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Archive | Cyber-Crime

Investigating Internet Crimes

Written by experts on the frontlines, Investigating Internet Crimes provides seasoned and new investigators with the background and tools they need to investigate crime occurring in the online world. This invaluable guide provides step-by-step instructions for investigating Internet crimes, including locating, interpreting, understanding, collecting, and documenting online electronic evidence to benefit investigations.

investigating_internet_crimesThis year I served as technical editor for this excellent book by Todd Shipley and Art Bowker. Cybercrime is the fastest growing area of crime as more criminals seek to exploit the speed, convenience and anonymity that the Internet provides to commit a diverse range of criminal activities. Today’s online crime includes attacks against computer data and systems, identity theft, distribution of child pornography, penetration of online financial services, using social networks to commit crimes, and the deployment of viruses, botnets, and email scams such as phishing. Symantec’s 2012 Norton Cybercrime Report stated that the world spent an estimated $110 billion to combat cybercrime, an average of nearly $200 per victim.

Law enforcement agencies and corporate security officers around the world with the responsibility for enforcing, investigating and prosecuting cybercrime are overwhelmed, not only by the sheer number of crimes being committed but by a lack of adequate training material. This book provides that fundamental knowledge, including how to properly collect and document online evidence, trace IP addresses, and work undercover.

  • Provides step-by-step instructions on how to investigate crimes online
  • Covers how new software tools can assist in online investigations
  • Discusses how to track down, interpret, and understand online electronic evidence to benefit investigations
  • Details guidelines for collecting and documenting online evidence that can be presented in court

Blackhatonomics: An Inside Look at the Economics of Cybercrime

blackhatonomicsBlackhatonomics: An Inside Look at the Economics of Cybercrime explains the basic economic truths of the underworld of hacking, and why people around the world devote tremendous resources to developing and implementing malware.

The book provides an economic view of the evolving business of cybercrime, showing the methods and motivations behind organized cybercrime attacks, and the changing tendencies towards cyber-warfare.

Written by an exceptional author team of Will Gragido, Daniel J Molina, John Pirc and Nick Selby,  Blackhatonomics takes practical academic principles and backs them up with use cases and extensive interviews, placing you right into the mindset of the cyber criminal.

The Russian Software Pirates

Every day here and in dozens of other Russian cities, pirate dealers sell copies of the world’s most popular software titles at $5 per CD-ROM.

Despite fears about the economy, small and medium-sized businesses are flourishing in this elegant northwestern Russian city – and pirated software is installed on almost all of their computers.

Nearly all high-end computer games, Encyclopaedia Britannicas and other educational and reference CDs are distributed through illegal sources.Bootlegged software use is certainly not limited to Russia. Industry analysts say that 27 percent of the software running on American computers is pirated.

And the Business Software Alliance, which monitors business software piracy, says 43 percent of PC business applications installed in Western Europe are illegal copies.

In Russia, however, the piracy rates are a stunning 91 percent for business applications and 93 percent for entertainment software, according to Eric Schwartz, counsel to the International Intellectual Property Association, a Washington, D.C.-based organization that lobbies internationally on behalf of the copyright industry.

Schwartz said that piracy in Russia costs American entertainment software manufacturers $223 million a year and business software makers almost $300 million. The Business Software Alliance estimates worldwide revenue losses to the software industry from piracy at $11.4 billion.

Under the 1992 agreement with the United States that guaranteed Most Favored Nation trading status, Russia is required to effectively enforce anti-piracy laws, but actual enforcement is virtually nonexistent.

Meeting the Dealers
The dealers, who operate in stalls and kiosks around major transportation hubs or in full-scale markets usually 15 minutes from the city center, offer an enormous range of titles, usually bundled in a form their manufacturers would never dream of.

“That’s Windows 98, Front Page 98, Outlook 98, MS Office 97 SR1 and, uh, yeah, Adobe 5.0,” said Pyotr R., a student at St. Petersburg Technical University, of a single CD-ROM. “On the disk there are files, like ‘crack’or ‘serial’ or something, and that’s where you’ll find the CD keys,” he said, referring to the codes that unlock CD-ROMs and allow users to install the programs.

