'Project Blitzkrieg': Are Russian cybercriminals about to invade US banks?

Security researchers uncovered 'Project Blitzkrieg', a plan for a major cyberheist of US banks, after its purported Russian mastermind posted recruitment messages online. It's not clear whether the publicity halted the plot.

In one of the most ambitious cyber-bank-heist plots ever uncovered, Russian cybercriminals plan to use a mass of fake wire transfers to steal millions from 30 big US financial institutions, possibly before spring 2013, security researchers say.

A key reason that "Project Blitzkrieg" has been exposed is that its purported mastermind, a cybercriminal who goes by the hacker alias “vorVzakone,” which translates to “thief in law,” posted notices in an underground criminal online forum advertising for accomplices, researchers say.

The messages vorVzakone posted, including key pictures of his computer setup, screenshots of his malware, and a general description of the plan to organize an army of 100 "botmasters" to attack the banks, were tantalizing, but also suspect – at least initially.

Was this bluster just evidence of the Russian police setting up sting operation to entrap would-be cyberthieves? No. New findings indicate the plot was all too real, and appears to have progressed since its first discovery in October, according to a new report released Thursday by McAfee, the Santa Clara, Calif., cybersecurity firm.

"McAfee Labs believes that Project Blitzkrieg is a credible threat to the financial industry and appears to be moving forward as planned," the report concludes.

"Not only did we find evidence validating the existence of an early pilot campaign operated by vorVzakone and his group using the Trojan Prinimalka that infected at a minimum 300 to 500 victims across the United States, but we were also able to track additional campaigns as a result of the forum posting."

But the report also notes that discovery and exposure of vorVzakone's message may have slowed the plot, McAfee admits later in the report. Other researchers say the plot might have been delayed, torpedoed entirely – or be progressing as McAfee avers.

What vorVzakone originally proposed in his Sept. 9, 2012, message to the cybercriminal underground was a novel mass attack that would organize previously unorganized cells of the cybercriminal community. The idea was to collaborate in exploiting the US banks' vulnerabilities in authenticating wire transfers.

“The goal – together, en-masse and simultaneously process large amount of the given material before antifraud measures are increased,” vorVzakone wrote in his message, according to a translation by cybersecurity blogger Brian Krebs.

The McAfee findings largely confirm and expand on earlier findings by RSA, the Bedford, Mass.-based cybersecurity division of EMC Corp., which published its findings on Project Blitzkrieg on the company's security blog in October.

McAfee and RSA agree that vorVzakone sought to put the prospective participants into a "boot camp-style process" in which "accomplice botmasters will be individually selected and trained, thereby becoming entitled to a percentage of the funds they will siphon from victims’ accounts into mule accounts controlled by the gang," RSA researchers blogged in October.

"To make sure everyone is working hard, each botmaster will select their own ‘investor,’ who will put down the money required to purchase equipment for the operation (servers, laptops) with the incentive of sharing in the illicit profits. The gang and a long list of other accomplices will also reap their share of the spoils, including the money-mule herder and malware developers."

A key feature of the plot was to purchase computerized "phone flooding" equipment so that banks seeking to call or text victims to verify whether a wire transfer was real or not, would not be able to reach them by phone because the digital pathways to the phones would be blocked. Meanwhile, the fraudster can call the bank, claiming to be the accountholder approving the transaction.

The planned attack, both RSA and McAfee agree, is built on a particularly nasty piece of a malicious software called Prinimalka, which is itself a previously little-known private variant of a better-known piece of criminal malware called Gozi that was specifically designed to steal banking login credentials.

The insidious difference between the two malwares is that Prinimalka clones the victim's computer – sending all the essential variables to Russia so a "virtual machine" can assemble a fake version of the victim's computer complete with all the same cookies, operating system, and other software configurations. The fake can then be operated from Russia, but appear to bank security systems to be the victim's legitimate machine sitting somewhere in the US.

"Their method of doing this is to essentially clone the victim's computer so the copy can be run on a virtual machine anywhere in the world," says Daniel Cohen, head of RSA's Knowledge Delivery branch, which deals with external cyber threats. "It looks to the bank like that computer belongs to Joe Schmo sitting somewhere in America."

While McAfee says the Blitzkrieg plot appears to have been real until very recently, based on the tracking of malware deposited on victim machines across the US, it is now possible that the plot has been sunk by all the publicity. Or it might merely be on hold – or even still in deep development.

"Some recent reports argue that vorVzakone has called off this attack because it has been made public," notes the McAfee study. "Yet it is possible that the publicity may merely drive his activities deeper underground."

After media picked up the story, vorVzakone wrote in a final message that things had become "too hot, too much media attention," Mr. Cohen agrees.

"The guy in charge of phone flooding said on the same forum that he was now out of a job and available for hire. We tracked vorVzakone as he went into deeper underground forums, but haven't seen him posting. He's also being chastised by members of the forum for bringing so much unwanted attention."

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.