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TJX suspect indicted in Heartland, Hannaford breaches

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Federal authorities have charged a previously indicted hacker with breaching additional corporate computers and stealing data for at least 130 million credit and debit cards, the biggest identity theft case ever prosecuted in the United States.

Albert "Segvec" Gonzalez and two unnamed Russians were indicted on Monday for attacks that hit credit card processor Heartland Payment Systems, retailers 7-Eleven and Hannaford Brothers, and two unidentified companies. The 28-year-old resident of Miami already stood accused of perpetrating a breach on stores owned by TJX Companies, which exposed more than 46.5 million card details. Other companies, including Dave & Busters and Boston Market restaurant chains, were also among the alleged victims.

Documents filed in US District Court in Newark, New Jersey claim that Gonzalez and three unidentified individuals cased the latest victims by visiting their storefronts and websites to identify the point-of-sale programs and web applications they used. Armed with this information, the trio used SQL injection attacks to install sniffer software on the companies' servers to intercept credit card data as it was being processed.

In November 2006, for instance, Gonzalez uploaded a file called injector.exe to a server located in Ukraine. It was the same program that was later discovered to have infiltrated Heartland's card processing system and servers belonging to one of the unidentified companies, prosecutors said.

A month later, the two Russia-based suspects, who were identified only as Hacker 1 and Hacker 2, accessed Heartland's network from servers located in the Netherlands and California. They used an SQL injection as the entry point.

The breach has proved to be a major embarrassment for Heartland, which processes some 100 million transactions per month for about 250,000 merchants. More than 160 banks have been affected by the breach, and Heartland has so far allocated $12.6m to cover costs stemming from the loss of sensitive card holder data as it crossed its network.

Monday's indictment is likely to revive criticism that so-called PCI DSS, or payment card industry data security standards, are an ineffective means of preventing modern attacks against servers containing sensitive card data. Heartland executives have said repeatedly that their systems were in full compliance with the rules, and yet it would appear they were pierced using SQL injection attacks. The decade-old technique exploits web applications that fail to adequately scrutinize text that visitors type into search boxes and similar website fields that accept user-supplied input.

In May and August 2008, Gonzalez and 10 other suspects were indicted for stealing more than 40 million credit and debit card accounts from TJX and eight other retailers. The suspects in those cases used wireless scanners to find stores with vulnerable networks and then captured credit-card numbers, PINs, and other account information.

The alleged perpetrators worked hard to cover their tracks, according to the indictment. In addition to using proxy servers that masked their real IP addresses, they used 20 different anti-virus programs to make sure none of them detected the malware used in the scheme, prosecutors said.

Once the perpetrators obtained credit card data, they tried to sell it in underground forums to others to use in making fraudulent purchases and withdrawals and to further identity theft schemes.

Each defendant in Monday's indictment was charged with two felony counts each for conspiracy to commit wire fraud; and conspiracy to gain unauthorized access to computers, to commit fraud in connection with computers, and to damage computers. If convicted, each faces a maximum of 35 years in prison and $1.25m in fines. ®

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