JACK: I grew up in the US, close to my grandma. She was old and needed medicine, and often she’d
buy her medicine in Mexico. I have many fond memories of taking an all-day road trip to Mexico,
getting across the border, trying to find la farmacia, hoping we’d get the right medicine
there, figuring out a way to get it back over the border, and then driving home. The thing is,
here in the US, medicine is crazy expensive, so making the trip down to Mexico for medicine
was worth it to us. [MUSIC] My grandma was just someone looking for deals and trying
to save money. But this is a common story I’ve heard from other people in the US, too. Yeah,
it’s often illegal to do this, because the US doesn’t want people importing drugs that
aren’t FDA-approved, but still, people do it. But then, another option landed on the table;
pharmacies began to appear online. Suddenly, you could order your medicines from your
computer and get it delivered right to your front door, and that changed everything.
But there was a problem with this, too; not all these internet pharmacies were above board. They
weren’t all licensed, and most of the time, the medicines they were selling weren’t regulated,
and that makes for a really murky and dangerous scene. When rogue online pharmacies hit the
market, underground partnerships were born to promote them and get more customers. Their
public face looked authentic, but the reality was much darker. Their digital partners were
internet spammers. Today’s internet is like a big mask. It’s full of shady characters
trying to trick you. This story is a look behind closed doors at what really goes on,
and how spammers and botnets and hackers have shaped how online pharmacies look
today. When you venture into the depths of the internet, the consequences can be life-changing.
(INTRO): [INTRO MUSIC] These are true stories from the dark side of
the internet. I’m Jack Rhysider. This is Darknet Diaries. [INTRO MUSIC ENDS]
JACK: When pharmacies started up online, getting medicines became much easier,
and that was a game-changer for a lot of people. But there was still one big problem; the cost.
These medicines were just unbelievably pricey. As more and more pharmacies became available online,
people looking around for medicines started to notice a big price difference on certain
sites. Some online pharmacies would show up and they had the same range of meds available,
but they were a lot cheaper, and I mean like, half the price cheaper, and they didn’t even ask
for a prescription. But these pharmacies weren’t the real thing. They were rogue,
and pretty much everything on their website was fake. A lot of these rogue internet pharmacies
advertised themselves under the Canadian Pharmacy brand. See, Canada is known for licensed
medicines being available at much more reasonable prices. There’s a regulation on medicine there,
so pharmacies are told by the government what prices to charge. So, when people thought these
online meds were coming from Canada, they were less suspicious and more trusting. The reality
though, is that these drugs were not being sold from Canada. Here’s an audio clip from
the Partnership of Safe Medicines. Have a listen to what they say about online Canadian pharmacies.
PSM: Have you ever Googled ‘Canadian online pharmacy’ and gotten like,
forty million results? Most people don’t realize that these online pharmacies that they find in
Google are not mom-and-pop businesses selling you inexpensive medicines because it’s the nice thing
to do. They’re fronts for large, global criminal networks that run hundreds or even thousands of
sites to sell unapproved drugs for huge profits. Sometimes the drugs aren’t FDA-approved. Sometimes
they don’t have enough or any active ingredient, and sometimes they have deadly ingredients.
JACK: [MUSIC] As the internet pharmacies were really starting to gain steam, the little blue
pill rose in popularity. Big Pharma company Pfizer started making their Viagra pill to
solve the problem of erectile dysfunction, and their marketing campaign was a throbbing
success. By 2008, Viagra sales brought Pfizer $2 billion that year, which accounted for 92% of all
erectile dysfunction pills. This pill had been prescribed to over thirty million men worldwide
in the ten years it had been available. There’s been books written about Viagra and how it changed
people’s lives, but Pfizer had a strict patent on the pill, and no generics were available. So,
the only way you could get it was to buy the name-brand, expensive one. So, those shady
online Canadian pharmacies became shadier. They decided to make their own Viagra pills,
and the most important part of it was to make sure it was the same shape, size, color, and label.
But it didn’t matter what the ingredients were. [MUSIC] These were fake pills. Some were harmless,
but others contained blue printer ink or boric acid. The fake online Canadian pharmacies knew
there was such a high demand for these pills that they wanted to cash in on that demand.
In 2006, two Russians, Igor Gusev and Dmitry Stupin, set up their own online pharmacy called
Glavmed. There’s a lot of characters in this story, and there’s actually
a few different Dimitrys, so I’m sorry if it gets confusing. Now, their website, Glavmed,
was nicely done and claimed to be part of the Canadian pharmacies group. But Glavmed was not
a legit pharmacy. There was no requirement for a prescription, and no online pharmacist available
to answer questions or check out each order. See, every legit pharmacy has a pharmacist
working there. To be a pharmacist, you need a PharmD degree, which is a Doctor of Pharmacy,
and you need to pass an exam to get a license. It’s important that a pharmacist checks every
order, because certain drug combinations can be deadly, or even some drugs by themselves can be
deadly and need proper warnings. But the Glavmed pharmacies didn’t care about that,
and didn’t hire pharmacists. They sold everything from fake Viagra to pain medicines,
and they were getting them from mass factories in Europe. It was like Amazon for meds; browse,
click, add to your basket, pay, and go. That was it. No prescription needed.
Igor had experience in some not-so-legal online businesses. Back in 2003, he had
set up a payment processor in Russia with his business partner at the time, Pavel Vrublevsky.
They called it ChronoPay, and it did pretty well. It wasn’t the most clean of operations,
though. A lot of the payments ChronoPay was processing were for underground online pharmacies,
or a lot of really shady porn sites. So, when Igor decided to set up his own fake internet pharmacy,
it really wasn’t that much of a leap. Igor and Pavel had a falling out in 2005,
and Pavel started running ChronoPay by himself, and that’s when Igor went and
started Glavmed with Dmitry Stupin. To be successful, Glavmed needed customers. So,
they needed to advertise. But they didn’t want to do the advertising themselves, so they set up an
affiliate network. [MUSIC] They offered affiliates an impressive 30%-40% commission rate on each sale
they drove to the Glavmed pharmacy sites. They would offer huge prizes and throw big parties
for their affiliates, because they were trying to be the top affiliate network and attracted
the best affiliates. These Russian affiliate networks were called Partnerka. It’s a good
and tried and tested business model. Igor and Dmitry-Stupin only paid out when they got sales.
The more money they were paying affiliates in commissions meant the more sales they
were getting. They’d deal with all the ordering of the medicines, keep the stock up, taking payments
from customers, and organizing the shipping. Their affiliates could concentrate on driving customers
to the site using whatever advertising models they wanted. Glavmed wasn’t picky;
anyone could sign up at this program and take a shot at making some money with it. If the
methods they used were on the black hat side? Well, that didn’t bother them too much, either.
Glavmed had a sister program called SpamIt, and they had an affiliate program, too. Now,
SpamIt was a spam affiliate program. You can sign up for them, get your little affiliate code and
whatever product SpamIt wanted you to market, and then spammers would send tons of e-mails out
with that URL and tracking code. Truckloads of e-mails were sent to everyone across the globe,
but mainly to people in the US, advertising things like Glavmed’s online pharmacies.
When people clicked the link to go the website, that link had a little tracking code which gave
the spammer credit for the traffic. So, if people do buy something, SpamIt knows which
spammer sent them that customer. [MUSIC] But SpamIt was a secret program and sat
under the Glavmed shadow. While anyone could sign up for an affiliate program at Glavmed,
not anyone could be an affiliate at SpamIt. People needed to be invited from somebody who
was already a member. Sometimes they’d even get background checks to have them
prove themself as a decent spammer. You know what it’s like in your inbox; you get e-mails
from your bank or your cell provider, great. But you also get a lot of other stuff too,
stuff you didn’t ask for, and sometimes it’s way more than just an e-mail. Microsoft’s Digital
Crimes Unit Senior Attorney Richard Boscovich explains it pretty well.
