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Cybersecurity Company Extorted Its Clients, Says Whistleblower

An anonymous reader writes: Richard Wallace used to be an investigator for Tiversa, a cybersecurity company that sells services like "breach protection" and "incident response." These days, Wallace is testifying in federal court that Tiversa faked breaches to encourage sales, and extorted clients that weren't interested. For example, Wallace said Tiversa targeted a cancer testing center called LabMD in 2010, tapping into their computers and downloading medical records. Tiversa then used those records as evidence to convince LabMD they had been hacked, offering its "incident response" service at the same time. LabMD didn't fall for it, so Tiversa told the FTC about the "hack." The FTC, none-the-wiser, went after LabMD in court, eventually destroying the business. Wallace has also cast suspicion on reports Tiversa has issued, including one saying President Obama's helicopter blueprints were found on Iranian computers.

65 comments

  1. Some guyz in my old neghborhood used to do this by NotDrWho · · Score: 5, Funny

    "Hey, you need us for security protection, otherwise you never know when a break-in might happen, right Vinnie?"

    "Yeah boss, this place *definitely* needs to pay for our security protection."

    "See? You should listen to Vinnie, he's a security expert and shit."

    --
    SJW's don't eliminate discrimination. They just expropriate it for themselves.
    1. Re:Some guyz in my old neghborhood used to do this by Anonymous Coward · · Score: 0

      You racist bastard!

    2. Re:Some guyz in my old neghborhood used to do this by jellomizer · · Score: 1

      More of an ethnist

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    3. Re:Some guyz in my old neghborhood used to do this by Anonymous Coward · · Score: 2, Funny

      I went to school with a Korean kid named Vinnie.

    4. Re:Some guyz in my old neghborhood used to do this by Anonymous Coward · · Score: 0

      My Korean Vinnie?

    5. Re:Some guyz in my old neghborhood used to do this by OhSoLaMeow · · Score: 2

      He was a Yute.

      --
      They can take my LifeAlert pendant when they pry it from my cold dead fingers.
    6. Re:Some guyz in my old neghborhood used to do this by Dutch+Gun · · Score: 1

      Did you say "yute"? What is a "yute"?

      --
      Irony: Agile development has too much intertia to be abandoned now.
  2. The FTC report by YrWrstNtmr · · Score: 5, Informative

    Details here: https://www.ftc.gov/enforcemen...

    That's some messed up stuff. Tiversa needs to be burned to the ground, and their board members in actual jail.

    1. Re:The FTC report by YrWrstNtmr · · Score: 4, Informative

      However, the plot thickens:
      From the Motion to Dismiss: https://www.ftc.gov/system/fil...
      (in part)"In 2008, Lime Wire was found on a LabMD workstation at Internet Protocol address 64.190.82.42 in Atlanta, Georgia. Lime Wire was installed by a LabMD employee, without authorization and in violation of company policy."

      "On May 13, 2008, Tiversa contacted Lab MD, advised that Tiversa had downloaded LabMD's file, but refused to provide any additional information unless LabMD paid Tiversa for "remediation." Over the next two months, Tiversa sent six more sales-pitch emails to LabM0. LabMD, however, declined Tiversa's shakedown."

    2. Re:The FTC report by Anonymous Coward · · Score: 1

      Lime Wire was found on a LabMD workstation

      That alone warrants burning LabMD to the ground, salting the earth, raping their women and putting heads on stakes as a warning to others, never to consider the possibility of committing the most hideous and unspeakable of crimes: possible copyright infringement.

    3. Re:The FTC report by YrWrstNtmr · · Score: 2, Informative

      Copyright infringement has nothing to do with it.
      If that workstation and user has access to patient data, and that patient data is/was exposed via a P2P application...then yes, maybe they do need to be burned to the ground as well as the asshat 'security company'.

    4. Re:The FTC report by Malenx · · Score: 2

      However, there is literally no admissible evidence that they actually had any files shared via a P2P application, only the word of a company financially motivated to hurt them.

    5. Re:The FTC report by YrWrstNtmr · · Score: 1

      That's why I said "if"

  3. Tiversa breached systems? by Anonymous Coward · · Score: 4, Interesting

    So Tiversa breached systems to get data from them to show the system owner that they needed their services?

    But if Tiversa did breach those systems, then they did need Tiversa's services didn't they?

