe. Bogus e-mails impersonating law enforcement and intelligence agencies are being used to trick unsuspecting users into downloading the virus. Video clips of popular celebrities have been used also.

The Internet Crime Complaint Center received more than 4,000 reports on Monday alone, per the FBI. Symantec stated that this worm has the ability to compromise personal information and McAfee reported 73,000 customers found the worm on their system. A British company (MessageLabs) reported intercepting more than 2.7 million copies of the "Sober X" worm and it's mutations (Sober X, Y, Z).

One security vendor, MXLogic is now reporting that one in every eight e-mails is infected. Thus far, the experts can only speculate what the intent of this massive attack is.

In another shocking revelation, there are reports that the military is removing Word documents off the internet after it discovered that when they obscured parts of documents that were classified on (Word and Adobe documents), they could be recovered and read by simply "cutting and pasting" them on to another document.

This was discovered after classified information about an incident in Iraq was posted on the internet.

Unless the private citizen and our governments take these massive attacks seriously, we could stand to lose more than our identities and bank accounts. National security and financial systems could eventually be at stake! Diplomacy and being politically correct need to be thrown out the window and replaced by swift action that includes severe consequences for individuals and governments found guilty of engaging in this activity.

My best guess is, failure to do so, could have grave implications.

Resources to avoid those dangerous Chinese products

There has been a lot in the news lately about dangerous Chinese products. At this point, there seems to be too many of them for the average person to keep up on.

I happened to be taking a look at Lou Dobbs' site and found some great resources that the average person can use to determine, whether or not, they are making a safe buying decision.

Since there doesn't seem to be enough oversight by our government to ensure our safety, I highly recommend taking matters into your own hands. Especially with the holiday season rapidly approaching.

On the site, I found a link to a U.S. PIRG page on recalled toys, here.

Additionally, the page had a safety blog set up by ConsumerReports.org, here.

Also, on the page, is a message from Mattel about products they have voluntarily recalled, here.

Of course, the Chinese haven't only been in the news lately for exporting dangerous products.

Here are some posts about other things they are doing that might be considered dangerous to the rest of the world:

China caught stealing government information again!

The Hackers from China are at it AGAIN!

How Dangerous is China

Here are another posts, I've done (with lots of references) about unsafe products from China.

The new red menace, global commerce from China

Of course, we can't only blame the Chinese. There are other forces in this equation, who are making a lot of money doing business with China:

The problem of unsafe products from China are just a symptom of the bigger problem!

Maybe if we started making more educated shopping choices, some of these problems would go away?

After all, the almighty dollar has a lot of power!

A Call for Action in Addressing Cyber Security

On Friday, President Obama addressed the nation on the importance of securing cyberspace and the reasons why it could be a danger to both our economy and national security. He also used the term, "weapons of mass disruption" and announced that he will appoint a cyber security czar.

The speech highlighted a 60-day study conducted at his direction, designed to take a look at how vulnerable we are to cyber attacks that could drastically change the whole way we exist.

Is this a far cry from reality? Perhaps not; if you can take command and control of the computer that controls something we use, you can do pretty much anything you want with it. This might be anything from a banking system to the system that controls an electrical grid or a sophisticated weapon. If you really think about, computers control just about everything nowadays.

As I was considering this, it reminded me that there are already millions of computers where some hacker has gained command and control of and formed into a botnet (essentially a supercomputer). All it took to do this was a little social engineering to trick someone into downloading some malicious code on a machine. While some of us might write this off as stupid people doing stupid things, people have even been tricked into doing this at government agencies and Fortune 500 companies. Trust me, not all the people who fall for some of this stuff are stupid. Social engineering is known to cause people to do things they normally would not!

While it takes a little technical sophistication to write malicious code, a person doesn't necessarily have to be a technical whiz to get their hands on it. They can buy it right on the Internet, complete with a do-it-yourself (DIY) kit to execute their intended misdeed. While most of the "misdeeds" seen in the wild have a financial intent, the intent is dictated by the person committing the act. In other words, the intent might be different depending on the person who is executing the deed.

