Those who follow data breaches will certainly be familiar with Albert Gonzalez, but may not realize how far back his criminal career goes.
On July 24, 2003, the NYPD arrested Gonzalez in front of a Chase Bank ATM at 2219 Broadway found Gonzalez in possession of 15 counterfeit Chase ATM cards and $3,000 in cash. (See case 1:09-cr-00626-JBS). After that arrest, Gonzalez was taken under the wing of a pair of Secret Service agents, David Esposito and Steve Ward. Gonzalez describes some of the activities he engaged in during his time as a CI in his 53 page appeal that he files March 24, 2011 from his prison cell in Milan, Michigan.
At one point, he claims that he explained to Agent Ward that he owed a Russian criminal $5,000 and he couldn’t afford to pay it. According to his appeal, he claims Ward told him to “Go do your thing, just don’t get caught” and that Agent Ward later asked him if he had “handled it.” Because of this, Gonzalez (who again, according to his own sentencing memo, likely has Asperger’s) claims he believed that he had permission to hack, as long as he didn’t get caught.
Over Christmas 2007, Gonzalez and his crew hacked Heartland Payments Systems and stole around 130 million credit and debit cards. He was also charged with hacking 7-Eleven (August 2007), Hannaford Brothers (November 2007) where he stole 4.2 million credit and debit cards. Two additional data breaches against “Company A” and “Company B” were also listed as victims. In Gonzalez’s indictment, it refers to “HACKER 1 who resided in or near Russia” and “HACKER 2 who resided in or near Russia.” Another co-conspirator “PT” was later identified as Patrick Toey, a resident of Virginia Beach, VA. (Patrick Toey’s sentencing memorandum is a fascinating document that describes his first “Cash out trip” working for Albert Gonzalez in 2003. Toey describes being a high school drop out who smoked marijuana and drank heavily who was “put on a bus to New York” by his mother to do the cash out run because she needed rent money. Toey later moved in with Gonzalez in Miami, where he describes hacking Forever 21 “for Gonzalez” among other hacks.
Gonzalez’s extracurricular activities caught up with him when Maksym Yastremskiy (AKA Maksik) was arrested in Turkey. Another point of Gonzalez’s appeal was to say that Maksik was tortured by Turkish police, and that without said torture, he never would have confessed, which would have meant that Gonzalez (then acting online as “Segvec”) would never have been identified or arrested. Gonzalez claims that he suffered from an inadequate defense, because his lawyer should have objected to the evidence “obtained under torture.” These charges against Gonzalez were tried in the Eastern District of New York (2:08-cr-00160-SJF-AKT) and proved that Gonzalez was part of the Dave & Buster’s data breach
On December 15, 2009, Gonzalez tried to shrug off some of his federal charges by filing a sentencing memo claiming that he lacked the “capacity to knowingly evaluate the wrongfulness of his actions” and asserting that his criminal behavior “was consistent with description of the Asperger’s discorder” and that he exhibited characteristics of “Internet addiction.” Two weeks later, after fighting that the court could not conduct their own psychological exam, Gonzalez signed a guilty plea, agreeing that the prosecutor would try to limit his sentence to 17 years. He is currently imprisoned in Yazoo, Mississippi (FBOP # 25702-050) scheduled to be released October 29, 2025.
Eventually “HACKER 1” and “HACKER 2” were indicted themselves in April 2012, with an arrest warrant issued in July 2012, but due to criminals still at large, the indictment was not unsealed until December 18, 2013. HACKER 1 was Drinkman. HACKER 2 was Alexandr Kalinin, who was also indicted with Drinkman and Smilianets.
Shortly after the Target Data Breach, I created a presentation called “Target Data Breach: Lessons Learned” which drew heavily on the history of Drinkman and Smilianets. Some of their documented data breaches included:
|NASDAQ||May 2007||loss of control|
|Carrefour||October 2007||2 million cards|
|Hannaford||November 2007||4.2 million cards|
|Wet Seal||January 2008|
|Commidea||November 2008||30 million cards|
|Dexia Bank Belgium||Feb’08-Feb’09|
|Jet Blue||Jan’08 to Feb ’11|
|EuroNet||Jul ’10 to Oct ’11||2 million cards|
|Visa Jordan||Feb-Mar ’11||800,000 cards|
|Global Payments Systems||Jan ’11 to Mar ’12|
|Diners Club Singapore||Jun ’11|
|Ingenicard||Mar ’12 to Dec ’12|
During the time of these attacks, Dimitry Smilianets was also leading the video game world. His team, The Moscow 5, were the “Intel Extreme Masters” champions in the first League of Legends championship, also placing in the CounterStrike category. Smilianets turned out not to be the hacker, but rather specialized in selling the credit cards that the other team members stole. Steal a few hundred million credit cards and you can buy a nice gaming rig!
|Smilianets with his World Champion League of Legends team in 2012|
How did these databreaches work?
