International Phishing Gang, nailed with a little teamwork!

I suppose it's big news when a phishing gang gets caught. Sadly, few of them ever seem to get nabbed, or prosecuted. Phishing is a crime that is committed across borders with the click of a mouse, or "bot," which makes investigating and prosecuting this type of crime, slightly challenging.

Saying that, the times might be changing, especially (more and more) when U.S. citizens are targeted. Besides this latest series of arrests, the FBI recently conducted a very successful operation against bot-herders in an effort dubbed "Operation Bot Roast."

Bot-herders, who run botnets are behind growing amounts of spam. Spam is the preferred method of spreading scams and other questionable activity across cyberspace.

According to the DOJ press release, 33 phishermen have been hooked, in an operation that was truly International in nature:

A federal grand jury in Los Angeles charged 33 individuals in a 65-count indictment unsealed today for their alleged participation in an international racketeering scheme that used the Internet to defraud thousands of individual victims and hundreds of financial institutions. Seven individuals were charged in a District of Connecticut indictment for their roles in an Internet phishing scheme, including two who were also charged in the Los Angeles case.

U.S. law enforcement authorities are executing nine arrest warrants in the Los Angeles area and Romanian law enforcement authorities are executing search warrants in Romania today in connection with the racketeering indictment.

Supporting the "global theory" of this activity, these phishermen operated from six different countries. They also claimed citizenship from several different countries:

The individuals named in the indictment operated from locations in the United States and abroad including Canada, Pakistan, Portugal and Romania, and include both U.S. citizens and foreign nationals. Sonny Duc Vo, Alex Chung Luong and Leonard Gonzales are U.S. citizens. Nga Ngo, Thai Hoang Nguyen, Loi Tan Dang and Dung Phan are permanent legal residents of Vietnam. Hiep Thanh Tran is a U.S. permanent resident from Vietnam. Caroline Tath is a permanent legal resident of Cambodia. Hassan Parvez is a citizen of Pakistan. Rolando Soriano is a Mexican citizen and is currently charged in Los Angeles with illegal entry by an alien following deportation. Ovidiu Ionut Nicola-Roman; Petru Bogdan Belbita; Stefan Sorin Ilinca; Sorin Alin Panait; Costel Bulugea; Nicolae Dragos Draghici; Florin Georgel Spiru; Marian Daniel Ciulean; Irinel Nicusor Stancu; Didi Gabriel Constantin; Mihai Draghici; Marius Sorin Tomescu; Lucian Zamfirache; Laurentiu Cristian Busca; Dan Ionescu; Marius Lnu; Alex Gabriel Paralescu; and Andreea Nicoleta Stancuta are Romanian citizens. An additional four individuals known only by their aliases, “Cryptmaster”; “PaulXSS”; “euro_pin_atm” and “SeleQtor” are believed to be Romanian citizens.

According to an article in PC World by John E. Dunn, stolen financial details (mostly payment card numbers) were stolen using a fake website. The stolen financial details were then sent via SMS (text) messaging to their cohorts in the United States and counterfeit payment (credit/debit) cards were produced.

After the counterfeit cards were produced, we can assume "runners" went to ATM machines and drained the accounts.

Financial institutions targeted included "People’s Bank, Citibank, Capital One, JPMorgan Chase & Co., Comerica Bank, Wells Fargo & Co., and PayPal," according to the DOJ press release. Although, not a financial institution, the DOJ press release mentioned eBay was a phishing target, also.

Two good resources, largely from the private sector that study phishing and provide a lot of relevant information about the activity are the Anti-Phishing Working Group and Artists Against 419. Besides goverment resources, there are private warriors out there dedicated to taking down phishing sites, also. The PIRT Phishing Incident Reporting and Termination Squad run by CastleCops, a site dedicated to computer and internet security, is a leader in this private effort to curb phishing. PIRT goes after phishing as it occurs in the "wild," or on the Internet.

Most of the information gathered by these groups is provided and used as intelligence by law enforcement resources. As a disclaimer, in this case, it is unknown what private resources might have contributed intelligence to this effort.