RICHARD: [MUSIC] You could open up your e-mail account and you’ll have tons of advertisements and
things of that sort that you just don’t want. But spam is much more than that. It’s kind of like if
you had junk mail come to your house, and when you open the envelope, a white powder exploded on you
and somehow you become infected with something. Literally, that’s what happens in the cyber world.
JACK: Then you’ve got a lot of porn e-mails, the ones telling you that somebody is nearby
and wants to hook up, and what websites to visit to see an exclusive show. Next to porn,
it’s pills, and Viagra was the leading one. The little blue pill was sold in e-mails telling
you how your sex life will be enhanced beyond your wildest imagination. See, back in 2007,
e-mail spam filters weren’t that sophisticated yet. They would look for keywords or phrases and
block them. Spammers figured out how to get around filters and were doing so pretty easily. So,
people would see e-mails show up with the subject ‘want to be rock hard?’ with links to where they
can buy Viagra without a prescription and for much cheaper. Now, e-mail spam laws did come in,
eventually making it harder for spammers to send these kind of unsolicited e-mails, and the e-mail
clients got way better at catching them and sticking them into dedicated spam folders.
But the shadier businesses still did it because, well, spam was working like,
really well. The more spam that went out meant more people were visiting the porn and pharmacy
websites, and profits for both the spammers and the website owners. Spammers are like the middle
men when it comes to shady online pharmacies. They might have a background in computers, IT,
or hacking, but then got involved with sending spam because they can make more money from that.
Damon McCoy is from George Mason University in Virginia. He was a lead author of a big study
in the partnerships between spammers and the online pharmacies. This is him giving a talk
‘PharmaLeaks’ in the 21st USENIX Security Symposium in 2012 in Bellevue, Washington.
DAMON: So, there’s three main players in this economy; there’s the user, which is the potential
customer, there’s the affiliate marketer, which is typically a spammer, and there’s the affiliate
program. Let me go into a concrete example of a business interaction between these three parties.
So, initially what happens is that the affiliate marketer perhaps gets the user to see some kind
of spam advertisement that includes some kind of link, that includes some kind of enticement
of cheap drugs, no prescriptions required, to get the user to click on this. If the user is
actually interested in perhaps buying these pharmaceuticals, clicks on it, they’ll be
delivered that template that I showed you in the original slide. The user can interact with this
template just as with a normal e-commerce site. There’s a wide selection of drugs there. They
can select their drugs if they indeed want to purchase some drugs from the site. Then at this
point in time, the relationship switches from the affiliate whose job it is to track customers, to
the affiliate program, whose job it is to actually monetize the customer and turn them into money.
So at this point in time, the spammer fades out, the affiliate program steps in, and if the user
decides to purchase this – typically purchases happen with credits cards – the user give their
credit card details to the affiliate program – actually operates much like a business, and their
job is to process these credit cards. Then they’ll actually deliver some product that you ordered,
so this isn’t a complete scam. These pharmacy affiliate programs that I’ll show you operate
much like a business, and they’re very interested in keeping their customers happy and satisfied,
because these customers are paying with credit cards. If they’re not satisfied customers,
they’re gonna charge back. These affiliate programs will be shortly out of business.
I’ll show you from the economics, these affiliate programs are in
it for the long haul and they want to scale their business to large,
millions of dollars. So, it’s not in their interest to have dissatisfied customers.
JACK: For a good spammer, this is a great deal. The more spam they send, the more money they
can make. They knew if they could scale up, it would mean they could really scale up;
their commissions could just go through the roof. This is what one guy figured out while
he was earning himself some money with Glavmed and SpamIt. He called himself ‘Google’. Yeah I know,
it’s confusing ‘cause it’s the name of the search engine, but that was the name he went by. So,
this guy Google started spamming and he saw that it was pretty effective, and he tried thinking
of ways that he could make more people visit the online pharmacy. Sending mass amounts of e-mail
is not so easy. [MUSIC] Every e-mail that’s sent has an IP address of where it’s from,
and if you send enough spam e-mail from a single IP address, that IP address gets added to an
abuse or block list and e-mail providers will stop accepting e-mails from it. So,
spammers would need to change their IP frequently, which can be a hassle. So,
the hacker named Google thought if he could control of hundreds of different computers and
send e-mails from them, then it would be harder for e-mail providers to block that many IPs.
Taking control of a bunch of different computers like this and putting them all to work together,
that’s called a botnet. When you combine spam with a botnet, you get an incredible working machine.
So, you can think of a botnet like a big network of computers that someone has full control over
all of them. So, from a single workstation, they can tell all the computers to carry out a task,
and these computers would be people’s home computers or laptops, or even work computers
in the office, and they can be located all over the world. But these people didn’t
sign up for their computer to be used like this. So, because nobody would opt into this,
it meant people running the botnets would have to stay hidden from the user and not let their
presence be known. In 2007, Vint Cerf, he’s the guy who co-developed the TCP/IP protocols,
he said of the 600 million computers connected to the internet, between 100 and [MUSIC] 150
million of them were already part of a botnet. Here’s Kaspersky talking about how they work.
CLIP: Malicious software, or malware, can harm your computer in a variety of ways, and sometimes
the effects are not known until it’s too late. What’s worse, your computer can become one of
many infected with malware, creating a botnet, short for robot and network. Cyber criminals use
special malware, usually a Trojan Horse, to breach the security of several users’ computers. These
take control of each computer and organize all of the infected machines into a network of bots,
which are unwitting tools that the cyber criminal can remotely manage. The infected system may act
completely normal with no warning signs. A bot can be a PC, Mac, or even a smart phone. Oftentimes,
the cyber criminal will seek to infect and control thousands, tens of thousands, or even
millions of computers so that they can act as the master of a large zombie network or bot network.
JACK: [MUSIC] Once infected, computers are hooked into a botnet, and they sit there quietly waiting
for instructions. It’s like hundreds of thousands of obedient little puppies just sitting in
silence, ears pricked up, and waiting to be told what to do next. They’re obedient and will follow
the instructions they’re given. Computers in a botnet are the most loyal machines you’ll ever
find. But all botnets are created by someone, and that someone is called a botmaster or botherder,
and Google wanted to become a botmaster. A botmaster sits behind their computer,
controlling it all. It’s all done remotely and it’s all done anonymously. These guys
don’t reveal their identities. In fact, one of the biggest problems in trying to fight a
botnet is not knowing who the botmaster is, or where in the world they’re even located.
Botnets are controlled through a command and control server, which I like to call C&C. Some
people call them C2s. This has to be set up and maintained by the botmaster. Even hackers need
to host their stuff, and C&C is like the nucleus of a cell. All the key information, instructions,
and communication with the zombie bots in the network go through here. Once the bots
have carried out their specified task, they send feedback back to the C&C. They like to
report back on how well they did and any problems they hit. They’re very well-trained bots. Botnets
have been used for all sorts of things in the past. I mean, think about it, you’ve got all
these computers at your command. The combined computing power is insane. You set that thing
loose and you can cause some serious damage. DDoS attacks are a favourite for botmasters and
their botnets. But bots can also steal personal information and banking information. But the one
thing botnets are really good at is sending out mass volumes of spam e-mails. [MUSIC] So,
Google had sat and thought about ways he could gain access to hundreds of computers.