Pyotr (who spoke, as did all others interviewed for this article, on condition of anonymity) sold that disk, plus a second one containing Lotus Organizer 97, several anti-virus programs and some DOS utilities, for 60 rubles or about $10.

Another dealer was offering Windows NT 4.0 for $5, and Back Office for $10. According to Microsoft, the recommended retail prices for these products are $1,609 and $5,599.

Many Russians, who during the days of the Soviet Union bought most necessities through black market sources, think nothing of buying their software this way. They even defend the markets as providing a commodity that had been long-denied them.

After the collapse of the Soviet Union, inexpensive computers began to flood into the country from Taiwan, Germany and the United States, increasing the importance of these illegal software markets. Spending at least $800 on a computer was an enormous investment for Russians, even relatively well-paid St Petersburgians who earn an average salary of around $350 a month. Those who did buy one were in no position to consider purchasing software legitimately, even if it were readily available, which it often wasn’t.

These days, though, legitimate outlets for hardware and software are popping up everywhere in Russia; computer magazines offer licensed versions of everything available in the United States and Western Europe, and software makers advertise in the city’s well-established English-language media.

The markets continue to thrive with an alarming degree of perceived legitimacy. Outside the Sennaya Square metro station in St. Petersburg, a police officer approached a pirate dealer (who offered, among other things, Adobe Font Folio and QuarkXPress) and angrily chastised him for not prominently displaying his license to operate the stall. When the dealer complied, the policeman moved on.

Customers feel secure that the pirated copies will work and that belief appears well-founded. Bootlegged titles come with a written guarantee – good for 15 days from the date of purchase – that they’re virus-free and fully functional.

And files on the CDs themselves boast of high-quality, code-cracking techniques: “When so many groups bring you non-working fakes, X-FORCE always gets you the Best of the Best. ACCEPT NO IMITATION!” boasts one.

“There’s a lot of viruses around in Russia,” said Dima V., a system administrator who runs several small company networks in St. Petersburg using bootlegged copies of Windows NT 4.0, “but most of the disks you buy in the markets are clean. The guys are there every day and if they give you a virus you’ll come back – it’s just easier to sell you the real thing.”

Foreigners get in on the action
Russians are not by any means the only people installing the pirated programs. While employees of multinational companies or representatives of American companies would never dream of risking their job by violating copyright laws, self-employed Westerners, or ones who have established small Russian companies have no qualms about doing so.

They also pose a question software manufacturers find difficult to answer: Who would buy a network operating system package for $5,000 when it’s available for $5?

“Nobody,” said Todd M., an American business owner in St. Petersburg, whose 24-PC network runs a host of Microsoft applications that were all bootlegged.

“There’s just no financial incentive for me to pay the kind of prices that legitimate software costs,” he said. “I mean, it would be nice to get customer service right from the source, but we have really excellent computer technicians and programmers in Russia and they can fix all the little problems that we have.”

Customer support and upgrades are just what the manufacturers point to as advantages of licensed software, even in markets like Russia.

“There are enormous incentives,” said Microsoft’s Mark Thomas, “to buying legitimate software, and they start with excellent customer support and service and upgrades. We spend $3 billion a year on research and development and the money that we make goes right back into making products better and better products. The pirates don’t make any investment in the industry.”

And local industry, Thomas pointed out, suffers disproportionately in the face of piracy.

“A huge amount of our resources are put into making sure local industry builds on our platform,” he said. “When a local company creates packages for, say, accounting firms, and somebody can come along and buy it for $5, these local companies can lose their shirts.”

Piracy getting worse
Despite heavy lobbying by industry representatives and government agencies, piracy has worsened. As CD copying technology becomes cheaper, large factories in Russia and other countries, including Bulgaria, churn out copies of software copied by increasingly sophisticated groups in countries around the world, especially in Asia.

Encyclopaedia Britannica wrote off Malaysia as a market effectively destroyed by pirates, who sold 98 out of every 100 copies of its flagship Encyclopaedia three-CD set for a fraction of its recommended retail price of $125. The same disks, which have not officially even been offered for sale in Russia, are readily available in the St. Petersburg markets for $10.

“For Encyclopaedia Britannica, the cost of piracy is millions a year,” said James Strachan, EB’s international product manager. “One hundred percent of the value of our product is an investment in the authority and depth of our content,” he said. “Piracy causes us extreme concern and we do everything we can to root it out and prosecute.”

