The U.S. Justice Department on Tuesday unsealed the guilty pleas of two men first identified in January 2017 by KrebsOnSecurity as the likely co-authors of Mirai, a malware strain that remotely enslaves so-called “Internet of Things” devices such as security cameras, routers, and digital video recorders for use in large scale attacks designed to knock Web sites and entire networks offline (including multiple major attacks against this site).

Entering guilty pleas for their roles in developing and using Mirai are 21-year-old Paras Jha from Fanwood, N.J. and Josiah White, 20, from Washington, Pennsylvania.

Jha and White were co-founders of Protraf Solutions LLC, a company that specialized in mitigating large-scale DDoS attacks. Like firemen getting paid to put out the fires they started, Jha and White would target organizations with DDoS attacks and then either extort them for money to call off the attacks, or try to sell those companies services they claimed could uniquely help fend off the attacks.

CLICK FRAUD BOTNET

In addition, the Mirai co-creators pleaded guilty to charges of using their botnet to conduct click fraud — a form of online advertising fraud that will cost Internet advertisers more than $16 billion this year, according to estimates from ad verification company Adloox. 

The plea agreements state that Jha, White and another person who also pleaded guilty to click fraud conspiracy charges — a New Orleans man named Dalton Norman — leased access to their botnet for the purposes of earning fraudulent advertising revenue through click fraud activity and renting out their botnet to other cybercriminals.

As part of this scheme, victim devices were used to transmit high volumes of requests to view web addresses associated with affiliate advertising content. Because the victim activity resembled legitimate views of these websites, the activity generated fraudulent profits through the sites hosting the advertising content, at the expense of online advertising companies.

Jha and his co-conspirators admitted receiving as part of the click fraud scheme approximately two hundred bitcoin, valued on January 29, 2017 at over $180,000.

Prosecutors say Norman personally earned over 30 bitcoin, valued on January 29, 2017 at approximately $27,000. The documents show that Norman helped Jha and White discover new, previously unknown vulnerabilities in IoT devices that could be used to beef up their Mirai botnet, which at its height grew to more than 300,000 hacked devices.

MASSIVE ATTACKS

The Mirai malware is responsible for coordinating some of the largest and most disruptive online attacks the Internet has ever witnessed. The biggest and first to gain widespread media attention began on Sept. 20, 2016, when KrebsOnSecurity came under a sustained distributed denial-of-service attack from more than 175,000 IoT devices (the size estimates come from this Usenix paper (PDF) on the Mirai botnet evolution).

That September 2016 digital siege maxed out at 620 Gbps, almost twice the size of the next-largest attack that Akamai — my DDoS mitigation provider at the time — had ever seen.

The attack continued for several days, prompting Akamai to force my site off of their network (they were providing the service pro bono, and the attack was starting to cause real problems for their paying customers). For several frustrating days this Web site went dark, until it was brought under the auspices of Google’s Project Shield, a program that protects journalists, dissidents and others who might face withering DDoS attacks and other forms of digital censorship because of their publications.

At the end of September 2016, just days after the attack on this site, the authors of Mirai — who collectively used the nickname “Anna Senpai” — released the source code for their botnet. Within days of its release there were multiple Mirai botnets all competing for the same pool of vulnerable IoT devices.

Some of those Mirai botnets grew quite large and were used to launch hugely damaging attacks, including the Oct. 21, 2016 assault against Internet infrastructure firm Dyn that disrupted Twitter, Netflix, Reddit and a host of other sites for much of that day.

The leak of the Mirai source code led to the creation of dozens of copycat Mirai botnets, all of which were competing to commandeer the same finite number of vulnerable IoT devices. One particularly disruptive Mirai variant was used in extortion attacks against a number of banks and Internet service providers in the United Kingdom and Germany.

In July 2017, KrebsOnSecurity published a story following digital clues that pointed to a U.K. man named Daniel Kaye as the apparent perpetrator of those Mirai attacks. Kaye, who went by the hacker nickname “Bestbuy,” was found guilty in Germany of launching failed Mirai attacks that nevertheless knocked out Internet service for almost a million Deutsche Telekom customers, for which he was given a suspended sentence. Kaye is now on trial in the U.K. for allegedly extorting banks in exchange for calling off targeted DDoS attacks against them.

