War on cybercrime--we're losing

[InfoSec News <isn () c4i org>]

Forwarded from: William Knowles <wk () c4i org>

http://zdnet.com.com/2100-1106-912780.html

By Greg Sandoval 
Special to ZDNet News
May 14, 2002, 5:50 AM PT

The nightmare for Ecount, an online gift certificate service, began 
last year when a hacker broke in to the company's system and stole 
personal information belonging to its customers. 

Nine months later, the criminal is still at large. The thief has 
brazenly taunted executives with repeated e-mails while staying ahead 
of investigators, deftly wiping away his electronic fingerprints and 
covering his tracks at every turn. 

"We're sick to death of hearing from him," Ecount Chief Executive Matt 
Gillin said of the intruder, who has offered to return the information 
for a fee. 

Although law enforcement agencies are quick to trumpet their 
occasional victories against cybercriminals, they are rarely able to 
track down hackers sophisticated enough to pull off such complicated 
heists. Few hackers of this caliber are arrested, and fewer still 
spend time behind bars. 

The resulting frustration for investigators, companies and consumer 
victims raises a question that has persisted for years: Why are 
hackers able to elude capture so easily? The answer, according to 
security analysts and fraud investigators, is that the Internet has 
bred an elite class of criminals who are organized, well funded and 
far more technologically sophisticated than most law enforcement 
officials. 

"It's a world-class business," said Richard Power, editorial director 
of the Computer Security Institute, a private research firm that 
tracks electronic crime. "Al-Qaida and serious narcotic terrorists are 
using credit card fraud to finance their groups." 

Fraud cost e-tailers $700 million in lost merchandise last year, says 
Avivah Litan, a financial analyst for research firm Gartner. Some 
large Internet retailers have software that screens transactions and 
refuses to sell to customers who appear suspicious. Litan estimates 
that this costs Web stores between 5 percent and 8 percent of sales. 

A Gartner study also shows that 5.2 percent of online shoppers have 
been victimized by credit card fraud and 1.9 percent by identity 
theft. 

"These are huge numbers. This is scary stuff," Litan said. "The 
Internet has got an albatross around its neck." 

Skilled hackers shake off investigators by shuttling between multiple 
servers before launching an attack. After fleeing a targeted site with 
credit card numbers or other bounty, the intruders immediately begin 
deleting the log files of each server they have passed through, 
eliminating any record that they were there. 

It is the equivalent of "vacuuming up the crime scene," said 
independent fraud investigator Dan Clements, who runs a Web site 
devoted to catching hackers called CardCops.com. Only about 10 percent 
of active hackers are savvy enough to work this way consistently, he 
said, but they are almost always successful. 

Having grown up with the breakneck pace of "Internet time," hackers of 
this digital generation use speed as a primary weapon. As with all 
criminal investigations, pursuing online suspects means time-consuming 
records searches that often require subpoenas--a process that can give 
hackers an insurmountable advantage. 

FBI agents can swiftly get subpoenas from the courts but often lose 
critical time trying to serve them. Agents can spend days sorting 
through digital smoke screens created by multiple servers, requiring 
agents to obtain and serve multiple subpoenas. 

In the meantime, valuable evidence is often lost, and by then, hackers 
are long gone. 

The federal government is taking steps to improve its fight against 
criminal activity online. FBI Director Robert S. Mueller created a new 
cybercrime unit in December, and the Bush administration has added 50 
new federal prosecutors to address the problem nationwide. 

Unsolved hacks

Still, few believe that these measures will eradicate a problem that's 
become so deeply entrenched. The FBI confirmed, for example, that no 
arrests have been made in any of six recent high-profile cases: 

* Playboy.com: An intruder slipped past the Web site security systems 
  of the adult entertainment company last November and obtained the 
  personal information of an undisclosed number of customers of the 
  site's e-commerce store. The hacker notified customers that he or 
  she had pilfered the information and, as proof, gave them their credit 
  card numbers. 

* Ecount: Last summer, a hacker circumvented the Internet defenses of 
  the Philadelphia-based company's gift certificate service and 
  notified customers of the breach in an e-mail that included their home 
  addresses. The hacker then demanded $45,000 from the company to keep 
  him from exposing the personal information of 350,000 customers. 

* Egghead.com: A hacker infiltrated the e-tailer's system in December 
  2000. After three weeks of investigation, the company said the 
  intruder did not obtain the personal information of its 3.7 million 
  customers, but many banks said they spent millions of dollars to 
  issue new credit cards in the meantime. 

