India's Cosmos Bank Suffers Unlimited ATM Attack

On August 10th, many American Financial Institutions received a warning from the FBI that the Bureau had found evidence that criminals were plotting an "Unlimited Operation."  We've written about these Unlimited Attacks a number of times in the past in this blog, but this is the first time that we know of where the FBI announced the attack before hand.  In these attacks, hackers compromise the internal systems of a bank and gain control of systems that allow them to bypass or reset ATM withdrawal limits.  Then, the magnetic stripe information for a selected number of cards is shared with trusted cash-out gangs around the world, who make physical ATM cards with the stripe information encoded and stand by for the pre-arranged attack to begin.  Once zero-hour arrives, hundreds of cash-out gang members begin draining every ATM machine they can find.  Literally emptying the machines, with the balance available for withdrawal being magically reset in real time by the hackers inside the systems of the targeted bank.

The most famous Unlimited Attack was also one of the earliest, when $9 Million in cash was withdrawn from at least 2100 ATM machines in 280 cities around the world on November 7th and 8th, 2008 in the RBS WorldPay attack.  That was far surpassed in 2013, when cash-out gangs in 26 Countries stole $40M.  More recently, Standard Bank was victimized in the first Japanese Unlimited Attack in 2016, involving at least 14,000 "maximum" ATM withdrawals.

In this case, the FBI's prediction came true almost immediately, even before our favorite security journalist, Brian Krebs, was able to get his story out: FBI Warns of Unlimited ATM Cashout Blitz.

The Times of India reported on August 14th "How hackers siphoned over Rs 94 crore off a co-operative bank in Pune", revealing that the 112 year old Cosmos Bank was the target of the attack.  During this attack hackers were able to cause the ATM Network to approve "Rupay" transactions by validating the requests against a fake payment gateway controlled by the hackers.  In 2.5 hours, from 3 pm to 5:30 pm, 12,000 Visa card transactions withdrew Rs 78 crore (approximately $10.9 Million USD) before Cosmos Bank terminated all ATM Visa Transactions, however Rupay transactions continued until at least 10PM.  RuPay is an India-only card system designed to allow national payments in India without reliance on Visa and Mastercard.  2,890 India-based RuPay transactions totaled an additional Rs 2.5 crore ($351,500 USD).  In addition to the ATM damages, on August 13th, the same hackers wired Rs 13.94 crore (almost $2M  USD) to Hong Kong via a fraudulent SWIFT transfer.  (Three separate MT103 transactions were sent to ALM Trading Limited at Hang Seng Bank in Hong Kong, according to Securonix analysis of the event.  Securonix believes the behavior of the attackers is consistent with the North Korean based APT group known as "Lazarus Group".  MITRE's ATT&CK program (Adversarial Tactics, Techniques & Common Knowledge) provides more information on the Lazarus Group.

As with many previous Unlimited attacks, Cosmos Bank chairman Milind Kale said that no customer accounts were impacted, as these were "dummy" accounts that were established for the attack.  If this attack is like historical ones, many of the follow-up arrests will come from using ATM video footage to identify individual cash-out gangs and try to follow their communications back to the criminals who recruited them for the scheme.

"Unlimited" ATM attack in Japan against South Africa's Standard Bank

We've written about Unlimited ATM attacks in this blog many times in the past, from 2008 until just a few months ago, but this newest attack is the first to feature Japanese ATM machines, to my knowledge.  In the early morning hours of 15MAY2016, at least 100 criminals visited at least 1,400 ATM machines and used a set of counterfeit ATM cards, cloned to correspond with accounts at Standard Bank in South Africa, to do the maximum 100,000 Yen withdraw ($913USD or £629) . . . about 14,000 times!

Standard Bank has confirmed the robbery to South African media that the event occurred, and has estimated the damage to the bank at around R200m (200 million South African Rand, or about $12.7M USD or about 1.4 billion Japanese Yen).  But is it truly an "Unlimited" attack?

The story was first reported in the 22MAY2016 Mainichi Daily News as "1.4 billion yen stolen from 1,400 convenience store ATMs across Japan".  The ATM machines are located in 7-Eleven convenience stores throughout Tokyo and 16 prefectures around the country.  The ATM machines in 7-Eleven stores in Japan are part of the bank network associated with Seven Bank.  Seven Bank's website invites international visitors to Japan to use their ATMs at 7-Eleven stores "Day or Night" which may be part of the appeal to these criminals.

www.sevenbank.co.jp/intlcard/index2.html

Several unique things happened in this account.  In previous "Unlimited" attacks, a very small number of accounts have had a related debit card "cloned" by making an exact copy of the magnetic stripe of the card.  In the past, an intruder onto the bank's network has been able to adjust the daily withdrawal limits of the cards, and reverse transactions, so that the same account could be used to perform hundreds or thousands of withdrawals.  The attacks are referred to as "Unlimited" attacks because a single account with a very small balance could be used to front millions of dollars worth of transactions, because each transaction is immediately reversed by the intruders who monitor the carefully orchestrated attack.  In the case of the most famous Unlimited attack, "The $9 Million World-Wide Bank Robbery", forty-four accounts were used to withdraw funds from 2,100 ATM machines in at least 280 cities around the world in a single evening.