    1. Re:Tiversa breached systems? by Pi1grim · · Score: 5, Insightful

      Well, fun fact, if some kid breaches the system and then gives the evidence that system is flawed to the company without demanding any money - than he's a criminal, if a large company does the same, only demanding a large payment for services rendered and subscription to future services - then it's business as usual.

    2. Re:Tiversa breached systems? by Anonymous Coward · · Score: 1

      That's called American Capitalism. Working as intended.

    3. Re:Tiversa breached systems? by BitZtream · · Score: 2

      I knew some asshole would try to use some bullshit like Aaron Schwartz to try and act like theres a double standard.

      The reason you're hearing about this on slashdot ... IS BECAUSE THEY ARE IN FEDERAL COURT.

      Seriously, its in the fucking summary, don't even need to get to the full article.

      --
      Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
    4. Re:Tiversa breached systems? by Anonymous Coward · · Score: 0

      Welcome to the festering cesspool of feces that is the united states of america

    5. Re:Tiversa breached systems? by Capt.Albatross · · Score: 3, Informative

      So Tiversa breached systems to get data from them to show the system owner that they needed their services?

      But if Tiversa did breach those systems, then they did need Tiversa's services didn't they?

      Yet the linked-to article says "If Wallace is telling the truth, the FTC aggressively prosecuted a company based on bogus evidence."

      The only way I can see the evidence being bogus is if Wallace exploited a position of trust granted to him by the target company, and not even necessarily then. Whatever the truth is, the report is not self-consistent. Apparently, rational analysis and critical thinking are not employed at CNN - but we suspected that, anyway.

    6. Re:Tiversa breached systems? by gstoddart · · Score: 5, Informative

      But, honestly though ... if a corporation is charged in federal court, will they pay a fine, or will someone do jail time?

      Because if the corporation will pay a fine, but a person would get jail time ... that's pretty much what a double standard means.

      So before you go all full-metal asshole on the poor guy, ask yourself, has anybody from a corporation who does this kind of crap gone to jail?

      If doing something on behalf of a corporation means you don't go to jail, there more assuredly is a double standard.

      --
      Lost at C:>. Found at C.
    7. Re:Tiversa breached systems? by orlanz · · Score: 2

      Thank you! There is so much less festering and feces here than the other parts of the world. Thou you seem to have more of one color vs another. Oh well, red or blue, not much different than green or dark blue or dark red.

    8. Re:Tiversa breached systems? by Anonymous Coward · · Score: 0

      I wonder why fucktards on the internet have such a hard time comprehending this. The only way I would be "okay" with a corporation getting off with a fine and no jail time for the behavior of the shitheads involved would be if the fines were so heavy that they virtually bankrupted the company. Very rarely does that ever happen. This is the very definition of a double standard, because the standard of punishment for the individual (for most, their lives are ruined) is nowhere near the standard of punishment for a corporation (at best, you're typically going to see fines that may cause them to not turn a profit that year). Boo fucking hoo for the profit margin, but not for the human being who will never be able to legally touch a computer again. Makes sense, if you're a moron and can't think for yourself.

      It's sad that we live in a world where an individual can have all of their human rights stripped, or worse: face life imprisonment, for something like computer hacking. What's worse still is that, like you said, when a COMPANY does the same thing, then in your average situation, AT BEST they are only likely to face a few fines, and regardless of how hefty they are or how the court case pans out, things go back to business as usual and the company is rarely affected. It's a slap on the wrist for a corporation, but a life-destroying sentence for the individual. Good job.

      At least this situation played out the way I would have liked to have seen it.

    9. Re:Tiversa breached systems? by Bob9113 · · Score: 4, Insightful

      LabMD may still have had a security problem worthy of investigation. But Tiversa's behavior is the subject of this criminal investigation. If Tiversa only blew the whistle on LabMD after they declined to purchase Tiversa's services, they are arguably engaged in racketeering, and should be prosecuted.

    10. Re:Tiversa breached systems? by Anonymous Coward · · Score: 0

      I knew some asshole would reply to some asshole talking about Aaron Schwartz to deny there is a double standard of justice.

      It's a HEARING in Federal Court. When some people in the company are facing federal criminal trials with potentially long jail sentences and FTC employees are being fired for negligence, I'll believe that there was a consistent standard applied.

    11. Re:Tiversa breached systems? by dcollins117 · · Score: 1

      Because if the corporation will pay a fine, but a person would get jail time ... that's pretty much what a double standard means.