Also mentioned, both in the report and in the speech, was cyber-warfare. For years now, the Chinese have been accused of hacking into government systems, although they always deny it. Also mentioned was an actual use of cyber warfare, or the Russian attack on Georgia that happened in the not very distant past.

Please note that botnets, which I mentioned above, were used to cripple the Georgian infrastructure. The zombie computers used in these botnets didn't come out of Russia, either. Some of them were traced right back to this country. In the current environment, you don't need to be in a physical location to take command and control; it might happen from anywhere.

The report also mentions attacking electrical grids and that the CIA has intelligence that this has already occurred in other countries. Just last month, the Wall Street Journal issued an article stating that Russian and Chinese hackers had mapped the U.S. power grid and left behind software that in theory could be used to attack our electrical grid. The article quoted unnamed officials from within the government. This set off a flurry of articles and in the end, most of the experts concluded that the threat, although real, wasn’t as bad as it was hyped up to be. Nonetheless, hacking certain utilities, such as electricity, water, and sewage could cause a lot of serious problems and there is evidence it has been accomplished in other countries.

While cyber warfare is an ominous subject, the report points out that we have already seen some pretty major events when financial systems were successfully attacked. Examples given were the TJX data breach (45 million payment cards compromised) and the more recent WorldPay payment card breach where a 30 minute exploit netted nine million dollars. This highly coordinated scheme took place all over the United States, Montreal, Moscow, and Hong Kong in a very short time-frame.

There is tangible evidence that so much personal and financial information has been stolen that the laws of supply and demand are driving prices down. Interestingly enough, a lot of this information is traded right over the Internet in anonymous forums using hard to trace forms of payment.

Two recent reports point to this. Symantec released a pretty interesting report on the underground economy and shortly afterwards, Verizon issued another report on the state of personal and financial information being stolen. The Verizon report, pointed out that the 285 million "known" records stolen in 2008 amounted to more than what was recorded in the previous three years. The Symantec report, which breaks down the going prices for information noted that the practice of spoofing (impersonating) financial institutions to steal information grew from 10 percent in 2007 to 29 percent in 2008. The Symantec report stated that 90 percent of the attacks being launched via botnets were designed to steal information and that the number of infected computers had grown 31 percent in 2008 over 2007, also.

Also cited in the report and in the speech was an estimated $1 trillion dollar loss per year in intellectual property. In recent years, the FBI has been busy catching numerous people stealing technology secrets and exporting them out of the country. This brings up another variable in the problem or if a person is given access to a system it is relatively easy to compromise it.

Recently, it was even disclosed that computers in Congress were hacked. It appears that even government intellectual property is being targeted.

When it comes to intellectual property theft, often we do not know what the motive is. Again, the intent is largely dictated by the end user. If you wanted to see a real world example, you might take a look at software piracy. The Business Software Alliance puts worldwide losses at over $50 billion, yearly. If you were to look at counterfeiting in general – which can involve the theft of intellectual property – the International Anticounterfeiting Coalition estimates the losses at $200 to $250 billion just in the U.S., every year.

The report, which is posted on WhiteHouse.gov, also addresses the growing problem of privacy in the digital world. Personal and financial information is worth a lot of money to businesses and criminals alike. Unfortunately, because of this, a lot of people are leery of putting in controls that might make it harder to profit from information. Because of this, a lot of people’s personal and financial information has gone missing.

The American Library Association, the Cato Institute, the Center for Democracy and Technology, Carnegie Mellon University, Consumer Action, the Center on National Security Studies, Cornell University, the Electronic Frontier Foundation, the Electronic Privacy Information Center, George Washington University, Harvard University, Indiana University, Johns Hopkins University, OMB Watch, Ohio State University, the National Security Archive, the University of California-San Diego and the American Civil Liberties Union were all consulted in the initial 60-day report.

