#AceNewsReport – Feb.18: A federal indictment unsealed today charges three North Korean computer programmers with participating in a wide-ranging criminal conspiracy to conduct a series of destructive cyberattacks, to steal and extort more than $1.3 billion of money and cryptocurrency from financial institutions and companies, to create and deploy multiple malicious cryptocurrency applications, and to develop and fraudulently market a blockchain platform:
‘Three North Korean Military Hackers Indicted in Wide-Ranging Scheme to Commit Cyberattacks and Financial Crimes Across the Globe’
A second case unsealed today revealed that a Canadian-American citizen has agreed to plead guilty in a money laundering scheme and admitted to being a high-level money launderer for multiple criminal schemes, including ATM “cash-out” operations and a cyber-enabled bank heist orchestrated by North Korean hackers.
“As laid out in today’s indictment, North Korea’s operatives, using keyboards rather than guns, stealing digital wallets of cryptocurrency instead of sacks of cash, are the world’s leading bank robbers,” said Assistant Attorney General John C. Demers of the Justice Department’s National Security Division. “The Department will continue to confront malicious nation state cyber activity with our unique tools and work with our fellow agencies and the family of norms abiding nations to do the same.”
“Today’s unsealed indictment expands upon the FBI’s 2018 charges for the unprecedented cyberattacks conducted by the North Korean regime,” said the FBI Deputy Director Paul Abbate. “The ongoing targeting, compromise, and cyber-enabled theft by North Korea from global victims was met with the outstanding, persistent investigative efforts of the FBI in close collaboration with U.S. and foreign partners. By arresting facilitators, seizing funds, and charging those responsible for the hacking conspiracy, the FBI continues to impose consequences and hold North Korea accountable for its/their criminal cyber activity.”
“ The scope of the criminal conduct by the North Korean hackers was extensive and long-running, and the range of crimes they have committed is staggering,” said Acting U.S. Attorney Tracy L. Wilkison for the Central District of California: “ The conduct detailed in the indictment are the acts of a criminal nation-state that has stopped at nothing to extract revenge and obtain money to prop up its regime.”
“ This case is a particularly striking example of the growing alliance between officials within some national governments and highly sophisticated cyber-criminals,” said U.S. Secret Service Assistant Director Michael R. D’Ambrosio: “ The individuals indicted today committed a truly unprecedented range of financial and cyber-crimes: from ransomware attacks and phishing campaigns, to digital bank heists and sophisticated money laundering operations. With victims strewn across the globe, this case shows yet again that the challenge of cybercrime is, and will continue to be, a struggle that can only be won through partnerships, perseverance, and a relentless focus on holding criminals accountable.”
The hacking indictment filed in the U.S. District Court in Los Angeles alleges that Jon Chang Hyok (전창혁), 31; Kim Il (김일), 27; and Park Jin Hyok (박진혁), 36, were members of units of the Reconnaissance General Bureau (RGB), a military intelligence agency of the Democratic People’s Republic of Korea (DPRK), which engaged in criminal hacking. These North Korean military hacking units are known by multiple names in the cybersecurity community, including Lazarus Group and Advanced Persistent Threat 38 (APT38). Park was previously charged in a criminal complaint unsealed in September 2018.
The indictment alleges a broad array of criminal cyber activities undertaken by the conspiracy, in the United States and abroad, for revenge or financial gain. The schemes alleged include:
- Cyberattacks on the Entertainment Industry: The destructive cyberattack on Sony Pictures Entertainment in November 2014 in retaliation for “The Interview,” a movie that depicted a fictional assassination of the DPRK’s leader; the December 2014 targeting of AMC Theatres, which was scheduled to show the film; and a 2015 intrusion into Mammoth Screen, which was producing a fictional series involving a British nuclear scientist taken prisoner in DPRK.
- Cyber-Enabled Heists from Banks: Attempts from 2015 through 2019 to steal more than $1.2 billion from banks in Vietnam, Bangladesh, Taiwan, Mexico, Malta, and Africa by hacking the banks’ computer networks and sending fraudulent Society for Worldwide Interbank Financial Telecommunication (SWIFT) messages.
- Cyber-Enabled ATM Cash-Out Thefts: Thefts through ATM cash-out schemes – referred to by the U.S. government as “FASTCash” – including the October 2018 theft of $6.1 million from BankIslami Pakistan Limited (BankIslami).
