Another Botnet Gets Dismantled, But This Time With Arrests

SAN FRANCISCO -- RSA Conference 2010 -- For the second time in weeks, a major botnet has been decapitated -- but this time investigators have arrested the alleged operators of the criminal network.

A team made up of law enforcement officials in Spain, the FBI, Panda Security, Defence Intelligence, and Georgia Tech cut off the so-called Mariposa botnet's command and control (C&C) infrastructure in one day in December, ultimately leading to the arrest of the alleged head botmaster and two of his partners earlier this month by Spanish authorities.

Mariposa was a massive global botnet with close to 13 million infected machines in more than 190 countries -- including those of half of all Fortune 1000 firms. The botnet harvested banking credentials, credit card information, account information from social networking sites and online email services, and other usernames and passwords.

Mariposa's demise follows that of Waledac, the reinvented version of the infamous Storm botnet, which was shut down last month by Microsoft, Shadowserver, researchers from Europe, the University of Washington, Symantec, and law enforcement. Waledac's takedown was highlighted by an unprecedented federal court order secured by Microsoft that required VeriSign to cut off 277 Internet .com domains that were serving as the connections between Waledac's C&C servers and around 60,000 to 80,000 bots or infected machines it had recruited to spew up to 1.5 billion spam messages a day.

Why the sudden surge in botnet takedowns? "We're now getting law enforcement involved in the earlier stages and discarding jurisdictional interests and self interests just to get the job done," says Paul Royal, a research scientist with the Georgia Tech Information Security Center, who worked on the Mariposa shutdown doing malware analysis. "We're all sick of the problem."

Pedro Bustamante, senior research adviser at Panda Security, says the researchers obtained a court order to monitor the Mariposa operators' IP addresses and ISP records, and to tap into their mobile records as part of the investigation. They turned over their findings to law enforcement after six months of gathering evidence on the head botmaster, nicknamed "Netkairo" and "hamlet1917," and his partners, "Ostiator" and "Johnyloleante," all of whom were arrested.

"This story has a happy ending. The botnet was shut down, and justice was served [against the bad guys]," Bustamante says.

But Mariposa was the tip of the iceberg, he says. "We still have a big problem that this is one of many botnets. This one was big enough to attract the attention of everyone," he says. "But there are still hundreds of thousands of botnets small enough to not draw attention."

While the Mariposa operators were fairly smart in some of the methods the used, they did commit a few fatal errors that led investigators to their trail. "They were careless in a few aspects -- they used a limited number of nicknames in email accounts that we were able to track ... and for the command and control servers," Bustamante says. "And we correlated that information with all the login IP and source IP information around different underground forums ... we got good profiles on them."

The alleged botnet operators were not skilled hackers, but the botnet infrastructure itself was fairly sophisticated: It used a custom protocol with encryption over UDP, and even later used a port typically associated with DNS, Port 53, to get malware in and out of infected machines' networks. "When they switched to Port 53, we saw a lot more compromised machines," says Georgia Tech's Royal. "The problem was that a firewall would confirm the destination was Port 53, but not perform the deep packet inspection to confirm it was DNS."

Like with Waledac, the Mariposa C&C takedown required a court order for those domains in VeriSign's .com purview. There were other domains, including .biz, and some Chinese domains, according to Panda Labs' Bustamante.

The team coordinated a simultaneous shutdown of the C&C domains on Dec. 23 to catch the botmasters off-guard. But that didn't stop the Mariposa operators from trying to resuscitate their botnet: According to Bustamante, one of the operators bribed his service provider with 500 Euros to reactivate one of his C&C domains in order to take back a portion of Mariposa. "He used it to perform a DDoS attack on one of the Mariposa Working Group [members]," Bustamante says.

Then he made the mistake of connecting to the botnet from his home without logging on anonymously to the VPN. "We could see when he was connecting from home," Bustamante says. "He got a little sloppy."

Even after the arrests, the same Mariposa botnet operator who was released under surveillance tried to recover the botnet again from his home IP address. "He made the same mistakes and connected directly to it from his home IP," he says.

Mariposa infected machines via email and Web exploits, as well as via instant messaging and USB drives. "It was very effective in spreading via P2P USB drives and IM links," namely via MSN Messenger, Bustamante says. "IM was one of the most effective ... it would send to all of your contacts with a social engineering approach that would make your contacts want to click on the link and then they would get infected."

Meanwhile, authorities could be making further arrests in the Mariposa case. And this won't be last team-effort botnet takedown, Royal says.

Panda Labs is posting a report with more details on the Mariposa case.

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