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U.S. Army deserter stole the identity of Microsoft's Paul Allen

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March 28, 2012

In the last two weeks, Brandon Price, an alleged U.S. Army deserter has been charged with stealing the identity of Microsoft co-founder Paul Allen to run a bank fraud scam, and was arrested late yesterday.

In January 2012, Price allegedly conned Citibank call centre employees into changing Allen’s mailing address to that of Price’s modest home, as well as changing the phone number associated with his card. And just days later, he also persuaded Citibank workers to send a replacement debit card in Allen's name to the fake address.

"An individual identifying himself as Paul Allen called the customer service department of Citibank. The caller stated that he had misplaced his debit card at his residence, but did not want to report it stolen. The individual then successfully ordered a new debit card on the account of Paul Allen and had it sent via UPS," said FBI agent Joseph Ondercin.

However, the complaint fails to explain what personal information was used to successfully impersonate Allen. As a high-profile public figure, a great deal of personal information about Allen is in the public domain and his address and even his social security number might not have been that be hard to determine in the first place.

Overall, Citibank is defending its handling of the case, pointing out that the bank's anti-fraud systems quickly spotted something was wrong and blocked further fraud from the account.

“Through our own security procedures, Citibank correctly identified the actions of fraudulent account transactions and turned the matter over to law enforcement. We will continue to work with the FBI and the police in the ongoing investigation,” said Catherine Pulley, a CitiBank spokeswoman.

Prosecutors in the case say that Price used the debit card the same day UPS delivered it on January 13 to make a $658 payment into his Armed Forces Bank loan account before unsuccessfully attempting to use it to pay for the wire transfer of Western Union and attempted purchases from Gamestop and Family Value stores in Pittsburgh.

All three of the latter transactions were blocked from the account. Price, who has been absent without leave from the U.S. Army since June 2010, faces wire fraud and bank fraud charges over the alleged scam. He's been held in federal custody pending a trial, the date for which is yet to be set. He faces a minimum 8 to 10-year term in a U.S. federal prison, plus a $250,000 fine.

In other internet security news

A Microsoft-led security operation resulted in the takedown of core servers used in the now infamous ZeuS and SpyEye banking Trojan botnets on March 23.

After months of investigation that culminated in the coordinated seizure of command-and-control servers associated with the botnets and hosted in Scranton, Pennsylvania, and Lombard, Illinois, Microsoft has confirmed today that the botnets are down for good and do not represent any threats anymore.

The action comes after Microsoft filed a lawsuit against no less than thirty-nine unnamed parties on March 16, asking for permission to sever the command-and-control structures of these ZeuS botnets. The action follows the same tactics as previous successful takedowns of Waledac, Rustock and Kelihos spam-distribution botnet networks back in 2010.

In a public statement, Microsoft described the ZeuS takedown as its most complex to date. It said the action had the "limited and achievable" aim of disrupting the operations of ZeuS-related cybercrime operations rather than decapitating a zombie network, as in previous security operations and takedowns.

Overall, cybercriminals have designed and built hundreds of botnets using variants of the ZeuS malware. For this action – codenamed Operation B-71, Microsoft focused initially on botnets using ZeuS, SpyEye and Ice-IX variants of the ZeuS family of malware, known to cause the most public harm and which experts believe are responsible for nearly half a billion dollars in overall damages.

Due to the unique complexity of these particular targets, unlike our prior botnet takedown operations, the goal here wasn't the permanent shutdown of all impacted targets. Rather, our goal was a strategic disruption of operations to mitigate the threat in order to cause long-term damage to the cybercriminal organization that relies on these botnets for illicit gain.

By definition, ZeuS and SpyEye are essentially cybercrime toolkits for the creation of customised banking Trojans. Those crimeware kits sell for anywhere between $700 to $15,000, depending on the version and features of the malware. Many cybercrime gangs use ZeuS as the launchpad for banking fraud so there are many different zombie networks at play here and at any given time.

In the last year, Microsoft has detected more than 13 million suspected infections of ZeuS and SpyEye-related malware worldwide, with more than 3 million in the United States alone. The malware is designed to infect the Windows operating system and some of its user software such as Office and Outlook.

Friday's takedown action follows months of work by investigators at Microsoft in co-operation with officers from the Financial Services, the Security Information Sharing and Analysis Center (SFS-ISAC), the National Automated Clearing House Association and the U.S. electronic payments association.

Net security firm F-Secure is credited with providing a major help in analyzing the malware that features in the operation. U.S. Federal Marshals accompanied security investigators in the raids on two hosting companies, during which servers were seized for subsequent analysis.

Microsoft's statement fails to clarify this point but other reports strongly suggest the hosting firms involved were unwittingly playing host of the key infrastructure resources associated with the ZeuS botnets rather than acting as accomplices in cybercrime.

The operations resulted in the dismantling of two IP addresses behind the ZeuS ‘command-and-control’ structure. Microsoft has started monitoring 800 domains secured in the operation, helping it to identify thousands of ZeuS-infected computers.

In other internet security news

Security experts testifying at hearings held by the U.S. Senate Armed Services Committee on internet security have repeatedly warned that maintaining a perimeter protection to keep out cyber spies is unsupportable, and that the United States should assume that its networks have already been fully penetrated, when they may have not.

