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5 charged in $450,000 e-banking malware swindle

California city bitten by Talex trojan

Internet Security Threat Report 2014

Federal prosecutors have filed charges against five people accused of trying to swipe more than $450,000 from a California city using stolen login credentials associated with its bank account.

The five individuals used online bank accounts to launder the stolen loot shortly after it was siphoned out of an account belonging to the city of Carson in May 2007, according to an indictment. They then allegedly withdrew, or attempted to withdraw, money from the accounts and funnel it to unnamed co-conspirators. The city bank account was breached using keylogging software that was installed on an official's laptop.

The city was ultimately able to recover all but $44,000 of the misappropriated funds, but officials still don't know how the malware was installed or by whom.

Investigators "don't know if it was an email or a website that I clicked on" that installed the malware, said Carson treasurer Karen Avilla, whose machine was infected. "That's the one issue that they have not been able to determine."

The malware that targeted Avilla's machine was a variant of the Talex trojan, she told El Reg late last week.

Since the breach, Carson has tightened its process for electronic transfers. Under the new system, three officials receive notification of any transaction using a combination of text messages, email, and fax.

"That kind of ensures that a lot more eyes are looking at it," Avilla said.

The five individuals named in the indictment are: Jennifer Ann Woodard, Deago Larase Smith, Lance Corbett Holt, John L. Quinn II, and Anthony Leonard Bobbitt. The case was filed in US District Court for the Eastern District of North Carolina, where many of the suspects' bank accounts were located. The suspects have not yet appeared in court, records indicate. ®

Internet Security Threat Report 2014

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