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11/13/2007
05:28 PM
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Help Desk Worker Pleads Guilty To Running Bot Net

The L.A. man known as "acidstorm" admits he assisted in creating a network of compromised computers that he helped control through IRC commands for more than a year.

A Los Angeles help desk worker has acknowledged operating a bot net of more than 250,000 PCs, spreading malicious software and stealing personal data.

Jonathan Kenneth Schiefer, 26, known online as "acidstorm," "acid," and "storm," pleaded guilty last week to a four-count felony indictment. He faces a maximum penalty of 60 years in prison and a $1,750,000 million fine.

Mark Krause, an assistant U.S. attorney in Los Angeles, declined to speculate on Schiefer's sentence but pointed to the 57 month sentence recently received by another bot master as a possible sentencing yardstick.

Krause characterized bot net crime as a growing problem. "The use of bots for identity theft is on the upswing," he said, likening the scope of the identity theft fraud committed by Schiefer to the data theft at ChoicePoint in 2005.

From his home and his workplace, Internet telephony firm 3G Communications, between 2005 until early 2006, Schiefer and unidentified co-schemers created a network of compromised computers that they controlled through Internet Relay Chat commands and used the bots to spread malware and to steal PayPal user names and passwords.

"Using the PayPal usernames and passwords collected with malware, defendant would access the PayPal accounts of individual users," a Nov. 9 court filing said. "Defendant would then cause transfers of funds from the individual users' bank accounts by making purchases using their PayPal accounts. At no time did the defendant have the authority or permission to make those purchases or transfers."

In his guilty plea, Schiefer also acknowledges defrauding Simpel Internet, a Dutch Internet advertising company. Schiefer and two co-conspirators identified only as "dynamic" and "Pr1me" enrolled in an advertising affiliate program, TopConverting.com, and proceeded to surreptitiously install adware on more than 110,000 compromised computers. During the month of June 2005, Schiefer earned more than $14,000 in fees from Simpel Internet through his illegally installed adware.

Krause said that what made the case unusual was that it marked the first time that federal wiretapping charges had been brought for Internet eavesdropping -- the defendant's use of HTTP sniffing malware to intercept communications between compromised computers and Internet Web sites.

Krause also said that this case was the first he knew of where someone had been charged with stealing data from the Protected Store (PStore) on users' computers using "psniffer" malware. As Microsoft explains on its developer site, "Protected Storage provides applications with an interface to store user data that must be kept secure or free from modification." Although PStore data is encrypted, court documents explain that PStore information can be vulnerable to malware coded to have specific access privileges.

Henry Park, president and founder for 3G Communications, said Schiefer was not a network security consultant, as suggested in some media reports. Rather, he said he was employed as a help desk technician. "It was a complete surprise that he was involved in anything like that," Park said.

Park said he was planning to terminate Schiefer for performance issues when Schiefer went on short-term disability leave in November 2005. In February 2006, according to Park, 3GC became aware of Schiefer's activities and it formally terminated him when he failed to file the paperwork to apply for long-term disability. He stressed that Schiefer had no access to 3GC's customer records or files and that the company's internal network had not been compromised. However, he noted that Schiefer's actions prompted 3GC to limit the kinds of Web sites employees can access.

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