He needed to infect them somehow with malware, and would bring them under his control. He
decided to use a Trojan to be the installer for his own spam botnet, but this really wasn’t easy.
Getting all this just right was something Google puzzled over, and so, he ended up accepting some
help. Igor Vishnevsky was another spammer that Google met years before in Moscow, and he came
on board to help protect it all. By the time they were done, hacker Google and Igor Vishnevsky had
built a botnet and called it Cutwail. Cutwail was designed as a centralized botnet. That meant
the C&C server would communicate directly with each infected computer. They designed it well,
but now they needed to populate it by infecting hundreds of computers to get them to join this
botnet. Google used a Trojan called Pushdo to infiltrate Windows computers and get the
Cutwail spam engine running on them. I don’t know who built Pushdo, or even if Google had something
to do with it himself. But Pushdo and Cutwail went hand-in-hand in their interoperability.
They were a pair that was rarely seen without the other, but it did happen occasionally. Pushdo
would infect machines through phishing e-mails; like, the e-mail might say, ‘Someone just sent
you an eCard. Click here to see it!’, and other methods were drive-by downloads. But that was just
a dropper, a tiny program whose job was to install Pushdo. The dropper scans computers, hunting for
gaps in the software. Maybe the operating system hasn’t been updated in a while, or there’s an app
that has a vulnerability. Once it finds this, it then installs Pushdo starts the infection. First,
it makes a copy of itself and sits quietly in the system directory. It also writes new code
for the registry. This enables new malware and updates to be installed every time the computer
starts up. Rootkits are installed to hide all this from the user and from any antivirus programs that
were installed. When those tasks are done, Pushdo gets on with its real purpose, [MUSIC] downloading
more malware, and Cutwail was at the top of the list. Once Cutwail downloads and runs for
the first time, the computer is now a zombie machine. It’s a slave and part of the Cutwail
botnet. Straight away, Cutwail contacts hardcoded IP addresses to talk to the C&C server controlled
by the hacker Google. This is the new bot asking for instructions on what it should do now, like
an obedient puppy that it is. The C&C server sends back a full spam creation pack for the bot to use.
So, the zombie machine gets a list of active e-mail addresses to send spam to,
and there’s a heap of e-mail templates with content already written and ready to go. This
was already written and tested that it could pass through spam filters. The bots put all
this together and starts sending the e-mails out in different spam campaigns. It’s important to
mention a little bit about how e-mails work here. It’s incredibly easy to spoof where an
e-mail is from. That little From: field in the e-mail? Yeah, you can write whatever you want
in there. In the early days of the internet, there were no checks to see if an e-mail came
from where it says it came from. But now, a lot of companies have added checks to verify that From:
field is where the e-mail actually came from, it matches. But when Cutwail was going around,
that feature wasn’t implemented very well, so you could put whatever you wanted from the From:
field. So, this was all going very well for hacker Google. He was getting Cutwail
into computers and collecting his zombie bots. The numbers were adding up fast,
and he didn’t want to just stop there. He started to offer Cutwail out to rent.
He was advertising his botnet on SpamIt underground’s web forums called spamdot.biz. Now,
this is a place where hackers and spammers would go to share information, hire software, or sell
malware, all illegal and dodgy. There are loads of reasons why a ready-made botnet would appeal
to some cyber criminals, but mainly it was because they wanted their own malware installed on as many
machines as possible and to send out crazy amounts of spam. [MUSIC] There were some standard prices
for botnet hires. Like, to use a botnet that has 10,000 installations, that would go for like, $300
or $800. Machines in the US were more valuable targets; they had better internet connection,
so they were up to $125 for 1,000 machines infected. The computers in Asia and Europe,
they were cheaper, at about $13-$35 per 1,000 infections. Some were even paying as high as
$10,000 a month to use a botnet which could send 100 million e-mails every day. These services
often came with free trials to prove how effective they are. There was another Trojan or botnet
called the Gameover ZeuS Trojan, and that stole personal information and banking information.
It was installed on millions of computers using Pushdo and the Cutwail botnet. This ZeuS Trojan
is so fascinating to me, that’s actually going to be the subject of the entire next episode,
so make sure to tune into that. [MUSIC] So, Cutwail was a roaring success and was growing
fast. This was all going in 2007. In case you’re curious where Google got all the e-mail addresses
from, underground hacker marketplaces. You can buy a million e-mails addresses for like,
twenty-five or fifty bucks, and Cutwail was amassing hundreds of millions of addresses
this way. The Cutwail botnet eventually became a self-service tool. Once you purchased the usage
of the botnet, you were given a URL which let you login and send your e-mail from. There,
you were given multiple support contacts in case you needed help. Even the botnet creators knew
that a satisfied customer would mean a repeat customer, so they wanted to do what they could
to make the user experience enjoyable. Cutwail soon passed 100,000 infected computers and was
growing in size. Remember, this botnet was sending spam e-mails from each of the infected computers.
The more computers they had in their botnet, the harder it would be to block
this botnet from sending spam, because it wasn’t sending spam from one place;
it was sending spam from 100,000 different places. The Cutwail botnet just kept growing,
and soon, it had over one million infected computers at its control. At its highest point,
the botnet was sending out 51 million spam e-mails every minute. 51 million e-mails a minute. Hacker
Google could send 74 billion spam e-mails a day through Cutwail. Google used his own botnet to
send pharmacy spam using Glavmed and SpamIt affiliates. From that alone, he was earning
$1,000 a day from affiliate commissions. [MUSIC] Just months after Cutwail launched on September 2,
2007, there was a big car accident in Moscow that shook up the world of spam botnets. Nikolai McColo
was twenty-three years old and he was the owner of McColo Corp, which was a web hosting provider,
and its headquarters were in San Jose, California. Now, Google knew McColo,
and hosted his C&C servers at McColo Corp, because when you’re running a massive, shady,
illegal operation like this, you want to host your servers at a place you know and trust.
Nikolai and McColo Corp were known for turning a blind eye to what their clients were doing
with their servers. So, the McColo hosting provider was a safe haven for spammers,
and criminals were happy to use the service. There was a lot of criminal activity on McColo’s
servers; from hosting big spam botnets to clients involved in spamming for fake goods, fake drugs,
and a lot of shady pornography. McColo Corp had a good reputation for hosting bad things. So,
on September 2, 2007, Nikolai McColo was riding in a BMW through Moscow. The driver was a guy
named Jaks, a known Russian spammer. When they got to an intersection in the middle of Moscow city,
a Porsche drove up beside them. Jaks and Nikolai looked over at the Porsche. Both
cars came to a red light and stopped side by side. One of them revved the engine;
the other revved back. A race was about to begin. When the lights turned green,
both cars roared off at high speed, but it all went wrong. Jaks lost control of
his car. The BMW went into a spin and clipped the corner of the Porsche.
Both cars went screaming off the road, and the BMW went straight into a lamppost. It totally
destroyed the car, and Nikolai was killed instantly at the age of twenty-three. Jaks
and the guy driving the Porsche walked away with minor injuries. This was big news across
the spammer community. At Nikolai’s funeral, Igor and Dmitry-Stupin from Glavmed were there,
and Google was, too. They knew the importance of Nikolai’s McColo Corp for the spamming world and
its hosting services, and they were fairly close to him. So, they were wondering how
Nikolai’s death was going to impact McColo and the hosting. The McColo group assured them that
hosting would still be fine and all was good. So, Google went with it and left his Cutwail
servers with them. Now, Cutwail wasn’t the only successful spam botnet on the go at the time. No,
there were others; Google wasn’t the only one who spotted this opportunity. [MUSIC] Other guys
with existing botnets saw this and wanted to monetize and earn some serious money,
too. One spammer had multiple affiliate accounts with SpamIt, and they called themselves Cosma.