While the report isn't clear on how privacy will be dealt with, it nonetheless is calling out that a problem exists. The problem is too much information being stored in too many not very well secured places.

For a real example here, one could refer to the DATALOSSdb Open Security Foundation, which tries to document all the known data breaches. The problem is getting worse all the time, and although some might argue that greater transparency is the reason for this, there are probably many more unknown data breaches that occur out there. After all, it’s unlikely that the hackers or other criminals stealing the information are going to come right out and tell us where they are getting it from. From a business perspective, it isn’t in their best interests.

The real casualties in this part of it are the individual victims, who suffer a lot when their information is used after it stolen. With the sheer amount of victims out there, some could argue we are facing an identity crisis.

To add to the problem, technology is now also being used to produce high-quality counterfeit documents and financial instruments in places, such as garages. This makes the information being stolen all the more dangerous, or easy to abuse.

Another thing the report addresses is the need for education and that laws need to catch up to the technology we are using. An interesting section at the end of the report highlights the history of modern communication technology. There is little doubt that as technology grows at a rapid pace; it is hard for the legal community to keep up with it.

In the end, in my humble opinion, the study is the first step in a positive direction. We have already seen too many examples of the abuse of technology, which has a lot of potential for good, too! The problem is how to deal with those who abuse it. The good news is that a large part of solution can be achieved by using a little more common sense and the clean slate approach (mentioned in the report) will go a long way towards making this a viable effort. In the end, a responsible balance is the key, and this is what it seems the report seems to be calling for.

China caught stealing government information again!

The Chinese, who were recently accused of poisoning pets and selling toxic toothpaste are now being accused of hacking into government computers in Germany.

Roger Boyes of the TIMESONLINE reports:

Der Spiegel, quoting senior officials from the German equivalent of Special Branch, said that the hacking operation was discovered in May. Computers in the Chancellery, the Foreign, Economics and Research ministries had been targeted. The Federal Office for the Protection of the Constitution (BfV) conducted a comprehensive search of government IT installations and prevented a further 160 giga-bytes of information being transferred to China. Commentators described it as “the biggest digital defence ever mounted by the German state”.

The information was being siphoned off almost daily by hackers in Lanzhou, northern China, in Canton province and in Beijing. The scale and the nature of the data being stolen suggest, the investigators say, that the operation must have been steered by the State and, in particular, the People’s Liberation Army.

Naturally, the Chinese are denying involvement, but this isn't the first time we've heard of them hacking into systems, or committing government/corporate espionage.

Here are a couple of posts, I wrote awhile ago where U.S. government computers were the target:

How Dangerous is China

The Hackers from China are at it AGAIN!

Last year, the FBI arrested two men stealing technology secrets and attempting to take them to China. Their press release on this matter can be seen, here.

USA Today (David J. Lynch) also did an excellent article quoting FBI sources about the problem, which can be seen, here.

We need to start considering the consequences of continuing to allow this to go on unchecked.

Roger Boyes story (worth reading), here.

Rogue Governments, Terrorists and Organized Criminals Raise the Stakes for Control of the Cyberworld

Hackers pose a very real threat to systems worldwide - here is evidence that this is no game being played by children.

I read this story from Government Computer News by Paitence Wait:

The Pentagon's primary Internet backbone, the Global Information Grid, comes under siege some 3 million times a day by outsiders looking for a way to penetrate military networks. And the outsiders come from all over the world, whether American script kiddies trying to prove their skills or Eastern European hackers looking for information they can sell.

Then there are the military cyberthreats from potential enemies.

Maj. Gen. William Lord, director of information, services and integration in the Secretary of the Air Force Office of Warfighting Integration and Chief Information Officer, today told an audience of civilian Air Force personnel attending the Air Force IT Conference that "China has downloaded 10 to 20 terabytes of data from the NIPRNet. They're looking for your identity, so they can get into the network as you."

Lord said that this is in accordance with the Chinese doctrine about the use of cyberspace in conflict.

Full story, here.

