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‘Satori’ IoT Botnet Operator Pleads Guilty

A 21-year-old man from Vancouver, Wash. has pleaded guilty to federal hacking charges tied to his role in operating the “Satori” botnet, a crime machine powered by hacked Internet of Things (IoT) devices that was built to conduct massive denial-of-service attacks targeting Internet service providers, online gaming platforms and Web hosting companies.

Kenneth “Nexus-Zeta” Schuchman, in an undated photo.

Kenneth Currin Schuchman pleaded guilty to one count of aiding and abetting computer intrusions. Between July 2017 and October 2018, Schuchman was part of a conspiracy with at least two other unnamed individuals to develop and use Satori in large scale online attacks designed to flood their targets with so much junk Internet traffic that the targets became unreachable by legitimate visitors.

According to his plea agreement, Schuchman — who went by the online aliases “Nexus” and “Nexus-Zeta” — worked with at least two other individuals to build and use the Satori botnet, which harnessed the collective bandwidth of approximately 100,000 hacked IoT devices by exploiting vulnerabilities in various wireless routers, digital video recorders, Internet-connected security cameras, and fiber-optic networking devices.

Satori was originally based on the leaked source code for Mirai, a powerful IoT botnet that first appeared in the summer of 2016 and was responsible for some of the largest denial-of-service attacks ever recorded (including a 620 Gbps attack that took KrebsOnSecurity offline for almost four days).

Throughout 2017 and into 2018, Schuchman worked with his co-conspirators — who used the nicknames “Vamp” and “Drake” — to further develop Satori by identifying and exploiting additional security flaws in other IoT systems.

Schuchman and his accomplices gave new monikers to their IoT botnets with almost each new improvement, rechristening their creations with names including “Okiru,” and “Masuta,” and infecting up to 700,000 compromised systems.

The plea agreement states that the object of the conspiracy was to sell access to their botnets to those who wished to rent them for launching attacks against others, although it’s not clear to what extent Schuchman and his alleged co-conspirators succeeded in this regard.

Even after he was indicted in connection with his activities in August 2018, Schuchman created a new botnet variant while on supervised release. At the time, Schuchman and Drake had something of a falling out, and Schuchman later acknowledged using information gleaned by prosecutors to identify Drake’s home address for the purposes of “swatting” him.

Swatting involves making false reports of a potentially violent incident — usually a phony hostage situation, bomb threat or murder — to prompt a heavily-armed police response to the target’s location. According to his plea agreement, the swatting that Schuchman set in motion in October 2018 resulted in “a substantial law enforcement response at Drake’s residence.”

As noted in a September 2018 story, Schuchman was not exactly skilled in the art of obscuring his real identity online. For one thing, the domain name used as a control server to synchronize the activities of the Satori botnet was registered to the email address nexuczeta1337@gmail.com. That domain name was originally registered to a “ZetaSec Inc.” and to a “Kenny Schuchman” in Vancouver, Wash.

People who operate IoT-based botnets maintain and build up their pool of infected IoT systems by constantly scanning the Internet for other vulnerable systems. Schuchman’s plea agreement states that when he received abuse complaints related to his scanning activities, he responded in his father’s identity.

“Schuchman frequently used identification devices belonging to his father to further the criminal scheme,” the plea agreement explains.

While Schuchman may be the first person to plead guilty in connection with Satori and its progeny, he appears to be hardly the most culpable. Multiple sources tell KrebsOnSecurity that Schuchman’s co-conspirator Vamp is a U.K. resident who was principally responsible for coding the Satori botnet, and as a minor was involved in the 2015 hack against U.K. phone and broadband provider TalkTalk.

Multiple sources also say Vamp was principally responsible for the 2016 massive denial-of-service attack that swamped Dyn — a company that provides core Internet services for a host of big-name Web sites. On October 21, 2016, an attack by a Mirai-based IoT botnet variant overwhelmed Dyn’s infrastructure, causing outages at a number of top Internet destinations, including Twitter, Spotify, Reddit and others.

The investigation into Schuchman and his alleged co-conspirators is being run out the FBI field office in Alaska, spearheaded by some of the same agents who helped track down and ultimately secure guilty pleas from the original co-authors of the Mirai botnet.

It remains to be seen what kind of punishment a federal judge will hand down for Schuchman, who reportedly has been diagnosed with Asperger Syndrome and autism. The maximum penalty for the single criminal count to which he’s pleaded guilty is 10 years in prison and fines of up to $250,000.

However, it seems likely his sentencing will fall well short of that maximum: Schuchman’s plea deal states that he agreed to a recommended sentence “at the low end of the guideline range as calculated and adopted by the court.”

Source: KREBS ON SECURITY

Spam In your Calendar? Here’s What to Do.