Todd M., the businessman with the 24-PC network, offers little hope that the situation will soon change in favor of manufacturers.

“With all the problems I have running my business here in Russia, from armed tax police to Byzantine procedures and customs duties, software piracy just doesn’t register with me,” he said.

“It’s the one thing about doing business here that’s somebody else’s problem.”

Software Pirates Rule In Russia

russia_piratesEvery day here and in dozens of other Russian cities, pirate dealers sell copies of the world’s most popular software titles at $5 per CD-ROM.

Despite fears about the economy, small and medium-sized businesses are flourishing in this elegant northwestern Russian city – and pirated software is installed on almost all of their computers.

Nearly all high-end computer games, Encyclopaedia Britannicas and other educational and reference CDs are distributed through illegal sources.Bootlegged software use is certainly not limited to Russia. Industry analysts say that 27 percent of the software running on American computers is pirated.

And the Business Software Alliance, which monitors business software piracy, says 43 percent of PC business applications installed in Western Europe are illegal copies.

In Russia, however, the piracy rates are a stunning 91 percent for business applications and 93 percent for entertainment software, according to Eric Schwartz, counsel to the International Intellectual Property Association, a Washington, D.C.-based organization that lobbies internationally on behalf of the copyright industry.

Schwartz said that piracy in Russia costs American entertainment software manufacturers $223 million a year and business software makers almost $300 million. The Business Software Alliance estimates worldwide revenue losses to the software industry from piracy at $11.4 billion.

Under the 1992 agreement with the United States that guaranteed Most Favored Nation trading status, Russia is required to effectively enforce anti-piracy laws, but actual enforcement is virtually nonexistent.

Meeting the Dealers

The dealers, who operate in stalls and kiosks around major transportation hubs or in full-scale markets usually 15 minutes from the city center, offer an enormous range of titles, usually bundled in a form their manufacturers would never dream of.

“That’s Windows 98, Front Page 98, Outlook 98, MS Office 97 SR1 and, uh, yeah, Adobe 5.0,” said Pyotr R., a student at St. Petersburg Technical University, of a single CD-ROM. “On the disk there are files, like ‘crack’or ‘serial’ or something, and that’s where you’ll find the CD keys,” he said, referring to the codes that unlock CD-ROMs and allow users to install the programs.

Pyotr (who spoke, as did all others interviewed for this article, on condition of anonymity) sold that disk, plus a second one containing Lotus Organizer 97, several anti-virus programs and some DOS utilities, for 60 rubles or about $10.

Another dealer was offering Windows NT 4.0 for $5, and Back Office for $10. According to Microsoft, the recommended retail prices for these products are $1,609 and $5,599.

Many Russians, who during the days of the Soviet Union bought most necessities through black market sources, think nothing of buying their software this way. They even defend the markets as providing a commodity that had been long-denied them.

After the collapse of the Soviet Union, inexpensive computers began to flood into the country from Taiwan, Germany and the United States, increasing the importance of these illegal software markets. Spending at least $800 on a computer was an enormous investment for Russians, even relatively well-paid St Petersburgians who earn an average salary of around $350 a month. Those who did buy one were in no position to consider purchasing software legitimately, even if it were readily available, which it often wasn’t.

These days, though, legitimate outlets for hardware and software are popping up everywhere in Russia; computer magazines offer licensed versions of everything available in the United States and Western Europe, and software makers advertise in the city’s well-established English-language media.

The markets continue to thrive with an alarming degree of perceived legitimacy. Outside the Sennaya Square metro station in St. Petersburg, a police officer approached a pirate dealer (who offered, among other things, Adobe Font Folio and QuarkXPress) and angrily chastised him for not prominently displaying his license to operate the stall. When the dealer complied, the policeman moved on.

Customers feel secure that the pirated copies will work and that belief appears well-founded. Bootlegged titles come with a written guarantee – good for 15 days from the date of purchase – that they’re virus-free and fully functional.

And files on the CDs themselves boast of high-quality, code-cracking techniques: “When so many groups bring you non-working fakes, X-FORCE always gets you the Best of the Best. ACCEPT NO IMITATION!” boasts one.

