Organizations in the throes of cleaning up after a ransomware outbreak typically will change passwords for all user accounts that have access to any email systems, servers and desktop workstations within their network. But all too often, ransomware victims fail to grasp that the crooks behind these attacks can and frequently do siphon every single password stored on each infected endpoint. The result of this oversight may offer attackers a way back into the affected organization, access to financial and healthcare accounts, or — worse yet — key tools for attacking the victim’s various business partners and clients.

In mid-November 2019, Wisconsin-based Virtual Care Provider Inc. (VCPI) was hit by the Ryuk ransomware strain. VCPI manages the IT systems for some 110 clients that serve approximately 2,400 nursing homes in 45 U.S. states. VCPI declined to pay the multi-million dollar ransom demanded by their extortionists, and the attack cut off many of those elder care facilities from their patient records, email and telephone service for days or weeks while VCPI rebuilt its network.

Just hours after that story was published, VCPI chief executive and owner Karen Christianson reached out to say she hoped I would write a follow-up piece about how they recovered from the incident. My reply was that I’d consider doing so if there was something in their experience that I thought others could learn from their handling of the incident.

I had no inkling at the time of how much I would learn in the days ahead.

EERIE EMAILS

On December 3, I contacted Christianson to schedule a follow-up interview for the next day. On the morning of Dec. 4 (less than two hours before my scheduled call with VCPI and more than two weeks after the start of their ransomware attack) I heard via email from someone claiming to be part of the criminal group that launched the Ryuk ransomware inside VCPI.

That email was unsettling because its timing suggested that whoever sent it somehow knew I was going to speak with VCPI later that day. This person said they wanted me to reiterate a message they’d just sent to the owner of VCPI stating that their offer of a greatly reduced price for a digital key needed to unlock servers and workstations seized by the malware would expire soon if the company continued to ignore them.

“Maybe you chat to them lets see if that works,” the email suggested.

The anonymous individual behind that communication declined to provide proof that they were part of the group that held VPCI’s network for ransom, and after an increasingly combative and personally threatening exchange of messages soon stopped responding to requests for more information.

“We were bitten with releasing evidence before hence we have stopped this even in our ransoms,” the anonymous person wrote. “If you want proof we have hacked T-Systems as well. You may confirm this with them. We havent [sic] seen any Media articles on this and as such you should be the first to report it, we are sure they are just keeping it under wraps.” Security news site Bleeping Computer reported on the T-Systems Ryuk ransomware attack on Dec. 3.

In our Dec. 4 interview, VCPI’s acting chief information security officer — Mark Schafer, CISO at Wisconsin-based SVA Consulting — confirmed that the company received a nearly identical message that same morning, and that the wording seemed “very similar” to the original extortion demand the company received.

However, Schafer assured me that VCPI had indeed rebuilt its email network following the intrusion and strictly used a third-party service to discuss remediation efforts and other sensitive topics.

‘LIKE A COMPANY BATTLING A COUNTRY’

Christianson said several factors stopped the painful Ryuk ransomware attack from morphing into a company-ending event. For starters, she said, an employee spotted suspicious activity on their network in the early morning hours of Saturday, Nov. 16. She said that employee then immediately alerted higher-ups within VCPI, who ordered a complete and immediate shutdown of the entire network.

“The bottom line is at 2 a.m. on a Saturday, it was still a human being who saw a bunch of lights and had enough presence of mind to say someone else might want to take a look at this,” she said. “The other guy he called said he didn’t like it either and called the [chief information officer] at 2:30 a.m., who picked up his cell phone and said shut it off from the Internet.”

Schafer said another mitigating factor was that VCPI had contracted with a third-party roughly six months prior to the attack to establish off-site data backups that were not directly connected to the company’s infrastructure.

“The authentication for that was entirely separate, so the lateral movement [of the intruders] didn’t allow them to touch that,” Schafer said.

Schafer said the move to third-party data backups coincided with a comprehensive internal review that identified multiple areas where VCPI could harden its security, but that the attack hit before the company could complete work on some of those action items.

