Russian Man Faces Hacking Charges

Friday, June 6, 2014 @ 07:06 PM gHale

A Russian man is facing charges for being the mastermind behind a group of hackers that were able to plant viruses on hundreds of thousands of computers around the world and secretly stole customer bank information which enabled them to rip off over $100 million from businesses and consumers, the Justice Department said.

In unveiling the criminal case, federal authorities said they disrupted European-based cyber threats that were sophisticated, lucrative and global.

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In one plan, the criminals infected computers with malicious software that captured bank account numbers and passwords, then used that information to secretly divert millions of dollars from victims’ bank accounts to themselves.

In another scheme, they locked hacking victims out of their own computers, secretly encrypted personal files on the machines and returned control to the users only when they received ransom payments of several hundred dollars.

“The criminals effectively held for ransom every private email, business plan, child’s science project, or family photograph — every single important and personal file stored on the victim’s computer,” said Leslie Caldwell, the head of the Justice Department’s criminal division.

Working with officials in more than 10 other countries, the FBI and other agencies seized computer servers that were central to the crimes, which affected hundreds of thousands of computers.

The FBI said the leader, Evgeniy Bogachev, 30, one of the most prolific cyber criminals in the world and issued a “Wanted” poster that lists his online monikers and describes him as a boating enthusiast. He faces criminal charges in Pittsburgh, PA, where he ended up named in a 14-count indictment, and in Nebraska, where officials filed a criminal complaint. He is not under arrest right now, but Deputy Attorney General James Cole said U.S. authorities were in contact with Russia to try to bring him into custody.

Officials said the case is another stark reminder of the evolving cybercrime threat, though it’s unrelated to the recently unsealed cyber-espionage indictment of five Chinese military hackers accused of stealing trade secrets from American firms.

Both sets of hackers relied on similar tactics — including sending emails to unsuspecting victims that installed malware — but the Chinese defendants were government officials who sought information that could bring companies in their country a competitive advantage.

Bogachev’s operation consisted of criminals in Russia, Ukraine and the United Kingdom who ended up assigned different roles within the conspiracy, prosecutors said.

The group, officials said, developed “Gameover Zeus” — a network of infected computers that intercepted customer bank account numbers and passwords that victims typed in— and “Cryptolocker,” malicious software that hijacked victims’ computers and demanded ransom payments. Computer users who refuse the ransom demands generally lose their files for good.

The victims of the different schemes included an American Indian tribe in Washington state; an insurance company and a firm that runs assisted living centers in Pennsylvania; a local police department in Massachusetts; a pest control company in North Carolina; and a restaurant operator in Florida.

The Pittsburgh indictment unsealed Monday accuses Bogachev’s group of trying to siphon hundreds of thousands of dollars from the bank accounts of Haysite Reinforced Plastics of Erie, in northwestern Pennsylvania, on a single day in 2011. According to the indictment, two of the transfers went through — one for about $198,000 and one for about $175,000 — but multiple other attempted transfers did not.

The accounts were with Pittsburgh-based PNC Bank, which declined to comment.

Other victims included a Florida bank that lost nearly $7 million through an unauthorized wire transfer. The Swansea, MA, police department, on the other hand, lost $750 when it paid a ransom demanded by the malicious software that infected its computers.

Last week, a federal judge in Pittsburgh granted a temporary restraining order against Bogachev and the others, demanding they cease such activities. That order ended up unsealed along with the charges Monday.

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