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Streetwise Professor

April 25, 2012

They’re Number 1 With a Cyberbullet

Filed under: Politics,Russia — The Professor @ 4:26 pm

In per capita terms, certainly, and perhaps overall.  Stories yesterday, based on a Russian source, report that Russian cybercrime revenues totaled $2.3 billion (for attacks emanating from Russia) and $4.5 billion (for attacks launched by Russian speakers) in 2011.  This is out of a total of $12.5 billion worldwide.  So even if China was responsible for the other $8 billion, Russians on a per capita basis Russians earn 4.5 times from hacking than Chinese.  And obviously the multiple is greater when you base off of world wide population.

This NYT article claims that hackers in Russia are untouchable.  I’m shocked! Shocked!

Law enforcement groups in Russia have been reluctant to pursue these talented authors of Internet fraud, for reasons, security experts say, of incompetence, corruption or national pride.

Yeah, maybe, but that’s not really it.  As the article points out later:

Computer security researchers have raised a more sinister prospect: that criminal spamming gangs have been co-opted by the intelligence agencies in Russia, which provide cover for their activities in exchange for providing expertise or allowing their networks of virus-infected computers to be used for political purposes, like crashing dissident Web sites.

Sometimes, the collateral damage for online business is immediate. A year ago, for example, hackers used a network of infected computers to direct huge amounts of junk traffic at the social networking accounts of a 34-year-old political blogger in Georgia, a country that fought a war with Russia in 2008. The attack, though, spun out of control and briefly crashed the global service of Twitter and slowed Facebook and LiveJournal, affecting tens of millions of computer users worldwide.

The Russian authorities have repeatedly denied that the state has any connection to cyberattacks.

Of course they deny.  That’s exactly the point.  Cutouts.  Plausible deniability.  Well, not so plausible.

And it was not just Georgia: Estonia was subject to a cyberassault during the conflict over the Bronze Soldier a/k/a Monument to the Unknown Rapist.

The efforts are now being directed at internal enemies:

Cyber attacks on websites of independent-minded news outlets such as Ekho Moskvy radio and cable and Internet TV channel Dozhd around the time of a December parliamentary and election have raised concerns about a crackdown on dissent.

Those attacks “confirmed the worst fears that the Kremlin can use the hacker community to organise attacks on independent media sites and the opposition,” said the report from Britain-based human rights advocacy website OpenDemocracy.

“The number of denial of service attacks on political targets has continued to grow,” the report said, referring to the most common form of assault used by pro-Kremlin activists, in which a flood of requests forces a site to shut down.

The quid pro quo here is obvious.  Like pomeshchiki of old who received land in exchange service to the state, the the hackers get the right to harvest credit cards, bank accounts, etc., in return for providing cyberservice for use against the state’s enemies.  And, of course the hackers no doubt have to share some of their $4.5 billion with the security services that suffer their existence.  крыши are expensive.

Make no mistake.  Russian hacking a very feudal business, a combination of an economic enterprise and a way of providing military force to the state.

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16 Comments »

  1. Gee…I don’t know. Once again, none of the top hackers – according to the community itself – is Russian, and most are American.

    http://www.extremetech.com/extreme/94647-black-hat-down-what-happened-to-the-most-famous-hackers

    And if hacking is really so horrible, why is the designer of the first computer worm virus – Robert Morris – now a tenured professor at MIT? He was actually the first person convicted under the Computer Fraud and Abuse Act, so there’s no question it was a crime.

    Maybe Russia has seen a surge in computer crime, but as of 2007, the USA led the world in cybercrime by a wide margin, generating almost a third of the world’s spam, phishing and malicious code threats. That was according to Symantec, producers of Norton Antivirus, among other products. The next-closest competitor was China, with about 10%. How did Russia get to be the world leader in only 5 years; especially if they’re such a backward bunch of savages, as you continually remind us?

    http://www.inc.com/news/briefs/200703/0319cyber.html

    I don’t want to say the New York Times is wrong, because it’s usually pretty reliable. Well, except when they published no end of nonsense on dastardly Saddam Hussein’s WMD programs. Which…ummm…didn’t exist.

    http://news.bbc.co.uk/2/hi/americas/3751933.stm

    And Vladislav Horohorin isn’t a Russian; he’s a dual-citizenship Israeli-Ukrainian, born in Ukraine.

    http://www.telegraph.co.uk/news/worldnews/europe/france/7941148/One-of-worlds-most-wanted-cyber-criminals-arrested.html

    I see how you’ve tried to get around that by saying how much crime originates with Russian SPEAKERS, but that’s kind of a dodge, isn’t it? I mean, do you think Jeffrey Dahmer should be associated with the UK because he’s an English speaker? Seems hardly fair. Just saying.