Law enforcement resources on a local, national and international level contributed to this latest series of arrests. Most experts agree that cybercrime has flourished in the past because of the inability of members of the "white side of the fence" to come together as a team. Sadly, the members of the "black side of the fence" have seemed to embrace teamwork and the result has been devastating, to say the least.

Last month, Attorney General Mukasey announced a "Law Enforcement Strategy to Combat International Organized Crime." This strategy was developed to combat a growing threat to the stability of U.S. interests posed by organized crime groups.

DOJ press release, here.

DOJ charges 11 in pump and dump stock spamming operation

The Department of Justice has just announced the arrests of 11 spammers involved in a pump and dump stock spam scheme.

Pump and dump schemes victimize people -- lured by the expectation of too good to be true money -- who buy the stocks at artificially inflated prices. They normally lose money when the value suddenly drops because the people behind the scheme sell off their artificially inflated shares.

One of those arrested, an Alan Ralsky is considered one of the biggest spammers around by Spamhaus, which is an organization dedicated to tracking spam.

From the press release:

A federal grand jury indictment was unsealed today in Detroit charging 11 persons, including Alan M. Ralsky, his son-in-law Scott K. Bradley, and Judy M. Devenow, of Michigan, and eight others, including a dual national of Canada and Hong Kong and individuals from Russia, California, and Arizona, in a wide-ranging international fraud scheme involving the illegal use of bulk commercial e-mailing, or "spamming."

This investigation was conducted over a three year period conducted by the FBI, Postal Inspectors and the Internal Revenue Service. The people involved used all the standard spam diversions including falsified domains and e-mail headers, social engineering lures and good old false advertising.

The release also states that they (tried?) to use botnets to send the spam:

The indictment also alleges that the defendants tried to send their spam by utilizing a cybercrime tool known as a “botnet,” which is a network of “robot” computers that have been infected with malicious software code that in turn would instruct the infected computers to send spam. The indictment charges that the defendants earned profits when recipients responded to the spam and purchased the touted products and services. Hui’s primary role in the scheme was to act as a conduit for Chinese companies who wanted their stocks pumped by the scheme. Ultimately, investigators estimate that the defendants earned approximately $3 million during the summer of 2005 alone as a result of their illegal spamming activities.

Recently, the FBI arrested a lot of Internet misfits in what they termed Operation Bot Roast and Operation Bot Roast II.

Botnets have become a major vehicle in which spam is circulated using zombie computers taken over using spam e-mail containing malicious software. Because the owner of the computer normally isn't aware their computer has been turned into a "spam spewing zombie," it also confuses investigative efforts to track the spam to it's source.

It should also be noted that here again, we see another "Chinese connection" in cybercrime. It's pretty interesting that publically held Chinese companies were working with these spammers to have the price of their stock artifically inflated.

Russian nationals were also arrested in this recent case. Eastern European types seem to be heavily involved in the world of cybercrime.

Here are a list of the laws the government is using to bring the spammers to justice:

The 41-count indictment covers three distinct, but interrelated, conspiracies to capture this evolution in their business practices. The indictment charges the defendants with the commission of several federal criminal offenses, including conspiracy, fraud in connection with electronic mail (CAN SPAM), computer fraud, mail fraud, wire fraud, and money laundering. It also charges the defendants with criminal asset forfeiture, as well as charging one defendant with making false statements to law enforcement.

Sadly enough, spammers have been bold enough to spoof all three investigative agencies involved in this case in the recent past. These spamming incidents normally are what are known as phishing attempts, where the intent of the spammer is to steal personal and financial information using social engineering techniques or malicious software.

The FTC released a report on spam a few days ago. One of the findings was that the people behind this activity are best addressed by agencies that have go after criminal activity.

This action and Operation Bot Roast indicate that these actions are already underway.

On the DOJ site right below the header on this press release is a warning about the DOJ itself being impersonated (spoofed).

A lot of people view spam as an annoying phenomenon in their inbox. If you really examine it, spam is the vehicle for just about every annoying and illegal activity on the Internet.

The full press release, including all the names of the spammers being charged can be seen, here.