“We did a risk assessment which was pretty much spot-on, we just needed more time to work on it before we got hit,” he said. “We were doing the right things, just not fast enough. If we’d had more time to prepare, it would have gone better. I feel like we were a company battling a country. It’s not a fair fight, and once you’re targeted it’s pretty tough to defend.”

WHOLESALE PASSWORD THEFT

Just after receiving a tip from a reader about the ongoing Ryuk infestation at VCPI, KrebsOnSecurity contacted Milwaukee-based Hold Security to see if its owner Alex Holden had any more information about the attack. Holden and his team had previously intercepted online communications between and among multiple ransomware gangs and their victims, and I was curious to know if that held true in the VCPI attack as well.

Sure enough, Holden quickly sent over several logs of data suggesting the attackers had breached VCPI’s network on multiple occasions over the previous 14 months.

“While it is clear that the initial breach occurred 14 months ago, the escalation of the compromise didn’t start until around November 15th of this year,” Holden said at the time. “When we looked at this in retrospect, during these three days the cybercriminals slowly compromised the entire network, disabling antivirus, running customized scripts, and deploying ransomware. They didn’t even succeed at first, but they kept trying.”

Holden said it appears the intruders laid the groundwork for the VPCI using Emotet, a powerful malware tool typically disseminated via spam.

“Emotet continues to be among the most costly and destructive malware,” reads a July 2018 alert on the malware from the U.S. Department of Homeland Security. “Its worm-like features result in rapidly spreading network-wide infection, which are difficult to combat.”

According to Holden, after using Emotet to prime VCPI’s servers and endpoints for the ransomware attack, the intruders deployed a module of Emotet called Trickbot, which is a banking trojan often used to download other malware and harvest passwords from infected systems.

Indeed, Holden shared records of communications from VCPI’s tormentors suggesting they’d unleashed Trickbot to steal passwords from infected VCPI endpoints that the company used to log in at more than 300 Web sites and services, including:

-Identity and password management platforms Auth0 and LastPass
-Multiple personal and business banking portals;
-Microsoft Office365 accounts
-Direct deposit and Medicaid billing portals
-Cloud-based health insurance management portals
-Numerous online payment processing services
-Cloud-based payroll management services
-Prescription management services
-Commercial phone, Internet and power services
-Medical supply services
-State and local government competitive bidding portals
-Online content distribution networks
-Shipping and postage accounts
-Amazon, Facebook, LinkedIn, Microsoft, Twitter accounts

Toward the end of my follow-up interview with Schafer and VCPI’s Christianson, I shared Holden’s list of sites for which the attackers had apparently stolen internal company credentials. At that point, Christianson abruptly ended the interview and got off the line, saying she had personal matters to attend to. Schafer thanked me for sharing the list, noting that it looked like VCPI probably now had a “few more notifications to do.”

Moral of the story: Companies that experience a ransomware attack — or for that matter any type of equally invasive malware infestation — should assume that all credentials stored anywhere on the local network (including those saved inside Web browsers and password managers) are compromised and need to be changed.

Out of an abundance of caution, this process should be done from a pristine (preferably non-Windows-based) system that does not reside within the network compromised by the attackers. In addition, full use should be made of the strongest method available for securing these passwords with multi-factor authentication.

Today marks the 10th anniversary of KrebsOnSecurity.com! Over the past decade, the site has featured more than 1,800 stories focusing mainly on cybercrime, computer security and user privacy concerns. And what a decade it has been.

Stories here have exposed countless scams, data breaches, cybercrooks and corporate stumbles. In the ten years since its inception, the site has attracted more than 37,000 newsletter subscribers, and nearly 100 million pageviews generated by roughly 40 million unique visitors.

Some of those 40 million visitors left more than 100,000 comments. The community that has sprung up around KrebsOnSecurity has been truly humbling and a joy to watch, and I’m eternally grateful for all your contributions.

One housekeeping note: A good chunk of the loyal readers here are understandably security- and privacy-conscious, and many block advertisements by default — including the ads displayed here.