    Comment by Mark — April 25, 2012 @ 9:12 pm

  2. Mark the Canadian sailor know the Russian jewhating monster Israel Shamir , you know his DNA ? He says that he served KGB in the 1973 war, after which he took up journalism and writing http://en.wikipedia.org/wiki/Israel_Shamir

    Comment by Anders — April 26, 2012 @ 1:13 am

  3. The comments of “Mark” are strongly indicative of Russian mental illness (not the kind that gets you sent to an asylum in Russia of course, for that you need to criticize Putin rather than kiss his butt as “Mark” does, but the kind that has turned Russia into a quasi-nation, on life support, heading for the big flush).

    “Mark” lies about Horohorin and the NYT. Anyone who actually reads the NYT story, unlike “Mark,” can see that he was operating out of Russia. His race is utterly irrelevant, and bringing it up indicates that “Mark” suffers from another classic Russian pathology, racism.

    “Mark” first says hacking is awful and Russians don’t do it, Americans do. Then he flips 180 and says hacking is just fine, doesn’t hurt anybody. Yet another classic Russian pathology on display, the inability to be consistent, obliviousness of making oneself look like a braying jackass. Emperor and his “new clothes.”

    The final sign of a classically deviated Russian “mind” is that Mark cannot face even the most undeniable of the country’s faults, and must impulsively deny them. In so doing, he blocks any attempt at reform, and the problems only grow worse. Ultimately, as we saw with the USSR and Tsarist Russia, this results in spectacular national collapse. While purporting to love Russia, in fact a Russophile like “Mark” is doing everything possible to destroy the country in the most painful way possible.

    Comment by La Russophobe — April 26, 2012 @ 5:14 am

  4. Ooooo…now you’re a doctor, too. Is there no end to your talents? And Ukrainian is not a “race”; Horohorin is a Caucasian male. The article quite clearly says he was a foreign citizen in Russia. Is it your position, then, that people from a foreign country who commit crimes in the USA are still American citizens even if they do not have American citizenship? I believe there’s a call for you from the Supreme Court; something about illegal deportations?

    Comment by Mark — April 26, 2012 @ 8:23 am

  5. @Mark-

    1. Re Morris. Will you people give the whataboutism a rest? It is so predictable, and so grating. All the worse for MIT. Do you really believe that a university hiring one guy who was convicted of cybercrime means that hacking isn’t horrible? Really? That is in the running for one of the most idiotic whatabouts evah. And further re Morris-the link says he’s a tenured *lecturer.* Uhm, I’ve been in academia for 20+ years, and I’ve never heard of a tenured lecturer. #fail
    2. The hackers you have to worry about are the ones you’ve never heard of. And even if Americans dominate the “superstar” ranks-who cares? A large number of largely anonymous, journeyman crooks can wreak a lot of havoc.
    3. That link is obviously retarded because it lists Assange as a hacker. Once upon a time, maybe. But he didn’t hack sh*t for Wikileaks. Manning stole the State Department cables using his access to SIPRNet. Stratfor was hacked by somebody else. Assange was just a middleman. A fence.
    4. Not talking spam.
    5. What’s the metric Symantec is using? Is it dollars? That’s the metric used by the *Russian* source of the numbers cited in the post. (But maybe the Russians are just bragging.)
    6. Russian language far more closely associated with ethnicity than English language. There was this thing called the USSR. You might have heard of it. It broke up about 20 years ago, stranding many ethnic Russians/Russian speakers in newly independent nations. Eastern Ukraine in particular is widely considered to be predominately Russian. There is a substantial irredentist movement in Russia, and in Russian dominated regions of other nations in the FSU.
    7. I guarantee you that the vast bulk of Russian speakers consider themselves Russian, regardless of which side of new boundaries The Greatest Geopolitical Tragedy of the 20th Century left them.
    8. Again, I didn’t derive the numbers that broke down hacking theft by Russian residency and Russian language. A Russian source did. Again, maybe they are just bragging.

    The ProfessorComment by The Professor — April 26, 2012 @ 9:42 am

  6. Further re Morris. He is a professor, but his web page indicates he is an assistant professor. Not tenured.

    The ProfessorComment by The Professor — April 26, 2012 @ 10:37 am

  7. 7. I guarantee you that the vast bulk of Russian speakers consider themselves Russian, regardless of which side of new boundaries The Greatest Geopolitical Tragedy of the 20th Century left them.

