Overnight Cybersecurity: DOJ charges 36 in cyber crime takedown | Russian hackers reportedly targeting defense contractors | Equifax, Dem senator spar over data breach

Overnight Cybersecurity: DOJ charges 36 in cyber crime takedown | Russian hackers reportedly targeting defense contractors | Equifax, Dem senator spar over data breach

Welcome to OVERNIGHT CYBERSECURITY, your daily rundown of the biggest news in the world of hacking and data privacy. We're here to connect the dots as leaders in government, policy and industry try to counter the rise in cyber threats. What lies ahead for Congress, the administration and the latest company under siege? Whether you're a consumer, a techie or a D.C. lifer, we're here to give you ...

 

THE BIG STORIES:

--DOJ CHARGES THREE DOZEN IN CYBER CRIME RING BUST: The Justice Department on Wednesday announced charges against 36 individuals as part of a takedown of a massive online cyber crime ring that trafficked in stolen personal and financial information. The alleged co-conspirators participated in an international cyber crime ring called Infraud, which facilitated the sale of stolen identities, credit card data, financial information, Social Security numbers and other personally identifiable information through an online discussion forum. The operation was also used to sell and purchase malware. Officials said that 13 of the defendants have already been arrested, including five Americans. Officials estimate that the operation netted $530 million in illicit profits from financial institutions, consumers and other victims throughout the world over a seven-year period. "We have victims in all 50 states and throughout the world," Deputy Assistant Attorney General David Rybicki told reporters Wednesday. "It's really a standout in terms of the amount of damage that it caused." Rybicki described the marketplace as "the one-stop shop for cyber criminals worldwide." According to the criminal indictment unsealed Wednesday, the Infraud organization was set up in October 2010 by a Ukrainian national. Through their investigation, officials identified over 10,000 individuals who traded and purchased personal information and other stolen data on the black market. Officials made 13 arrests on Tuesday, which also included individuals from six other countries. Eighteen of the remaining defendants will need to be extradited to the United States in order to be apprehended.

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--RUSSIAN HACKERS TARGETING DEFENSE CONTRACTORS: Russian hackers targeted employees at major defense contractors working on sensitive U.S. military programs, The Associated Press reported on Wednesday. Hackers with cyber-espionage group Fancy Bear used phishing emails to target no less than 87 contractors working on military technology projects such as drones, missiles and fighter jets for the U.S. government, according to the AP. The news agency's investigation relied on email phishing data tracked by cyber firm Secureworks between March 2015 and May 2016. Those targeted included employees of major defense contractors like Lockheed Martin, Raytheon and Boeing, as well as lesser-known firms. They were largely targeted on their personal Gmail accounts. Such hacking efforts could potentially allow Moscow to obtain sensitive details on American military technology. It is unclear the extent to which the phishing scams were successful, but the AP concluded that as many as 40 percent of those targeted clicked on the malicious links. Fancy Bear has been active since the mid-2000s, but has been thrust into the spotlight by revelations of Russian interference in the 2016 presidential election. Fancy Bear, which many have assessed is linked to Russian intelligence, was implicated in the 2016 hacks of the Democratic National Committee and Hillary ClintonHillary Diane Rodham ClintonMueller recommends Papadopoulos be sentenced to up to 6 months in prison Poll: Dem opponent leads Scott Walker by 5 points Cuomo fires back at Trump: 'America is great because it rejects your hate-filled agenda' MORE campaign chairman John Podesta.

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--DHS PUSHES BACK ON KASPERSKY MOTION: The Department of Homeland Security (DHS) is pushing back against a motion filed by Russia-based Kaspersky Lab that seeks to overturn the government-wide ban on its anti-virus products. DHS argues that even if a judge grants an injunction to reverse the ban, the federal agency will still not use the Russian software on its computer systems because of a congressional ban that goes into effect on Oct. 1, according to court documents filed this week and first reported late Tuesday. "Nothing of any practical value would come from a favorable ruling here," the court filing reads. DHS argues that most agencies would not opt to reinstall or buy Kaspersky products in the short period before this year's National Defense Authorization Act (NDAA) goes into effect, even if a judge does rule in favor of lifting the federal ban against its products. If reversing the ban would not change any circumstances for the firm, then there is no legal basis for seeking a reversal, DHS argued. "Rescinding the [binding operational directive] would leave the congressional ban in place, which means federal agencies still would be required to remove and stop using Kaspersky products and there still would be law branding the company's software as a security risk," lawyers for DHS argue. The Moscow-based firm filed an injunction in court last month in an attempt to block the Trump administration's September directive that orders the removal and banning of Kaspersky's software over concerns about the firm's alleged ties to the Russian government. Agencies and departments had a December deadline to remove the Kaspersky products from their computers.

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A LEGISLATIVE UPDATE:

SENATE PANEL SCHEDULES WORLDWIDE THREATS HEARING WITH FBI CHIEF: FBI Director Christopher Wray is set to appear before the Senate Intelligence Committee next week for a hearing focused on global threats, the panel announced Wednesday.