Just a reminder that KrebsOnSecurity does not run third-party ads and has no plans to change that; all of the creatives you see on this site are hosted in-house, are purely image-based, and are vetted first by Yours Truly. Love them or hate ’em, these ads help keep the content at KrebsOnSecurity free to any and all readers. If you’re currently blocking ads here, please consider making an exception for this site.

Last but certainly not least, thank you for your readership. I couldn’t have done this without your encouragement, wisdom, tips and support. Here’s wishing you all a happy, healthy and wealthy 2020, and for another decade of stories to come.

Synoptek, a California business that provides cloud hosting and IT management services to more than a thousand customers nationwide, suffered a ransomware attack this week that has disrupted operations for many of its clients, according to sources. The company has reportedly paid a ransom demand in a bid to restore operations as quickly as possible.

Irvine, Calif.-based Synoptek is a managed service provider that maintains a variety of cloud-based services for more than 1,100 customers across a broad spectrum of industries, including state and local governments, financial services, healthcare, manufacturing, media, retail and software. The company has nearly a thousand employees and brought in more than $100 million in revenue in the past year, according to their Web site.

News of the incident first surfaced on Reddit, which lit up on Christmas Eve with posts from people working at companies affected by the outage. The only official statement about any kind of incident came late Friday evening from the company’s Twitter page, which said that on Dec. 23 it experienced a “credential compromise which has been contained,” and that Synoptek “took immediate action and have been working diligently with customers to remediate the situation.”

Synoptek has not yet responded to multiple requests for comment. But two sources who work at the company have now confirmed their employer was hit by Sodinokibi, a potent ransomware strain also known as “rEvil” that encrypts data and demands a cryptocurrency payment in return for a digital key that unlocks access to infected systems. Those sources also say the company paid their extortionists an unverified sum in exchange for decryption keys.

Sources also confirm that both the State of California and the U.S. Department of Homeland Security have been reaching out to state and local entities potentially affected by the attack. One Synoptek customer briefed on the attack who asked to remain anonymous said that once inside Synoptek’s systems, the intruders used a remote management tool to install the ransomware on client systems.

Much like other ransomware gangs operating today, the crooks behind Sodiniokibi seem to focus on targeting IT providers. And it’s not hard to see why: With each passing day of an attack, customers affected by it vent their anger and frustration on social media, which places increased pressure on the provider to simply pay up.

A Sodinokibi attack earlier this month on Colorado-based IT services firm Complete Technology Solutions resulted in ransomware being installed on computers at more than 100 dentistry practices that relied on the company. In August, Wisconsin-based IT provider PerCSoft was hit by Sodinokibi, causing outages for more than 400 clients.

To put added pressure on victims to negotiate payment, the purveyors of Sodinokibi recently stated that they plan to publish data stolen from companies infected with their malware who elect to rebuild their operations instead of paying the ransom.

In addition, the group behind the Maze Ransomware malware strain recently began following through on a similar threat, erecting a site on the public Internet that lists victims by name and includes samples of sensitive documents stolen from victims who have opted not to pay. When the site was first set up on Dec. 14, it listed just eight victims; as of today, there are more than two dozen companies named.

Last summer, a wave of sextortion emails began flooding inboxes around the world. The spammers behind this scheme claimed they’d hacked your computer and recorded videos of you watching porn, and promised to release the embarrassing footage to all your contacts unless a bitcoin demand was paid. Now, French authorities say they’ve charged two men they believe are responsible for masterminding this scam. One of them is a 21-year-old hacker interviewed by KrebsOnSecurity in 2017 who openly admitted to authoring a banking trojan called “Nuclear Bot.”

On Dec. 15, the French news daily Le Parisien published a report stating that French authorities had arrested and charged two men in the sextortion scheme. The story doesn’t name either individual, but rather refers to one of the accused only by the pseudonym “Antoine I.,” noting that his first had been changed (presumably to protect his identity because he hasn’t yet been convicted of a crime).