Not long after the Mirai source code was leaked, I began scouring cybercrime forums and interviewing people to see if there were any clues that might point to the real-life identities of Mirai’s creators.

On Jan 18, 2017, KrebsOnSecurity published the results of that four-month inquiry, Who is Anna Senpai, the Mirai Worm Author? The story is easily the longest in this site’s history, and it cited a bounty of clues pointing back to Jha and White — two of the men whose guilty pleas were announced today.

According to my reporting, Jha and White primarily used their botnet to target online gaming servers — particularly those tied to the hugely popular game Minecraft. Around the same time as the attack on my site, French hosting provider OVH was hit with a much larger attack from the same Mirai botnet (see image above), and the CTO of OVH confirmed that the target of that attack was a Minecraft server hosted on his company’s network.

My January 2017 investigation also cited evidence and quotes from associates of Jha who said they suspected he was responsible for a series of DDoS attacks against Rutgers University: During the same year that Jha began studying at the university for a bachelor’s degree in computer science, the school’s servers came under repeated, massive attacks from Mirai.

With each DDoS against Rutgers, the attacker — using the nicknames “og_richard_stallman,” “exfocus” and “ogexfocus,” — would taunt the university in online posts and media interviews, encouraging the school to spend the money to purchase some kind of DDoS mitigation service.

It remains unclear if Jha (and possibly others) may face separate charges in New Jersey related to his apparent Mirai attacks on Rutgers. According to a sparsely-detailed press release issued Tuesday afternoon, the Justice Department is slated to hold a media conference at 2 p.m. today with officials from Alaska (where these cases originate) to “discuss significant cybercrime cases.”

Update: 11:43 a.m. ET: The New Jersey Ledger just published a story confirming that Jha also has pleaded guilty to the Rutgers DDoS attacks, as part of a separate case lodged by prosecutors in New Jersey.

PAYBACK

Under the terms of his guilty plea in the click fraud conspiracy, Jha agreed to give up 13 bitcoin, which at current market value of bitcoin (~$17,000 apiece) is nearly USD $225,000.

Jha will also waive all rights to appeal the conviction and whatever sentence gets imposed as a result of the plea. For the click fraud conspiracy charges, Jha, White and Norman each face up to five years in prison and a $250,000 fine.

In connection with their roles in creating and ultimately unleashing the Mirai botnet code, Jha and White each pleaded guilty to one count of conspiracy to violate 18 U.S.C. 1030(a)(5)(A). That is, to “causing intentional damage to a protected computer, to knowingly causing the transmission of a program, code, or command to a computer with the intention of impairing without authorization the integrity or availability of data, a program, system, or information.”

For the conspiracy charges related to their authorship and use of Mirai, Jha and White likewise face up to five years in prison, a $250,000 fine, and three years of supervised release.

This is a developing story. Check back later in the day for updates from the DOJ press conference, and later in the week for a follow-up piece on some of the lesser-known details of these investigations.

The Justice Department unsealed the documents related to these cases late in the day on Tuesday. Here they are:

Jha click fraud complaint (PDF)
Jha click fraud plea (PDF)
Jha DDoS/Mirai complaint (PDF)
Jha DDoS/Mirai plea (PDF)
White DDoS complaint (PDF)
White DDoS/Mirai Plea (PDF)
Norman click fraud complaint (PDF)
Norman click fraud plea (PDF)

The final Patch Tuesday of the year is upon us, with Adobe and Microsoft each issuing security updates for their software once again. Redmond fixed problems with various flavors of Windows, Microsoft Edge, Office, Exchange and its Malware Protection Engine. And of course Adobe’s got another security update available for its Flash Player software.

The December patch batch addresses more than 30 vulnerabilities in Windows and related software. As per usual, a huge chunk of the updates from Microsoft tackle security problems with the Web browsers built into Windows.