FTC issues report on Malicious Spam and Phishing

The Federal Trade Commission just released it's report on the current state of malicious spam and phishing in today's electronic world.

Interestingly enough, it points out that spammers are criminals.

While this isn't a new revelation, the report seems to want to drive that point home. Maybe this is part of the education process referred to at the bottom of this post?

Here is what the press release had to say:

During the workshop, panelists confirmed that spam has increasingly become a significant global vector for the dissemination of malware and the propagation of financial crimes. Panelists opined that, in most instances, the acts of malicious spammers are inherently criminal, and criminal law enforcement agencies are best suited to shut down their criminal operations.

The report discusses the problem of botnets at length and refers to a 2006 report stating that an estimated 12 million bot infected computers are being used to send spam. The report also states that most of these computers are physically located outside the United States.

Going deeper into the problem the report discusses a phenomenon called fast flux:

With fast flux, infected bot computers serve as proxies or hosts for malicious websites. The IP addresses for these sites are rotated regularly to evade discovery. For example, a phisher can deploy numerous and different IP addresses for a single phishing campaign, foiling the efforts of ISPs and law enforcement seeking to stop these campaigns by dismantling a single web site. Despite these challenges, the record reflects that at least one ISP does take proactive measures to detect and disconnect “fast flux” web sites from a portion of its network.

The report also acknowledges that DIY (do it yourself) crimeware kits are making it easy for just about anyone to mount a phishing campaign. One kit described sells for as little as $17.

Also cited are some statements from jailed bot-herders that botnets are being rented by the hour for $300-$700 an hour.

The report also give some statistical information on what this is costing all of us:

A survey by Consumer Reports reveals that viruses, phishing, and spyware resulted in over $7 billion in costs to U.S. consumers in 2007. The survey revealed further that computer infections prompted 850,000 U.S. households to replace their computers. The costs to businesses also are high. One panelist reported that 80 percent of 639 businesses it studied experienced cybercrime-related losses, totaling $130 million.

Also included in the report is information on Operation Bot Roast conducted by the FBI and Department of Justice.

Besides going after the criminal element, the report states that e-mail authentication is crucial in detecting spam at the ISP level so that it can be filtered out by existing spam filters.

Of greatest importance (call me a socialist) is that the report calls that a broader effort needs to be made to educate the public on the dangers of spam:

Consumer and business education can have a significant impact in the fight against spam and phishing. Because spam is an ever-evolving problem, stakeholders should revitalize efforts to educate consumers about how to protect their computers from online threats and improve methods for disseminating educational materials to consumers and businesses. In addition, the Summit identified consumer-interfacing tools such as spam reporting buttons as valuable tools for ISPs and reputation service providers. Accordingly, staff will encourage industry to continue to develop and fine-tune such tools.

In keeping with this theory, the FTC has three sites listed on the right side of the press release to educate the public about spam, FTC Spam site, OnGuard Online: Spam Scams and OnGuard Online: Phishing.

The full report can be viewed, here.

Symantec reveals how the spammers are trying to steal Christmas

Kelly Conley announced the Christmas edition of Symantec's spam report on the company blog:

Here we are the end of another year. As 2007 rolls to a close the December State of Spam Report reviews this past month’s key trends and reflects on some of the year’s most notable spam events and trends.

The report notes that Bill Gates' prediction in 2004 that spam would be eradicated has proven not only to be wrong, but that the amount of spam circulating on the Internet has exceeded everyone's expectations (nightmares?).

This month, three out of every four e-mails sent is spam!

Spammers are even using MP3s, videos, and Google's alerts/searches to spread their seedy marketing ventures to Internet users.

Here are some of the highlights of the end-of-year report:

• Penny stocks use Thanksgiving holiday captions in subject line – spammers using common personal Thanksgiving-related words in the subject of emails

• Replica products a favorite for spammers this holiday season – replica gear has always been a spammer favorite. Spammers are marketing their wares using seasonal words in the subject lines of their mailings

• Spam begins to snowball – spammers collecting email addresses by using a funny .gif that shows a snowball hurtling at you through your computer

• Christmas freebie anyone? – spammers taking advantage of the season to market "free" gift cards for well known companies

• Seasonal lotto scams - in a scam targeted at UK end users, spammers have updated a lottery spam email for a Christmas Bonanza special

The current interest in celebrities like Britney Spears, Lindsay Lohan and the Osmonds were used as lures to get people to open spam e-mails hawking "questionably safe" drugs.