“According to sources close to the investigation, Antoine I. surrendered to the French authorities at the beginning of the month, after being hunted down all over Europe,” the story notes. “The young Frenchman, who lived between Ukraine, Poland and the Baltic countries, was indicted on 6 December for ‘extortion by organized gang, fraudulent access to a data processing system and money laundering.’ He was placed in pre-trial detention.”

According to Le Parisien, Antoine I. admitted to being the inventor of the initial 2018 sextortion scam, which was subsequently imitated by countless other ne’er-do-wells. The story says the two men deployed malware to compromise at least 2,000 computers that were used to blast out the sextortion emails.

While that story is light on details about the identities of the accused, an earlier version of it published Dec. 14 includes more helpful clues. The Dec. 14 piece said Antoine I. had been interviewed by KrebsOnSecurity in April 2017, where he boasted about having created Nuclear Bot, a malware strain designed to steal banking credentials from victims.

My April 2017 exposé featured an interview with Augustin Inzirillo, a young man who came across as deeply conflicted about his chosen career path. That path became traceable after he released the computer code for Nuclear Bot on GitHub. Inzirillo outed himself by defending the sophistication of his malware after it was ridiculed by both security researchers and denizens of the cybercrime underground, where copies of the code wound up for sale. From that story:

“It was a big mistake, because now I know people will reuse my code to steal money from other people,” Inzirillo told KrebsOnSecurity in an online chat.

Inzirillo released the code on GitHub with a short note explaining his motivations, and included a contact email address at a domain (inzirillo.com) set up long ago by his father, Daniel Inzirillo.

KrebsOnSecurity also reached out to Daniel, and heard back from him roughly an hour before Augustin replied to requests for an interview. Inzirillo the elder said his son used the family domain name in his source code release as part of a misguided attempt to impress him.

“He didn’t do it for money,” said Daniel Inzirillo, whose CV shows he has built an impressive career in computer programming and working for various financial institutions. “He did it to spite all the cyber shitheads. The idea was that they wouldn’t be able to sell his software anymore because it was now free for grabs.”

If Augustin Inzirillo ever did truly desire to change his ways, it wasn’t clear from his apparent actions last summer: The Le Parisien story says the sextortion scams netted the Frenchman and his co-conspirator at least a million Euros.

In August 2018, KrebsOnSecurity was contacted by a researcher working with French authorities on the investigation who said he suspected the young man was bragging on Twitter that he used a custom version of Nuclear Bot dubbed “TinyNuke” to steal funds from customers of French and Polish banks.

The source said this individual used the now-defunct Twitter account @tiny_gang1 to taunt French authorities, while showing off a fan of 100-Euro notes allegedly gained from his illicit activities (see image above). It seemed to the source that Inzirillo wanted to get caught, because at one point @tiny_gang1 even privately shared a copy of Inzirillo’s French passport to prove his identity and accomplishments to the researcher.

“He modified the Tinynuke’s config several times, and we saw numerous modifications in the malware code too,” the source said. “We tried to compare his samples with the leaked code available on GitHub and we noticed that the guy actually was using a more advanced version with features that don’t exist in the publicly available repositories. As an example, custom samples have video recording functionality, socks proxy and other features. So the guy clearly improved the source code and recompiled a new version for every new campaign.”

The source said the person behind the @tiny_gang Twitter account attacked French targets with custom versions of TinyNuke in one to three campaigns per week earlier this year, harvesting French bank accounts and laundering the stolen funds via a money mule network based mostly in the United Kingdom.

“If the guy behind this campaign is the malware author, it could easily explain the modifications happening with the malware, and his French is pretty good,” the researcher told KrebsOnSecurity. “He’s really provocative and I think he wants to be arrested in France because it could be a good way to become famous and maybe prove that his malware works (to resell it after?).”

The source said the TinyNuke author threatened him with physical harm after the researcher insulted his intelligence while trying to goad him into disclosing more details about his cybercrime activities.

