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Russia arrests creator of the devastating Blackhole exploit kit

003Thirteen people, including the creator of Blackhole, a popular exploit tool used to infect computers with malware, were arrested and charged in Russia with creating and participating in a criminal organization.

The gang specialized in stealing money from the bank accounts of individuals and organizations by using computer Trojan programs to gain unauthorized access to legally protected information like log-in information, passwords, electronic keys and certificates, the Russian Ministry of Interior said Friday in an announcement in Russian.

The malware was installed on computers by exploiting software vulnerabilities using the Blackhole exploit kit, a very popular attack tool among cybercriminals, according to Russian authorities.

The information stolen by the malware was collected on a network of command-and-control servers operated by the suspects and was subsequently used to set up fraudulent payment orders on behalf of the victims. The recipients of the stolen funds were individuals or entities controlled by members of the gang.

The group’s activity affected customers of Russian banks in the Moscow, Tyumen, Ulyanovsk, Krasnodar, Petrozavodsk and Kursk regions and the damage is estimated at 70 million Russian roubles (over US$2.1 million), the ministry said.

The information that the creator of Blackhole, a man who used the online identity “Paunch,” was arrested got leaked online in early October by people familiar with the investigation.

Paunch, who is 27, was arrested on Oct. 4 and was residing in Togliatti, a city in Samara Oblast, Russia, according to Group-IB, a cybercrime investigations firm that assisted the Russian police in the case. His name has not been disclosed by the Russian Ministry of Interior or Group-IB.

Aside from the Blackhole exploit kit, Paunch also created the Cool Exploit Kit and Crypt.am, a service for obfuscating malware code to prevent its detection by antivirus programs, Group-IB said in a report sent Friday via email.

One interesting aspect of this case is that the suspects were charged with offenses under article 210 of the Criminal Code of the Russian Federation, which is not directly related to computer crimes.

”There are two main articles in the Criminal Code: 272 (unauthorized access to information) and 273 (creation and distribution of malicious code), which should be very well linked with this particular case,” said Andrey Komarov, the CEO of IntelCrawler, a Los Angeles-based security intelligence startup, via email. “Hopefully, they won’t be forgotten.”

Komarov believes that Paunch’s activities fall under these two articles and that if they’re not used in his prosecution, he might not even serve jail time. This is what his lawyers are potentially working on now, he said.

His arrest is the most important aspect of the case, because Blackhole was used by many cybercriminals, not only from Russia, but also from other countries in Europe and Asia, Komarov said. “I hope that after his arrest other cybercriminals will be uncovered and hopefully it will be done together with the international law enforcement community.”

Russian prosecutors are focusing on victims from Russia to build the criminal case locally, but Blackhole was used to distribute many online banking Trojan programs whose victims include customers of banks from all over the world, including the E.U. and the U.S., Komarov said.


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