Latest Online Menace: Custom Worms Built For Industrial Espionage - InformationWeek

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Latest Online Menace: Custom Worms Built For Industrial Espionage

The industrial espionage ring broken up by Israeli police over the weekend is only the most recent evidence of a trend toward smart targeting by hackers.

The industrial espionage ring broken by Israeli police over the weekend, where private investigators hired a programmer to custom-create a Trojan horse that was then planted on rivals' PCs, is only the most recent evidence of a trend towards smart targeting by hackers, a security analyst said Wednesday.

Police in Tel Aviv and London arrested 18 people on Sunday, including executives of a Volvo importer, two cell phone providers, and Israel's largest satellite television company, and charged them -- and investigators they hired -- for gaining illegal access to competitors' computer networks.

According to authorities, three Israeli private investigation firms hired a British programmer to create a Trojan horse, which was then distributed both on CD and via e-mail to the rivals. The Trojan allowed the investigators to access PCs remotely, which they did to gather confidential information such as the amount bid for contracts. British authorities arrested the alleged Trojan creator, Michael Haephrati, 41, and his wife, Ruth Brier-Haephrati, 28, last week in London, and are holding them awaiting an extradition hearing Friday.

"Events like this are not very common," acknowledged Mark Sunner, the chief technology officer with U.K.-based mail filtering firm MessageLabs. "But while they're low in numbers, they are on the increase. Worse, they're very dangerous because they're virtually undetectable by traditional anti-virus defenses."

The problem: anti-virus vendors require samples of the malicious code to create a signature file for the scanning engine. Those samples are sometimes provided by their own researchers (gathered from honeypot networks of purposefully-exposed PCs), but more frequently, from customers.

"The dirty secret is that anti-virus is very very reactive," said Sunner. "It entirely relies on samples, on a portion of customers 'taking the bullet,' so to speak. If you're dealing with a single, customized and targeted attack, it's nearly impossible to get a sample and then create a definition."

To make matters worse, Trojans and other malicious software built for espionage invariably include "rootkits," disguising tools and code that makes it difficult, if not impossible, for anti-virus scanners to notice the malware.

These tactics aren't new; anti-virus vendors face them every day as worm writers try to evade defenses -- usually by creating code, then running the major virus scanners to see if their work slips through -- and constantly tweak or repackage their creations.

The sticking point is the lack of samples. "In each [espionage] case we know of, the virus was hand-crafted," said Sunner.

Sunner argued that beyond-the-gateway filtering, the service that MessageLabs provides, is a necessary addition to signature-based anti-virus if targeted hacks like this are to be caught.

"[Filtering] isn't necessarily a replacement, but more an additional level of detection," he said. "The odds of seeing a single attack are a lot higher than with signature-based AV, because the scanning database can be so much larger, and because the hacker can't download a service like ours and test out his code against it."

Sunner's convinced that other attacks like the Israeli case are upcoming. "You'd have to be nave to think that this would never happen again. I think it's a sure fire bet that other companies have Trojans like this in place, if only because by its insidious nature, it's almost impossible to detect."

In the U.S., where news of computer-related espionage is rare, the closest case was one in 2004, when six men were indicted in the nation's first denial-of-service attack against competitors' Web sites. "I think it will take another major incident [like the Israeli investigation] or even a few before everyone realizes the danger," said Sunner.

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