FBI, State Department And Other US Law Enforcement Standby And Watch Russian Hackers Steal 160 Million Credit Card Numbers (Updated April 8, 2014)
Neiman Marcus Data Breach Tied To Russian Group
Neiman Marcus is one of the victims of a Russian syndicate that has stolen more than 160 million credit card numbers from retailers over seven years, according to authorities.
Hackers who raided the credit card payment system of Neiman Marcus Group Ltd. belong to a sophisticated Russian syndicate that has stolen more than 160 million credit card numbers from retailers over seven years, according to people with knowledge of the matter.
The Russian group is well-known to U.S. authorities, who have indicted several members and linked it to pillaging more than 100 companies, including Citigroup Inc. and Plano-based J.C. Penney Co.
Attempts to shut down the criminal network have failed despite international sting operations and secret meetings with Russian intelligence officials, according to two former U.S. officials who asked not to be named because they weren’t authorized to discuss the activities.
FBI officials visited their Russian counterparts in 2008 and 2009 to share information that could help locate and stop hackers, one of the former officials said.
“The FBI has tried to get cooperation, the State Department has asked for help and nothing happens, so law enforcement options under the current circumstances are pretty negligible,” said Richard Clarke, special adviser for cybersecurity under George W. Bush.
Law enforcement officials describe Russian stonewalling as just one obstacle as they try to curb the burgeoning theft of credit card data that has sparked a congressional inquiry and left banks and retail chains blaming each other for the failures of outdated credit card technology.
Law enforcement officials describe Russian stonewalling as just one obstacle as they try to curb the burgeoning theft of credit card data that has sparked a congressional inquiry and left banks and retail chains blaming each other for the failures of outdated credit card technology.
Trails Diverged
Investigators initially suspected that the Russian syndicate was responsible for the recent series of security breaches at Target Corp. and other retailers. But the trails diverged during the investigations.
Serious incursions at Target and Irving-based Michaels Stores are thought to have been perpetrated by two less-experienced and less-sophisticated hacking groups, or a mix of veterans and newcomers, according to people with knowledge of the cases.
These new hackers are successful because of simple tools that have become ubiquitous and cheap, and are operating throughout Eastern Europe, further confounding law enforcement efforts to stop cybercrime.
Investigators initially suspected that the Russian syndicate was responsible for the recent series of security breaches at Target Corp. and other retailers. But the trails diverged during the investigations.
Serious incursions at Target and Irving-based Michaels Stores are thought to have been perpetrated by two less-experienced and less-sophisticated hacking groups, or a mix of veterans and newcomers, according to people with knowledge of the cases.
These new hackers are successful because of simple tools that have become ubiquitous and cheap, and are operating throughout Eastern Europe, further confounding law enforcement efforts to stop cybercrime.
The FBI and Secret Service declined to comment, as did the FSB, Russia’s main intelligence agency. Ginger Reeder, a spokeswoman for Dallas-based Neiman Marcus, didn’t respond to an email seeking comment.
In 2008, Peretti, who is now a partner at law firm Alston & Bird LLP, first encountered the Russian syndicate that hacked Neiman Marcus as a prosecutor investigating the theft of 130 million credit and debit cards from Heartland Payment Systems, one of the U.S.’s largest payment processors. Prosecutors have since compiled a lengthy list of other victims they believe the group has hacked, including Dallas-based 7-Eleven Inc., JetBlue Airways Corp., J.C. Penney, Visa Inc., and the French retailer Carrefour SA, according to court documents.
The group is responsible for hacking more than 100 companies, Peretti said.
Five members of the gang were indicted last year at a federal court in New Jersey. Only two of them are in custody, and Russia is seeking the return of one who is in a Dutch jail.
The group is larger than that, and membership fluctuates as key leaders break off to do heists on their own or with other cybercriminals they meet on underground forums, according to court documents and investigators. The members who have been detained appear to have been easily replaced, and the arrests have done little to slow the group’s activities.
“Some of the hacking groups connected to large data breaches are not necessarily static organizations, but loose confederations of hackers who come together to commit a particular hack or series of hacks, swapping members in and out based on the skills needed,” said Christopher Kelly, deputy criminal chief in the office of the U.S. attorney in New Jersey, which issued the 2013 indictment.
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