Now, Cosma had signed up as an affiliate spammer soon after SpamIt set up in 2006.
He generally used the handle ‘Cosma2k’ on his affiliate accounts, but there were others,
too. He had an idea to propel himself to be one of the most successful spammers ever. Cosma built
a botnet called Rustock, and he had some of his command and control servers hosted with
McColo Corp, too. He’d been toying with the idea of doing some kind of stock manipulation scam,
but once he got involved with SpamIt, he saw he could really make some money. In 2007, Cosma
switched Rustock to be a pharmacy-spamming botnet. Rustock was a little bit different than Cutwail;
Windows machines were still the targets, and computers were infected in a similar way through
malware download, but Rustock malware didn’t launch straightaway. No, Cosma programmed Rustock
to just sit quietly, do absolutely nothing for five days after infecting a computer,
which is kinda crafty. This helped it hide from antivirus scans. Rustock used some custom
encryption techniques so when it downloaded, it just looked like a .rar file, a compressed
archive file. It ran complicated rootkits to embed itself into the infected machine.
Debugging programs were automatically disabled, and Rustock would hide its tracks
so that it couldn’t be discovered. Once Rustock infected a machine,
that computer would contact Cosma’s C&C servers, just like Cutwail, but Cosma had things set up
a little differently here, too. He had more than one command server, and communication
from these servers to his bots were done in more like a relay at different levels. So,
Cosma would send communication to a secondary command and control server, and that one would
then talk to another set of C&C servers lower down, and they would be the one who passed on the
information to the bots making up the botnet. One reason for having so many C&C servers is it makes
it harder to stop a botnet. If a huge botnet has one C&C server and you take down that C&C server,
you might lose complete control of the botnet. So, Cosma programmed it this way in order to keep
it up longer. [MUSIC] The same kind of feedback went on for the bots; when they needed to tell
Cosma something, they would go down the chain and relay messages all the way back to Cosma somehow.
So, while Cutwail was centralized, which is one computer talking to many bots,
Rustock was decentralized, where thousands of systems would issue commands to infected machines.
Cosma had something like 2,500 domains in place for Rustock. The botnet used DNS for the bots
to connect to. But Cosma had also coded in some specific IP addresses as backup systems. It was
contingency planning. If some of his C&C servers got taken down, the botnet would just reach out
to the hardcoded IP addresses and get an update on which new IP addresses to communicate with,
and it would just carry on after that. Rustock also used TLS encryption when sending spam to
conceal what it was doing. Cosma’s C&C servers were dotted all over the US, and he was paying
a fair whack for them too, about $10,000 each month. These were servers with dodgy ISPs,
known for offering hosting to shady services. Cosma did have some of his servers with McColo,
yeah, but he rented servers from straight-up legitimate ISPs, too. These ISPs had no idea
what Cosma was using them for. This was a spam botnet hiding in plain sight.
Rustock grew into an enormous powerful botnet. Cosma had collected between 850,000 to 2.4
million bots on his network. It became so big that some estimate that Rustock botnet
was responsible for 41% of the total spam in the world. Each individual bot was sending over 192
spam e-mails per minute. That put the collective Rustock output at 32 million e-mails per minute.
That’s 46 billion e-mails a day. That’s just insane. In November 2008, Cosma got twitchy
about hosting at McColo Corp, so he started moving his Rustock servers to different providers based
in Russia instead. Cosma, it seems, wasn’t taking any chances with his botnet. [MUSIC] As Cosma was
seeing huge success with Rustock as a spam botnet, Pavel was reappearing on the scene. He was the guy
who created ChronoPay with Igor, and then Igor went off to make Glavmed. Pavel was still running
ChronoPay, but he wanted to get in on some of this other action, too. That year, he launched his own
rogue online pharmacy, RX-Promotion, which would be a direct competitor to Glavmed, Igor’s company.
But he didn’t launch it on his own; he had a new partner, Yuri Kabayenkov,
who did all the tech stuff for him. So now, Igor and Pavel were going head-to-head in a
battle to secure more of the online pharmacy market than their rival. Pavel, though,
decided to appeal to a different part of the online medicine market demand. Igor and Dmitry
Stupin were pushing erectile dysfunction drugs as their top seller. They were selling their
knock-off versions for a mark-up of twenty-five times what they bought them for. Pavel instead
went on to highly addictive medicines that people often abused, like opiates. So,
he was selling Oxycodone and Valium, and others like Adderall and Ritalin. These would be his top
medicines, and all for really cheap prices. Pavel opened RX-Partners not long after,
using the same model that Glavmed and SpamIt used. RX-Partners was the affiliate program for
RX-Promotion. Spammers that were signed up with SpamIt happily opened up accounts on RX-Partners,
too. They didn’t care who they were promoting, as long as it made money for them. Some of the
figures that the top spammer affiliates were earning in commissions was pretty mind-blowing.
Here’s Damon McCoy again talking about the data he analyzed when drilling this down.
DAMON: Let’s look at some of the schemes that these high – that these top-earning
affiliates use to be successful spammers. So, an obvious one to think of is, right,
run a large bot network and spew out a whole bunch of spam. So, in fact,
the operator Rustock, we identified him within the SpamIt data set and in fact, he made close
to $2 million by operating Rustock and sending out spam shilling for the Glavmed-SpamIt program. So,
that indeed is a very good way of becoming a successful marketer, is run a large bot
network. So, as you could see, these top earners, they earn quite a bit of money,
and they in fact earn the largest share of each individual sale. However, the affiliate programs,
if the affiliate programs are very successful, they in fact can earn more by taking a smaller
portion of each sale over all the sales from their affiliate program than the individual affiliates.
JACK: It must be exciting for the spamming botmaster. Think about it; you’ve worked
really hard, made this big botnet, infected all these hosts, launched your campaign, and sent out
a ton of e-mails, and now you’re looking at the dashboards on Glavmed and SpamIt and you’re just
watching your numbers grow, seeing the rewards pay out in real-time, and watching the earnings get
higher and higher. That must have been a pretty big kick for these botmasters. [MUSIC] 2008 turned
out to be a busy year for spam botnets, and this next botnet was probably the most complex of them
all. The Waledac botnet was started by a guy named Severa. He was known on the spamdot.biz forum,
but just like the other botmasters, he kept himself totally in the shadows. Waledac used
similar methods as the others to get computers infected and part of its network. Social
engineering trickery, innocent looking e-mails that had an attachment of malware or a link to
malware, and once you clicked on it, Waledac would unleash itself into the machine, turning
it into a spamming bot. Once a machine had been infected, Waledac binaries were let loose. It was
coded in C++. The executables were just under 1MB in size. As all the other botnets did, the first
task of the malware was to amend the machines registry so that each time the computer starts up,
Waledac would be run to check for updates and keep the machine as an active spam bot.