Also in the batch today is an out-of-band update that Microsoft first issued last week to fix a critical issue in its Malware Protection Engine, the component that drives the Windows Defender/Microsoft Security Essentials embedded in most modern versions of Windows, as well as Microsoft Endpoint Protection, and the Windows Intune Endpoint Protection anti-malware system.

Microsoft was reportedly made aware of the malware protection engine bug by the U.K.’s National Cyber Security Centre (NCSC), a division of the Government Communications Headquarters — the United Kingdom’s main intelligence and security agency. As spooky as that sounds, Microsoft said it is not aware of active attacks exploiting this flaw.

Microsoft said the flaw could be exploited via a booby-trapped file that gets scanned by the Windows anti-malware engine, such as an email or document. The issue is fixed in version 1.1.14405.2 of the engine. According to Microsoft, Windows users should already have the latest version because the anti-malware engine updates itself constantly. In any case, for detailed instructions on how to check whether your system has this update installed, see this link.

The Microsoft updates released today are available in one big batch from Windows Update, or automagically via Automatic Updates. If you don’t have Automatic Updates enabled, please visit Windows Update sometime soon (click the Start/Windows button, then type Windows Update).

The newest Flash update from Adobe brings the player to v. 28.0.0.126 on Windows, Macintosh, Linux and Chrome OS. Windows users who browse the Web with anything other than Internet Explorer may need to apply the Flash patch twice, once with IE and again using the alternative browser (Firefox, Opera, e.g.).

Chrome and IE should auto-install the latest Flash version on browser restart (users may need to manually check for updates and/or restart the browser to get the latest Flash version). Chrome users may need to restart the browser to install or automatically download the latest version.

When in doubt, click the vertical three dot icon to the right of the URL bar, select “Help,” then “About Chrome”: If there is an update available, Chrome should install it then. Chrome will replace that three dot icon with an up-arrow inside of a circle when updates are waiting to be installed.

Standard disclaimer: Because Flash remains such a security risk, I continue to encourage readers to remove or hobble Flash Player unless and until it is needed for a specific site or purpose. More on that approach (as well as slightly less radical solutions ) can be found in A Month Without Adobe Flash Player. The short version is that you can probably get by without Flash installed and not miss it at all.

For readers still unwilling to cut the cord, there are half-measures that work almost as well. Fortunately, disabling Flash in Chrome is simple enough. Paste “chrome://settings/content” into a Chrome browser bar and then select “Flash” from the list of items. By default it should be set to “Ask first” before running Flash, although users also can disable Flash entirely here or whitelist and blacklist specific sites.

Another, perhaps less elegant, solution is to keep Flash installed in a browser that you don’t normally use, and then to only use that browser on sites that require it.

Not long ago, phishing attacks were fairly easy for the average Internet user to spot: Full of grammatical and spelling errors, and linking to phony bank or email logins at unencrypted (http:// vs. https://) Web pages. Increasingly, however, phishers are upping their game, polishing their copy and hosting scam pages over https:// connections — complete with the green lock icon in the browser address bar to make the fake sites appear more legitimate.

According to stats released this week by anti-phishing firm Phishlabs, nearly 25 percent of all phishing sites in the third quarter of this year were hosted on HTTPS domains — almost double the percentage seen in the previous quarter.

“A year ago, less than three percent of phish were hosted on websites using SSL certificates,” wrote Crane Hassold, the company’s threat intelligence manager. “Two years ago, this figure was less than one percent.”

As shown in the examples above (which KrebsOnSecurity found in just a few minutes of searching via phish site reporting service Phishtank.com), the most successful phishing sites tend to include not only their own SSL certificates but also a portion of the phished domain in the fake address.

Why are phishers more aggressively adopting HTTPS Web sites? Traditionally, many phishing pages are hosted on hacked, legitimate Web sites, in which case the attackers can leverage both the site’s good reputation and its SSL certificate.

Yet this, too, is changing, says Phishlabs’ Hassold.

“An analysis of Q3 HTTPS phishing attacks against PayPal and Apple, the two primary targets of these attacks, indicates that nearly three-quarters of HTTPS phishing sites targeting them were hosted on maliciously-registered domains rather than compromised websites, which is substantially higher than the overall global rate,” he wrote. “Based on data from 2016, slightly less than half of all phishing sites were hosted on domains registered by a threat actor.”