“There’s a lot of viruses around in Russia,” said Dima V., a system administrator who runs several small company networks in St. Petersburg using bootlegged copies of Windows NT 4.0, “but most of the disks you buy in the markets are clean. The guys are there every day and if they give you a virus you’ll come back – it’s just easier to sell you the real thing.”

Foreigners get in on the action

Russians are not by any means the only people installing the pirated programs. While employees of multinational companies or representatives of American companies would never dream of risking their job by violating copyright laws, self-employed Westerners, or ones who have established small Russian companies have no qualms about doing so.

They also pose a question software manufacturers find difficult to answer: Who would buy a network operating system package for $5,000 when it’s available for $5?

“Nobody,” said Todd M., an American business owner in St. Petersburg, whose 24-PC network runs a host of Microsoft applications that were all bootlegged.

“There’s just no financial incentive for me to pay the kind of prices that legitimate software costs,” he said. “I mean, it would be nice to get customer service right from the source, but we have really excellent computer technicians and programmers in Russia and they can fix all the little problems that we have.”

Customer support and upgrades are just what the manufacturers point to as advantages of licensed software, even in markets like Russia.

“There are enormous incentives,” said Microsoft’s Mark Thomas, “to buying legitimate software, and they start with excellent customer support and service and upgrades. We spend $3 billion a year on research and development and the money that we make goes right back into making products better and better products. The pirates don’t make any investment in the industry.”

And local industry, Thomas pointed out, suffers disproportionately in the face of piracy.

“A huge amount of our resources are put into making sure local industry builds on our platform,” he said. “When a local company creates packages for, say, accounting firms, and somebody can come along and buy it for $5, these local companies can lose their shirts.”

Piracy getting worse

Despite heavy lobbying by industry representatives and government agencies, piracy has worsened. As CD copying technology becomes cheaper, large factories in Russia and other countries, including Bulgaria, churn out copies of software copied by increasingly sophisticated groups in countries around the world, especially in Asia.

Encyclopaedia Britannica wrote off Malaysia as a market effectively destroyed by pirates, who sold 98 out of every 100 copies of its flagship Encyclopaedia three-CD set for a fraction of its recommended retail price of $125. The same disks, which have not officially even been offered for sale in Russia, are readily available in the St. Petersburg markets for $10.

“For Encyclopaedia Britannica, the cost of piracy is millions a year,” said James Strachan, EB’s international product manager. “One hundred percent of the value of our product is an investment in the authority and depth of our content,” he said. “Piracy causes us extreme concern and we do everything we can to root it out and prosecute.”

Todd M., the businessman with the 24-PC network, offers little hope that the situation will soon change in favor of manufacturers.

“With all the problems I have running my business here in Russia, from armed tax police to Byzantine procedures and customs duties, software piracy just doesn’t register with me,” he said.

 

“It’s the one thing about doing business here that’s somebody else’s problem.”

Lessons of the HBGary Hack

“My father was in the secret service, Mr Manfredjin St. John, and I know that you don’t ‘keep the public informed’ when you are debriefing KGB defectors in a safe house.”
– Wendy, A Fish Called Wanda

I’ve been speaking quite a bit lately about how information security professionals can work with law enforcement – in fact, I’m speaking about it next week at BSides San Francisco. The attacks by Anonymous against HBGary, and the accompanying defecation-hitting-the-ventilation raises some important rules of the road for this.

Private-public sector cooperation is at the heart of nearly all successful initiatives. The public sector relies on private-sector innovation and expertise – indeed, organizations like In-Q-Tel and the Chesapeake Innovation Center count on it to make crucial advances in security. There’s great satisfaction in working for the greater good – which can come in a warm, fuzzy feeling of accomplishment, or even in the warmth of some “non-recurring engineering funds” from some grinning, creepy guys in “Maryland”. Trying to get the specifics of your good deeds into the limelight, though, for personal or company public-relations gain is just bad business.

When speaking with journalists and analysts, executives at information security companies – especially venture-funded, non-profitable, non-cash-flow-positive ones – have long used implication, hints, wink-wink gestures and other sometimes adorable intimations that they ‘work with’ ‘three-letter agencies’* or law enforcement in darkly secret and very important ways. They do this because they are trying to build their brand credibility.

