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Kentucky payroll phishing scam nets small fortune

Blue grass county hit by Trojan-fueled cybercrime

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A gang of cybercrooks has made off with $415,000 from the coffers of Bullitt County, Kentucky following the conclusion of an elaborate phishing scam, The Washington Post reports.

Crackers in Ukraine are reckoned to have stolen a county treasurer's login credentials using a Trojan keylogger before using them to transfer funds to the bank accounts of local victims.

County officials told The Washington Post's Security Fix that the fraudsters began making wire transfers, each below the $10,000 limit that would have triggered closer inspection, from the local authority's payroll account on 22 June. It took a week for the bank to realise something was amiss and begin reversing the transfers.

But by then some of the money had already been spirited away.

Reporter Brian Krebs spoke to an investigator looking into the case who said that a custom variant of the Zbot keystroke logging Trojan was used in the scam. The malware had been adapted so that stolen messages were forwarded to attackers via instant message. Secondly the malware allows crackers to log onto online banking accounts using the victim's internet connection, bypassing a widely used type of security control.

Transfers made using the county account needed to be countersigned by a second authorised user, maintained by a local judge. The hackers reportedly got around this restriction by changing the judge's password, as well as the associated email address, once they had gotten into the first account.

Once the system was compromised in this way the hackers set up fictitious worker accounts, which were rewarded with fraudulent salary transfers.

Security Fix was able to contact two of the money mules used in the scam. Speaking anonymously, the two women said they thought they were working for a firm called Fairlove Delivery Service, and had no idea they were acting as a cog in an elaborate scam.

The two were approached after posting CVs on CareerBuilder.com. They were initially asked to edit letters, which it's clear in hindsight were designed to recruit other phishing mules, before been recruited as "local agents". This role involving receiving funds, actually transfers of around $9,700 from Bullitt County's bank, and wiring all but a $500 fee to the Ukraine.

One of the women became suspicious and sent only a fraction of this amount but the other, who wired the full amount, was left with a $9,000 overdraft after the initial transfer was reversed.

Bullitt County has called in the FBI and other investigators to investigate the case. Security Fix has the full low-down of the scam, an elaborate phishing fraud targeting a corporate instead of personal online banking account, here. ®

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