In this case, it is not clear if this is what happened, primarily because the published reports say that at least 1,600 Standard Bank customers' accounts were used to perform the transactions. If this is true, with an estimate of 100 criminals involved in the "cash-out" portion of this robbery, that means on the average each criminal had access to 16 accounts that were unique to that criminal.  Also, with 1600 accounts in play, that means the average account holder's account would only have faced $7900 USD in charges.  This, however, contradicts the description of events that the BBC quotes, when it says that Standard Bank reported that "a small number" of fake cards were used in the event.  (The BBC article also places Standard Banks' estimated lossed at $19.25m, which, if you do the math, shows they chose the higher of the two contradictory values being reported in South Africa of either R200m or R300m.  R200m matches all of other figures being thrown about, while R300m is 50% higher.)

In my humble opinion, I believe that a journalist not versed in this type of cybercrime heard that 1600 counterfeit cards were used and assumed that they must belong to 1600 customers.  The key difference, and the most important with regards to Standard Bank, is that in a true "Unlimited" attack, the criminals would need to be controlling ATM accounts and logs INSIDE the Standard Bank network with administrator-level privileges. 

The Japan Times say "Japanese police have put suspects belonging to a Malaysian group on an international wanted list" relating to this event.  In reports from 2014, Japanese officials say that Chinese students are often used as money mules in Japan for withdrawing cash on behalf of organized cyber criminals, in much the same way that Russian money mules are used to withdraw cash from American banks.

"Unlimited" ATM Mastermind Ercan Findikoglu pleads guilty

One of the most fascinating types of cybercrime, in my opinion, is the Unlimited ATM attack.  There have been several such attacks over the years, as we've written about in this blog previously, including:

• 02JUL2008 - 7-11 ATM Hackers - More Details
• 07SEP2008 - Is the Analyzer Really Back? (The return of Ehud Tenenbaum) 
• (Tenenbaum was transferred to the US, pled guilty to two other cases, sentenced in July 2012 to Time Served and ordered to pay $503,129 restitution) 
• 11NOV2009 - The $9 Million World-Wide Bank Robbery
• 09MAY2013 - ATM Cashers in 26 Countries Steal $40   

In an "Unlimited" attack, hackers gain access to the internal systems of a bank or banking network and are either able to "reset" ATM withdrawal limits or eliminate the limits altogether for a card or group of cards.  The magnetic stripe data from these cards are then widely distributed to "cash-out crews" who take responsibility for draining as many ATM cards as possible in their area, while each time a card is used, the hackers "undo" the transaction so that the card appears to have not been used.

33-year old Turkish citizen Ercan Findikoglu was charged with conducting three such Unlimited campaigns.

In February 2011, $10M was withdrawn using the pre-paid debit cards distributed by the American Red Cross to disaster relief victims.  The cards were operated by JPMorgan Chase.  On February 27 and 28, 2011 a total of around 20 pre-paid debit cards were used in approximately 15,000 transactions to withdraw $10M from ATM machines in 18 countries, including ATMs in the Eastern District of New York.

In Findikoglu's second Unlimited attack, pre-paid debit cards for the India-based company ECS, operated by National Bank of Ras Al-Khaimah PSC (RAKBANK) in the United Arab Emirates were used.  On December 21 and 22, 2012, approximately 5,000 transactions in at least 20 countries resulted in withdrawal of $5M.

In the largest of his three documented Unlimited campaigns, enStage, a California-based payment processor, suffered an intrusion and had many cards stolen from its internal database.  A group of pre-paid debit cards for Bank Muscat in Oman were selected as the target, and on February 19 and 20, 2013, 36,000 transactions in 24 countries were used to steal $40M.

ERCAN FINDIKOGLU, who called himself "Segate" or "Predator" online, was arrested in December of 2013 while visiting Germany.

He was originally charged with 18 counts:

(1)   CONSPIRACY TO DEFRAUD THE UNITED STATES
(2-4) FRAUD ACTIVITY CONNECTED WITH COMPUTERS
(5-6) ATTEMPT AND CONSPIRACY TO COMMIT MAIL FRAUD
(7)   BANK FRAUD
(8)   ATTEMPTS TO COMMIT AN OFFENSE
(9-14) PRODUCES/TRAFFICS IN COUNTERFEIT DEVICE
(15) MONEY LAUNDERING CONSPIRACY
(16) MONEY LAUNDERING
(17) TAMPERING WITH WITNESS, VICTIM, OR AN INFORMANT
(18) INTIMIDATION OR FORCE AGAINST WITNESS

On June 24, 2015, Ercan was ordered into US detention, having been extradited from Germany.  The German courts in Frankfurt declared that Findikoglu was "the most-wanted computer hacker in the world and may face more than 247 years in prison if convicted of all U.S. charges" (as quoted in Bloomberg's story of 23JUN2015 - "Most-wanted cybercriminal extradited to U.S. from Germany."

As usual, the reality of sentencing varies dramatically from the overblown initial press release.  On March 1, 2016, All parties appeared before the honorable Judge Kiyo A. Matsumoto for a Change of Plea Hearing.    Sentencing is scheduled for July 12, 2016, but according to the BBC, prosecutors have agreed in a plea deal to limit his incarceration for "between 11 and 15 years."  (See "US bank hacker faces long jail time").

Many of the "Cash-out crews" from these operations have been separately arrested and charged, while many others (the vast majority really) remain at large.