Waledac was designed to be a spamming machine. It was crafted to collect bots, grow in size,
and distribute mass spam e-mail campaigns. In the core binaries of the malware was an
SMTP engine which could communicate with an SMTP server and send e-mails. The malware
can deal with two types of HTTP traffic; the control message to the C&C servers,
and the normal HTTP traffic to and between the Waledac bots. [MUSIC] Waledac was structured in
a different way compared to Rustock and Cutwail. It was a custom-written, peer-to-peer structured
botnet with a maze of layers for its infected machines. It had categories for its bots and
different communication routes. The C&C servers did not communicate directly with the infected
machines. It was all designed for resiliency and to protect itself and to hide from anyone who was
trying to find it. Over in Canada, there’s an engineering school connected to Montreal
University. It’s called Polytechnique Montreal. Two security researchers there, Joan Calvet and
Carlton Davis, and Pierre-Marc Bureau who was from US internet security company ESET, well,
they got ahold of these binaries from Waledac and started reverse-engineering them. What they found
revealed a complicated botnet. Waledac didn’t miss an opportunity to steal data that it could use.
It would scan the hard drives of infected machines and sniff their network traffic. It was hunting
for e-mail addresses and passwords that it could steal and send it up the communication chain
back to the command and control servers, straight into the hands of Severa. When thinking about how
Waledac was structured, imagine a big pyramid. The base layer, the biggest layer, were the spam bots,
the infected Windows machines, and they were the worker bees, the ones who were actually sending
out spam e-mails. These spam bot machines couldn’t talk to each other, only to the layer above them,
who the researchers called the repeaters. This layer were infected Windows machines that had
public IP addresses. But these didn’t send out any spam; their job was to pass information
between the worker bots and the communicator bots. They could talk to each other and to the
layer above in this pyramid. The third layer was the protector group. They were the Linux servers,
which the researchers thought acted as proxies for the core C&C servers. They
were the protection layer, hiding the valuable servers from sight. The five of these servers
that researchers identified were scattered across the globe in locations like Germany,
the US, Netherlands, and Russia, and all had at least one protector server.
The only layer above them and sitting at the top of the pyramid was the actual C&C server for
Waledac. [MUSIC] Waledac also used this layered system of lists in its structures, too. So,
all the spammer bots had their own hardcoded list of repeater bots that they’d have to deal with,
like, 200 of them, all communicating through .xml files using encrypted registry keys. Now,
they would contact a random set of these repeaters to get updates,
and they would also send the repeater another list of repeater bots taken from the original
list of 200. It’s confusing just for me to try to figure out what’s going on here,
but that’s a lot of lists, and there’s a lot of different layers here and a lot of
different bots that you have to juggle as the botmaster. But all this worked
in harmony and was acting pretty smoothly. The Waledac botnet was pretty successful,
and it kept its botmaster earning some pretty good money. [MUSIC] Before that year was out though,
the other spam botnets would take a hit. The McColo web host provider was forcibly taken down
on November 11, 2008. Their not-so-ethical practices had finally caught up with them.
After a number of reports highlighting the shady nature of what McColo was doing,
their two US-based internet providers, Global Crossing and Hurricane Electric,
pulled the plug on them. Suddenly, a big chunk of these botnets lost their hosting provider,
and the spam volume across the world just took a huge drop. Like, suddenly something around 80%
of all spam worldwide just stopped. Cosma had already moved some of his servers from McColo,
but not all. Google had most of his servers for Cutwail there. This was enough to make
both botnets stunned and immobile, but the effect was short-lived. A few days later,
McColo reactivated one of their servers in the exact same location where it was before,
in San Jose, California. When that server came online, the Rustock botnet came online again,
too. But within weeks, that botnet found a new hosting provider. C&C servers were reconfigured
to send new sever information to all the bots, and the spamming machines got rolling again. Spam
volumes once again began to climb. [MUSIC] By the middle of 2009, pharma e-mail spam
was dominating the global spam market. 74% of all spam e-mails were pushing for dodgy online
pharmacies. 67% of all that spam was promoting the Canadian Pharmacy brands like Glavmed and
SpamIt. That year, spam botnets were sending an average of 150 billion spam messages a day.
Cutwail was riding high again, but it took another big hit in June that year,
when again it lost the hosting of its master C&C servers. Another hosting provider based
in California was called 3FN, and hacker Google had loads of his servers there,
especially after the McColo takedown a year before. 3FN was like a repeat of McColo. It
was sort of known for hosting things that were dodgy or crime-ridden, like child pornography
websites. The FTC stepped in and shut it down on June 4, 2009. When that happened,
there was a noticeable drop in e-mail spams being sent as a result, but nowhere near as big as the
one after the McColo takedown. But a few months after that, the Cutwail botnet was back at it
and just as strong as ever. The botnets were once again at full steam, but they were also
in the crosshairs of some determined people who wanted to take them down. Security analysts,
academics, and software companies, and big brand pharmaceutical companies like Pfizer were all
getting pretty frustrated with these botnets and rogue pharmacies, because these online pharmacies
were selling fake Viagra, which Pfizer made, and at the time, there was no generic available,
so Pfizer was losing a bunch of money from these botnets. But by this time, the botnet spamming
empire and the Russian affiliate networks were all starting to show cracks in their operations.
[MUSIC] The Waledac botnet was the first to fall. At 1.5 billion spam e-mails a day, Waledac was a
big part of the pharma e-mail spam problem. Severa brought the online pharmacies an extra $438,000
in revenue, and his cut from that was about $145,000. Software giant Microsoft was getting
especially annoyed with Waledac. In December of 2009, they found 651 million e-mails going from
Waledac through their customers’ Hotmail accounts alone. They decided to fight back; they realized
to take down Waledac, they were going to have to do something pretty unusual. Successfully
taking down a botnet is as much about tactics and strategy than anything else. Researchers need to
bide their time, do their homework, and identify the botnet’s weakest points. Most of the time,
that’s their C&C servers. It’s not a game of chess where authorities have to make a
move or wait for the botmaster to make theirs. It’s the opposite, because the best attack is
a coordinated worldwide sudden strike on multiple levels to cut the botnet away from the botmaster.
By February 2010, Microsoft’s Digital Crimes Unit, their Malware Protection Center, and their
Active Response to Security guys were building a takedown team to knock out Waledac. They had
Symantec involved, experts from Shadowserver too, and there were security researchers involved from
Universities of Washington, Mannheim, and the Technical University in Vienna. That’s a lot of
people. Together, they would try to take down this Waledac botnet, and they codenamed this Operation
b49. The team identified 277 domains that Waledac was using to operate its botnet. Their plan was
to try to disconnect all of these domains at the same time, which would cut off all communication
routes between the command and control servers and the bots. But it wasn’t going to be easy.
Microsoft had their Senior Attorney for the Digital Crimes Unit, [MUSIC] Richard Boscovich,
who was fully involved in this takedown attempt. Here’s a clip of him explaining why.
RICHARD: The challenge we were facing is how do we go about stopping a botnet
of this magnitude? In essence, how do we go about disconnecting all of the robot
computers from the botherder? We looked at a traditional and well-established
legal principle called the ex parte TRO. Ex parte meaning we don’t notice the other side,
TRO meaning temporary restraining order. The reason why we chose the temp – the ex party TRO,
because it was a crucial importance that when we went out to sever, to cut the connections
between the botherder and his bots, had to be done without him knowing. So, it was imperative
for the operation that we get the ex parte TRO before the botherder knew we were coming.
JACK: Microsoft filed a lawsuit naming twenty-seven John Does as the orchestrators
of Waledac, including the mysterious Severa. They wanted a restraining order on VeriSign,
the company that oversees .com and .net domains,
to force them to disconnect these 277 Waledac domains. VeriSign was hesitant though,
which makes it sound like VeriSign was refusing to help, but it was more like
they weren’t sure that they were able to help. Alex Lanstein from FireEye explains it here.
