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Massive check-fraud botnet operation tied to Russia

By Ellen Messmer
July 28, 2010 08:45 AM ET

Network World -  Check fraud is an old-fashioned kind of crime, but a criminal ring with ties to Russia is using modern cybercrime  techniques, including botnets, online databases of financial information and check imaging archives, to run a highly automated, multi-million-dollar counterfeit-check operation.

The crime ring, dubbed "BigBoss" after the name found on a directory server used as part of the massive check-fraud operation, was discovered by researchers from SecureWorks last April.

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"We figured out they're running a large-scale check counterfeiting scheme," says Joe Stewart, director of malware analysis for SecureWorks, who stumbled upon evidence of BigBoss while researching botnet code on the Internet.

Botnets are elaborate command-and-control systems used by criminals to control compromised PCs. The so-called "ZeuS" botnets that SecureWorks was researching that day are mainly used for financially related crime, such as stealing bank account information and executing unauthorized funds transfers. But Stewart says this is the first time he's come upon a check-fraud scheme that was linked to one.

"I came across this ZeuS sample that used this VPN tunnel, which was unusual," says Stewart, who is sharing his findings during a presentation at this week's Black Hat Conference. "They were accessing digital copies of check images, archives of check images, downloading massive amounts of these check images" after hacking into check-cashing services as well as corporate databases, which SecureWorks declines to name. Weak authentication and SQL injection vulnerabilities in warehoused check repositories were often a way for BigBoss to get in.

Ironically, some of the check images are said to have come from an anti-fraud network service for merchants who have a check-cashing service. Wherever it hit, BigBoss was after the check image and the ABA routing number, account number, company name and address and an image of the authorized signature for thousands of businesses.

All told, the BigBoss scam resulted in 3,285 fraudulent business checks in the last 12 months, totaling about $9 million in fake paper checks to try and fool banks into processing them through accounts held by legitimate businesses.

The fake checks were copied from digital check images that were stolen from a variety of databases and downloaded to be duplicated as paper checks with startling accuracy by BigBoss, a group using Russian as their shared language, with links to St. Petersburg, Russia, where they wanted money to be wired, whenever they could get someone to fall for the scheme.

So who were these fake business checks made out to? The payees were individuals that the shadowy Russian gang had recruited in the United States to act as financial agents for any number of numerous fake foreign firms that BigBoss made up. Some in the United States drafted into this scam clearly thought this was a legit job acting as a financial manager on behalf of a foreign firm, which sometimes passed itself off as Finnish.

Originally published on www.networkworld.com. Click here to read the original story.
Reprinted with permission from NetworkWorld.com. Story copyright 2012 Network World, Inc. All rights reserved.
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