- Ransomware and Cyber-Enabled Extortion: Creation of the destructive WannaCry 2.0 ransomware in May 2017, and the extortion and attempted extortion of victim companies from 2017 through 2020 involving the theft of sensitive data and deployment of other ransomware.
- Creation and Deployment of Malicious Cryptocurrency Applications: Development of multiple malicious cryptocurrency applications from March 2018 through at least September 2020 – including Celas Trade Pro, WorldBit-Bot, iCryptoFx, Union Crypto Trader, Kupay Wallet, CoinGo Trade, Dorusio, CryptoNeuro Trader, and Ants2Whale – which would provide the North Korean hackers a backdoor into the victims’ computers.
- Targeting of Cryptocurrency Companies and Theft of Cryptocurrency: Targeting of hundreds of cryptocurrency companies and the theft of tens of millions of dollars’ worth of cryptocurrency, including $75 million from a Slovenian cryptocurrency company in December 2017; $24.9 million from an Indonesian cryptocurrency company in September 2018; and $11.8 million from a financial services company in New York in August 2020 in which the hackers used the malicious CryptoNeuro Trader application as a backdoor.
- Spear-Phishing Campaigns: Multiple spear-phishing campaigns from March 2016 through February 2020 that targeted employees of United States cleared defense contractors, energy companies, aerospace companies, technology companies, the U.S.Department of State, and the U.S. Department of Defense.
- Marine Chain Token and Initial Coin Offering: Development and marketing in 2017 and 2018 of the Marine Chain Token to enable investors to purchase fractional ownership interests in marine shipping vessels, supported by a blockchain, which would allow the DPRK to secretly obtain funds from investors, control interests in marine shipping vessels, and evade U.S. sanctions.
According to the allegations contained in the hacking indictment, which was filed on Dec. 8, 2020, in the U.S. District Court in Los Angeles and unsealed today, the three defendants were members of units of the RGB who were at times stationed by the North Korean government in other countries, including China and Russia. While these defendants were part of RGB units that have been referred to by cybersecurity researchers as Lazarus Group and APT38, the indictment alleges that these groups engaged in a single conspiracy to cause damage, steal data and money, and otherwise further the strategic and financial interests of the DPRK government and its leader, Kim Jong Un.
Money Launderer Charged in California and Georgia
Federal prosecutors today also unsealed a charge against Ghaleb Alaumary, 37, of Mississauga, Ontario, Canada, for his role as a money launderer for the North Korean conspiracy, among other criminal schemes. Alaumary agreed to plead guilty to the charge, which was filed in the U.S. District Court in Los Angeles on Nov. 17, 2020. Alaumary was a prolific money launderer for hackers engaged in ATM cash-out schemes, cyber-enabled bank heists, business email compromise (BEC) schemes, and other online fraud schemes. Alaumary is also being prosecuted for his involvement in a separate BEC scheme by the U.S. Attorney’s Office for the Southern District of Georgia.
With respect to the North Korean co-conspirators’ activities, Alaumary organized teams of co-conspirators in the United States and Canada to launder millions of dollars obtained through ATM cash-out operations, including from BankIslami and a bank in India in 2018. Alaumary also conspired with Ramon Olorunwa Abbas, aka “Ray Hushpuppi,” and others to launder funds from a North Korean-perpetrated cyber-enabled heist from a Maltese bank in February 2019. Last summer, the U.S. Attorney’s Office in Los Angeles charged Abbas in a separate case alleging that he conspired to launder hundreds of millions of dollars from BEC frauds and other scams.
Accompanying Mitigation Efforts
Throughout the investigation, the FBI and the Justice Department provided specific information to victims about how they had been targeted or compromised, as well as information about the tactics, techniques, and procedures (TTPs) used by the hackers with the goals of remediating any intrusion and preventing future intrusions. That direct sharing of information took place in the United States and in foreign countries, often with the assistance of foreign law enforcement partners. The FBI also collaborated with certain private cybersecurity companies by sharing and analyzing information about the intrusion TTPs used by the members of the conspiracy.