They often end up sounding like a tool.

Now, often-times, they actually are using their technologies and their skills to support the work of law enforcement, but they’re not supposed to talk about it. Nor should they want to, necessarily. If I sound snarky, let me be clear that public service is not to be mocked, it is absolutely to be lauded, and anyone helping a law enforcement agency fight crime, whether for money or service, is to be encouraged.

But don’t forget that, as you help out, it is just that: public service. You can’t publicize the specifics of your assistance without jeopardizing its very value. This is the line, apparently, that HBGary employees inadvertently crossed, and the results were terrible.

[Let me say that, while I am using this as a cautionary tale, everything I know about the HBGary folks is that they are good, innovative and really smart people who care, who are passionate about technology and security. They’re good people who made a tactical marketing blunder.]

In the Financial Times last Saturday, in an article entitled, “Cyberactivists warned of arrest,” Joseph Menn quoted HBGary researcher Aaron Barr as saying that, “he had collected information on the core leaders, including many of their real names, and that they could be arrested if law enforcement had the same data.”

They could be arrested if? What hubris! Now, I don’t know much about law enforcement, but I do think that, if you’re planning, say, to serve a felony warrant, it’s a bad idea to phone ahead and let the guy know you’ll be by in 15 minutes. If?

A good rule of thumb is that you don’t tip your hand about the specifics of your work on any case for any reason. And drumming up business through publicizing your specific public service is as bad a reason as any.

Reasons for this fall into two categories. The first is that fighting crime is, you know, dangerous. Criminals generally engage in criminal enterprises for the money (few people have a driving passion to establish, say, an industry-leading counterfeiting ring for the societal benefit), and those who stand between criminals and their goal risk the ire of the criminals. This is not fair or just, but it is so.

Now, stating in a newspaper that you possess the secret identity of a criminal? This falls squarely into the category of “standing between a criminal and his goal.” That’s a tip, kids. Write it down. To paraphrase Wendy in A Fish Called Wanda, one only briefs the public on an upcoming law enforcement action if one is congenitally insane or irretrievably stupid.

Second, law enforcement officers, agents and agencies fight crime for a living. It’s dangerous and often thankless; it’s a calling, and these folks work hard under difficult conditions that require dedication, passion and purpose. Implying that they’re somehow not up to the task by stating that you have the X-factor that can be the secret of their success alienates those you seek to help.

Security firms and security professionals who want to help law enforcement should recognize a few things:

  1. Helping law enforcement is rarely a straightforward task. Sure, in movies, “we need your help” is followed by specific tasks that lead to the capture of the bad guys, the breaking up of the crime syndicate and windsurfing at Disneyland.
  2. Relationships in law enforcement must be carefully cultivated. Sworn officers and agents need to learn that you are trustworthy. You must learn the extents of their capabilities and authority. This takes time.
  3. Your help can’t be more trouble than it’s worth. In the movies, the brilliant but eccentric mathematician/hacker/systems expert can be un-bathed, wild-eyed and unpredictable. When you’re working with the fuzz, one press release costs you any and all good-will you’ve developed to date.
  4. The time to talk about arrests is a year later. The people to talk about arrests are cops. You’re helping law enforcement as part of your civic duty. While the cops will often be happy to mention your help in a press release at some point down the road, your primary driver for helping is public service, not self-promotion. If you’re in it for the publicity, get a cooking show.
  5. Criminals are dangerous. Criminals seek profit, and seek through illegal means to thwart those who would prevent these profits from being realized. Fighting criminals can absolutely be a cooperative exercise between public and private sector, but private sector people should keep the details of their cooperation as secret as the “sauce” they love to say makes their product work.

In short, companies wishing to help out might consider following the advice of Chris Rock, as he described some of the best ways Not to Get your Ass Kicked by the Police.

  • Obey the law;
  • Use common sense;
  • Be polite; and
  • Shut the #!@k up.

Nick Selby is CEO of a stealth-mode technology start-up. He is a sworn law enforcement officer in Texas, and will speak at BSIdes San Francisco on February 14th about ways in which information security professionals can work with law enforcement.

*a phrase which itself provides proof that they do not