Spammers use whatever is trendy, popular or in the news to trick people into clicking on them. Here is one of the sicker examples of this seen recently:

An attack this month preyed on the public interest in the story of the missing British child, Madeleine McCann. The email contained a link to http://madeleine2007.notlong.com/, which redirected to http://internetwonderful.com/madeleine. The second site is designed to look similar to the official McCann family site, www.findmadeleine.com, however, it actually is set up to distribute a virus. The site also contains an unauthorized use of the Symantec logo and a number of Google ads for anti-virus products.

It should be noted that although the spam email also contains a link to the legitimate findmadeliene.com site, there is no connection between the spammers and the genuine site.

The report concludes it's findings with recognition of anti-spam efforts during the year, such as the FBI's Operation Bot Roast, the SEC's Operation Spamalot, ISP's sharing more information and security vendors employing new spam filter technologies.

We need to remember that spam is the vehicle used to spread 99.9 percent of the questionable marketing and scams on the Internet. Clicking on a spam e-mail can cause a person to become victim of anything from a financial scam to using a unsafe product that is a threat to their personal safety.

These reports serve a purpose, which is to educate the average person on what to watch out for and not click on a spam e-mail in the first place. Since it's Christmas and a lot of us are thinking about the young people in our lives, perhaps this is a good time to educate them on the growing problem of spam on the Internet!

I meet a few older people from time to time that might benefit from the education process, also.

Kelley Conley's blog post announcing the December report, here.

Symantec's December (year end) report on the state of spam, here.

On a lighter note, here is the YouTube video on the 12 days of Christmas Spam:

Are criminal to criminal (C2C) networks making cyber crime too easy?

With the FBI's announcement of Operation Bot Roast II detailing the arrests of several bot-herders infecting computer systems on an International basis, it's become apparent that a lot of crime is going on with the click of a mouse.

One of the more amazing revelations to come forward from Operation Bot Roast II was that a teenager was described in the media as a "cyber crime kingpin." Most of the people arrested were under 30. This led me to wonder if our young people are getting smarter, or cyber crime is getting a lot easier to commit?

I ran into an article from ZDNet entitled, "The new battleground in cyber crime." It covered a lot of things, I already knew, but perhaps it hits on the reason cyber crime is growing at an explosive rate.

From the article written by Yuval Ben-Itzhak (originally published on News.com):

In an age where "data equals money," fortune has replaced fame as hackers' key motivation. Criminals are willing to pay top dollar for personal, financial, and corporate data collected by Trojans and other "crimeware."

The evidence is out there. Price lists discovered on the black market reveal that criminals are willing to pay $5,000 for a financial report, $500 for a credit card with PIN, and $150 for a driver's license ID.

With do-it-yourself malicious software packages available for $200, cybercriminals need neither deep pockets nor programming skills to compromise a Web site or steal sensitive financial data from an infected PC. Indeed, Finjan's security research confirms that crimeware toolkits have become cybercriminals' favorite weapon. The new business model is criminal-2-criminal (C2C)--attackers selling malicious code and stolen data to other criminal elements that profit from it.

The criminal to criminal (C2C) business model was a new term for me, but after thinking about it -- it describes exactly what we keep hearing is going on out there.

Yuval made another statement in his article, which is something I've tried to point out numerous times:

The cybercrime equation is simple: the longer the crimeware remains undetected, the higher the profit for the attackers.

When I say I've tried to point this thought out before, it was in reference to all the data breaches we see in the news. Once a data breach becomes transparent, the information probably isn't of very much use in the C2C business model, anymore.

Maybe that is why after a data breach, we rarely see anyone get caught using the information?

If this is true, the more we can monitor the C2C business model in real time, the more effective we will be in attacking the criminals behind it?