Hassold posits that more phishers are moving to HTTPS because it helps increase the likelihood that users will trust that the site is legitimate. After all, your average Internet user has been taught for years to simply “look for the lock icon” in the browser address bar as assurance that a site is safe.

Perhaps this once was useful advice, but if so its reliability has waned over the years. In November, Phishlabs conducted a poll to see how many people actually knew the meaning of the green padlock that is associated with HTTPS websites.

“More than 80% of the respondents believed the green lock indicated that a website was either legitimate and/or safe, neither of which is true,” he wrote.

What the green lock icon indicates is that the communication between your browser and the Web site in question is encrypted; it does little to ensure that you really are communicating with the site you believe you are visiting.

At a higher level, another reason phishers are more broadly adopting HTTPS is because more sites in general are using encryption: According to Let’s Encrypt, 65% of web pages loaded by Firefox in November used HTTPS, compared to 45% at the end of 2016.

Also, phishers no longer need to cough up a nominal fee each time they wish to obtain a new SSL certificate. Indeed, Let’s Encrypt now gives them away for free.

The major Web browser makers all work diligently to index and block known phishing sites, but you can’t count on the browser to save you:

So what can you do to make sure you’re not the next phishing victim?

Don’t take the bait: Most phishing attacks try to convince you that you need to act quickly to avoid some kind of loss, cost or pain, usually by clicking a link and “verifying” your account information, user name, password, etc. at a fake site. Emails that emphasize urgency should be always considered extremely suspect, and under no circumstances should you do anything suggested in the email.

Phishers count on spooking people into acting rashly because they know their scam sites have a finite lifetime; they may be shuttered at any moment. The best approach is to bookmark the sites that store your sensitive information; that way, if you receive an urgent communication that you’re unsure about, you can visit the site in question manually and log in that way. In general, it’s a bad idea to click on links in email.

Links Lie: You’re a sucker if you take links at face value. For example, this might look like a link to Bank of America, but I assure you it is not. To get an idea of where a link goes, hover over it with your mouse and then look in the bottom left corner of the browser window.

Yet, even this information often tells only part of the story, and some links can be trickier to decipher. For instance, many banks like to send links that include ridiculously long URLs which stretch far beyond the browser’s ability to show the entire thing when you hover over the link.

The most important part of a link is the “root” domain. To find that, look for the first slash (/) after the “http://” part, and then work backwards through the link until you reach the second dot; the part immediately to the right is the real domain to which that link will take you.

“From” Fields can be forged: Just because the message says in the “From:” field that it was sent by your bank doesn’t mean that it’s true. This information can be and frequently is forged.

If you want to discover who (or what) sent a message, you’ll need to examine the email’s “headers,” important data included in all email.  The headers contain a lot of information that can be overwhelming for the untrained eye, so they are often hidden by your email client or service provider, each of which may have different methods for letting users view or enable headers.

Describing succinctly how to read email headers with an eye toward thwarting spammers would require a separate tutorial, so I will link to a decent one already written at About.com. Just know that taking the time to learn how to read headers is a useful skill that is well worth the effort.

Keep in mind that phishing can take many forms: Why steal one set of login credentials for a single brand when you can steal them all? Increasingly, attackers are opting for approaches that allow them to install a password-snarfing Trojan that steals all of the sensitive data on victim PCs.

So be careful about clicking links, and don’t open attachments in emails you weren’t expecting, even if they appear to come from someone you know. Send a note back to the sender to verify the contents and that they really meant to send it. This step can be a pain, but I’m a stickler for it; I’ve been known to lecture people who send me press releases and other items as unrequested attachments.

If you didn’t go looking for it, don’t install it: Password stealing malware doesn’t only come via email; quite often, it is distributed as a Facebook video that claims you need a special “codec” to view the embedded content. There are tons of variations of this scam. The point to remember is: If it wasn’t your idea to install something from the get-go, don’t do it.