      Where it gets interesting is that for about $80 and a a little paperwork you can incorporate yourself. Whether you are contemplating a life of crime or just concerned about the possibility of someone suing you, it seems like money well spent considering all the legal protections you gain.

    12. Re:Tiversa breached systems? by sjames · · Score: 2

      You seem confused. Wallace is the whistle blower. If his claim that the "evidence" was fake is true then the FTC aggressively prosecuted a company based on bogus evidence.

      Does that help?

    13. Re:Tiversa breached systems? by radarskiy · · Score: 5, Informative

      Tiversa's claim to LabMD was not that LabMD had vulnerabilities, but that LabMD had been breached. Tiversa then claimed to the FTC that LabMD had failed to disclose a breach but did not disclose that the breach was by Tiversa themselves.

      LabMD may have needed the services of a security consulting company. No one needs the services of a lying security consulting company.

    14. Re:Tiversa breached systems? by Anonymous Coward · · Score: 0

      Maybe. What if Tiversa called attention to LabMD failing to protect their clients, employees, and stock holders? Not saying that's what happened, but if there was an issue that was actionable by the FTC isn't that the real issue?

    15. Re:Tiversa breached systems? by Livius · · Score: 1

      Exactly why legitimate fire departments only hire former mob arsonists!

    16. Re:Tiversa breached systems? by JWSmythe · · Score: 4, Interesting

      That's probably the biggest reason to have good in-house security people. They don't have a financial interest to make breaches or lie about them. It's in their best interest to keep everything secure, and continue to look for new ways to attempt breaking into their own stuff.

      I've never felt good about letting third parties in to do security testing. When someone above my rank decided to let a 3rd party do external tests, they'll pick anything and make it sound disastrous. One place was bitching about anything.

      They complained that we had the current version of Bind running on the DNS servers. "But people can do DNS requests!" Yup.

      They flagged the fact that we dropped unwanted traffic at the firewall. Yup. Get over it. They were upset it took forever to scan the network. Good.

      They flagged us for having a web server providing static content. They were upset they couldn't find any way to exploit CGIs or do SQL injection. Yup. That was kind of the idea.

      There were a whole bunch of other trivial things that they flagged us for. Then they were brought to the office, and got upset that we didn't provide wifi. Nope, that's a security risk. They wanted to plug their laptop into our network, so they were only given external access. Again, they bitched. But letting an unknown computer owned by an unauthorized party plug into our network is a security risk.

      They eventually gave up trying to bully us into dropping our security precautions and gave us a pass.

      I already habitually ran tests with privileged access to make sure even if all layers of protection failed, nothing really bad could happen.

      Honestly, if they are given everything, they can find something. Give them administrative rights to everything, and credentials to everything, they can find something. Like, email accounts can be accessed with full admin rights. Funny how that works.

      --
      Serious? Seriousness is well above my pay grade.
  4. Theyre creating jobs! by Anonymous Coward · · Score: 5, Funny

    Im off to go smash some windows.

    Its okay though because i work for Window Smashers LLC.

  5. LEO by jythie · · Score: 4, Insightful

    I love how they use awards by law enforcement as an example of them being good actors. One of the old and scary problems in our legal system has always been law enforcement working with really shady companies and protecting them. The fraternal atmosphere tends to leave police departments particularly vulnerable to being scammed, esp when those scams result in things that benefit the department like cash, 'evidence', or validation of existing prejudice.

  6. Carnegie Mellon involvement by Anonymous Coward · · Score: 1

    Were people with respected academic credentials involved?
    Was anyone from Carnegie Mellon involved?
    Did Carnegie Mellon have any involvement?

    I don't care about Gen. Wesley Clark. Wasn't he the 4th stooge?

  7. They reveal themselves ! by redelm · · Score: 5, Interesting

    Hmm ... Iran has blueprints ... sounds bad. But of _course_ they have blueprints of that model helo -- the Shah bought them prior to 1979! Marine One is [usually] a Sikorski VH-3 "Sea King" which first flew in 1959.

    When advocates make inflammatory claims that have innocent explanations, I consider them confidence crooks. They know their best arguments and have made them. Yet another example of lies being more revealing than the truth (so long as you already know it.)

    1. Re:They reveal themselves ! by slimdave · · Score: 1

      Your argument, that the presence of an innocent explanation let you consider the advocates to be confidence crooks, is based on your belief that the blueprints were for VH-3.

      They were not -- they were for the VH-60, which started coming into service in the mid-let 1980's for VIP duties, nearly 10 years after the Iranian Revolution.