Lockheed Martin’s famous paper “Intelligence-Driven Computer Network Defense Informed by Analysis of Adversary Campaigns and Intrusion Kill Chains” laid out the phases of an attack like this:
But my friend Daniel Clemens had explained these same phases to me when he was teaching me the basics of Penetration Testing years before when he was first starting Packet Ninjas!
1. External Recon – Gonzalez and his crew scan for Internet-facing SQL servers
2. Attack (Dan calls this “Establishing a Foothold”) – using common SQL configuration weaknesses, they caused a set of additional tools to be downloaded from the Internet
3. Internal Recon – these tools included a Password Dumper, Password Cracker, Port Scanner, and tools for bulk exporting data
4. Expand (Dan calls this “Creating a Stronghold”) – usually this consisted with monitoring the network until they found a Domain Admin userid and password. (for example, in the Heartland Payments attack, the VERITAS userid was found to have the password “BACKUP” which unlocked every server on the network!
5. Dominate – Gonzalez’ crew would then schedule an SQL script to run a nightly dump their card data
6. Exfiltrate – data sent to remote servers via an outbound FTP.
|In Rolling Stone, Gonzalez claims he compromised more than 250 networks|
In the Rolling Stone article, “Sex, Drugs, and the Biggest Cybercrime of All Time” , Steven Watt, who was charged in Massachusetts for providing attack tools to Gonzalez in October 2008. Watt’s tools were used in breaches, including BJ’s Wholesale Club, Boston Market, Barnes & Noble, Sports Authority, Forever 21, DSW, and OfficeMax. As part of his sentencing, Watt was ordered to repay $171.5 Million dollars.
Almost all of those databreaches followed the same model … scan, SQL Inject, download tools, plant a foothold, convert it to a stronghold by becoming a domain admin, dominate the network, and exfiltrate the data.
How did the TARGET Data breach happen, by the way? Target is still listed as being “Unsolved” … but let’s review. An SQL injection led to downloaded tools, (including NetCat, PSExec, QuarksPWDump, ElcomSoft’s Proactive Password Auditor, SomarSoft’s DumpSec, Angry IP Scanner (for finding database servers), and Microsoft’s OSQL and BCP (Bulk Copy)), a Domain Admin password was found (in Target’s case, a BMC server monitoring tool running the default password), the POS Malware was installed, and data exfiltration begun.
With most of Gonzalez’s crew in prison by 2010, the data breaches kept right on coming, thanks to Drinkman and Smilianets.
Drinkman, the hacker, was sentenced to 144 months in prison.
Smilianets, the card broker, was sentenced to 51 months and 21 days, which was basically “time served” — he was extradited to the US on September 7, 2012, so he’ll basically walk.
Will Smilianets return to video gaming? to money laundering? or perhaps choose to go straight?
Meanwhile, Alexandr Kalinin, of St. Petersburg, Russia; Mikhail Rytikov, of Odessa, Ukraine; and Roman Kotov, of Moscow, Russia, are all still at large. Have they learned from the fate of their co-conspirators? or are they in all likelihood, scanning networks for SQL servers, injecting them, dropping tools, planting footholds, creating strongholds, and exfiltrating credit card data from American companies every day?
Kalinin (AKA Grig, AKA “g”, AKA “tempo”) is wanted for hacking NASDAQ and planting malware that ran on the NASDAQ networks from 2008 to 2010. (See the indictment in the Southern District of New York, filed 24JUL2013 ==> 1:13-cr-00548-ALC )
Mykhailo Sergiyovych Rytikov is wanted in the Western District of Pennsylvania for his role in a major Zeus malware case. Rytikov leased servers to other malware operators. Rytikov is also indicted in the Eastern District of Virginia along with Andriy DERKACH for running a “Dumps Checking Service” that processed at least 1.8 million credit cards in the first half of 2009 and that directly led to more than $12M in fraud. ( 1:12-cr-00522-AJT filed 08AUG2013.) Rytikov did have a New York attorney presenting a defense in the case — Arkady Bukh argues that while Rytikov is definitely involved in web-hosting, he isn’t responsible for what happens on the websites he hosts.
Roman Kotov, and Rytikov and Kalinin, are still wanted in New Jersey as part of the case 1:09-cr-00626-JBS (Chief Judge Jerome B. Simandle ). This is the same case Drinkman and Smilianets were just sentenced under.
This is a Security Bloggers Network syndicated blog post authored by Gary Warner, UAB / PhishMe. Read the original post at: CyberCrime & Doing Time