While investing a lot of resources dealing with the data breaches is probably necessary, it does little to solve the overall problem. The statistics are that once a data breach becomes transparent the information rarely gets used, if at all.

With litigation arising from some of these data breaches, the cost of revealing one is becoming cumbersome, also. I wonder what would happen if we started spending more money up-front going after what is going on right now? We might spend a lot less money cleaning up the mess, after the fact.

Unfortunately, the monetary resources allocated by most organizations to fight cyber, financial and information crime are often considered a necessary evil. The result is that the people dedicated to protecting us from these types of crimes are often some pretty over-worked individuals.

Please note that this is true in both the private and public sectors.

Couple this with certain marketing practices that make committing some of these crimes fairly easy and it's no wonder, we are facing an ever growing problem.

Perhaps, we should start rethinking how we go after this problem?

Yuval's article (which I consider an interesting read) can be seen, here.

Some of the reference material, he used in writing his article came from the security research people at Finjan. The interesting information in this report is available on the Internet, and can be seen by linking, here.

Operation Bot Roast II snares bot herders, worldwide!

Official FBI photo for Bot Roast II (Globe in a laptop)

This morning I read that a teenager in New Zealand had been arrested for allegedly being the kingpin behind an international cyber-crime network.

Because he was a juvenile when the crimes were being committed, the authorities aren't releasing his real name, but on the Internet he is known as "AKILL."

The Associated Press is reporting:

Police arrested the suspected teenage kingpin of an international cyber crime network accused of infiltrating 1.3 million computers and skimming millions of dollars from victims' bank accounts, officials said.

Working with the FBI and police in the Netherlands, New Zealand police arrested the 18-year-old in the North Island city of Hamilton, said Martin Kleintjes, head of the police electronic crime center. The suspect's name was not immediately available.

Kleintjes charged that the ring was responsible for stealing at least $20 million using bank account and login details detected by their illegal spyware.

I decided to do a little digging on this and the FBI announced on their site that this is part of Operation Bot Roast II.

It appears that more than a teenager is being taken down for victimizing millions of people, worldwide.

From the announcement on the FBI site:

In June, we announced the first phase of Operation Bot Roast, which pinpointed more than a million victimized computers and charged a number of individuals around the country with various cyber-related crimes.

Today, we’re announcing part two of this operation, with more results:

Three new indictments, including two this past month. In one case, we uncovered a denial of service attack on a major university in the Philadelphia area and then knocked out much of the botnet by disrupting its ability to talk to other computers.

Two previously charged criminals who pled guilty, including a California man who is a well known member of the botnet underground.

The sentencing of three others, including a pair of men who launched a major phishing scheme targeting a Midwest bank that led to millions of dollars in losses.

I discovered more information on Operation Bot Roast II in a FBI press release:

The FBI today announced the results of the second phase of its continuing investigation into a growing and serious problem involving criminal use of botnets. Since Operation 'Bot Roast' was announced last June, eight individuals have been indicted, pled guilty, or been sentenced for crimes related to botnet activity. Additionally, 13 search warrants were served in the U.S. and by overseas law enforcement partners in connection with this operation. This ongoing investigative effort has thus far uncovered more than $20 million in economic loss and more than one million victim computers.

FBI Director Robert S. Mueller, III said, "Today, botnets are the weapon of choice of cyber criminals. They seek to conceal their criminal activities by using third party computers as vehicles for their crimes. In Bot Roast II, we see the diverse and complex nature of crimes that are being committed through the use of botnets. Despite this enormous challenge, we will continue to be aggressive in finding those responsible for attempting to exploit unknowing Internet users."

The press release also has detail on the most current arrests:

1. Ryan Brett Goldstein, 21, of Ambler, Pennsylvania, was indicted on 11/01/07 by a federal grand jury in the Eastern District of Pennsylvania for botnet related activity which caused a distributed denial of service (DDoS) attack at a major Philadelphia area university. In the midst of this investigation the FBI was able to neutralize a vast portion of the criminal botnet by disrupting the botnet's ability to communicate with other botnets. In doing so, it reduced the risk for infected computers to facilitate further criminal activity. This investigation continues as more individuals are being sought.