ALEX: So, most of those domains existed inside the .com and .name space, and it’s not just that
a registrar or registree – so, the way DNS works is you have registrees that are responsible for
CCTLDs and GTLDs, and then you have registrars who essentially resell those. Sometimes you have
a shared model, but it’s not that some of these registries – and in particular,
this one was in the US – it’s not that they didn’t want to help out, but it’s that they weren’t
exactly sure whether they had the legal authority to help out. This is sorta the – the coordinated
takedown is sort of a new model that security and the ISP community are sort of working on. Yeah,
and like what Julia was saying, in that case, the DNS infrastructure wasn’t going to be
enough because they had some ISPs hardcoded, and you couldn’t just take out the domain
names. But that’s the first, I think, legal mechanism that anyone’s used to take domains.
JACK: This really hadn’t been done before. It was totally unprecedented, and no one was quite sure
how the courts were going to respond to something like this. But the federal court in Alexandria,
Virginia did grant the restraining order. VeriSign went ahead and cut off all the domains,
and Waledac’s main botmaster Severa had no idea the strike was coming. When VeriSign disconnected
the domains, the effect was immediate. The spam traffic fell massively. The number of
bots dropped from 80,000 down to 20,000. Waledac was severely crippled, and with quick work by
the takedown team, they were able to take over the domains which were required for Waledac to
operate. Once those were taken over, the bot no longer could function, as no new commands
could be issued to it, and it was successfully shut down. [MUSIC] Operation b49 was a success.
CLIP: I think it is a landmark case in the sense that we’re able to finalize the case,
close it out, so to speak, and we’re able to get the default judgement which we wanted. It’s the
first time from both a technical perspective and a civil, legal perspective that we’ve
been able to literally address and dismantle a botnet threat such as Waledac. The end game,
of course, is with the default judgement, we will now own those domains. By doing so,
we ensure that these domains will not be used for any criminal activities in the future,
effectively eliminating them from the botherder’s control.
CLIP2: One of the early criticisms was that Microsoft’s actions were from vigilantism
and that they were supplanting federal law enforcement. In this case, it’s exactly the
opposite. Our justice system is broken up into both civil and criminal processes, and Microsoft
has every right to use civil, legal process to protect themselves and their customers from harm.
CLIP3: The legal process which we used is a process now that I think
any other particular company in the United States
which has a vested interest and is able to meet the legal requirements could do.
JACK: [MUSIC] The online pharmacies Glavmed and SpamIt were still going strong. The hacker
Google with his Cutwail botnet was still one of their best affiliates. Pairing Cutwail with
Pushdo was a good move by hacker Google. It had made it very hard to take Cutwail down,
but that didn’t stop people from trying. This botnet, though, seemed to have nine lives. See,
taking down Cutwail’s C&C servers would cut off Google’s ability to communicate with his bots,
but he’d just activate new servers in replacement. Pushdo would just update what the IPs are for the
C&C servers, and Cutwail would be fully alive and kicking again. Between 2008 and 2010,
there were three attacks on the Cutwail botnet. In November 2008,
when the McColo ISP got taken down, that had a massive impact on Cutwail. But Google recovered,
and Cutwail got back its previous strengths. In early 2010, FireEye managed to get ahold of
a handful of Cutwail’s C&C servers and knocked them out. But again, the drop in spam e-mails
only lasted weeks before the numbers went back up again. The takedown that had the biggest impact
on Cutwail was actually a little accidental. Thorsten Holz was the senior threat analyst
at the US cyber security company Lastline, and assistant professor at a university in Germany.
He and some colleagues were working on a research project in August 2010,
examining botnets including Pushdo and Rustock. They were trying to match infected IP addresses
with the botnets that were responsible. To properly do their research, they needed some
C&C servers to be able to test an algorithm that they’d come up with. So, they decided to try to
take down some of Pushdo’s C&C servers to get ahold of the data so they could do their part
of their project. [MUSIC] They identified eight hosting providers that were hosting thirty of
Pushdo’s C&C servers. They didn’t really set out to take down this botnet, and they really weren’t
sure what their efforts with Pushdo servers could do to Cutwail. They sent out an abuse
notification to these hosting providers with evidence that these servers had been used as
command and control servers for botnets. 66% of the servers were located in Europe, with a
couple hosted inside the US. Most of the providers responded by cutting off the servers, but a few
just ignored the notifications completely. But the server disconnections did damage Cutwail.
In fact, it stopped 80% of Cutwail’s e-mail spam overnight. Unfortunately though,
it wouldn’t last. With Cutwail momentarily weakened, that only gave more opportunity for
Rustock to climb up the spam botnet world. Cosma was bringing in decent money through
Rustock and SpamIt, and he was holding his own as one of the top affiliates. By August 2010,
Rustock was the most dominant pharma spamming botnet. But then some news broke that wasn’t
taken very well by these spammer affiliates. [MUSIC] That month, Glavmed and SpamIt got hacked,
and it was a huge breach. The hacker got the sales logs, customer figures, affiliate commissions,
and revenue data. It was a database 9GB in size, with records going back to when both
programs started in 2006. It all got released to security researchers and got passed into the hands
of US law enforcement. Now, this was all a little weird. You remember Igor’s old company, ChronoPay,
and that his rival Pavel was still running? Well, seven months earlier, that got hacked, too. Data
for ChronoPay and RX-Promotion found its way online and into the hands of security analysts.
Security journalist Brian Krebs from Krebs on Security was one of the people who got ahold
of the Glavmed and SpamIt data. He’d been contacted months earlier by someone calling
themselves ‘Despduck’, who said they had it all and they were going to release it. From
what he could figure out, this all went back to that ongoing rivalry between Igor
and Pavel. Krebs was quite convinced that this anonymous Despduck character was actually Pavel,
and he was using this name as a dig to Igor, whose nickname was actually ‘Desp’. It seems
like these two guys were so enraged with each other that they arranged hacks on one other and
then force their data to be leaked to the world. It’s just crazy to me, because they
were trying to destroy each other. This really wasn’t good news for the spammer affiliates;
the data that was being leaked contained all kinds of details about the hacker and spammer
activities, like how much they were earning and some pretty big clues as to what their
real identities were. Here, have a listen to this. It’s Alex Lanstein from FireEye
talking at BlackHat 2011 about this data leak and what it revealed about the top spammers.
ALEX: So, they leaked the database of one of the competitors to Krebs. They’re like,
oh yeah, here’s a bunch of data; go and blog about it. What he found was that the top three
affiliates were all the same dude, so like, the top three money-earners for SpamIt all use the
same WebMoney ID, and they were all the Rustock guy. So, he would register multiple affiliate
accounts and managed to be the top one, two, and three affiliate for these huge spam campaigns
and just make boatloads of money. But he didn’t want to be too big, or else everyone would get
pissed at him. They’re like oh, who is that one username who registered multiple accounts
on all these services and still be the top earners for all those different accounts?
JACK: Everyone was interested in this data set. Getting raw data like this from the underground
shady pharmacy operations? That doesn’t happen very often. Brian Krebs started researching
this and started connecting real identities to some of these top spammers after digging around
in this data. So, Cutwail’s botmaster, Google, Krebs identified him as a Russian spammer named
Dmitry Nechvolod. He doesn’t stop there; from cross-referencing e-mail addresses on affiliate
accounts with SpamIt and RX-Promotion, Krebs found the name for Cosma, too,
Dmitri Sergeev. Damon McCoy and his colleagues at George Mason University, they got this data too,
as well as the leaks from ChronoPay, and it formed the basis for their PharmaLeaks study.