Lay traps: When you’ve mastered the basics above, consider setting traps for phishers, scammers and unscrupulous marketers. Some email providers — most notably Gmail — make this especially easy.

When you sign up at a site that requires an email address, think of a word or phrase that represents that site for you, and then add that with a “+” sign just to the left of the “@” sign in your email address. For example, if I were signing up at example.com, I might give my email address as krebsonsecurity+example@gmail.com. Then, I simply go back to Gmail and create a folder called “Example,” along with a new filter that sends any email addressed to that variation of my address to the Example folder.

That way, if anyone other than the company I gave this custom address to starts spamming or phishing it, that may be a clue that example.com shared my address with others (or that it got hacked!). I should note two caveats here. First, although this functionality is part of the email standard, not all email providers will recognize address variations like these. Also, many commercial Web sites freak out if they see anything other than numerals or letters, and may not permit the inclusion of a “+” sign in the email address field.

Crooks who make and deploy ATM skimmers are constantly engaged in a cat-and-mouse game with financial institutions, which deploy a variety of technological measures designed to defeat skimming devices. The latest innovation aimed at tipping the scales in favor of skimmer thieves is a small, battery powered device that provides crooks a digital readout indicating whether an ATM likely includes digital anti-skimming technology.

A well-known skimmer thief is marketing a product called “Smart Shield Detector” that claims to be able to detect a variety of electronic methods used by banks to foil ATM skimmers.

The device, which sells for $200, is called a “Smart Shield Detector,” and promises to detect “all kinds of noise shields, hidden shields, delayed shields and others!”

It appears to be a relatively simple machine that gives a digital numeric indicator of whether an ATM uses any of a variety of anti-skimming methods. One of the most common is known as “frequency jamming,” which uses electronic signals to scramble both the clock (timing) and the card data itself in a bid to confuse skimming devices.

“You will see current level within seconds!,” the seller enthuses in an online ad for the product, a snippet of which is shown above. “Available for sale after November 1st, market price 200usd. Preorders available at price 150usd/device. 2+ devices for your team – will give discounts.”

According to the individual selling the Smart Shield Detector, a readout of 15 or higher indicates the presence of some type of electronic shield or jamming technology — warning the skimmer thief to consider leaving that ATM alone and to find a less protected machine. In contrast, a score between 3-5 is meant to indicate “no shield,” i.e., that the ATM is ripe for compromise.

KrebsOnSecurity shared this video with Charlie Harrow, solutions manager for ATM maker NCR Corp. Harrow called the device “very interesting” but said NCR doesn’t try to hide which of is ATM include anti-skimming technologies — such as those that claim to be detectable by the Smart Shield Detector.

“We don’t hide the fact that our ATMs are protected against this type of external skimming attack,” Harrow said. “Our Anti-Skimming product uses a uniquely shaped bezel so you can tell just by looking at the ATM that it is protected (if you know what you are looking for).”

Harrow added that NCR doesn’t rely on secrecy of design to protect its ATMs.

“The bad guys are skilled, resourced and determined enough that sooner or later they will figure out exactly what we have done, so the ATM has to be safe against a knowledgeable attacker,” he said. “That said, a little secret sauce doesn’t hurt, and can often be very effective in stopping specific attack [methods] in the short term, but it can’t be relied on to provide any long term protection.”

The best method for protecting yourself against ATM skimmers doesn’t require any fancy gadgets or technology at all: It involves merely covering the PIN pad with your hand while you enter your PIN!

That’s because the vast majority of skimming attacks involve two components: A device that fits over or inside the card reader and steals data from the card’s magnetic stripe, and a tiny hidden camera aimed at the PIN pad. While thieves who have compromised an ATM you used can still replicate your ATM card, the real value rests in your PIN, without which the thieves cannot easily drain your checking or savings account of cash.

Also, be aware of your physical surroundings while using an ATM; you’re probably more apt to get mugged physically than virtually at a cash machine. Finally, try to stick to cash machines that are physically installed inside of banks, as these tend to be much more challenging for thieves to compromise than stand-alone machines like those commonly found at convenience stores.