* Creditcards.com: Also in December 2000, a hacker broke in to systems 
  maintained by the company, which enables merchants to accept 
  payments online, and made off with about 55,000 credit card numbers. 
  The hacker tried to extort the company and, when executives refused 
  to pay, exposed the numbers by posting them on the Web. 

* Western Union: In September 2000, a hacker exploited an opening in 
  the Web site of the financial services company and got away with 
  more than 15,000 credit card numbers. Human error left "performance 
  management files" open on the site during routine maintenance, 
  allowing the hacker access. 

* CD Universe: About 350,000 credit card numbers were stolen from the 
  online music company in January 2000, one of the first large-scale 
  hackings of its kind. The thief, identified only as "Maxus," held 
  the card numbers hostage and demanded a $100,000 ransom. When the 
  company refused, the hacker posted the numbers on a Web site. 

Without commenting on these specific cases, law enforcement officials 
say many online merchants may be partly to blame for the lack of 
arrests because they do not devote enough resources to prevent 
intrusion or facilitate investigations in the event of a crime. 

"If there is any message to get out there, it would be for companies 
to upkeep their antivirus and firewall software," said Laura Bosley, a 
spokeswoman for the FBI's Los Angeles field headquarters. 

Jennifer Granick, litigation director at the Stanford Law School 
Center for Internet and Society, said security is often neglected by 
companies more interested in making a quick buck. 

E-commerce companies "rushed online during the dot-com boom, and they 
saw the money that was to be had and didn't give a thought to 
security," she said. "They were too busy trying to capture eyeballs to 
secure their sites." 

Even if they have fortified their Web sites against attack, many 
companies are still unaware of the importance of preserving evidence 
if a crime occurs--ignorance that can kill any hope of catching a 
perpetrator, said Bruce Smith, an investigator for Pinkerton 
Consulting & Investigations and a former FBI agent who worked on 
computer crime cases for six years. 

Frequently, Smith said, agents will scan the Web logs of a hacked 
company only to find a blank record that leaves the intruder's trail 
stone cold. Sometimes, he said, the shopkeeper accidentally destroys 
the logs, covering the hacker's tracks with other records. More often, 
the online store never turns on the logging feature to begin with 
because it could slow a Web site's performance. 

"You cross your fingers when you start looking at the logs," Smith 
said. "Sometimes you get lucky, sometimes not." 

Moreover, precious time can be lost when companies hesitate to contact 
authorities immediately after an intrusion. The reason for the delay 
is often rooted in business, not justice. 

"Fear," Smith said. "They're reluctant to admit that they've been 
victimized. You can imagine the bad press. Here's someone who's 
telling clients their information is safe at the same time their site 
is getting hacked." 

Security experts blasted Egghead for taking weeks to investigate 
whether the personal information of its customers had been 
compromised. A company with good logging capability should have been 
able to determine the extent of the intrusion within a few days, 
security specialists said, perhaps saving banks a cost of between $5 
and $25 for each new credit card issued out of precaution. 

"I think there was some things that we wished we did before the 
attack," said Jeff Sheahan, the former chief executive of Egghead. "We 
thought we had a tight oversight system. We asked ourselves how we 
missed this. It was just focusing on other things and not sensing that 
there was a big enough risk." 

The investigation was expensive for Egghead, but the intrusion exacted 
a much higher price in the form of lost confidence among its 
customers. "When you're an e-commerce business, trust is important. I 
don't think there is any doubt that trust level took a hit to some 
degree," Sheahan said. 

Other online merchants would do well to learn from Egghead's mistakes, 
for the number of hackings is growing. To gauge this trend, CardCops' 
Clements posted fake credit card numbers on the Web and then spread 
the word at sites popular with "carders"--those who traffic in stolen 
credit cards--that a Web site had accidentally divulged the 
information. 

In less than a half-hour, the site had 74 visitors from 31 countries. 
Within a couple of days, the number of visitors had grown to 1,600. No 
one can say how many came to the site with criminal intent, but 
Clements believes most did. 

"There's a war raging online," he said, "and the bottom line is that 
law enforcement is losing." 


 
*==============================================================*
"Communications without intelligence is noise;  Intelligence
without communications is irrelevant." Gen Alfred. M. Gray, USMC
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