-Caveat Lector-
Monday July 16 11:15 AM EDT
Russian Mafia Net Threat
By Laura Lorek
Interactive Week
Organized crime rings in Russia and the rest of the former Soviet Union are
increasingly hacking into U.S. e-commerce and banking Web sites, posing an
enormous economic threat.
Hackers have launched computer viruses and disruptive denial-of-service
attacks, but the biggest danger comes from hackers with ties to organized
crime breaking into computers, FBI officials said.
Spearheading the organized hacking rings is the Russian Mafia, security
experts say. The Russian Mafia has infiltrated many businesses in the
former Soviet Union, and is becoming increasingly sophisticated in computer
crimes.
These groups are penetrating computers in the U.S. and other Western
countries to obtain illegal profits, said John Collingwood, FBI assistant
director for public affairs, during a briefing at FBI headquarters in
Washington, D.C., recently.
"For the foreseeable future, we are going to see an explosion in this
area," Collingwood said. "It's literally a brand new area for us. And it is
one where no one is sure of what the implications will be."
The FBI said that 40 companies in 20 states have been identified as targets
of what the agency euphemistically calls Eastern European organized crime
groups. More than 1 million credit card numbers have been stolen by the
groups.
The Russian Mafia is operating in 50 countries, including the U.S., with
representatives in every major city, according to Jeffrey Robinson, an
expert on the Russian Mafia and author of The Merger. He said it has
created a "wealthy cabal destined to become the most powerful special
interest group in the world."
Russian hackers pose one of the biggest threats to the United States'
vibrant e-commerce and computer industry, said Julie Fergerson, a fraud
detective and co-founder of ClearCommerce, a security company for
e-commerce firms in Austin, Texas. "We are seeing more and more
sophisticated attacks coming from that part of the world," Fergerson said.
Security experts said the Russian Mafia hacking rings are often run by
former KGB agents who recruit hackers in their 20s to do the dirty work.
The young hackers typically answer Internet advertisements for computer
programmers, planted by organized crime outfits in Moscow, St. Petersburg
and Murmansk.
The Russian Ministry of Internal Affairs estimated that 5,600 criminal
groups with more than 100,000 members are primarily involved in money
laundering, the drug business and extortion.
The hackers hired by the Russian Mafia break into e-commerce computers and
steal credit card and bank account numbers. Some of them even resort to
extortion, pledging to release the data if companies do not pay them off,
security experts said.
The FBI said such hackers have penetrated U.S. e-commerce computers by
exploiting vulnerabilities in unpatched Microsoft Windows NT operating
systems. Microsoft has known about the holes since 1998 and has posted
patches to fix them on its Web site. But many companies have still not
taken steps to fix the holes, according to the FBI.
Authorities said the Russian Mafia members gain access to a company's
computer systems, download proprietary information - such as trade secrets,
customer databases and credit card information - and then demand money to
patch the system against other hackers.
"We are seeing more and more clients being victims of cyberextortion
because it's so easy to launch a cyberattack," said Ty R. Sagalow, chief
operating officer of AIG eBusiness Risk Solutions, a company that writes
insurance policies against hacking attacks for companies. American
International Group hires an investigator to look into the break-in, but
under many circumstances, it will actually pay off the extortionist.
"If our clients are going to lose money by getting attacked, then we pay
him off," Sagalow said. "But right after we pay him off, we post a $50,000
reward for information leading to an arrest."
Eastern Europe's computer crackers and hackers are the most skillful in the
world, said Joe Rosetti, senior vice president of Ipsa International, a New
York security company.
Incidences of Russian hackers breaking into e-commerce sites abound, but it
is unclear whether they are tied to the Russian Mafia. The FBI would not
provide details on the organized hacking rings in Eastern Europe because it
has an ongoing investigation, a spokesman said.
In May, Russian police arrested a gang of suspected hackers led by a
63-year-old man. The hackers used Internet cafZ*s in Moscow to steal about
300 credit card numbers from people in Western countries, the chief of
Moscow's police computer crime unit said.
Last year, a Russian cyberthief known as Maxus stole credit card numbers
from Internet retailer CD Universe. He demanded a $100,000 ransom, but when
this was denied, he placed 25,000 of the numbers on a Web site, said Yaron
Galant, director of product development at Sanctum, an Internet security
software company. Maxus has never been caught.
The Russian Mafia is also selling trade secrets to foreign competitors of
U.S. business, said Paul Fichtman, president and CEO of Internet
Clearinghouse, an international fraud investigation company. In addition,
organized crime groups are planting employees inside companies they want to
target, he said.
"It's a nice tidy business," Fichtman said. "We're seeing it happen on a
regular basis. There is nothing that cannot be hacked into. Some merchants
make it a lot easier than others."
Russian law makes it illegal to hack into computer systems. The government
imposes prison sentences of up to 10 years, plus fines, and has established
a special technical crime department. But few cases are prosecuted, Ipsa's
Rosetti said.
Hackers often work out of Internet cafZ*s in Russia, experts said. Street
vendors sell Russian hacking software, and tools and magazines publish
articles on how to break into Web sites. Russian Web sites also offer
hacking tools.
Law enforcement agencies have trouble tracking down and prosecuting
cybercriminals in foreign countries, and many businesses are often
reluctant to report break-ins.
"There really is no deterrent for hackers to engage in this activity,"
Rosetti said.
Senior Writer Brian Ploskina contributed to this report
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