Hacking Ring Nabbed By US Authorities

Slatterz writes "The members of a hacking ring responsible for stealing more than 40 million credit and debit card numbers from retail organizations in the US have been caught and charged. The case before the US Department of Justice is believed to be the largest hacking and identity theft case ever prosecuted. The criminals allegedly obtained bank details by hacking into the retailers' computer networks and then installing 'sniffer' programs to capture card numbers and password details as the customers moved through the retailers' credit and debit processing networks."

Comments

will there be changes?

[CaptainNerdCave]

are security measures going to be changed with this revelation to the public? having seen the inner-workings of various bank and investment facilities, i can safely say that one doesn't need to go through any really complicated work to take financial information from consumers: most wiring closets aren't even locked.

Re:will there be changes?

[El_Muerte_TDS]

are security measures going to be changed with this revelation to the public?

Of course not. After all, they caught the people that abused it. Why waste money to protect something from criminals when the criminals were already caught. Nobody would dare to try it again.

Re:will there be changes?

[Strilanc]

I'm going to go out on a limb and say the core of the problem isn't the security of the computers, it's the fact that in order to use a credit card number you have to reveal it. There will always be some retailer or customer without a secure system. _We can't change this, it's too hard_.

I think the solution is a small device with an embedded secret key. All it has to do is sign data [secondary: show text, wireless, usb, etc].

For example, to complete a transaction, a store asks you to sign this:
[
      VISA Credit Transfer
      "here's a one-line ad because we just can't help it!"
      amount: 12.34$us
      buyer: John Doe
      seller: Matt's Grocery Store
      date: August 7, 2008
      buyer public key: 09 f9 11 02 9d 74 e3 5b d8 41 56 c5 63 56 88 c0
      seller public key: 4B 3D BA 71 3B D8 56 43 2B A7 E8 F4 69 CA C5 5A
      seller transaction id: 594864purplebunnies
      protocol version: 1
]
Then the store also signs it, and sends it and the signatures to VISA, or whoever.

The beauty here is that the security is now entirely encapsulated in a) the signing device, and b) the plaintext format for requesting credit.

In the example I have given the buyer only has to check that the amount is correct because all other modifications give them free groceries. The store only needs to ensure they match the format specified by VISA, and that the buyer's signature is valid. VISA takes most of the work, checking that the format is correct, the signatures are valid, the transaction id is unique for the seller, the buyer has enough credit, etc.

I'm sure there are holes, but it's a hell of a lot better than what we have now.

Re:will there be changes?

[dsginter]

are security measures going to be changed with this revelation to the public?

If they secured credit cards so that there was no fraud, then how would the providers justify their exorbitant fees?

Re:will there be changes?

[timmarhy]

what, they justify them now?

Re:will there be changes?

[Iamthecheese]

hash clash

Re:will there be changes?

[kabocox]

In the example I have given the buyer only has to check that the amount is correct because all other modifications give them free groceries. The store only needs to ensure they match the format specified by VISA, and that the buyer's signature is valid. VISA takes most of the work, checking that the format is correct, the signatures are valid, the transaction id is unique for the seller, the buyer has enough credit, etc.

I'm sure there are holes, but it's a hell of a lot better than what we have now.

I'm surprised that we even still use signatures now. It seems like no cashier actually looks at them, or could tell if there is even a difference. There is a strong part of me that would like the credit/debit card industry to add various biometrics that would at least be scanned by a machine so we'd actually have some ID verification other than the damn PIN number.

I think that the credit card companies are stuck at the moment. They'd like to actually throw out a few more security measures, but it would cost retailers money to add the biometric scanners. We could end alot of ID theft if a finger print was required to be sent with each purchase. If some one stole your card, they'd also have to have a means to forge your finger prints to use it most places. It won't stop these professionals as they'd figure out ways around any system in a few months, but for all the less casual ID thefts that go on, it would make detecting ID fraud and criminals far, far easier.

Re:will there be changes?

[bberens]

Or you could.. ya know.. discover that there's vulnerabilities inherent in the system and just use cash instead. Using cards (even debit) causes price inflation. Cash is king.

Re:will there be changes?