Many spam trends are cyclical: Spammers tend to switch tactics when one method of hijacking your time and attention stops working. But periodically they circle back to old tricks, and few spam trends are as perennial as calendar spam, in which invitations to click on dodgy links show up unbidden in your digital calendar application from Apple, Google and Microsoft. Here’s a brief primer on what you can do about it.

Image: Reddit

Over the past few weeks, a good number of readers have written in to say they feared their calendar app or email account was hacked after noticing a spammy event had been added to their calendars.

The truth is, all that a spammer needs to add an unwelcome appointment to your calendar is the email address tied to your calendar account. That’s because the calendar applications from Apple, Google and Microsoft are set by default to accept calendar invites from anyone.

Calendar invites from spammers run the gamut from ads for porn or pharmacy sites, to claims of an unexpected financial windfall or “free” items of value, to outright phishing attacks and malware lures. The important thing is that you don’t click on any links embedded in these appointments. And resist the temptation to respond to such invitations by selecting “yes,” “no,” or “maybe,” as doing so may only serve to guarantee you more calendar spam.

Fortunately, the are a few simple steps you can take that should help minimize this nuisance. To stop events from being automatically added to your Google calendar:

-Open the Calendar application, and click the gear icon to get to the Calendar Settings page.
-Under “Event Settings,” change the default setting to “No, only show invitations to which I have responded.”

To prevent events from automatically being added to your Microsoft Outlook calendar, click the gear icon in the upper right corner of Outlook to open the settings menu, and then scroll down and select “View all Outlook settings.” From there:

-Click “Calendar,” then “Events from email.”
-Change the default setting for each type of reservation settings to “Only show event summaries in email.”

For Apple calendar users, log in to your iCloud.com account, and select Calendar.

-Click the gear icon in the lower left corner of the Calendar application, and select “Preferences.”
-Click the “Advanced” tab at the top of the box that appears.
-Change the default setting to “Email to [your email here].”

Making these changes will mean that any events your email provider previously added to your calendar automatically by scanning your inbox for certain types of messages from common events — such as making hotel, dining, plane or train reservations, or paying recurring bills — may no longer be added for you. Spammy calendar invitations may still show up via email; in the event they do, make sure to mark the missives as spam.

Have you experienced a spike in calendar spam of late? Or maybe you have another suggestion for blocking it? If so, sound off in the comments below.

Source: KREBS ON SECURITY

Feds Allege Adconion Employees Hijacked IP Addresses for Spamming

Federal prosecutors in California have filed criminal charges against four employees of Adconion Direct, an email advertising firm, alleging they unlawfully hijacked vast swaths of Internet addresses and used them in large-scale spam campaigns. KrebsOnSecurity has learned that the charges are likely just the opening salvo in a much larger, ongoing federal investigation into the company’s commercial email practices.

Prior to its acquisition, Adconion offered digital advertising solutions to some of the world’s biggest companies, including Adidas, AT&T, Fidelity, Honda, Kohl’s and T-Mobile. Amobee, the Redwood City, Calif. online ad firm that acquired Adconion in 2014, bills itself as the world’s leading independent advertising platform. The CEO of Amobee is Kim Perell, formerly CEO of Adconion.

In October 2018, prosecutors in the Southern District of California named four Adconion employees — Jacob Bychak, Mark ManoogianPetr Pacas, and Mohammed Abdul Qayyum —  in a ten-count indictment on charges of conspiracy, wire fraud, and electronic mail fraud. All four men have pleaded not guilty to the charges, which stem from a grand jury indictment handed down in June 2017.

‘COMPANY A’

The indictment and other court filings in this case refer to the employer of the four men only as “Company A.” However, LinkedIn profiles under the names of three of the accused show they each work(ed) for Adconion and/or Amobee.

Mark Manoogian is an attorney whose LinkedIn profile states that he is director of legal and business affairs at Amobee, and formerly was senior business development manager at Adconion Direct; Bychak is listed as director of operations at Adconion Direct; Quayyum’s LinkedIn page lists him as manager of technical operations at Adconion. A statement of facts filed by the government indicates Petr Pacas was at one point director of operations at Company A (Adconion).

According to the indictment, between December 2010 and September 2014 the defendants engaged in a conspiracy to identify or pay to identify blocks of Internet Protocol (IP) addresses that were registered to others but which were otherwise inactive.

The government alleges the men sent forged letters to an Internet hosting firm claiming they had been authorized by the registrants of the inactive IP addresses to use that space for their own purposes.

“Members of the conspiracy would use the fraudulently acquired IP addresses to send commercial email (‘spam’) messages,” the government charged.

HOSTING IN THE WIND

Prosecutors say the accused were able to spam from the purloined IP address blocks after tricking the owner of Hostwinds, an Oklahoma-based Internet hosting firm, into routing the fraudulently obtained IP addresses on their behalf.

Hostwinds owner Peter Holden was the subject of a 2015 KrebsOnSecurity story titled, “Like Cutting Off a Limb to Save the Body,” which described how he’d initially built a lucrative business catering mainly to spammers, only to later have a change of heart and aggressively work to keep spammers off of his network.