    Interesting to know that Kyiv residents almost all consider themselves to be Russian.

    Or maybe SWP is an idiot as usual.

    Comment by Sublime Oblivion — April 26, 2012 @ 12:04 pm

  8. Overall, I have to say that was a pretty weak effort, and I’m kind of hurt that you don’t really seem to be trying.

    One man’s predictable and grating is another’s diverting and thought-provoking. Do you not relish dissenting opinion? Is your preference for jumping up and down and shouting, “Me!! Me!! I want to have your babies!!!” like La Russophobe does? And on the subject of what you like to characterize as “whataboutism”…what are you doing? You don’t live in Russia, never have to the best of my understanding, and have no connections there. Yet you bash it non-stop, day after day, for no reason other than that you dislike it. You ignore larger problems in your own country in order to obsess over those of others at a great remove from you in every respect, claiming the mantle of arbiter over Russia’s problems when you are manifestly unable to deal with bigger ones at home. It’s like saying, “Christ, you have a big nose” because mine is the size of a pickle, while yours is the size of a baguette – but if I say, “Well, yours is bigger”, you shout, “Stick to the point!!! The point is YOUR nose!! Stop with the whataboutism!!”

    And you do have bigger problems. All right, then, let’s use dollars as a metric, if you prefer. And not mention spam, which wasn’t really important anyway. Let’s just stick to plain, ordinary, garden-variety crime. In dollars.

    Only 12.5 Billion worldwide? Are you sure? And of that, you allege Russia could be responsible for as much as $6.8 Billion by virtue of the fact that some of the alleged hackers are “Russian speakers”. Chicken feed, my friend. Certainly compared to as much as $30 Billion stolen from Americans, by Americans and Latin Americans, in 2011 through a tax-return/ Social Security scam.

    http://www.cringely.com/2012/03/the-30-billion-hack/

    The Wall Street Journal article linked will only stipulate to $7 Billion, although they don’t seem to have much of a handle on how big it actually is, so you could cling to that if you like, even if it is already bigger than the claimed problem in Russia. But Mr. Cringely seems to have pretty good qualifications (30 years in the PC/IT business, published in the New York Times, Forbes, Worth, Newsweek) and when he says the problem is national and not restricted to Puerto Rico, I tend to believe him. If accurate, the proceeds – in dollars – of this single hack, in America and perpetrated mostly by Americans, tot up to well over double the alleged proceeds of cybercrime worldwide for 2011. Russians are going to have to do more than just brag to come close to matching that.

    A lecturer, in the United States and Canada, is an academic who teaches full or part time but has few or no research responsibilities. A lecturer generally does not have tenure, which I would submit does not rule it out. But, come on. Are you really going to make this about whether or not he has tenure? Does he or does he not teach full or part-time at MIT, after having generated a computer virus for which he was found guilty under a specific American statute prohibiting it? And is that or is that not pretty close to “untouchable”?

    http://en.wikipedia.org/wiki/Lecturer

    Whatever you might think of Julian Assange now, he was in fact a fairly accomplished hacker at one time. His inclusion might well have been influenced by his present notoriety, but he – as “Mendax” – hacked into Nortel in the early 90’s. No small feat, and the level of difficulty might have been mirrored in the 25 charges he drew for it, suggesting that “retarded” may be in the eye of the beholder.

    If the hackers we really have to worry about are the largely anonymous ones we have never heard of, then you don’t know who they are, either. Therefore, the argument by you that Russians are the kings of cybercrime is specious.

    Thanks for the explanation regarding the ethnicity of Russian speakers. It clarifies why what is regularly referred to as the “Russian Mafia” is actually mostly comprised of Georgians.

    http://www.georgiatimes.info/en/articles/32102.html

    Comment by Mark — April 26, 2012 @ 1:08 pm

  9. Is it possible that Mark (Help! I need to feel important) Chapman is more loathsome and pathetic thank Mr. Oblivion?

    Comment by Basilisk — April 26, 2012 @ 9:22 pm

  10. Good post, Prof. But it doesn’t get to the heart of the matter. This ain’t about co-opting rogue hackers and sharing the spoils. This is another piece of the KGB-nouveau. Check out the DNI’s site:

    http://www.fas.org/irp/dni/osc/runet.pdf

    1) The good stuff is at fn. h on p. 6 of DNI:

    “In October 2009, the Communications and Press Ministry offered a tender for the provision of technology needed to allow bureaucrats to promote state interests on social networking sites like Twitter and Facebook.