DAMON: As part of this, we have the back end database which includes order information,
transactional information, a very rich set of information on the Glavmed-SpamIt programs,
which are two of the larger online affiliate programs, according to when we did our analysis
of spam and linked it back to the different pharmaceutical affiliate programs. We also have
chat logs from the operators of the Glavmed-SpamIt program, which again gave us a lot of metadata and
insight into how their business operates. We have a more restricted set of transactional information
from the RX Promotion affiliate program. Again, an extremely major online affiliate
program that’s constituted a large portion of spam while they were operating. We also have
extremely fine-grained revenue and cost structure information from the RX Promotion data set.
So, just a quick summary of this data; it incorposes over $185 million worth of revenue,
of purchases. It encompasses over a million customers, over 1.5 million orders, and over 2,600
affiliates. During our analysis of this data, we realized that Glavmed has often denied that
they are the operators of SpamIt. However, by our analysis of the databases of Glavmed-SpamIt, we
realized that SpamIt is just a fork of the Glavmed databases and that in fact, these two are operated
by the same people. If you crunch the numbers, the Glavmed-SpamIt programs attract about 3,500 new
customers per week, and the RX Promotions program attracts about 1,500 new customers per week.
JACK: [MUSIC] On October 3, 2010, another weird thing happened; the global volume of spam being
sent all of a sudden hit an all-time low. In fact, Rustock, the biggest spam botnet
going on at the time, stopped sending spams completely for fourteen hours. It just stopped
doing anything. Cutwail’s spam e-mails also dropped across the same day, but nowhere near
as much as Rustock’s did. Bradley Anstis from M86 Security Labs gave a talk at the BlackHat
conference in 2011 a few months after this happened, and here’s what he knew about it.
BRADLEY: Certainly, SpamIt basically closed its doors overnight in September. Now,
we’re not – still not quite sure why SpamIt closed. We can only guess what it might be,
whether they just got embarrassed, got sick of seeing their name in the press all the time,
their upstream, downstream customers started getting frustrated that they
were continuously getting mentioned. Whatever the reason was, they got abducted by aliens,
and you can see here the effect; the graph there on the left-hand side is the global spam volume.
Now, we track this. You can see this all the time in our Labs website, and you can
see the overnight impact in global spam volumes with the closure of just one affiliate program.
JACK: [MUSIC] Igor and Dmitry Stupin had shut down SpamIt. They posted a message on the front page of
the SpamIt affiliate website. It said the program was attracting too much attention from the wrong
people. Igor had got word that the authorities were looking into him after the Glavmed data got
leaked, so he was watching his back. SpamIt’s top affiliates went into a freefall. For Cosma,
especially with Rustock, this was really bad for him. He canceled scheduled spam campaigns
and left his bots sitting idle for further instructions. Cutwail took a big hit too,
but Google had his bots sending out more than just pharma spam,
so Cutwail did continue sending spam and earning affiliate commissions from other programs. Then,
he was also getting good money from renting Cutwail out, too. On October 26,
Igor’s apartment and offices in Moscow were searched by Russian federal authorities.
Igor had fled the country already with his family, not hanging around to be arrested.
Investigators found three laptops, seven hard drives, and a handful of flashcards. Later
that day, the Internal Affairs Directorate of the Central District of Moscow announced the criminal
investigation into Igor. They charged him with running Glavmed without registration and illegal
entrepreneurship. Investigators added up how much they thought Glavmed made since it started
in 2006, and they concluded the revenue was $120 million. Internal unrest and bitter rivalry had
knocked out the spamming botnets who had been enjoying an easy ride off-course. But by 2011,
they made a comeback, switching their affiliate alliance to the rogue online pharmacy programs.
The Russian revenue from these pharmacies was estimated to be $142 million in just 2011 alone.
The e-mail spam volumes had once again climbed back up to astonishing levels. The time had come
once again to start taking these botnets out of operation, and it was Rustock’s turn to be
in the firing line. The preparations to take down Rustock had begun nine months earlier,
right as the online pharmacies started hacking each other and leaking each other’s data.
Like with Waledac, Microsoft was once again leading the charge to take down Rustock, and they
were coming in hard. Microsoft, FireEye Security, US law enforcement, and computer scientists from
the University of Washington were all working together to take down the Rustock botnet. Pfizer
also came on board. Rustock was pushing internet pharmacies that were ripping off their products,
and they weren’t happy about it. Both Microsoft and FireEye had been tracking Rustock, quietly
collecting data on how it’s operated, and its preparations to destroy it. FireEye figured out
which of Rustock’s ninety-six C&C servers were acting as the primary server. They identified
twenty-six to put in their target list. Most of these servers were located within the US,
sitting in legitimate ISPs, oblivious to what they were really doing. Julia Wolf and Alex
Lanstein from FireEye talk about how Rustock laid out its C&C servers in their BlackHat 2011 talk.
ALEX: All of the C&Cs for Rustock were – all but two of them were host – actually
hosted within the United States, and the other two were hosted in Amsterdam.
CLIP4: So, they bought a bunch of servers in Scranton and used that as a big command and
control point, and they bought a bunch of servers in Kansas City. These places that
– nothing wrong with Scranton, Pennsylvania, but it’s not just that it’s not suspicious,
it makes you think that it’s completely legit. If you see traffic going to Scranton, you’re like,
yeah, that’s probably legit. Like, what bad could possibly be going on there? The Microsoft
DCU guys, they have this whole department that’s basically set up to bring the hurt to bad guys,
and they kind of approached us and they said what do you think – not just would be able to
be taken down, but is causing a lot of harm to our customers? From where we stand, we make a product
that detects malware. Rustock was like, the – not just the most prevalent, but it was causing a very
easily-measurable amount of harm on the internet. So, they came to us and they said, you know,
what do you think? Is Rustock something that you could help us with? We said yeah, absolutely. So,
they said what do you think you could provide us some intel on that would help us, you know,
both validate what they were seeing and from a third-party security company perspective,
just basically give us your input. So, we put together a set of monitoring tools where we
were feeding them all the command and control servers that we were seeing on a daily basis.
JACK: So, there were a lot of Rustock C&C servers that kept this botnet running. To
stop it, they needed to shut down those servers and seize them. This
was so they could be examined forensically for analysis and to provide evidence. Plus,
if the servers got seized, it would be very hard for that botnet to be reactivated again
later. Here’s some more on what the plan was behind physically seizing the servers.
CLIP4: They didn’t seize the servers as any sort of punitive damages. They were granted temporary
access to the servers to get any sort of forensic detail that might exist on them
so that they can go after the bad guy, right? That’s still ongoing, but certainly if a bad
guy doesn’t think – or he thinks the servers are pretty bulletproof – and these were up for like,
a year and a half, so there’s a reasonable chance that he thought that he was pretty well-protected,
so he might have made a mistake such as connecting directly to it, like SSHing right to the server,
or leaving things on it, like leaving a code base. Maybe he’s compiling something, leaving
code artifacts, leaving things inside the actual – the server side of the command and control that’s
never meant to be seen by a person. You never see that. So, that was the idea in going after
the hard drives, and then obviously just kind of a shot across the bow to the criminal himself.
JACK: The problem with this though, is that not all ISPs owned all the equipment they used. So,
it was really complicated to get authorities to seize equipment. So, there was only one option;
Microsoft used the same tactics to hit Rustock as they did with Waledac earlier
that year. [MUSIC] Microsoft filed a lawsuit at the US District Court in the Western District of
Washington. It named eleven John Does as the operator of Rustock, who they thought were
involved with Cosma. Rustock was sending a lot of its spam e-mails through Hotmail accounts,
and they were sending e-mails claiming to be from Microsoft or Pfizer. On top of that,
Rustock enabled a heap of users’ remote access to Windows clients so the infected
machines could talk to each other and the core C&C servers. But, you can’t do that because that
goes against Microsoft’s licence agreement. So, the legal team at Microsoft actually used
a clause in their Trademark Act to give them a legal basis to help with this takedown.