I recently wrote a post, Great Britain Creates National Fraud Squad to Fight Organized Crime and Terrorists. Add some rogue countries to the problem - and it's easy to see why a lot of the experts are becoming concerned.

Technology has also made communicating one's thoughts and beliefs rather easy.

The Internet (Cyberworld) -- with it's worldwide reach -- is also used by a lot of "entities" to spread propaganda. To illustrate this, we have a new blogger (Iran's President Mahmoud Ahmadinejad) who has created a "blog" to get his version of the word out. To see it, link here.

Of course, a lot of subversive organizations have been doing this for years. Al Qaeda (in particular) has used the Internet to further their despicable deeds. Timothy Thomas did an interesting essay on this, here.

With President Ahmadinejad and his proxy Hezbollah in the news recently, we need to reflect on history for a moment before reading his "jihad of the pen."

These are the people responsible for taking American hostages in Iran and later Lebanon. They were also responsible for the Marine barracks being bombed at the Beruit airport in 1983 - and more recently have been a conduit for terrorist activity in Iraq.

And he (Mahmoud Ahmadinejad) says he wants nuclear technology for peaceful purposes? If anyone believes that I can refer them to someone who needs help getting millions of dollars out of Africa.

Why Walmart might be looking for a few good spies

Ran into a interesting story alleging that large corporations -- in this instance Wal-Mart -- are hiring former government intelligence types to work in their corporate security departments.

The story that I found in RINF.com, which states that they monitor the "surveillance society," focused on Wal-Mart delving into the personal details of two of their former executives.

Apparently, the personal details of an affair became public, when one of the executives was being investigated for a conflict of interest with a advertising agency. The article also states that the executive being investigated got the other executive her job.

In all fairness -- despite the article's focus on privacy concerns -- conflicts of interest and intellectual property crimes are becoming a growing problem for corporations. The fact that one person got another person a job based on a personal relationship might be a little questionable, also?

Here is what the article, written by Douglas Frantz, had to say about former goverments running this investigation:

Largely overlooked in the furor was the role that Wal-Mart’s internal security department had played in digging up the salacious details. This department, a global operation, was headed by a former senior security officer for the Central Intelligence Agency and staffed by former agents from the C.I.A., the Federal Bureau of Investigation, and other government agencies. (See our Spy Slang guide) A person familiar with the episode said in an interview that an ex-C.I.A. computer specialist was involved in piecing together the email evidence—which included copies of Womack’s private Gmail messages, provided by his estranged wife—and that another former government agent had supervised the overall investigation.

Ex-government agents appear to be Wal-Mart’s investigators of choice. The retailer has emailed job listings to members of the Association for Intelligence Officers as well as posted ads on its site seeking to hire “global threat analysts” with backgrounds in intelligence. The job description for the analysts, who would have reported to a former Army intelligence officer, entailed collecting information from “professional contacts” to gauge threats from “suspect individuals and groups.” In practice, their responsibilities would have extended to gathering information about Wal-Mart employees, suppliers, and customers; Wal-Mart monitors shoppers for suspicious or potentially criminal activity. A Wal-Mart spokesman said the company does not comment on security matters.

Ex-government agents appear to be Wal-Mart’s investigators of choice. The retailer has emailed job listings to members of the Association for Intelligence Officers as well as posted ads on its site seeking to hire “global threat analysts” with backgrounds in intelligence. The job description for the analysts, who would have reported to a former Army intelligence officer, entailed collecting information from “professional contacts” to gauge threats from “suspect individuals and groups.” In practice, their responsibilities would have extended to gathering information about Wal-Mart employees, suppliers, and customers; Wal-Mart monitors shoppers for suspicious or potentially criminal activity. A Wal-Mart spokesman said the company does not comment on security matters.

While the article seems to target activity at Walmart, it alleges that their is a substantial market for this type of service:

The best estimate is that several hundred former intelligence agents now work in corporate espionage, including some who left the C.I.A. during the agency turmoil that followed 9/11. They quickly joined private-investigation firms whose U.S. corporate clients were planning to expand into Russia, China, and other countries with opaque business practices and few public records, and who needed the skinny on international partners or rivals.