Wray will be joined by a slate of top intelligence officials, including Director of National Intelligence Dan CoatsDaniel (Dan) Ray CoatsCNN: Trump intel chief not consulted before decision to revoke Brennan's clearance Study: 3 of every 10 House candidate websites vulnerable to hacks West Virginia set to allow smartphone voting for those serving overseas MORE, CIA Director Mike PompeoMichael (Mike) Richard PompeoThe US must not turn its back on refugees Taiwan is key to US power in Pacific The Hill's Morning Report: Dems have a majority in the Senate (this week) MORE, National Security Agency Director Mike RogersMichael (Mike) Dennis RogersPentagon’s No. 2 official: Trump’s ‘Space Force’ could cost 'billions' Ex-astronaut: Trump's plan for a Space Force 'redundant,' 'wasteful' Pence announces first steps in establishing 'Space Force' MORE, Defense Intelligence Agency Director Robert Ashley and National Geospatial Intelligence Agency Director Robert Cardillo, the committee said.

While the Feb. 13 testimony is routine -- part of an annual hearing intended to examine current threats to U.S. national security -- Wray's appearance comes as the FBI faces scrutiny from the White House and some Republican lawmakers who have raised concerns about political bias among agents at his bureau.

That scrutiny spilled out into the open last week when Republicans on the House Intelligence Committee released a contentious memo alleging that senior FBI and Department of Justice (DOJ) officials misused their authority to obtain a secret surveillance warrant on Carter Page, a former Trump campaign adviser.

President TrumpDonald John TrumpBrennan fires new shot at Trump: ‘He’s drunk on power’ Trump aides discussed using security clearance revocations to distract from negative stories: report Trump tried to dissuade Melania from 'Be Best' anti-bullying campaign: report MORE moved to approve the memo's release, despite concerns raised by the FBI about material omissions in the document that could affect its accuracy.

Trump claimed on Saturday that the memo "vindicates" him in the law enforcement investigation into possible collusion between his presidential campaign and Russia.

After the memo was released on Friday, Wray sent a message to FBI employees, urging them to "keep calm and tackle hard."

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A LIGHT (ISH?) CLICK: 

Yikes: Social media influencers get swept up in a data breach. (Gizmodo)

 

A REPORT IN FOCUS:

EQUIFAX, WARREN BUTT HEADS OVER BREACH DISCLOSURE DETAILS: Equifax is contesting part of a report from Sen. Elizabeth WarrenElizabeth Ann WarrenOvernight Health Care: Senate takes up massive HHS spending bill next week | Companies see no sign of drugmakers cutting prices, despite Trump claims | Manchin hits opponent on ObamaCare lawsuit Elizabeth Warren and the new communism Companies report no signs of drugmakers cutting prices, despite Trump pledge MORE (D-Mass.) that alleged the credit reporting agency "failed to disclose" that consumers' passport numbers were exposed in a massive data breach last year.

Meredith Griffanti, a spokeswoman for Equifax, said that the company has no reason to believe that passport numbers were compromised.

"We examined passport numbers as an element of our forensic investigation, however we found no evidence that any passport numbers were affected, accessed or stolen," Griffanti told The Hill.

Warren's report, which was released Wednesday, claims that "Equifax failed to disclose the fact that the hackers gained access to consumers' passport numbers."

Warren's office did not respond when asked for comment.

The report accuses Equifax of failing to implement necessary safeguards and criticizes its response to the breach that exposed the sensitive personal information of nearly half the country. It also emphasized the need for lawmakers and regulators to ensure credit bureaus are taken to task for leaving consumer information vulnerable.

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WHAT'S IN THE SPOTLIGHT:

FBI TEXTS: President Trump on Wednesday highlighted newly released texts from FBI agents that some say suggest President Obama wanted updates on the Hillary Clinton email investigation.

"NEW FBI TEXTS ARE BOMBSHELLS!" Trump tweeted.

Fox News reported that texts between FBI agent Peter Strzok and FBI attorney Lisa Page included an exchange about preparing talking points for then-FBI Director James Comey to give to Obama, who "wants to know everything we're doing."

The pair also worked on special counsel Robert MuellerRobert Swan MuellerSasse: US should applaud choice of Mueller to lead Russia probe MORE's team investigating Russia's interference in the 2016 election, and whether Trump's campaign was involved.

Some Republicans argue the new exchange is evidence that Obama was more involved in the Clinton email probe than previously known.

But the texts were sent in September, roughly two months after Comey announced he would not recommend criminal charges against Clinton for using a personal email server as secretary of State.

The texts were sent three days before Obama was scheduled to meet with Russian President Vladimir Putin at the G-20 summit in China, meaning that the messages could have been about the Russia investigation and not the Clinton probe.

Nevertheless, Trump and his GOP allies have seized on Strzok and Page's texts as proof that the Russia investigation is politically motivated.

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IN CASE YOU MISSED IT:

Links from our blog, The Hill, and around the Web.

Tillerson: Russia already looking to interfere in 2018 midterms. (The Hill)

Pressure builds on Trump to release Dem countermemo. (The Hill)

GOP senators: FBI relied 'heavily' on Steele dossier for surveillance warrants. (The Hill)

Russian accounts used Tumblr in election influence campaign. (The Hill)

Dem senator introduces DHS bill to improve data sharing to identifying terrorists. (The Hill)

House Intel Dem: Lewandowski breaking his pledge to answer questions (The Hill)

Business Wire was hit by a cyberattack. (Reuters)

Your smart TV could fall prey to hackers. (USA Today)

Top Pentagon official emphasizes need for 'uncompromising' cyber-hygiene. (FedScoop)

This small startup helps government hackers get around iPhone encryption. (Motherboard)

A profile of Christopher Steele, the ex-British spy behind the controversial Russia dossier. (Washington Post)

Data systems in Dallas have been hit by a computer virus. (CBS DFW)

Huawei is making inroads in Britain. (Reuters)