"We've got the wrong mental model here," said Dr James Peery, director of the Information Systems Analysis Center at Sandia National Laboratories. "I don't think that we could keep spies out of our country. We've got this model for cyber security that says, 'We're going to develop a system where we're not attacked.' I think that we have to go to a model where we assume that the adversary is in our networks," he said.

"It's on our computers and servers, and we've got to operate anyway," said Peery. The committee heard that the U.S. Department of Defense (DoD) operates over 15,000 computer networks with about seven million computing devices, and protecting them against hacking was virtually impossible, particularly in light of the increasing complexity of both the devices themselves and the software that runs on them.

The commercial software industry has, of course, realized that the old idea of a perimeter defense is increasingly useless, and groups such as the Jericho Forum have been working on systems to protect data, rather than network boundaries for many years.

Such principles might be a bit blurry to the military mind, but Dr Kaigham Gabriel, current head of the DARPA Group said that the cost of perimeter control would be huge and most likely ineffective at any rate.

"Modern computer systems today will demand the effective use of cyber, kinetic, and the combined cyber and kinetic means," he suggested. "The shelf-life of cyber tools and capabilities is short-– sometimes measured in just a few days. To a greater degree than in other areas of Defense, cybersecurity solutions require that the DoD develops the ability to build quickly, at scale, and over a broad range of capabilities."

Overall, cyber arms races are all well and good, but the head of research at the National Security Agency (NSA) Dr Michael Wertheimer warned that the U.S. is also facing an increasing intelligence gap, as not enough citizens have the skills of online defense.

A bit less than two years ago, there were just 726 computer science PhDs awarded to U.S. citizens, and only 64 of them signed up for government work.

In other internet security news

London's Metropolitan Police Service said this morning that it will use software designed in the 80s to help coordinate the command and communications of its policing operations during the 2012 Summer London Olympic Games in the United Kingdom.

Better known as MetOps, the software in question is currently installed in the force's special operations room (SOR), the central control room providing communications support during more than 500 major incidents and events each year, according to a report by London's police into the riots of August of last year.

MetOps, a messaging and recording system wasn't designed for dynamic incident management, and it means that commanders and police officers have no method to view in real-time the latest situation during an evolving incident, the report says.

The aging MetOps software also system means that it isn't linked directly to the other programs used in the force's central communications center known as the computer aided dispatch (CAD) system.

"This can result in the central communications centre being totally unaware of what is being dealt with within SOR, and conversely SOR being unaware of what is being dealt with through the CAD system," says the report.

The system's serious limitations contributed to a number of issues during the August 2011 riots, the report found, including the inability to monitor key incidents, slow communication with commanders on the ground, the lack of capability to hand over command to the oncoming team and the total inability to log key decisions for future review.

"These significant limitations coupled with the sheer scale of various tasks around the flow of information, communication and coordination of resources posed an immense challenge for those within SOR, particularly on August 8, 2011" the document says.

The process of replacing MetOps is under way and the force has also proposed some temporary solutions, including a new GIS system which is being trialled to assist with the coordination of resources. The Met is also considering adopting software currently used with live crime investigations for SOR.

The questions that are raised now is why did London's police wait until the last minute when they had a whole year to evaluate, plan and design modern software that would have prevented last year's riots. And one of the other question that is being asked now is: will the new software be ready in time for the Olympics which are less than four months from now? And it can take up to a year to fully test drive such complex software once it's available.

The Met's report also highlights the use of CCTV during disturbances. While the document says CCTV proved to be critical to the investigation of offences committed during the riots, it also says that there were significant challenges because of the sheer volume of footage, an estimated 200,000 hours, that had to be thoroughly examined.

The police's response to social media is also examined in the report, which notes that a digital communications steering group has been set up by the Met in response to its struggle to monitor social media in real time during the riots. The group wants to use social media to help the police understand what is going on in the community.

In other internet security news

The U.S. Department of Homeland Security has officially shut down and disabled a domain name registered outside of the United States by individuals who are not American citizens, and who registered with a Canadian registrar.

However, what's truly unique about this particular case is that the U.S. authorities didn't get the domain's registrar to seize the domain. Instead, they ordered Verisign, which manages all .com domains and had them void the DNS root records for the domain, essentially rendering it useless and non-operational.

And the domain in question has been in trouble in the past more than once. Bodog happens to be a big name in online gambling everywhere and as such, it became an attractive target for many who are seeking to stop U.S. citizens gambling online.

When we typed in a browser today, it brought us to a page that said the U.S. Department of Homeland Security and the DoJ have seized the domain and rendered it useless.

It was set up and run by Canadian billionaire Calvin Ayre. He, and three others involved with the site, have been indicted on several counts and could be extradited to the United States if the authorities can catch them, and they most likely will.

The indictment filed accuses the four individuals of violation of Maryland laws. The site spent a lot of time and effort talking about the money it made outside of the U.S., and took particular offence to the hiring of advertisers to promote internet gambling on a wide scale, according to court documents.

"Sports betting is illegal in Maryland and a few other states, and federal law prohibits bookmakers from breaking that law simply because they are located outside the U.S.," said attorney Rod Rosenstein in a statement.

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Source: The U.S. Department of Justice.

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