    2. Re:They reveal themselves ! by redelm · · Score: 1

      Good point. But the judgement stands, given that the warning is from 2009 -- hardly current news.

  8. Overzealous Law Enforcement by Anonymous Coward · · Score: 0

    I recently heard a story where the FBI raided an office and came in with about 20 people, most armed with machine guns. They took the company's servers and all the desktops in the company. Literally shut the company down. It took nearly a year and half a million in attorney's fees to clear the company of wrongdoing. It turned out that a disgruntled employee who had been fired for cause was not happy about it and called in a "tip" to the FBI. The FBI did no investigation and took everything at the informant's word. Based on that employees lie they raided a company, shut the company down, and sent about 60 employees home. They are so overzealous looking for wrong doing that stuff like this happens. Thankfully this company had the capital to withstand the assault. Nothing happened to the ex-employee.

    1. Re:Overzealous Law Enforcement by tompaulco · · Score: 1

      Nothing happened to the ex-employee.

      Well, it kind of depends on why he was disgruntled. If he was fired for cause, he may have done something wrong and deserved to be fired. However, if the company laid him off because they had made him promises and didn't want to follow through, then the company deserves everything they got and more.

      --
      If you are not allowed to question your government then the government has answered your question.
    2. Re:Overzealous Law Enforcement by moeinvt · · Score: 1

      These regulatory and law enforcement douche-nozzles love to exercise their power over helpless victims. They raid small businesses, family farms and sole proprietorships just to get their jollies. Makes them feel like real tough guys to intimidate someone into compliance. The worst are the bureaucrats in agencies like OSHA and EPA.
      Until you've run a small business, you can't possibly understand the nitpicking BS that these jerks will pull on you.

    3. Re:Overzealous Law Enforcement by Hognoxious · · Score: 1

      Bollocks. They might have deserved a fine, or being ordered to pay compensation, but not this.

      My take is that when someone makes an intentionally & blatantly false call to LE, then 1) the subject of the complaint should get the right to actually commit the crime against the complainant with impunity or 2) the complainant serves the maximum sentence for the alleged offence(s), doubled.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  9. Iraq War by tekrat · · Score: 1

    Funny thing, but the Iraq war worked the same way. George Bush took the word of an informant (who would later turn out to be an Iranian spy); that Iraq had WMD.

    No real investigation was done, and we invaded a country and slaughtered many hundreds of thousands, destabilized the entire region and ended up creating ISIS.

    So, yeah, this kind of stuff happens all the time.

    --
    If telephones are outlawed, then only outlaws will have telephones.
    1. Re:Iraq War by belthize · · Score: 1

      Well mostly all the time. April 11th 1954 was noted for it's absence of this kind of shit.

      http://www.dailymail.co.uk/sci...

    2. Re:Iraq War by Anonymous Coward · · Score: 0

      ...and we captured Saddam. ...and Iraq had democratic elections.

      It's not all puppies and rainbows in Iraq, but if you think they're worse off now than they were before, you need to pickup a history book.
      I think the US had no fucking business getting involved, but to claim that the US fucked it up is like claiming dropping a turd on the ground made it inedible.

    3. Re:Iraq War by YrWrstNtmr · · Score: 1

      No real investigation was done, and we invaded a country and slaughtered many hundreds of thousands, destabilized the entire region and ended up creating ISIS.

      You do realize, that after Gulf War 1 (1991), we (Western military forces) never left the region. You're aware of this, right?

    4. Re: Iraq War by Anonymous Coward · · Score: 0

      We always leave tools behind, this has been the case since WWI.

      But please continue...

    5. Re:Iraq War by operagost · · Score: 1

      I didn't support the USA going in, but it's best we act like adults and not pretend that Iraq was just minding its own business while we made an unprovoked attack. Iraq was supposed to allow UN inspectors to ensure they didn't develop WMDs; they'd long been keeping them out. That, combined with the (faulty) intelligence, indicated malfeasance.

      --

      Gamingmuseum.com: Give your 3D accelerator a rest.
    6. Re: Iraq War by AvitarX · · Score: 1

      Didn't it come out recently that they did have WMDs.,and the reports were burried because they were made in America.?

      Not that I would consideassderyconsiderid similar in any way.

      --
      Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
  10. Bullshit by Anonymous Coward · · Score: 0

    Do you really think the decision was based solely on one informant's word? Nonsense.

    And if you hadn't noticed, that region has been unstable for centuries.