[gcatullus]

Will not happen because credit card companies are NOT The ones on the hook for the losses. The charade of PCI compliance has foisted all responsibility back to the merchant. The Visa/Mastercard cartel actually make MORE money from fraud because there are many more transactions, and they profit from every single transaction. Visa/mastercard took approximately $40 Billion last year in interchange fees, this is in addition to any customer interest or late penalties. They have no incentive to change and teh merchants (other than say Walmart) are in no position to quibble with them.

Re:will there be changes?

[tlhIngan]

I'm surprised that we even still use signatures now. It seems like no cashier actually looks at them, or could tell if there is even a difference. There is a strong part of me that would like the credit/debit card industry to add various biometrics that would at least be scanned by a machine so we'd actually have some ID verification other than the damn PIN number.

Actually, it's a misconception that the signature has meaning to the retailer if they match. If you look at the slip you sign, it says something to the effect of "I agree to pay this debt according to the terms of the cardholder agreement" or similar.

SIgning your card is an indication that you accept the cardholder agreement (i.e., the card is valid). Technically, a store can refuse to accept any card that is unsigned, says "CHECK ID" or similar because those cards are invalid (because you haven't indicated you accept the cardholder agreement, which covers things like... repayment of debt). The slip is used to indicate that you, the cardholder, will pay the issuer the amount listed, who will then pay the merchant that amount.

During a dispute, the best proof a merchant has is the signed slip. What makes life interesting are those places where signing the slip isn't necessary (e.g., some for transactions under $25).

Re:will there be changes?

[blair1q]

Or you could.. ya know.. discover that there's vulnerabilities inherent in the system and just use cash instead. Using cards (even debit) causes price inflation. Cash is king.

But your cash is counterfeit. Please step to the side and speak with the nice policeman. Thank you.

More details

[hattable]

If you felt a little cheated by the lack of info in the 'article' the DOJ site has more.

Re:More details

[Anonymous Coward]

From that FA:

"Criminal informations were also released today in Boston on related charges against Christopher Scott and Damon Patrick Toey, both of Miami."

Informations? The DOJ can't find a person who knows basic English to write their PRs?

Re:More details

[Anonymous Coward]

those damn Legali immigrants.

Re:More details

[consonant]

As does Ars..

Re:Hacking?

[srjh]

hacking (uncountable)

1. (computing) Unauthorized attempts to bypass the security mechanisms of an information system or network.

Hack

...4b: to gain access to a computer illegally

You may prefer to use other definitions yourself, but the usage here is perfectly correct.

indictment links

[ya really]

Links to the indictments of the top two suspects:

suspect 1
suspect 2

Re:Hacking?

[BPPG]

You can bet hackers didn't write those definitions. Those definitions are accurate in the context of mainstream media, but as the GP stated, this is /.

Better Article

[FSWKU]

http://news.bbc.co.uk/2/hi/business/7545212.stm has a much better write-up.

So now we will get even MORE draconian measures to stop the "evil hackers" when in reality, it was a combination of bad intentions, and old-fashioned stupidity. The article specifically mentions looking for "vulnerable" access points. This means that whoever set the network up for these stores did not do a proper job in securing said network. Also, why the HELL were the systems used to process credit card transactions on the same insecure wireless network? There is NO excuse for that. I'm not excusing what these guys did, but once again we have a case where whoever setup the hardware in these places needs to be held for criminal negligence.

Re:Better Article

[elnico]

whoever setup the hardware in these places needs to be held for criminal negligence

IANA(legal scholar), but this doesn't seem to fit the definition of criminal negligence for two reasons:

1) Doing a bad job at something and allowing others to come to harm isn't enough. Essentially, you must be aware of the risk of your actions (or inaction), or you must intentionally allow yourself too little information to make a proper decision.

2) I'm pretty sure that once you commit a negligent act, it has to be nature that takes something "the rest of the way." If your act simply allows someone else to commit a crime, then the crime falls the perpetrator, not you.

Keep in mind too, that I'm talking about criminal negligence. You can sue in civil courts on a much broader basis.