2. Adam Sweaney, 27, of Tacoma, Washington, pled guilty on September 24, 2007 in U.S. District Court, District of Columbia, to a one count felony violation for conspiracy fraud and related activity in connection with computers. He conspired with others to send tens of thousands of email messages during a one-year period. In addition, Sweaney surreptitiously gained control of hundreds of thousands of bot controlled computers. Sweaney would then lease the capabilities of the compromised computers to others who launched spam and DDoS attacks.

3. Robert Matthew Bentley of Panama City, Florida, was indicted on 11/27/07 by a federal grand jury in the Northern District of Florida for his involvement in botnet related activity involving coding and adware schemes. This investigation is being conducted by the U.S. Secret Service.

4. Alexander Dmitriyevich Paskalov, 38, multiple U.S. addresses, was sentenced on 10/12/2007 in U.S. District Court, Northern District of Florida, and received 42 months in prison for his participation in a significant and complex phishing scheme that targeted a major financial institution in the Midwest and resulted in multi-million dollar losses.

5. Azizbek Takhirovich Mamadjanov, 21, residing in Florida, was sentenced in June 2007 in U.S. District Court, Northern District of Florida, to 24 months in prison for his part in the same Midwest bank phishing scheme as Paskalov. Paskalov established a bogus company and then opened accounts in the names of the bogus company. The phishing scheme in which Paskolov and Mamadjanov participated targeted other businesses and electronically transferred substantial sums of money into their bogus business accounts. Immigrations Customs Enforcement, Florida Department of Law Enforcement, and the Panama City Beach Police Department were active partners in this investigation.

6. John Schiefer, 26, of Los Angeles, California, agreed to plead guilty on 11/8/2007 in U.S. District Court in the Central District of California, to a four felony count criminal information. A well-known member of the botnet underground, Schiefer used malicious software to intercept Internet communications, steal usernames and passwords, and defraud legitimate businesses. Schiefer transferred compromised communications and usernames and passwords and also used them to fraudulently purchase goods for himself. This case was the first time in the U.S. that someone has been charged under the federal wiretap statute for conduct related to botnets.

7. Gregory King, 21, of Fairfield, California, was indicted on 9/27/2007 by a federal grand jury in the Central District of California on four counts of transmission of code to cause damage to a protected computer. King allegedly conducted DDoS attacks against various companies including a web based company designed to combat phishing and malware.

8. Jason Michael Downey, 24, of Dry Ridge, Kentucky, was sentenced on 10/23/2007 in U.S. District Court, Eastern District of Michigan, to 12 months in prison followed by probation, restitution, and community service for operating a large botnet that conducted numerous DDoS attacks that resulted in substantial damages. Downey operated Internet Relay Chat (IRC) network Rizon. Downey stated that most of the attacks he committed were on other IRC networks or on the people that operated them. Downey's targets of DDoS often resided on shared servers which contained other customer's data. As a result of DDoS to his target, innocent customers residing on the same physical server also fell victim to his attacks. One victim confirmed financial damages of $19,500 as a result of the DDoS attacks.

Recently, I did a post, Botnet owner faces 60 years in prison and a $1.75 million fine, which is about about John Schiefer (above).

The amount of damage bot herders have caused millions of people on the Internet is astounding. Even when you consider the amount of spam, the average Internet user has to deal with on a daily basis, these current arrests are good news for the Internet community. Spam is the vehicle in which most scams, misleading advertising and counterfeit goods are spread in the electronic world.

The FBI press release mentioned some great resources where the average person can learn how to avoid becoming the victim of a bot herder.

In closing, I would like to pass them on:

http://www.fbi.gov/
http://www.onguardonline.gov/
http://www.lookstoogoodtobetrue.com/
http://www.uscert.gov/
http://www.ic3.gov/

One not mentioned that is great (my opinion) is http://www.fakechecks.org/. A lot of the scams involving counterfeit checks start with a spam e-mail AND most spam is spread using botnets.

AP article on New Zealand teenage bot herder, here.