With outsourcing becoming the norm for large corporations, I would imagine that experts in the espionage field might be a prudent investment for some of these corporations.

One reason might be counterfeiting, which the International Anticounterfeiting Association estimates to be a $600 billion dollar a year problem.

Intellectual property theft is being touted the crime of this century. While just about everything you can imagine is being counterfeited, technology seems to be targeted, most frequently.

In fact, IPhones, which were last years big tech item, were being cloned and sold on eBay by the time the product was rolled out in the United Kingdom.

There are constant reports of Chinese involvement in espionage from the corporate level to hackers breaking into government systems. Couple this with large corporations having their a lot of products manufactured in China and it's no wonder the services of a few good former spies might be prudent.

We probably shouldn't be surprised that corporations are turning to espionage experts to protect their assets. In fact in the age of the global economy and outsourcing, we are going probably going to see a growing demand for this type of expertise in the private sector.

RINF.com article, here.

IAAC White Paper on intellectual property theft, here.

The FBI did an interesting (my opinion) press release showing a little corporate espionage with a Chinese connection in 2006, which can be seen by clicking here.

Cyber Warfare, Not Just a Theory Anymore?

Last week, the news of a cyber attack by Russia against Georgia made this type of warfare become a chilling reality. According to an article in the LA Times, it also revealed how ill-prepared most of the world is to deal with this new threat.

Most of the experts now agree that cyber attacks started well before lead started flying and were not very sophisticated by current standards. Most of the attacks were run of the mill DDOS (Distributed Denial of Service) type events designed to deface and shut down government sites.

One of the problems is that no one can actually pin the attacks to the Russians. As usual, botnets of zombie computers were used to facilitate the assault on the sites in question. Since these zombie computers are taken over by malicious software -- normally after an unsuspecting user clicks on a link in a spam e-mail -- the computers used in the attack probably resided in locations all over the world. Botnets are also used to send out the spam e-mails with the malicious links that turn systems into what are known as zombie computers, which add to the power of the botnet.

Researchers at Shadowserver, a volunteer group monitoring cyber attacks, have traced the attacks against Georgia as starting in July and being based out of the United States, according to an article in the New York Times. The Times article suggested that there might be ties in this attack to Russian organized cyber criminals.

It should be noted that the words Russia and cyber crime bring up pages of results on most search engines. Russian organized crime is also known to have a global reach so it is no surprise that some of the current DDOS attacks were traced to a server in the United States. Simply stated, these attacks can be made to appear as if they are coming from just about anywhere.

While this is one the first times cyber warfare has actually occurred, it's starting to become a topic of concern in government circles. As a matter of fact, in April it was a hot topic at the NATO summit and an EU conference. China is also known to be actively seeking a cyber warfare capability and gets accused of hacking into other government's websites all the time.

Last year, Estonia suffered cyber attacks, which were allegedly facilitated by Russian Hackers, also. In an interesting development, Network World reported that they are sending cyber defense advisors to assist the Georgians.

Wikipedia has an interesting article (Wiki) on cyber warfare. It cites that McAfee stated in their 2007 annual report that approximately 120 countries have been developing cyber warfare capabilities designed to disrupt financial markets, government computer systems and utilities. The article also lists several examples of attacks, which many suspect were facilitated by the Russians or the Chinese, that have recently occurred.

The McAfee report surmised that cyber attack capabilities are becoming a global issue as well as a threat to national security. Current events seem to be making that prediction turn into reality.

Video shows mock cyber attack on power grid

Ted Bridis and Eileen Sullivan of the AP are reporting about a video, which shows how a cyber attack might shut down our utilities.