    1. Re:Bullshit by countach74 · · Score: 1

      So because it's been unstable for centuries, that justifies any acts that the US takes that could aid in its instability?

    2. Re:Bullshit by sjames · · Score: 1

      Of course not. It was based on Bush wanting to be a war president like his daddy. From there, they just had to get a few shady people to tell a few convenient lies and it's off to the races.

  11. Bulher buhler,, by Anonymous Coward · · Score: 0

    Ferris Bulher, Bulher, bulher,
    Snoden, Snoden, .......

  12. unregretted attrition by Anonymous Coward · · Score: 0

    The summary is so random it sounds like disgruntled-employee drama: extortion all the way down.

  13. LabMD and the FTC by silas_moeckel · · Score: 1

    They were breached and data did get out the bad actors, it really does not matter than it was those same said bad actors that told the FTC about it. LabMD failed to keep patient records safe and when they were told about the breach failed to act upon that information.

    --
    No sir I dont like it.
    1. Re:LabMD and the FTC by sjames · · Score: 1

      The whistle blower's allegation is that LabMD was NOT actually breached. Do you have an independent report that says otherwise?

    2. Re:LabMD and the FTC by silas_moeckel · · Score: 1

      Per the article the whistleblower Wallace testified that he breached LabMD and downloaded patient data. Sounds like a breach to me.

      --
      No sir I dont like it.
    3. Re:LabMD and the FTC by sjames · · Score: 1

      Looking again, it seems TFA claims both. Perhaps a reporter who needs to slow down a bit, drink more coffee.

  14. Sounds like Hongkong action movies.... by sentiblue · · Score: 1

    I come from a country where small thugs run business in a jurisdicitonal area....

    In which area, the hoodlum gets to collect cash from small businesses in exchange for protection... but in fact they dont really provide any protection, that's just the cost for being able to run a business. Whoever refuses to pay, their business gets smashed/burnt...

    This company we're reading about is exactly that and I hold the US government agencies responsible to make very very very sure that their entire group of decision makers go to jail... and compensate every penny of damage that has been done to LabMD.

    Also, I expect government agencies to protect businesses... not destroying them. I can understand that the FTC was mis-led by the company and in turn destroyed LabMD... I want to know what they will do for LabMD, or the people that used to own it.

  15. yo dawg by Hognoxious · · Score: 2

    Hey, you defined a double standard twice!

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    1. Re:yo dawg by q4Fry · · Score: 1

      One kind of double standard applies to people like gstoddart.
      The other kind applies to everyone else.

  16. I recently heard a story where ... by Anonymous Coward · · Score: 0

    You read it on the Internet so it must be true...

  17. LIARS! by Anonymous Coward · · Score: 0

    YOU DARE SHAKE MY FAITH IN VAPID CLAIMS BY TERRIBLE PEOPLE. Also, too many caps it says, so fuck it, a sentence without caps.

  18. I have worked with these sorts by EmperorOfCanada · · Score: 2

    In every single, and I mean without exception, every single consulting company that I worked for/with the "security specialists" were full of shit assholes. The guys who were in charge of the actual network were very well trained and capable security people but they weren't marketing themselves as specialists. The security guys just spouted endless paranoia and blah blah'd about military grade security. Yet when put to a test not a single one of them could exploit a linux system that hadn't had an upgrade in a year.

    What they didn't have in skill they made up in swagger and threats. If consultants in the company didn't submit their laptops to them for a security audit they got all shitty saying how our laziness would take down the company. So my solution was to hand them a laptop that I would get fresh from IT with nothing installed, no documents, and fully up to date. Then I would laugh at their report where they would say that I had all kinds of unencrypted documents and had installed insecure software on the laptop. Then when I showed this to upper management they got even angrier that I had wasted what otherwise would have been valuable billing hours, even though it was they who wanted to audit all the computers.

    But the thing that finally broke their stranglehold over the company's management was when they bullied their way into a friend's project devastating his budget after they convinced the client he was working for that his unaudited system would leave their company wide open. So he made a mirror image of their laptop from a backup, changed the background to a picture of two guys having sex with the company logo of the client on the face of the guy getting it and a picture of the security "expert" over the face of the guy giving it. Then on the way to the meeting he swapped laptops. Security expert was fired that day.

  19. Most AV software were come from the same countries by Anonymous Coward · · Score: 0

    were the viruses from.

    https://www.youtube.com/watch?...