Digital underground is behind the attack on Target

They are known as "coders" and "carders," high-tech gurus who live in a digital underworld.

Their identities have been elusive, but their tactics and profiles are emerging in the aftermath of the malware attacks against Target and other retailers.

A 23-year-old Russian, said to use the online nickname Ree[4], told a television interviewer in January that he cowrote the code used by whoever orchestrated the Target attack. Investigators are trying to find out more about someone else, known as Rescator, who has been selling stolen card data from Target.

Although Target's breach remains under cloaked investigation with no official results, a security intelligence firm that tracks carder activity says it is following a ring of nine people dealing in access to hacked point-of-sale terminals.

Some of the hacked terminals being offered in the underground forums come preloaded with memory-scraping malware, such as the type used in Target's huge breach, said Dan Clements, president of Los Angeles-based IntelCrawler. The group is mostly from Eastern Europe, but one of the hackers is based in the United Kingdom, Clements said.

"This niche was fairly developed and fairly sophisticated back in the spring," Clements said. "Thus the Target attack was not really a surprise."

Clements, whose team has been independently tracing the band's digital tracks for a range of clients including global law enforcement, said it's "highly probable" the members are related to the memory-scraping point-of-sale malware involved in the attack on Target, in which cyberthieves scooped up the payment card information of 40 million people.

A joint report from the Secret Service, cyber intelligence firm iSight Partners and others dated Jan. 16 referred to the malware at Target as a new variant of the Kaptoxa (Kar-toe-sha) malware called Trojan.POSRAM, derived from one called BlackPOS. Kaptoxa means potato in Russian and is also slang for stolen cards in underground forums.

The FBI said it's discovered about 20 point-of-sale malware attacks on retailers over the last year using several different kinds of malware including Kaptoxa, which it said has been around since at least 2011.

The ring that IntelCrawler is tracking includes Rinat Shabayev, a 23-year-old Russian hacker that IntelCrawler first publicly identified as the co-author of the malware that was ultimately used against Target. Shabayev subsequently told a Russian news outlet that he co-authored the Kartoxa software, as the word was written by a translator, a variant of which infected Target's point-of-sale systems.

"We were blown away that he admitted to writing it," Clements said.

In an interview published Jan. 21, Shabayev told the Russian news outlet LifeNews that he lives in Saratov, a port city on the Volga River, and is looking for a job. He started working as programmer while attending university, he said, and used to moonlight as a hacker.

"I just gave the program and that was it," he said. "If you use this software with malicious intent you can earn well, but it's illegal. So I didn't want to engage in this. I just developed it for sale, not for my personal use. And let other people use it in their conscience."

He said he met Kartoxa's other author online and doesn't know where he lives.

Shabayev's page on a popular Russian social network, displayed on IntelCrawler's website, shows a photo of him playing a bass guitar and lists his interests as bass, beautiful girls and coding. It says he attended Engels Technological Institute.

It also said he views kindness and honesty as important in other people, and that his political views are apathetic.

Brian Krebs, the security blogger who broke the news of Target's huge holiday breach at KrebsonSecurity.com, said in an interview that he, too, thinks Shabayev co-authored the original malware. But he said there are likely several layers between Shabayev and whoever carried out the intricate and customized attack on Target.

Krebs said Shabayev's attitude toward writing the code is typical of malware authors he has interviewed.

"They have an agnostic view of code," Krebs said. "They're freelancers. It's just ones and zeros. It can't be good or evil. That seems to be the view of a lot of guys that code malicious software."

Krebs said that he has not yet looked for links between Shabayev and the person nicknamed Rescator who has been hawking stolen card information from Target in underground card shops. Krebs suspects Rescator also uses the name Helkern online and is a leading member of a highly structured underground forum called Lampeduza. Krebs said he has identified a man in Illichivisk, a city in the Odessa province of Ukraine, that he suspects is Rescator/Helkern.

Krebs told the Star Tribune he suspects Rescator is not just hawking stolen cards but played a central role in the Target hit itself.

Clements, at IntelCrawler, said he is not aware of a link between the two men.

The Secret Service declined to comment on Shabayev.

IntelCrawler is not the only organization that has tracked Shabayev.

Dmitri Alperovitch, co-founder of Irvine, Calif.-based CrowdStrike, said his firm has been carefully tracking cybercriminals in Eastern Europe, Russia and elsewhere for retail clients. Shabayev has been "very active" selling the BlackPOS memory scraper malware for about a year, he said. He described the original BlackPOS malware as fairly basic.

"A first-year computer science student in college could have written this," he said.

Alperovitch said he didn't believe Shabayev's assertions that the program he co-authored was innocent and intended for defending computer systems.

As for the card seller Rescator, Alperovitch, too, suspects that Rescator is a Ukrainian man from Odessa.

Odessa is well known as the birthplace of CarderPlanet.com, one of the first online bazaars for trading stolen financial data, Alperovitch said.

It was in an Odessa restaurant in 2001 that a group of 150 hackers launched the notorious website, he said.

The global marketplace flourished as a go-to spot for fraudsters until it shut down around 2004 after the arrest of key members, including co-founder Roman Vega, a Ukrainian man nicknamed Boa who was arrested when he was in Cyprus. Vega was sentenced in December 2013 in a Brooklyn courthouse to 18 years in prison after pleading guilty to conspiracies to commit money laundering and access-device fraud.