Most of the spammers Hostswinds terminated were sending messages for marketing programs that sign consumers up for various products or services which bill monthly and can be very difficult for consumers to cancel. Others were involved in sending spam to people who’d given away their email addresses and other personal information in response to various “free gift” offers.

That a case of such potential import for the digital marketing industry has escaped any media attention for so long is unusual but not surprising given what’s at stake for the companies involved and for the government’s ongoing investigations.

Adconion’s parent Amobee manages ad campaigns for some of the world’s top brands, and has every reason not to call attention to charges that some of its key employees may have been involved in criminal activity.

Meanwhile, prosecutors are busy following up on evidence supplied by several cooperating witnesses in this and a related grand jury investigation, including a confidential informant who received information from an Adconion employee about the company’s internal operations.

THE BIGGER PICTURE

According to a memo jointly filed by the defendants, “this case spun off from a larger ongoing investigation into the commercial email practices of Company A.” Ironically, this memo appears to be the only one of several dozen documents related to the indictment that mentions Adconion by name (albeit only in a series of footnote references).

Prosecutors allege the four men bought hijacked IP address blocks from another man tied to this case who was charged separately. This individual, Daniel Dye, has a history of working with others to hijack IP addresses for use by spammers.

For many years, Dye was a system administrator for Optinrealbig, a Colorado company that relentlessly pimped all manner of junk email, from mortgage leads and adult-related services to counterfeit products and Viagra.

Optinrealbig’s CEO was the spam king Scott Richter, who later changed the name of the company to Media Breakaway after being successfully sued for spamming by AOL, MicrosoftMySpace, and the New York Attorney General Office, among others. In 2008, this author penned a column for The Washington Post detailing how Media Breakaway had hijacked tens of thousands of IP addresses from a defunct San Francisco company for use in its spamming operations.

Dye has been charged with violations of the CAN-SPAM Act. A review of the documents in his case suggest Dye accepted a guilty plea agreement in connection with the IP address thefts and is cooperating with the government’s ongoing investigation into Adconion’s email marketing practices, although the plea agreement itself remains under seal.

Lawyers for the four defendants in this case have asserted in court filings that the government’s confidential informant is an employee of Spamhaus.org, an organization that many Internet service providers around the world rely upon to help identify and block sources of malware and spam.

Interestingly, in 2014 Spamhaus was sued by Blackstar Media LLC, a bulk email marketing company and subsidiary of Adconion. Blackstar’s owners sued Spamhaus for defamation after Spamhaus included them at the top of its list of the Top 10 world’s worst spammers. Blackstar later dropped the lawsuit and agreed to paid Spamhaus’ legal costs.

Representatives for Spamhaus declined to comment for this story. Responding to questions about the indictment of Adconion employees, Amobee’s parent company SingTel referred comments to Amobee, which issued a brief statement saying, “Amobee has fully cooperated with the government’s investigation of this 2017 matter which pertains to alleged activities that occurred years prior to Amobee’s acquisition of the company.”

ONE OF THE LARGEST SPAMMERS IN HISTORY?

It appears the government has been investigating Adconion’s email practices since at least 2015, and possibly as early as 2013. The very first result in an online search for the words “Adconion” and “spam” returns a Microsoft Powerpoint document that was presented alongside this talk at an ARIN meeting in October 2016. ARIN stands for the American Registry for Internet Numbers, and it handles IP addresses allocations for entities in the United States, Canada and parts of the Caribbean.

As the screenshot above shows, that Powerpoint deck was originally named “Adconion – Arin,” but the file has since been renamed. That is, unless one downloads the file and looks at the metadata attached to it, which shows the original filename and that it was created in 2015 by someone at the U.S. Department of Justice.

Slide #8 in that Powerpoint document references a case example of an unnamed company (again, “Company A”), which the presenter said was “alleged to be one of the largest spammers in history,” that had hijacked “hundreds of thousands of IP addresses.”

A slide from an ARIN presentation in 2016 that referenced Adconion.

There are fewer than four billion IPv4 addresses available for use, but the vast majority of them have already been allocated. In recent years, this global shortage has turned IP addresses into a commodity wherein each IP can fetch between $15-$25 on the open market.

The dearth of available IP addresses has created boom times for those engaged in the acquisition and sale of IP address blocks. It also has emboldened scammers and spammers who specialize in absconding with and spamming from dormant IP address blocks without permission from the rightful owners.

In May, KrebsOnSecurity broke the news that Amir Golestan — the owner of a prominent Charleston, S.C. tech company called Micfo LLC — had been indicted on criminal charges of fraudulently obtaining more than 735,000 IP addresses from ARIN and reselling the space to others.

KrebsOnSecurity has since learned that for several years prior to 2014, Adconion was one of Golestan’s biggest clients. More on that in an upcoming story.

Source: KREBS ON SECURITY