    “According to the tender, the winning company would further be required to draft a concept to promote state interests through the websites and propose “methods of monitoring” the sites in order to “boost the effectiveness” of the activities of state bodies on the sites. The ministry added that it was also considering tracking discussions at social networking sites operating in languages other than Russian (Moscow Times, 23 October 2009).”

    2) Ok, moving on to the next factoid in the DNI report (p. 1):

    “Over the last several years, progovernment oligarchs have accumulated significant stakes in the leading portals of the Russian Internet. Between them, they own the majority of the most popular Russian social networking sites and the majority of the most popular Russian websites(see Appendix B for a list of the top 100 sites). While media outlets owned by government companies or allies have not yet shown signs of censorship, the leadership and owners of these Russian investment companies are close to the Kremlin and may be willing to cede their business interests to government priorities.
    
    “Metals magnate Alisher Usmanov, whom experts consider to be close to the Kremlin, purchased half of SUP, the owner of Russia’s most popular blogging platform
    LiveJournal, in June 2008. He recently increased his stake in Digital Sky Technologies — a Russian Internet investment company that owns controlling interests in top-ranked Russian social media portals VKontakte, Mail.ru and Odnoklassniki — to 35%, making
    him the single-largest stakeholder (Russkiy Newsweek, 17 August 2009).”

    3)In case you missed it, the point of interest there concerns Digital Sky Technologies(DS, for short). Fast forward to 2011, and a big investment in Facebook by DS (Digital Sky) and GS (Goldman Sachs):

    http://dealbook.nytimes.com/2011/01/02/goldman-invests-in-facebook-at-50-billion-valuation/

    Just to make things clear: “Under the terms of the deal, Goldman has invested $450 million, and Digital Sky Technologies, a Russian investment firm that has already sunk about half a billion dollars into Facebook, invested $50 million, people involved in the talks said.

    “Goldman has the right to sell part of its stake, up to $75 million, to the Russian firm, these people said. For Digital Sky Technologies, the deal means its original investment in Facebook, at a valuation of $10 billion, has gone up fivefold.

    “Representatives for Facebook, Goldman and Digital Sky Technologies all declined to comment.”

    4) Why is this interesting? There are no “Russian intelligence agencies” in Russia, there is only the reconstituted KGB, which takes the form of the Russian oligarchy. A little backgrounder on the KGB, for those too young to appreciate how formidable they were and still are in their new incarnation:

    http://www.time.com/time/magazine/article/0,9171,953701-1,00.html

    (check out the ubiquitous FB link at the top of that Time link … )

    Now, ask yourself: Who’s co-opting whom?

    Summing 1+2+3+4, we see: The KGB-nouveau buys into the most complete intell lattice (i.e., information matrix) in the history of the world, with a little assist from the U.S. taxpayer via GS’s TBTF guarantee.

    Anyone know how large FB nation is? i.e., how many billion users now? in how many countries? If the KGB-nouveau had all the money in the world, they couldn’t build the files and dossiers provided by total (overt and covert) access to everything on FB. All guaranteed by the U.S. taxpayer.

    How brilliant is that!?!?!?

    Just a parting thought: Wonder if the DNI planted the Newsweek story, just so it could “open source” it. Interesting, no?

    Comment by markets.aurelius — April 28, 2012 @ 8:54 am

  11. @Markets-interesting and disturbing. You identify social networking sites with large Russian investors as a means of by which FSB can potentially obtain access to vast amounts of personal information. I would be interested in your opinion on another possible source of information, namely anti-virus/security software, and Kaspersky Labs in particular.

    The ProfessorComment by The Professor — April 28, 2012 @ 12:36 pm

  12. I just googled Kaspersky Labs. Not familiar with them. My natural impulse would be to avoid such offerings. Sorta gives a whole new meaning to Trojan Horse, doesn’t it.

    I think Russia has collapsed. I also think Putin and the KGB-nouveau (FSB) is the only thing keeping “Russia” relevant. In another post you talked about Russia and China running joint naval ops. Russian naval vessels are barely seaworthy. The Russo-Georgian War exposed their land forces as being rusted thru; they’re staffed by conscripts and riddled thru with corruption.