In addition to the criminal charges, the FBI and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, in collaboration with the U.S. Department of Treasury, today released a joint cybersecurity advisory and malware analysis reports (MARs) regarding North Korean cryptocurrency malware. The joint cybersecurity analysis and MARs highlight the cyber threat North Korea – which is referred to by the U.S. government as HIDDEN COBRA – poses to cryptocurrency and identify malware and indicators of compromise related to the “AppleJeus” family of malware (the name given by the cybersecurity community to a family of North Korean malicious cryptocurrency applications that includes Celas Trade Pro, WorldBit-Bot, Union Crypto Trader, Kupay Wallet, CoinGo Trade, Dorusio, CryptoNeuro Trader, and Ants2Whale). The joint cybersecurity advisory and MARs collectively provide the cybersecurity community and public with information about identifying North Korean malicious cryptocurrency applications, avoiding intrusions, and remedying infections.
The U.S. Attorney’s Office and FBI also obtained seizure warrants authorizing the FBI to seize cryptocurrency stolen by the North Korean hackers from a victim in the indictment – a financial services company in New York – held at two cryptocurrency exchanges. The seizures include sums of multiple cryptocurrencies totaling approximately $1.9 million, which will ultimately be returned to the victim.
Jon, Kim, and Park are charged with one count of conspiracy to commit computer fraud and abuse, which carries a maximum sentence of five years in prison, and one count of conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison.
In relation to the case filed in Los Angeles, Alaumary has agreed to plead guilty to one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.
The charges contained in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
The investigation of Jon, Kim, and Park was led by the FBI’s Los Angeles Field Office, which worked closely with the FBI’s Charlotte Field Office. The U.S. Secret Service’s Los Angeles Field Office and Global Investigative Operations Center provided substantial assistance. The FBI’s Cyber Division also provided substantial assistance.
The investigations of Alaumary were conducted by the U.S. Secret Service’s Savannah Field Office, FBI’s Los Angeles Field Office, and the U.S. Secret Service’s Los Angeles Field Office and Global Investigative Operations Center. The FBI’s Criminal Investigative Division also provided substantial assistance.
The case against Jon, Kim, and Park is being prosecuted by Assistant U.S. Attorneys Anil J. Antony and Khaldoun Shobaki of the Cyber and Intellectual Property Crimes Section, with substantial assistance from Trial Attorney Scott Claffee of the Department of Justice National Security Division’s Counterintelligence and Export Control Section.
Assistant U.S. Attorneys Antony and Shobaki are also prosecuting the case against Alaumary, in which the U.S. Attorney’s Office for the Southern District of Georgia and the Criminal Division’s Computer Crimes and Intellectual Property Section (CCIPS) provided substantial assistance. Assistant U.S. Attorneys Antony and Shobaki, along with Assistant U.S. Attorney Jonathan Galatzan of the Asset Forfeiture Section, also obtained the seizure warrants for cryptocurrency stolen from the financial services company in New York.
The Criminal Division’s Office of International Affairs provided assistance throughout these investigations, as did many of the FBI’s Legal Attachés, as well as foreign authorities around the world. Numerous victims cooperated and provided valuable assistance.
Assistant Attorney General John C. Demers Delivers Remarks on the National Security Cyber Investigation into North Korean Operatives
Justice Department Announces New Charges in United States v. Jon Chang Hyok, Kim Il, and Park Jin Hyok (CDCA)
Today, the Justice Department is announcing charges following a significant national security cyber investigation first disclosed publicly more than two years ago.
As laid out in today’s indictment, North Korea’s operatives, using keyboards rather than guns, stealing digital wallets of cryptocurrency instead of sacks of cash, are the world’s leading bank robbers. The Department will continue to confront malicious nation state cyber activity with our unique tools and work with our fellow agencies and the family of norms abiding nations to do the same. We were together back in September 2018, when the U.S. Attorney’s Office for the Central District of California, with the assistance of the National Security Division, charged a North Korean programmer, who was working for the government of the Democratic People’s Republic of Korea (DPRK), with conspiring to conduct some of the most damaging cyberattacks ever, including the:
- November 2014 destructive attack and hack-and-dump targeting Sony Pictures Entertainment over a comedy film they did not like;
- February 2016 cyber-enabled heist of $81 million from the Bank of Bangladesh and other heists; and
- May 2017 global Wannacry 2.0 attack.
The events as described in that complaint provided the first indications that the North Korean regime would become focused on, and adept at, stealing money from institutions around the world.