CLIP5: Anyway, so, legal council at Microsoft. Richard Boscovich came up with this great idea
for how to do this, and there’s a – there’s an interesting clause in the Lanham Trademark Act
that basically allows anyone who owns a trademark to seize counterfeit goods. So basically,
the legal argument that was made was that these C&C servers had spam templates that claimed to
be from Microsoft or from Pfizer, selling Viagra or whatever, and that’s trademark infringement.
They’re selling counterfeit Viagra and whatnot and stuff like that. So basically, it’s under
the jurisdiction of this Trademark Act, and all of the C&Cs are also within the US jurisdiction,
so this still applies. There was a lot of victims in the US also, and so basically, the
jurisdictional requirements have been satisfied as well. The actual request that Microsoft made
is kinda written like this; basically it says all your servers are belong to us, kind of.
JACK: That lawsuit had a solid case, and it worked; their requests were granted. So,
now it was just a matter of getting in and taking down the Rustock servers. [MUSIC] On March 16,
2011, Operation b107 was launched. Twenty-six individual Rustock C&C servers from five
different hosting providers were seized by US Marshals at exactly the same time across
seven cities in the US; Denver, Dallas, Chicago, Kansas City, Scranton, Seattle,
and Columbus. There were two servers outside the US that were seized. One was in the Netherlands
and taken down by the Dutch High Tech Crime Unit, and the other was in China. Rustock
domains registered there were blocked with the help of the Chinese cyber security technical
center known as CNCERT/CC. Cosma, Rustock’s main botmaster, had no time to respond. All around him,
server after server was going down. Now all the infected machines that made up the Rustock botnet
suddenly faced silence from the controlling master. The security community witnessed a
sudden drop in spam traffic coming from Rustock, but they had no idea why it happened. Here’s
Richard Cox, the Chief information Officer for Spamhaus, talking about when they found out.
RICHARD: [MUSIC] One day, we suddenly saw the botnet Rustock disappear from the world
stage. Our first thoughts were our equipment was faulty. I thought we’ve never seen that
before. But some cross-checking proved that in fact it wasn’t the equipment was faulty;
the spam coming from the Rustock botnet suddenly went silent. Silent, that is,
until the silence to be somewhat shattered by shouts of joy worldwide as people realized that
the most significant source of spam on the planet had suddenly ceased spamming.
JACK: After the takedown, Microsoft made sure to sinkhole Rustock’s main
C&C server IP addresses. Basically, they were intercepting the traffic going to
these servers and redirecting it to their own. This way, they can start to identify
machines infected with Rustock. Within three months of Operation b107 starting,
the million or so Rustock infected botnets had dropped to around 500,000. Computer users were
slowly claiming their machines back under their control. The hunt for Cosma and those who helped
him with Rustock was still on. Microsoft offered a $250,000 reward for information
leading the to arrest and conviction of Cosma, but that reward still stands. Cosma still is on the
loose. He hasn’t been tracked down. Microsoft’s legal team though, are still looking for him.
LEGAL: [MUSIC] We’re not gonna stop until the people behind these botnets
that are affecting our customers and are impacting our platform
get the message that if you target our platform, we will target you.
JACK: Now, one thing I haven’t really talked much about yet is the botmasters’
real identities. The data leaked from Glavmed, SpamIt, and RX-Promotions did give some clues,
because there was a ton of chat logs on that server, but it’s hard to know for sure. But we do
know who Severa was, the botmaster behind Waledac. [MUSIC] We know who he is because authorities have
confirmed he’s a long-time Russian hacker and a spammer called Peter Levashov, sometimes known as
Peter Severa. He was not just behind the Waledac botnet either, but the earlier Storm botnet,
too, and he was the one who created the Kelihos botnet. That was a massive spamming machine that
stole credentials and installed malware for years before Peter was caught and that botnet was shut
down. So, where does that leave us today? Well, the rogue online pharmacies and the spamming
botnets that promote them are ongoing problems even today. Waledac and Rustock are gone, but
Cutwail is still going with different versions, and it’s still paired up with the Pushdo Trojan.
It’s just a really persistent botnet. Both Google and Cosma have not yet been found or arrested.
Microsoft still has a $250,000 reward for information leading to the arrest of Cosma,
the guy who created the Rustock botnet. Igor Vishnevsky, the guy who helped Google set up
Cutwail? He seems to be in the wind, too. SpamIt, the favourite Russian affiliate network, yeah,
it’s shut down. Glavmed though, and RX-Partners, are still active and selling their knock-off meds.
I don’t know who’s running them, though. Igor, the guy who helped create Glavmed and SpamIt,
is still on the run, hiding out somewhere, so maybe Dmitry Stupin is still running it,
since he helped Igor set it up. Yuri still might be running RX-Partners, I don’t know. Or maybe
they’ve passed it on to some other people at this point. The FDA sent both of the online pharmacies
warning letters that they were violating the Food, Drug, and Cosmetic Act in the last few years,
but haven’t been able to stop them from operating. Glavmed got a serious warning;
apparently some of the drugs they were selling contained ingredients that gave people serious
side effects which could be fatal, which doesn’t surprise me. When you ingest medicine from a
fake online pharmacy, who knows what you’re putting in your body. Rx-Partners just this
year had been trying to cash in on the COVID pandemic. Some of their websites
were found offering prescription-only drugs they claimed to be treatments for the virus.
The sell was a heap of false information about COVID to play on people’s fear and to push them
in to buy out of hope and desperation. Preying on sick people with no actual solution to their
illness, ugh, what scoundrels. Their goal was money, plain and simple, and they were happy
to exploit the most vulnerable people to get as much of it as they could. Igor and Pavel
basically destroyed each other with their rivalry and feuding, which was good for getting rid of
some the dodgy online pharmacy partnerships that were going on. Pavel, the guy who helped
start ChronoPay, used some botnets to attack a ChronoPay rival in 2013. After he did that,
he was caught and arrested, and spent a year in prison. These rogue online pharmacies are just
mega-dangerous. If you’re gonna order your meds online, make sure to check the pharmacy first.
Make sure the medicine is real and from a trusted source. You don’t want to put junk into your body
that isn’t regulated or safe. The spamming botnets and botmasters are gonna keep going as long as
this thing makes money, which makes this a game of Cat and Mouse that seems neverending. But the
good guys are fighting back, and they’ll keep fighting back until the bad guys are all gone.
(OUTRO): [OUTRO MUSIC] If you like this show, you’re gonna love the Darknet Diaries shop.
There are over fifty original, unique t-shirt designs. You’ve got to check out this artwork;
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too. Visit shop.darknetdiaries.com. This show is made by me, your friendly firewall admin,
Jack Rhysider. This episode was written by the crime traveler,
Fiona Guy. Sound design and original music was by Garrett Tiedemann, who makes some
really cool music that you should check out. Go to cynarpictures.com and click the music to
hear it. That’s C-Y-N-A-R pictures.com. Editing help this episode by the cat-herder, Damienne,
and our theme music is by the beet farmer, Breakmaster Cylinder. Even though I think
a rubber mallet is a perfectly good hardware troubleshooting tool, this is Darknet Diaries.