FBI press release on Bot Roast II, here.

Botnet owner faces 60 years in prison and a $1.75 million fine

Until recently, botnet owners seemed to be able to trash people's systems without having to face very many consequences. And in a lot of instances, more than a system gets trashed when it is compromised by a botnet owner.

Friday, the Central California U.S. Attorney's office announced the prosecution of one of these botnet owners. Of interest, the botnet owner, John Schiefer admitted to compromising up to 250,000 computers with malware (malicious software).

In the first prosecution of its kind in the nation, a well-known member of the “botnet underground” was charged today with using “botnets” – armies of compromised computers – to steal the identities of victims across the country by extracting information from their personal computers and wiretapping their communications.

The criminal information and plea agreement filed this morning in United States District Court in Los Angeles outline a series of schemes in which Schiefer and several associates developed malicious computer code and distributed that code to vulnerable computers. Schiefer and the others used the illicitly installed code to assemble armies of up to 250,000 infected computers, which they used to engage in a variety of identity theft schemes. Schiefer also used the compromised computers to defraud a Dutch advertising company.

According to the press release, Schiefer and crew seemed to prefer harvesting eBay and PayPal information:

In his plea agreement, Schiefer acknowledged installing malicious computer code, or “malware,” that acted as a wiretap on compromised computers. Because the users of those compromised computers were unaware that their computers had been turned into “zombies,” they continued to use their computers to engage in commercial activities. Schiefer used the malware, which he called a “spybot,” to intercept electronic communications being sent over the Internet from those zombie computers to www.paypal.com and other websites. Once in possession of those intercepted communications, Schiefer and the others sifted through the data to mine usernames and passwords. With Paypal usernames and passwords, Schiefer and the others accessed bank accounts to make purchases without the consent of the true owners. Schiefer also acknowledged in the plea agreement that he transferred both the wiretapped communications and the stolen Paypal information to others. It is the first time in the nation that someone has been charged under the federal wiretap statute for conduct related to botnets.

It appears that the FBI's Cyber Division might have had something to do with catching Mr. Schiefer and crew.

In June, they announced a nationwide initiative against botnet owners called Operation Bot Roast.

Mr. Schiefer isn't mentioned in the release about Operation Bot Roast, but it appears that the FBI is starting to take this activity seriously and is making it more dangerous for botner owners to operate.

When Schiefer pleads guilty to all of this on November 28th, he will face a statutory maximum sentence of 60 years in federal prison and a fine of $1.75 million.

Full press release from the United States Attorney's Office Central District of California, here.

If you have been a victim of a botnet owner, who turned your computer into a zombie you can assist the FBI by reporting the matter at the Internet Crime Complaint Center.

They also have some information on how to avoid having your computer turned into a zombie, here.

FBI roasts a few Bot-Herders, which will free up to a million Zombies

Sick and tired of all the spam filling up your inbox, despite filtering technology that doesn't seem to work very well? If you are, Operation Bot Roast is a story that might catch your interest, or if you are like me, is chicken soup for the soul.

Botnets are a primary cause for the ever increasing levels of spam. Botnets are infected computers that their masters (bot-herders) turn into zombies, spewing out spam e-mails by the millions.

These bot-herders cause a lot of us, a whole lot of grief.

The FBI press release announced yesterday:

They’re called “bot-herders:” hackers who install malicious software on computers through the Internet without the owners’ knowledge. Once the software is loaded, they can control the computer remotely. And once they’ve compromised enough computers, they have a robot network or botnet.

Some botnets are huge: tens of thousands of infected computers. Or more. As a result of Operation Bot Roast, an ongoing and coordinated initiative to disrupt and dismantle these bot-herders, we’ve identified about 1 million computers across the country that have been compromised.

According to the press release, several people have been arrested, including three of the big-time "masters."

Full story from the FBI, here.

Also contained are a lot of useful links on protect yourself -- and of course your computer -- and what to do if you think your computer was turned into a zombie.

Bot-herders have been reported to rent out their illicit networks to organized criminals by the hour.



What your computer must feel like after being turned into a zombie (Courtesy of Wikipedia).