“The guy has a serious ego problem,” the researcher said. “He likes when we talk about him and he hates when we mock him. He got really angry as time went by and started personally threatening me. In the last [TinyNuke malware configuration file] targeting Poland we found a long message dedicated to me with clear physical threats.”

All of the above is consistent with the findings detailed in the Le Parisien report, which quoted French investigators saying Antoine I. in October 2019 used a now-deleted Twitter account to taunt the authorities into looking for him. In one such post, he included a picture of himself holding a beer, saying: “On the train to Naples. You should send me a registered letter instead of threatening guys informally.”

The Le Parisien story also said Antoine I. threatened a researcher working with French authorities on the investigation (the researcher is referred to pseudonymously as “Marc”).

“I make a lot more money than you, I am younger, more intelligent,” Antoine I. reportedly wrote in July 2018 to Marc. “If you do not stop playing with me, I will put a bullet in your head. ”

French authorities say the defendant managed his extortion operations while traveling throughout Ukraine and other parts of Eastern Europe. But at some point he decided to return home to France, despite knowing investigators there were hunting him. According to Le Parisien, he told the French authorities he wanted to cooperate in the investigation and that he no longer wished to live like a fugitive.

As if the scourge of ransomware wasn’t bad enough already: Several prominent purveyors of ransomware have signaled they plan to start publishing data stolen from victims who refuse to pay up. To make matters worse, one ransomware gang has now created a public Web site identifying recent victim companies that have chosen to rebuild their operations instead of quietly acquiescing to their tormentors.

Less than 48 hours ago, the cybercriminals behind the Maze Ransomware strain erected a Web site on the public Internet, and it currently lists the company names and corresponding Web sites for eight victims of their malware that have declined to pay a ransom demand.

“Represented here companies dont wish to cooperate with us, and trying to hide our successful attack on their resources,” the site explains in broken English. “Wait for their databases and private papers here. Follow the news!”

KrebsOnSecurity was able to verify that at least one of the companies listed on the site indeed recently suffered from a Maze ransomware infestation that has not yet been reported in the news media.

The information disclosed for each Maze victim includes the initial date of infection, several stolen Microsoft Office, text and PDF files, the total volume of files allegedly exfiltrated from victims (measured in Gigabytes), as well as the IP addresses and machine names of the servers infected by Maze.

As shocking as this new development may be to some, it’s not like the bad guys haven’t warned us this was coming.

“For years, ransomware developers and affiliates have been telling victims that they must pay the ransom or stolen data would be publicly released,” said Lawrence Abrams, founder of the computer security blog and victim assistance site BleepingComputer.com. “While it has been a well-known secret that ransomware actors snoop through victim’s data, and in many cases steal it before the data is encrypted, they never actually carried out their threats of releasing it.”

Abrams said that changed at the end of last month, when the crooks behind Maze Ransomware threatened Allied Universal that if they did not pay the ransom, they would release their files. When they did not receive a payment, they released 700MB worth of data on a hacking forum.

“Ransomware attacks are now data breaches,” Abrams said. “During ransomware attacks, some threat actors have told companies that they are familiar with internal company secrets after reading the company’s files. Even though this should be considered a data breach, many ransomware victims simply swept it under the rug in the hopes that nobody would ever find out. Now that ransomware operators are releasing victim’s data, this will need to change and companies will have to treat these attacks like data breaches.”

The move by Maze Ransomware comes just days after the cybercriminals responsible for managing the “Sodinokibi/rEvil” ransomware empire posted on a popular dark Web forum that they also plan to start using stolen files and data as public leverage to get victims to pay ransoms.

This is especially ghastly news for many companies that may already face steep fines and other penalties for failing to report breaches and safeguard their customers’ data. For example, many companies in the healthcare sector are required to report ransomware incidents to the U.S. Department of Health and Human Services, which often documents breaches involving lost or stolen healthcare data on its own site.

While these victims may be able to avoid reporting ransomware incidents if they can show forensic evidence demonstrating that patient data was never taken or accessed, sites like the one that Maze Ransomware has now erected could soon dramatically complicate these incidents.