    Russia appears to be run by a group Nato refers to as the “the Team” (HT to Brian Whitmore @ RFE/RL). It’s believed to consist of Putin and Medvedev, and Igor Sechin; Aleksei Kudrin; Sergei Naryshkin; Vladislav Surkov; Sergei Sobyanin; Yury Kovalchuk; and three businessmen: Gennady Timchenko; Roman Abramovich, and Alisher Usmanov (see DS above). Google any one of these guys to get an idea of how they made their chops. The problem for the West and the contiguous states around Russia is it’s not a state any more. It’s an incredibly powerful syndicate, which has appropriated world-historical individual wealth for its members, and can presumably mobilize a derelict military, which, regardless of how inept it is can still launch nukes and roll tanks. Together, the oligarchs have crafted a post-post-modern transmogrification of a nuclear state, doing everything possible to appear to be a state. What exactly is that?

    Comment by markets.aurelius — April 28, 2012 @ 6:14 pm

  13. When we had problems with my wife’s computer (totally unshielded, son who was a gamer using it most of the time)in Russia, we had a tech come over from a reputable computer dealer (where they bought it, in fact), and he installed a Kaspersky antivirus program after cleaning the bugs that were already in it. It looked and behaved quite a bit like a Symantec product, and might have been modeled on one. It seemed to do the job quite well, and if it implanted any of its own backdoors in the system, it was pretty subtle because we never noticed anything different in its performance. We did a limited amount of online banking from it, and never noticed any problem. My impression is that it was a perfectly serviceable antivirus program that was as sophisticated as anything else on the market at the time. What’s important is how often it’s updated. A lot of talk suggests it’s the guys at McAfee and Norton who write most of the viruses, in order to guarantee a market for their product, and while that’s probably not true, it is true that a lot of successful hackers are hired by various security companies for what they know.

    According to the U.S. Director of National intelligence, Russia remains the second-biggest military threat to the United States, after China.

    http://www.washingtontimes.com/news/2011/mar/10/china-deemed-biggest-threat-to-us/?page=all

    So I think you should definitely call him, and tell him what you and Brian Whitmore have stumbled over about “The Team”. His number is 703-733-8600. I’m sure he’ll be fascinated: I certainly am, I can’t wait for the movie to come out. Please, please don’t let Tom Cruise play Dmitry Medvedev, even though they’re about the same height and age; that guy is getting SO WEIRD. Tom Cruise, I mean.

    Although the percentage of the U.S. budget termed “discretionary spending – defense” has come down since the highs of the 1960′s, it is still nearly a quarter of the budget; around 18% this year. And you’re running a $1.3 Trillion deficit. The USA accounts for nearly half the world’s annual military spending. Think you can keep that up? I’m sure there are a few countries who hope you do.

    Comment by Mark — April 28, 2012 @ 8:42 pm

  14. @ Mark: Nothing personal, man.

    I’ll try to keep it up.

    Comment by markets.aurelius — April 29, 2012 @ 5:33 pm

  15. Is the tie-eating Canadian Sailor Mark Chapman part of the Putin-mafias Georgian political opposition who receive funds from KGB, Georgian and Russian organized crime networks ?

    More importantly, the BK report states that Goguadze maintained a close personal connection with fugitive and former Minister of State Security of Georgia Igor Giorgadze, who has been residing in Moscow under the putative protection of the Russian Federal Security Service (FSB) since 1995, when he fled Georgia in the aftermath of the botched assassination attempt on Shevardnadze (Frankfurter Rundschau, June 22). Despite the Georgian government’s repeated extradition requests and the fact that Igor Giorgadze has long been placed on Interpol’s international wanted list, Moscow granted him political asylum in 2006 and continues to harbor him (For more information on Igor Giorgadze’s involvement in Georgia’s politics, see: “Georgian Coup Plotter Accused of Ties to Exiled State Security Minister,” Jamestown Foundation Blog, May 13, 2009).

    http://georgiandaily.com/index.php?option=com_content&task=view&id=19142&Itemid=133

    Comment by Anders — April 30, 2012 @ 6:09 am

  16. @ Anders, well Mark is Canadian….

    The same losers who wine about “the Brits sending in the colonials first in WW2″, funny how the Kiwi’s, Aussies, and South Africans did see the poms in Greece, Crete, North Africa, Italy etc.

    The Canadian OE, beer drinking in UK pubs 1939-45 with one unfortunate excursion in 1942…

    What was it my uncle said about his time in the Korean war? That’s right “Canadians, they are Yanks with their brains kicked out…”

    Comment by Andrew — May 2, 2012 @ 1:27 pm

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