How FBI, police busted massive botnet
12m zombie machines run by 3 admins
Analysis More details have emerged about a cybercrime investigation that led to the takedown of a botnet containing 12m zombie PCs and the arrest of three alleged kingpins who built and ran it.
As previously reported, the Mariposa botnet was principally geared towards stealing online login credentials for banks, email services and the like from compromised Windows PCs. The malware infected an estimated 12.7 million computers in more than 190 countries.
The botnet was shut down on 23 December 2009 following months of collaboration between security firms Panda Security and Defence Intelligence in co-operation with the FBI and Spain's Guardia Civil.
Half the roster of Fortune 1000 companies harboured machines infected by Mariposa at one time or another, according to Christopher Davis, chief exec at Canada-based Defence Intelligence, who first discovered the Mariposa botnet back in May 2009. Defence Intelligence teamed up with academics at Georgia Tech Information Security Center and security experts at PandaLabs and law enforcement to form the Mariposa Working Group in order to eradicate the botnet and bring the perpetrators to justice.
The Mariposa Working Group infiltrated the command-and-control structure of Mariposa to monitor the communication channels that relayed information from compromised systems back to the hackers who run the botnet. Analysis of the command system laid the groundwork for the December 2009 shutdown of the botnet, as well as shedding light on how the malware operated and provided a snapshot of the current state of the underground economy.
Mariposa  (Spanish for butterfly) botnet malware spread through P2P networks, infected USB drives, and via MSN links that directed surfers to infected websites. Once infected by the Mariposa bot client, compromised machines would have various strains of malware installed (advanced keyloggers, banking trojans like Zeus, remote access trojans, etc) by the hackers to obtain greater control of infected systems.
The botmasters made money by selling parts of the botnet to other cybercrooks, installing pay-per-install toolbars, selling stolen credentials for online services and laundering stolen bank login credentials and credit card details via an international network of money mules. Search engine manipulation and serving pop-up ads was also part of the illegal business model behind the botnet.
The criminal gang behind Mariposa called themselves the DDP (Días de Pesadilla or Nightmare Days) Team. They nearly always connected to the Mariposa controlled servers from anonymous VPN (Virtual Private Network) services, preventing investigators from identifying their real IP addresses.
However when the December shutdown operation happened, the gang’s leader, alias Netkairo, panicked in his efforts to regain control of the botnet. Netkairo made the fatal error of connecting directly from his home computer instead of using the VPN, leaving a trail of digital fingerprints that led to a series of arrests two months later.
A blog post  by Panda Software explains what happened next.
Netkairo finally regained control of Mariposa and launched a denial of service attack against Defence Intelligence using all the bots in his control. This attack seriously impacted an ISP, leaving numerous clients without an Internet connection for several hours, including several Canadian universities and government institutions.
Once again, the Mariposa Working Group managed to prevent the DDP Team from accessing Mariposa. We changed the DNS records, so the bots could not connect to the C&C servers and receive instructions, and at that moment we saw exactly how many bots were reporting. We were shocked to find that more than 12 million IP addresses were connecting and sending information to the C&C servers, making Mariposa one of the largest botnets in history.
On February 3, 2010, the Spanish Civil Guard arrested Netkairo. After the arrest of this 31-year-old Spaniard, police seized computer material that led to the capture of another two Spanish members of the gang: J.P.R., 30, a.k.a. “jonyloleante”, and J.B.R., 25, a.k.a. “ostiator”. Both of them were arrested on February 24, 2010.
Domains used by Mariposa were unwittingly hosted by US ISP CDmon,which assisted security researchers and law enforcement officials in taking down the botnet.
The main botmaster, nicknamed “Netkairo” and “hamlet1917”, as well as his two alleged lieutenants “Ostiator” and “Johnyloleante” have been charged with cybercrime offences. More arrests are expected to follow.
Under Spanish law suspects are not named at this stage of proceedings. Pedro Bustamante, senior research advisor at Panda Security, said: “Our preliminary analysis indicates that the botmasters did not have advanced hacking skills.
"This is very alarming because it proves how sophisticated and effective malware distribution software has become, empowering relatively unskilled cyber criminals to inflict major damage and financial loss." ®