Today, the Department unseals an indictment, returned by a grand jury in the Central District of California, charging the same DPRK programmer, as well as two newly-identified DPRK conspirators, with a campaign of cyber heists and extortion schemes, targeting both traditional and cryptocurrencies. The indictment adds to the list of victims since 2018, including continued cyber-enabled heists from banks on four continents targeting over $1.2 billion. It also describes in stark detail how the DPRK cyber threat has followed the money and turned its revenue generation sights on the most cutting edge aspects of international finance, including through the theft of cryptocurrency from exchanges and other financial institutions, in some cases through the creation and deployment of cryptocurrency applications with hidden backdoors. The indictment refines the attribution of this crime spree to the DPRK military intelligence services, specifically the Reconnaissance General Bureau (RGB). Simply put, the regime has become a criminal syndicate with a flag, which harnesses its state resources to steal hundreds of millions of dollars.
In a moment, you will hear more details about the charges and evidence in this case from the Acting United States Attorney for the Central District of California, the FBI, and the United States Secret Service. But, I want to take a moment to highlight the significance of these charges for the Department, the United States, and the international community: As the description of victim entities in the indictment shows, the DPRK’s malicious activities are a global problem, requiring global awareness, condemnation, and cooperative disruption. With this indictment and related disruptions, the United States continues to do its part.
First, we continue to shine a light on the global campaign of criminality being waged by the DPRK. Nation-state indictments like this are an important step in identifying the problem, calling it out in a legally rigorous format, and building international consensus.
Second, in addition to educating the U.S. public and international community about this activity, we are also targeting the networks through which the DPRK is cashing-out its ill-gotten gains. As will be described in more detail by my colleagues, the Department has obtained custody over a dual-U.S./Canadian national who organized the laundering of millions of dollars stolen by the DPRK hackers. He has admitted his role in these criminal schemes in a plea agreement, and he will be held to account for his conduct. This prosecution demonstrates the commitment of the Department to ensuring that those who conspire with the DPRK hackers will face justice. The Department was also able to seize and expects to ultimately return almost $2 million stolen by the DPRK hackers from a New York-based financial services company. This follows on similar seizure actions announced in March and August 2020, in which with the U.S. Attorney’s Office for the District of Columbia seized and froze approximately $8.5 million of cryptocurrency. These cryptocurrency seizures and prosecution of a high-level money launderer collectively represent important steps in disrupting the DPRK hackers and their money laundering networks, and illustrate the Department’s commitment to repatriating stolen funds before they reach the DPRK.
Third, the United States is empowering network defenders. As you will hear about, the prosecutors and investigators have — throughout this investigation — worked closely with victims and intended victims of the DPRK hackers, and have provided these victims with information about avoiding and remediating infections. This work continues today. Accompanying this announcement, the FBI and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, with the assistance of the Department of the Treasury, are releasing a Joint Cybersecurity Advisory and Malware Analysis Report regarding the DPRK’s malicious cryptocurrency applications. The criminal investigation leading to today’s indictment obtained that information for distribution to network defenders. Further, the context provided in today’s indictment underscores the necessity of paying attention to this Advisory and its recommendation.
Fourth, the allegations in today’s indictment inform and empower the international community so that they can not only join us in condemning this activity, but also help stop it. In that regard, the European Union’s (EU) July 2020 sanctions related to the Lazarus group was a welcome development. We commend the EU for its initial efforts to impose consequences for state-sponsored malicious cyber activities. However, other nations that wish to be regarded as responsible actors on the international stage must also step up. These conspirators described in today’s indictment are alleged to have been working, at times, from locations in China and Russia. The DPRK has also utilized Chinese over-the-counter cryptocurrency traders and other criminal networks to launder the funds. Just as the United States has disrupted the DPRK’s crime spree through arrests, forfeitures, and seizures, the time is ripe for Russia and China, as well as any other country whose entities or nationals play a role in the DPRK revenue-generation efforts, to take action.
The Department’s criminal charges are uniquely credible forms of attribution — we can prove these allegations beyond a reasonable doubt using only unclassified, admissible evidence. And they are the only way in which the Department speaks. If the choice here is between remaining silent while we at the Department watch nations engage in malicious, norms-violating cyber activity, or charges these cases, the choice is obvious — we will charge them.
Before I turn this over, I’d like to thank the agents at the FBI in Los Angeles, Charlotte, and Raleigh; the Secret Service in Savannah, Los Angeles, and D.C.; and the prosecutors in Los Angeles and at the National Security Division in D.C. for stepping up to the plate to play their part.
#AceNewsDesk report ………..Published: Feb.18: 2021:
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