In fact, I find your entire comment rather ironic, since you imply that the recent crimes will be an excuse for some 1984-state to implement "MORE draconian measures," but then go on to suggest criminalizing what is essentially poor job performance.

Re:Hacking?

[Anonymous Coward]

This is SLASHDOT!!!

kick to the chest

Re:Hacking?

[pegdhcp]

Provided that this is still the /. that we all know, this should not be necessary, but one may never be sure about the level of truth...

Slashdot is days behind the news

[Xenna]

There used to be a time when you read tech-news first on slashdot. Nowadays I read it in my (Dutch) newspaper first (yep, the paper one that they actually have to print and deliver first) end a few days later it appears in /.

What the hell is wrong?

Re:Billing department infiltration

[unfasten]

Well if you can record the call (and phone boxes aren't hard to tap, though I'm not sure how exactly it would work at a call center) then it's easy to convert the DTMF tones into numbers using a tone decoder.

Here's a link to a DIY hardware version: http://www.bobblick.com/techref/projects/tonedec/tonedec.html And a quick search should turn up software solutions, or you could write one yourself since the tones are standard. Wiki lists all the tones: http://en.wikipedia.org/wiki/DTMF#Keypad

Was the ring working in a windowless environment?

[hansraj]

;-)

Re:Hacking?

[Anonymous Coward]

Dear hackers,

You can't own a word. Get over it.

Who foots the bill?

[brucmack]

So, who foots the bill for this? The retailer, the credit card comany / debit card issuer, or the customer?

Re:Who foots the bill?

[Bravoc]

So, who foots the bill for this? The retailer, the credit card comany / debit card issuer, or the customer?

The credit card company raises my rates to cover their expenses, the government uses my taxes to pay for the investigation and prosecution, looks like I'm paying for it!

Drinks for everyone! Here, use my card!

Re:Who foots the bill?

[budword]

The customer always foots the bill, sooner or later.

Re:Who foots the bill?

[Stanislav_J]

So, who foots the bill for this? The retailer, the credit card comany / debit card issuer, or the customer?

The credit card company raises my rates to cover their expenses, the government uses my taxes to pay for the investigation and prosecution, looks like I'm paying for it!

Dude, the customer pays for everything one way or another -- haven't you figured that out by now?

Defendant worked for the Secret Service

[unfasten]

The main defendant in this case, Albert Gonzalez, used to be a informant for the Secret Service and cooperated in the Operation: Firewall case 4 years ago. Apparently they didn't keep a very good eye on him while he was working for them or after they were done with him. He became an informant after he was arrested around mid-2003 and the case lasted until the end of October, 2004. So according to this Washington Post article (which got the informantion from the indictment someone linked above) he was actively committing crimes at the same time he was an informant:

-- In about 2003, Gonzalez and others found an unencrypted wireless access point at a BJ's Wholesale Club store. BJ's reported a breach of its computer networks in early 2004.

-- In 2004, other members of the ID theft ring compromised an OfficeMax wireless access point in Miami, and they were able to steal credit card data. After law enforcement officials in 2006 identified OfficeMax as the victim of a data breach, the company said it hired an outside auditor to conduct an investigation and found no evidence of a security breach. An OfficeMax spokesman didn't immediately return a message seeking comment.

So either the Secret Service was letting this go on just so they could make one bust, or they had no idea that their own informant was committing major breaches while under their supervision. Also, how stupid is this guy that he didn't even stop breaking the law after getting busted and becoming an informant? Some people are just begging to be sent to prison, and it looks like the prosecuters are going to grant his wish. For the rest of his life if they have their way.

P.S.: The Threat Level post with the info about him being an informant also contains a link to another case about another informant who was stealing social security numbers while working on a computer inside the Secret Service offices.

The usdoj.gov website seems to be down for me at the moment but should come back up eventually.

Re:Defendant worked for the Secret Service

[ya really]

I'm not really getting the thrust of your argument. Informants are, by definition, most likely to be criminals or criminal accessories. What's your point?

I believe his point is, they were supposed to be former criminals, in the past tense. Law enforcement's job is to see that they stay that way, not to go run amok with 40+ million credit cards.

