This Year’s Crop of Tax Phishing Scams Target Individuals, Employers, and Tax Preparers

Tax season is stressful enough without having to worry about becoming the victim of a cyber crime. Here are three different tax phishing scams targeting employers, individuals, and even tax preparers that are currently making the rounds.

Employers: W-2 Phishing Emails

The W-2 phishing scams that have plagued employers for a couple of years are back with a vengeance. The IRS noticed a significant uptick in these tax phishing scams beginning in January and recently issued an official warning. Also known as spear phishing or business email compromise (BEC) scams, these campaigns differ from traditional phishing scams in that they are highly targeted. They are sent to specific employees within organizations who have access to employee tax data, usually human resources personnel, and often appear to come from a company executive. Occasionally, the IRS reports, the email will request a wire transfer along with employee W-2 data.

Individuals: Phony “Tax Notification” Emails

While the hackers behind this particular scam are not seeking tax ID data, they are harnessing the stress of tax season and victims’ fear of the IRS to get them to click on phishing links. The targets are Microsoft 365 users, and Dark Reading reports that “tens of millions” may have received the emails. The messages purport to be from the IRS, warn recipients that there is some sort of problem with their taxes and that dire consequences will result if they do not take immediate action, and include attachments with names such as “taxletter.doc.” Downloading and opening the attachment installs password-stealing malware on the victim’s machine.

Tax Preparers and Individuals: New Tax ID Theft Phishing Scheme

These highly sophisticated tax phishing scams are executed in two phases. In the first phase, hackers send traditional or spear phishing emails to tax preparers, which install malware on their computers and allow the hackers to steal client tax and bank account data.

In the second phase, the hackers use the data to file fraudulent tax returns – then have IRS refunds deposited in the victims’ bank accounts. In some cases, the return is filed using one victim’s tax data and the money deposited in another victim’s bank account. The bank account owners are then contacted by someone claiming to be an IRS representative, demanding that they take specific (and irreversible) steps to “return” the money.

Fighting Back Against Tax Phishing Scams

There are several ways to prevent falling victim to these and other tax phishing scams. Organizations should ensure that all employees are trained to identify phishing emails, including spear phishing, have a specific and clear procedure to report suspicious emails, and take all other appropriate proactive cyber security measures. Individuals should also be aware of the warning signs of a phishing email, including text written in broken English and return addresses that appear to be off, such as a government agency with a .com address.

The IRS requests that suspected tax-related phishing emails be forwarded to phishing@irs.gov. If you receive an erroneous refund deposit to your bank account, follow the IRS’s instructions for returning it:

1. Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
2. Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.
3. Interest may accrue on the erroneous refund.

The cyber security experts at Lazarus Alliance have deep knowledge of the cyber security field, are continually monitoring the latest information security threats, and are committed to protecting organizations of all sizes from security breaches. Our full-service risk assessment services and Continuum GRC RegTech software will help protect your organization from data breaches, ransomware attacks, and other cyber threats.

Lazarus Alliance is proactive cyber security®. Call 1-888-896-7580 to discuss your organization’s cyber security needs and find out how we can help your organization adhere to cyber security regulations, maintain compliance, and secure your systems.

Mueller indictments of Russian cyber criminals put election hacking at top of mind

State officials expressed grave concerns about election hacking the day after Special Counsel Robert Mueller handed down indictments of 13 Russian nationals on charges of interfering with the 2016 presidential election. The Washington Post reports:

At a conference of state secretaries of state in Washington, several officials said the government was slow to share information about specific threats faced by states during the 2016 election. According to the Department of Homeland Security, Russian government hackers tried to gain access to voter registration files or public election sites in 21 states.

Although the hackers are not believed to have manipulated or removed data from state systems, experts worry that the attackers might be more successful this year. And state officials say reticence on the part of Homeland Security to share sensitive information about the incidents could hamper efforts to prepare for the midterms.

Granted, the Mueller indictments allege disinformation and propaganda-spreading using social media, not direct election hacking. However, taken together with the attacks on state elections systems, it is now indisputable that Russian cyber criminals used a highly sophisticated, multi-pronged approach to tamper with the 2016 election. While there have been no reported attacks on state systems since, there is no reason to believe that election hacking attempts by Russians or other foreign threat actors will simply cease; if anything, cyber criminals are likely to step up their game during the critical 2018 midterms this November.

These aren’t new issues; cyber security was a top issue leading up to the 2016 election. Everyone agreed then, and everyone continues to agree now, that more needs to be done to prevent election hacking. So, what’s the holdup?

One of the biggest issues in tackling election hacking is the sheer logistics of U.S. elections. The United States doesn’t have one large national “election system”; it has a patchwork of thousands of mini election systems overseen by individual states and local authorities. Some states have hundreds, even thousands of local election agencies; The Washington Post reports that Wisconsin alone has 1,800. To its credit, Wisconsin has encrypted its database and would like to implement multi-factor authentication. However, this would require election employees to have a second device, such as a cell phone, to log in – and not all of them have work-issued phones or even high-speed internet access.

Not surprisingly, funding is also a stumbling block. Even prior to the 2016 elections, cyber security experts were imploring states to ensure that all of their polling places were using either paper ballots with optical scanners or electronic machines capable of producing paper audit trails. However, as we head toward the midterms, five states are still using electronic machines that do not produce audit trails, and another nine have at least some precincts that still lack paper ballots or audit trails. The problem isn’t that these states don’t want to replace their antiquated systems or hire cyber security experts to help them; they simply don’t have the budget to do so.