From the AP article (courtesy of the Washington Post):

The video, produced for the Homeland Security Department and obtained by The Associated Press on Wednesday, was marked "Official Use Only." It shows commands quietly triggered by simulated hackers having such a violent reaction that the enormous turbine shudders as pieces fly apart and it belches black-and-white smoke.

Although, this attack never took place, the article quotes goverment sources as saying:

President Bush's top telecommunications advisers concluded years ago that an organization such as a foreign intelligence service or a well-funded terror group "could conduct a structured attack on the electric power grid electronically, with a high degree of anonymity, and without having to set foot in the target nation." Ominously, the Idaho National Laboratory _ which produced the new video _ has described the risk as "the invisible threat."

Experts said the affected systems were not developed with security in mind.

Now for the good news:

The Homeland Security Department has been working with industries, especially electrical and nuclear companies, to enhance security measures. The electric industry is still working on their internal assessments and plans, but the nuclear sector has implemented its security measures at all its plants, the government said.

In July the Federal Energy Regulatory Commission proposed a set of standards to help protect the country's bulk electric power supply system from cyber attacks. These standards would require certain users, owners and operators of power grids to establish plans and controls.

The bad news, not mentioned in this article, is that some say foreign nations (China in particular) routinely attempt to hack into government systems.

Previous posts, I've written about alleged hacking attempts from China can be seen, here.

Of course, the Chinese government denies this is the case!

AP Story, courtesy of the Washington Post, here.

NATO Summit and EU Conference address the global reaches of illict cyber activity

On the Internet -- crime, espionage and some say, terrorism can cross a border with the click of a mouse. Because of this, it probably shouldn't be surprising that this is a hot topic at the NATO summit, as well as, a seperate conference conducted by the EU.

The AP is reporting:

At a two-day conference starting Tuesday in Strasbourg, France, the Council of Europe will to review implementation of the international Convention on Cybercrime and discuss ways to improve international cooperation.

Cyber defense also will be on the agenda when heads of state from NATO's 26 member nations gather in Bucharest Wednesday for three days. The leaders are expected to debate new guidelines for coordinating cyber defense.

Cyber defense is increasingly becoming a concern. For instance, there is increasing evidence that the Chinese have been hacking into other government's systems and have a cyber war doctrine being developed.

Last year, there was the much written about attack on the government of Estonia, also.

The EU conference will also address more financially motivated criminal activity on the Internet, also.

The AP article quotes a German University Professor, Marco Gercke, who specializes in computer law as saying:

Compared to regular terror attacks, it is much easier for the offenders to hide their identity. There are at least 10 unique challenges that make it very difficult to fight computer-related crime," said Gercke, one of the conference participants. "The success rate of cybercrime is very high."

While it is unknown, whether or not, these meetings of the minds will yield any results -- the fact is that unless there is greater cooperation and collusion between the good guys -- the problems of undesirable activity being spread with the click of a mouse is likely to continue growing at an alarming rate.

A little more teamwork and forward thinking might go a long way towards solving the problem. Of course, taking some of the players out from the opposition (bad guys) would go a long way, also!

To close this brief post, I would like to point to matters a little closer at home. An American computer law expert recently wrote a forward thinking article on the Hannaford data breach, where hackers stole 4.2 million payment (credit/debit) card numbers and the recent settlement between TJX and the FTC.

In his well thought out article, Ben Wright of SANS writes:

The FTC is well-meaning here, but it is misdirected. By singling out TJX and chastising it with the “unfairness” “bad guy” rhetoric, the FTC distracts the necessary public conversation. It implies that if we can just punish these lazy merchants enough (and force them to comply with the PCI and similar controls), then credit cards will be safe. That’s wrong.

The criminal warfare directed at the credit card system is more powerful than the theory behind PCI. The whole credit card system needs to change. As a society we need to focus on beating the criminals, and stop flogging victims like TJX as unfair privacy infringers.

To me, this means that instead of spending all our resources on inadequate security and filing litigation against the "unlucky targets" of organized cyber crime, we need to start addressing the root of the problem. I'll give anyone reading this one guess, who that might be?