When US prosecutors this week charged two Israelis and an American fugitive with raking in hundreds of millions of dollars in one of the largest and most complex cases of cyber fraud ever exposed, they also provided an unusual look into the burgeoning industry of criminal hackers for hire.
The trio, accused of orchestrating massive computer breaches at JPMorgan Chase & Co and other financial firms, as well as a series of other major offences, did little if any hacking themselves, indicate the federal indictments and a previous civil case brought by the US Securities and Exchange Commission.
Rather, they constructed a criminal conglomerate with activities ranging from pump-and-dump stock fraud to Internet casino break-ins and unlicensed Bitcoin trading. And just like many legitimate corporations, they outsourced much of their technology needs.
"They clearly had to recruit co-conspirators and have that type of hacker-for-hire," said Austin Berglas, former assistant special agent in charge of the FBI's New York cyber division, who worked the JPMorgan case before he left the agency in May. "This is the first case where it's that clear of a connection."
Berglas, who now heads cyber investigations for private firm K2 Intelligence, said additional major cases of freelance hacking will come to light, especially as more people become familiar with online tools, such as Tor, that seek to conceal a user's identity and location.
This week's indictments accused a hacker referred to as "co-conspirator 1" of installing malicious software on the servers of multiple victims at the direction of Gery Shalon, the alleged mastermind of the scheme now under arrest in Israel. A second indictment charges a man referred to as John Doe, believed to be in Russia, for an attack on online trading firm E*Trade.
Officials have not said if the co-conspirator and John Doe was the same person, or if the FBI knows their true identities.
Law enforcement and computer security officials say outsourced cyber-crime services — including rented time on networks of previously compromised personal computers and custom break-ins — are most readily found on underground Russian-language computer forums, where skilled attackers advertise their services.
The forums are tight-knit communities where newbies must be vouched for by multiple known members and pay membership fees that cost thousands of dollars, said Daniel Cohen, who oversees an undercover team at EMC Corp's RSA Security that monitors the forums.
"You can find anything you want for an operation. Hackers, servers, software, code writing. They are all available," said Cohen. Individuals hide their identities even from each other, making infiltration and arrests rare.
In this case, the ringleaders are accused of hiring hackers to steal contact information and other data they then used to help convince ordinary investors to buy little-regulated stocks. Prosecutors have not disclosed how the hackers were compensated.
Fees vary greatly in the cyber underground, depending on the complexity of the assignment and supply of talent available to do a particular job. Elite hackers who pull off the most technically challenging attacks might get a percentage of profits, while others might earn an hourly rate or get paid a few thousand dollars for winning access to a target's network, said researchers.
All three of those accused this week — Shalon, Joshua Samuel Aaron, who is at large, and Ziv Orenstein, who is also in jail in Israel — began promoting penny stocks before the hacks took place, according to US government claims.
Orenstein's lawyer declined to comment, and Shalon's lawyer did not return messages seeking comment.