In the case of the other informant he linked, the guy stole information directly from the Secret Service office's computers while the agents are on duty (though probably off viewing porn while the informant conducts non-authorized criminal activity). Mind you, they had a huge monitor displaying whatever the informant was doing on there aside from keylogging. Seriously, that's a huge lax on monitoring, if they can't even watch an informant in their own office. Makes you wonder if they are even capable of doing their jobs.

He's basically saying that this bust is just a front for the US government cleaning up a mess they created in 2003 by not initially locking this guy up or restricting his computer access/monitoring him more closely.

One other thing, the informant did absolutely no time for all previous criminal activity he conducted before turning informant, after his initial arrest in 2003 (which according to the FBOP inmate tracker, he is 27). Thus, he could have been doing this for some time. Basically, he got a free pass on whatever crime he did before his intial arrest, plus almost five more years of reeking havoc on the banking system. This is in sharp contrast to what most people would assume "informing" is, where a criminal cuts a deal for reduced time or perhaps probation/house arrest, but still gets charged. This guy however has not been charged, until now.

Re:Defendant worked for the Secret Service

[phayes]

Time to wakey wakey young one, the world is more complicated than your parents told you...

In order to catch a thief, law enforcement officials will use people who are criminals themselves. When, in the course of an investigation, they have enough evidence to put away suspect A, A will often turn over information on other people the government wants to put away more. As the leaders of criminal organizations usually protect themselves by passing orders on to underlings & often do not commit overtly illegal acts themselves, this is the only way to collect enough evidence to put them behind bars.

However, turning states evidence, will not protect A a second time if he continues to break the law unless he can once again deliver on someone that the DA wants more than A.

I see nothing abnormal in putting in prison a criminal who was too dumb to stop committing crimes.

Re:Defendant worked for the Secret Service

[Oligonicella]

"Law enforcement's job is to see that they stay that way,..."

Uh, no. It is law enforcement's job to apprehend people who have committed a crime. It is not their job to ride shotgun on people who have in the past committed crimes, only to catch them again if they repeat.

priceless

[dbcad7]

hacking ring responsible for stealing more than 40 million credit and debit card numbers from retail organizations in the US have been caught and charged.

To which they replied.. "put it on the card"

Re:Hacking?

[Sophia Ricci]

He is just doing 'identity theft' of hackers.

Re:Hacking?

[houghi]

The price for correcting the Editors is being moderated as a troll, apparently.

Re:This was in Wednesdays newspaper!

[Redneck Hacker]

This was in Wednesdays newspaper!

It was also in Tuesday's /.

one time CC numbers

[timmarhy]

ALL of this could be ended if visa and mastercard changed to single use CC numbers. if they gave me a token that created a new CC number with each transaction it might actually justify that annual fee the assholes charge me.

Re:one time CC numbers

[maxume]

If you don't feel you are getting your money's worth from the annual fee, you should consider switching to one of the hundreds (thousands?) of cards available without an annual fee.

Re:one time CC numbers

[AvitarX]

Maybe he/she was referring to the merchant fees (the part that actually goes to VISA). These are (for me) $0.50 transaction and 2% of gross.

Don't worry though, it's the customers, credit cards or no, that pay these fees in the end. SInce profits are low enough and it is a competitive business, without the fees, prices would be lower.

Re:Hacking?

[mixmatch]

Maybe because you are ignorantly trying to say that because they are black hats they should not be called hackers. The term hacker can be appropriately used to describe anyone with above-average knowledge on a subject and a desire to explore and tinker, usually outside the confines of what is expected or desired. Maybe you can educate yourself a little better before complaining on slashdot, Try reading some Kevin Mitnick, Michal Zalewski, or if nothing else Wikipedia.

Good - Hang the fsckers

[xgr3gx]

But they'll probably just end up going to club fed for 2 years

Sort of Frightening

[b4upoo]

The people arrested were in several nations. What is unusual and a bit frightening is that it seems like they were able to get arrest warrants or whatever was needed crossing international lines really quickly. It almost seems like some uber government organization was at work on this affair.

Bail was set at $10,000,000 each...

[clt829]

which they promptly paid by credit card.