KrebsOnSecurity would like to thank Alex Holden, founder of Milwaukee, Wisc. based Hold Security, for sharing the above video.

Are you fascinated by skimming devices? Then check out my series, All About Skimmers, which looks at all manner of skimming scams, from fake ATMs and cash claws to PIN pad overlays and gas pump skimmers.

Leakbase, a Web site that indexed and sold access to billions of usernames and passwords stolen in some of the world largest data breaches, has closed up shop. A source close to the matter says the service was taken down in a law enforcement sting that may be tied to the Dutch police raid of the Hansa dark web market earlier this year.

Leakbase[dot]pw began selling memberships in September 2016, advertising more than two billion usernames and passwords that were stolen in high-profile breaches at sites like linkedin.com, myspace.com and dropbox.com.

But roughly two weeks ago KrebsOnSecurity began hearing from Leakbase users who were having trouble reaching the normally responsive and helpful support staff responsible for assisting customers with purchases and site issues.

Sometime this weekend, Leakbase began redirecting visitors to haveibeenpwned.com, a legitimate breach alerting service run by security researcher Troy Hunt (Hunt’s site lets visitors check if their email address has shown up in any public database leaks, but it does not store corresponding account passwords).

Leakbase reportedly came under new ownership after its hack in April. According to a source with knowledge of the matter but who asked to remain anonymous, the new owners of Leakbase dabbled in dealing illicit drugs at Hansa, a dark web marketplace that was dismantled in July by authorities in The Netherlands.

The Dutch police had secretly seized Hansa and operated it for a time in order to gather more information about and ultimately arrest many of Hansa’s top drug sellers and buyers. 

According to my source, information the Dutch cops gleaned from their Hansa takeover led authorities to identify and apprehend one of the owners of Leakbase. This information could not be confirmed, and the Dutch police have not yet responded to requests for comment. 

A message posted Dec. 2 to Leakbase’s Twitter account states that the service was being discontinued, and the final message posted to that account seems to offer paying customers some hope of recovering any unused balances stored with the site.

“We understand many of you may have lost some time, so in an effort to offer compensation please email, refund@leakbase.pw Send your LeakBase username and how much time you had left,” the message reads. “We will have a high influx of emails so be patient, this could take a while.”

My source noted that these last two messages are interesting because they are unlike every other update posted to the Leakbase Twitter account. Prior to the shutdown message on Dec. 2, all updates to that account were done via Twitter’s Web client; but the last two were sent via Mobile Web (M2).

Ironically, Leakbase was itself hacked back in April 2017 after a former administrator was found to be re-using a password from an account at x4b[dot]net, a service that Leakbase relied upon at the time to protect itself from distributed denial-of-service (DDoS) attacks intended to knock the site offline.

X4B[dot]net was hacked just days before the Leakbase intrusion, and soon after cleartext passwords and usernames from hundreds of Leakbase users were posted online by the hacker group calling itself the Money Team.

Many readers have questioned how it could be illegal to resell passwords that were leaked online in the wake of major data breaches. The argument here is generally that in most cases this information is already in the public domain and thus it can’t be a crime to index and resell it.

However, many legal experts see things differently. In February 2017, I wrote about clues that tied back to a real-life identity for one of the alleged administrators of Leakedsource, a very similar service (it’s worth noting that the subject of that story also was found out because he re-used the same credentials across multiple sites).

In the Leakedsource story, I interviewed Orin Kerr, director of the Cybersecurity Law Initiative at The George Washington University. Kerr told me that owners of services like Leakbase and Leakedsource could face criminal charges if prosecutors could show these services intended for the passwords that are for sale on the site to be used in the furtherance of a crime.

Kerr said trafficking in passwords is clearly a crime under the Computer Fraud and Abuse Act (CFAA).

Specifically, Section A6 of the CFAA, which makes it a crime to “knowingly and with intent to defraud traffic in any password or similar information through which a computer may be accessed without authorization, if…such trafficking affects interstate or foreign commerce.”

“CFAA quite clearly punishes password trafficking,” Kerr said. “The statute says the [accused] must be trafficking in passwords knowingly and with intent to defraud, or trying to further unauthorized access.”