Congress Must Act to Prevent Election Hacking

Several bills that would appropriate more money for states to secure their systems against election hacking are pending before Congress, including the Secure Elections Act. Congress can also release funding that was authorized by the 2002 Help America Vote Act, but never appropriated.

The integrity of our elections is the cornerstone of our nation’s democracy. Proactive cyber security measures can prevent election hacking, but states cannot be expected to go it alone; cyber attacks do not respect borders.

The cyber security experts at Lazarus Alliance have deep knowledge of the cyber security field, are continually monitoring the latest information security threats, and are committed to protecting organizations of all sizes from security breaches. Our full-service risk assessment services and Continuum GRC RegTech software will help protect your organization from data breaches, ransomware attacks, and other cyber threats.

Lazarus Alliance is proactive cyber security®. Call 1-888-896-7580 to discuss your organization’s cyber security needs and find out how we can help your organization adhere to cyber security regulations, maintain compliance, and secure your systems.

Crypto-Mining Malware is Crippling Enterprise Networks

Cryptocurrencies such as Bitcoin and Ethereum have gone mainstream; it seems like everybody and their brother is looking to buy some crypto and get their piece of the digital currency gold rush. Hackers want a piece of it, too. In addition to hacking ICO’s and cryptocurrency exchanges, they’re using crypto-mining malware to “mine” their own “coins.”

Crypto-mining malware isn’t new; last summer, this blog reported on a crypto-mining malware variant called Adylkuzz that came to light in the wake of the WannaCry attacks. Adylkuzz took advantage of the same Windows exploit as WannaCry. In fact, it acted as a sort of “vaccine” against the ransomware, preventing it from taking root in Adylkuzz-infected computers lest it interfere with its Monero-mining operations. However, Adylkuzz wasn’t a kinder, gentler malware. While it didn’t directly lock down systems or access data, it did hijack infected machines’ processing power, and it proved to be far more lucrative than WannaCry; it’s estimated that Adylkuzz raked in 10 times more money for its users than WannaCry.

At first, rogue crypto-miners were viewed as an annoyance; the most they did was slow down machines and perhaps cause problems accessing certain network folders. They were also seen as more of a threat to consumers than businesses. Many variants went after IoT devices, such as smartphones, overwhelming their processors to the point where the devices could be damaged or even destroyed. However, as crypto-mining malware has evolved, it has become more sophisticated, and hackers are looking to harvest enterprise processing power.

Move Over, WannaCry; Here Comes WannaMine

Recently, Dark Reading reported on yet another exploit of the Eternal Blue tool stolen from the NSA, a crypto-mining malware variant dubbed WannaMine. WannaMine doesn’t attack smartphones and other small IoT devices; it goes after Windows computers, and isn’t just slowing systems down. Security firm CrowdStrike reports having seen it cause “applications and hardware to crash, causing operational disruptions lasting days and sometimes even weeks.”

A report in Security Week elaborates on how WannaMine appears to be designed to specifically target enterprise networks:

WannaMine, the security researchers explain, employs “living off the land” techniques for persistence, such as Windows Management Instrumentation (WMI) permanent event subscriptions. The malware has a fileless nature, leveraging PowerShell for infection, which makes it difficult to block without the appropriate security tools.

The malware uses credential harvester Mimikatz to acquire legitimate credentials that would allow it to propagate and move laterally. If that fails, however, the worm attempts to exploit the remote system via EternalBlue.

To achieve persistence, WannaMine sets a permanent event subscription that would execute a PowerShell command located in the Event Consumer every 90 minutes.

The malware targets all Windows versions starting with Windows 2000, including 64-bit versions and Windows Server 2003. However, it uses different files and commands for Windows Vista and newer platform iterations.

WannaMine isn’t the only crypto-mining malware harnessing Eternal Blue and using the Windows Management Infrastructure to propagate. Another Monero-mining worm, dubbed Smominru (aka Ismo), has infected over a half a million Windows hosts, most of them servers.

These “next-generation” crypto-mining malware variants have proven extremely difficult to take down. First, the malware is distributed. Second, even if all machines on a network are patched against Eternal Blue, the malware will seek to use the Mimikatz credential harvester to get in by cracking a weak password. Finally, some legacy antivirus products do not detect crypto-mining malware because it doesn’t actually write files to an infected machine’s disk.

Protecting Your Organization Against WannaMine and Other Crypto-Mining Malware

There are several ways to protect your enterprise systems from being hijacked for illegal crypto-mining:

• Keep your systems and software up-to-date; only older Windows machines are susceptible to the Eternal Blue exploit.
• Use network security software to monitor for and block the activity needed for crypto-miners to work.
• Ensure that all system users are using strong passwords that cannot be cracked by Mimikatz.

In addition to doing damage to enterprise systems, crypto-mining malware can be employed by real-world threat actors to fund their criminal activity. It’s in everyone’s best interest to put a stop to it.

The cyber security experts at Lazarus Alliance have deep knowledge of the cyber security field, are continually monitoring the latest information security threats, and are committed to protecting organizations of all sizes from security breaches. Our full-service risk assessment services and Continuum GRC RegTech software will help protect your organization from data breaches, ransomware attacks, and other cyber threats.

Lazarus Alliance is proactive cyber security®. Call 1-888-896-7580 to discuss your organization’s cyber security needs and find out how we can help your organization adhere to cyber security regulations, maintain compliance, and secure your systems.