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3 Face Charges for Targeting Bank Accounts

3 Face Charges for Targeting Bank Accounts

Prosecutors in the U.S. charged three foreign nationals on Wednesday and allegations include targeting and distributing viruses that infected 1 million computers around the globe; 40,000 of which were in the U.S. Unfortunately, this is just one small part of an overwhelming and growing criminal puzzle. Sometimes, those puzzle pieces aren’t found until they’ve wreaked untold damage, sometimes for years.

The viruses were created to allow cyber thieves to steal millions from bank accounts in the U.S. and abroad. The primary Trojan virus, Gozi, hit 40,000 computers here, including NASA’s servers. U.S. Attorney Preet Bhara told a federal court that Nikita Kuzmin, 25, Deniss Calovskis, 27, and Mihai Ionut Paunescu, 28 created what he described as “one of the most financially destructive computer viruses in history”.

Vulnerabilities in American Banking

The cyber ring brings to light the many vulnerabilities in our American financial system, specifically online consumer banking. While this is considered the most detailed in history, it’s not the only efforts being made to bring down entire nation’s financial sector. Late last year, there were endless rounds of online attacks by a middle Eastern group that sought to crash the nation’s biggest bank servers. There wasn’t a national bank that wasn’t attacked between late August and December, many of which here hit more than once. While there weren’t any efforts to hack into individual bank accounts, these attacks also highlighted the overdue security upgrades to ensure consumers are safer while banking and doing business online. The websites were crippled or slowed briefly.

This latest scheme is not believed to be part of last year’s efforts. The attacks that made headlines in late 2012 were “denial of service” attacks, which aimed to shut down bank websites. A few of those banks included Citigroup Inc., Wells Fargo & Co. and Bank of America. Even the Stock Exchange was targeted successfully towards the end of the attacks. Those attacks fell to the wayside as quickly as they appeared. No arrests were made nor have there been any definitive truths on who was behind them, other than a group that claimed it would continue the attacks until an insulting video was removed from YouTube. That video remains online.

The three charged on Wednesday, a Russian, a Latvian and a Romanian, are accused of creating and then spreading a virus named Gozi. The malware infected both individual and business computers and then harvested log in details for online banking and even credit card accounts. One program is said to have mirrored a bank’s website in an effort to trick users into providing their PIN numbers and other identifying information, including basic questions like a mother’s maiden name.

No Masks, No Guns

Bharara said of the case,

Their bank heists required neither a mask nor a gun, but a clever computer program and an Internet connection.

Meanwhile, FBI Assistant Director in Charge George Venizelos said,

Banking Trojans are to cyber criminals what safe-cracking or acetylene torches are to traditional bank burglars – but far more effective and less detectable.

He also said the investigation and subsequent arrests have put an end to the Gozi virus. The problem is, there are likely thousands more waiting to fill the gap this virus left behind.

Computers were infected in Turkey, Poland Finland and others, including the U.S. Bharara either could not or would not provide details on how much money was stolen from American accounts nor how many accounts had been penetrated, though he did say tens of millions of dollars were stolen. He declined to provide further details, citing the ongoing investigation.

As mentioned, NASA was hit and it’s believed close to 200 of the government agency’s computers were hit with the bug over the course of five years. The data that was stolen included log in information for the agency’s email accounts as well as Google chat messages and even the browsing history of those computers.

Bharara has been a long time crusader for online banking terrorism and has said repeatedly that these problems are just the tip of the iceberg. He did say on Wednesday that there would be other cases coming this year.

Programmers and Cyber Criminals

It’s believed the mastermind was Nikita Kuzmin, described as a Russian computer programmer. It’s believed he created the virus in 2005 and it could have spread via infected .pdf files. His partner, Deniss Calovskis, a Latvian, is said to have help create “web injects”, known as the phone websites that were created to mimic the real ones in an effort to fool consumers. He is also accused of creating an “online bazaar for cyber criminals”. This is where others came to buy, rent or lease the virus to help spread it. Kuzmin often rented out the malware to different cyber criminals for a weekly fee through a business he called “76 Service”. After he’d made a lot of money doing that, he eventually sold the virus to his co-conspirators, most likely sometime during 2009, according to court documents. Calovskis is accused of writing the virus’ code, while Paunescu is being accused of providing “bullet-proof hosting” to distribute Gozi. Each faces anywhere between 60 and 95 years in prison if they are convicted of the charges.

Kuzmin has already pleaded guilty and is said to be cooperating with authorities. Meanwhile, Calovskis was arrested in his home country last month and the others were arrested in other areas around the world. All are awaiting extradition to the U.S.

Wake Up Call

After the court hearing yesterday, Bharara said,

This case should serve as a wake-up call to banks and consumers alike, because cyber crime remains one of the greatest threats we face, and it is not going away any time soon. It threatens our financial security and our national security.

Unfortunately, it was also revealed in court that this hack was created using “astonishing sophistication”. It only further highlights the efforts of some determined to compromise the nation’s banking systems. It’s a “high tech challenge for law enforcement”, said Bharara.

What do you think about the future of cyber attacks? Are U.S. officials and banks doing enough to protect your accounts? Do the sentencing guidelines go far enough or is it too much? Share your thoughts with us.

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