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Feds shutter DNS malware scam that infected 4 million PCs

Nov
09

Federal authorities have shut down an international conspiracy that forced more than four million computers to connect to fraudulent webpages when users tried to visit Netflix, the US Internal Revenue Service, Apple’s iTunes and other services.

Prosecutors named seven Eastern European defendants alleged to have generated more than $14 million in profit from the scheme, which used malware to replace the IP addresses of legitimate sites with those controlled by the attackers. Operators received a payment each time a rogue page was opened because they had entered into advertising agreements awarding them fees based on the number of times links for certain websites were clicked on.

The scam was controlled by an Estonian company known as Rove Digital, according to a blog post published by researchers from anti-virus provider Trend Micro, who said they’ve been tracking the group’s movements since 2006. The operators relied on malware known as DNS Changer, which caused infected PCs to rely on rogue DNS, or domain name system, servers. In addition to pointing to fraudulent IP addresses for false websites, the DNS servers also prevented infected machines from connecting to sites used to install or update antimalware software.

As a result, victims couldn’t disinfect their machines.

According to Trend Micro, two data centers in New York and Chicago were recently raided, and more than 100 command and control servers were taken offline. To reduce the disruption to infected machines, the rogue DNS servers have been replaced with modified machines that are being operated for the next four months by the not-for-profit Internet Systems Consortium. Authorities wisely opted not to disconnect the DNS servers completely because millions of PCs now rely on them to find internet domains.

Federal prosecutors in Manhattan said six Estonian nationals have been arrested by local authorities. The prosecutors plan to seek the defendants’ extradition to the US. They include Vladimir Tsastsin, 31; Timur Gerassimenko, 31; Dmitri Jegorov, 33; Valeri Aleksejev, 31; Konstantin Poltev, 28; and Anton Ivanov, 26. A seventh defendant, 31-year-old Russian national Andrey Taame, remains at large.

Each defendant is charged with five counts of wire fraud and computer intrusion crimes. Tsastsin is charged with an additional 22 counts of money laundering. If convicted on all counts, six of the defendants face a maximum of 85 years in prison. Tsastsin faces an additional maximum 10 years in prison for each of the additional counts.

Tsastsin was the president of EstDomains, a domain name registrar with a reputation for catering to cyber criminals. He lost his accreditation with ICANN in 2008 following a conviction in an Estonian court for credit card fraud, money laundering, and document forgery.

In addition to fleecing advertisers out of $14 million in fraudulent fees, the scam also deprived legitimate website operators and advertisers of revenue they would have generated if victims hadn’t been diverted. Search engines also lost money in fees they paid for clicks they believed came from interested computer users.

More from the US Attorney’s office and the FBI is here and here. ®

Article source: http://go.theregister.com/feed/www.theregister.co.uk/2011/11/09/dns_malware_scam/

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