Botnet Herder Acidstorm Pleads Guilty

Published Mon, 2008-04-21 15:14 Internet

In the first prosecution of its kind in the nation, a man who is well known to members of the “ botnet underground” pleaded guilty to federal charges related to his use of “ botnets” – armies of compromised computers – to steal the identities of victims throughout the country by extracting information from their personal computers and wiretapping their communications.

John Schiefer, 26, of Los Angeles (90011), appeared before United States District Judge A. Howard Matz and pleaded guilty to accessing protected computers to conduct fraud, disclosing illegally intercepted electronic communications, wire fraud and bank fraud.

During the court hearing, Schiefer admitted that he gained access without authorization to hundreds of thousands of computers in the United States and that he remotely controlled these compromised machines through computer servers. Once in control of the “ zombie” computers, Schiefer used his botnets to search for vulnerabilities in other computers, intercept electronic communications and engage in identity theft.

In connection with the wiretapping scheme, Schiefer admitted that he and others installed malicious computer code, known as “ malware,” on zombie computers that captured electronic communications as they were sent from users’ computers. Because victims with compromised computers did not know that their computers had become infected and were “ bots,” they continued to use their computers to engage in commercial activities, such as making online purchases. Schiefer’s “ spybot” malware allowed him to intercept communications sent between victims’ computers and financial institutions, such as PayPal. Schiefer sifted through those intercepted communications and mined usernames and passwords to accounts. Using the stolen usernames and passwords, Schiefer made purchases and transferred funds without the consent of the victims. Schiefer also gave the stolen usernames and passwords, as well as the wiretapped communications, to others. Schiefer is the first person in the nation to plead guilty to w iretapping charges in connection w ith the use of botnets.

Schiefer also admitted stealing information from numerous computers by accessing the PStore, w hich is intended to be a secure storage area of computers running Microsoft operating systems. To accomplish this, Schiefer installed malw are on computers that caused them to send account access information, including usernames and passw ords for PayPal and other financial w ebsites, to computers controlled by Schiefer and his co-schemers. Schiefer used that information to make unauthorized purchases using funds transferred directly from victims’ bank accounts. Schiefer is the first known defendant to plead guilty botnets to harvest information from the PStores.

Finally, Schiefer admitted defrauding a Dutch Internet advertising company with his armies of zombie computers. Schiefer signed up as a consultant w ith the advertising company and promised to install the company’ s programs on computers only w hen the ow ners of those computers gave consent. Instead, Schiefer and two co-schemers installed that program on approximately 150,000 zombie computers whose owners did not give consent. Schiefer was ultimately paid more than $19,000 by the advertising company.

In addition to his guilty pleas to the criminal charges, Schiefer has agreed to pay approximately $20,000 in restitution to the Dutch advertising company and financial institutions that he defrauded.

Schiefer, who used the online handle “ acidstorm,” is scheduled to be sentenced by Judge Matz on August 20. At that time, he faces a statutory maximum sentence of 60 years in federal prison and a fine of $1.75 million. This case w as investigated by the Federal Bureau of Investigation.

Guilty Plea For Botnet Infected Computers It is the first time in the nation that someone has been charged under the federal wiretap statute for conduct related to botnets.

Bot Roast II A botnet is a collection of compromised computers under the remote command and control of a criminal "botherder." A botherder can gain control of these computers by unleashing malicious software such as viruses, worms, or trojan horses.

Botnet Operator Pleads Guilty “Botherders” or “Botmasters” operate within a group of computer hackers on a global scale, making this computer crime one of the most pervasive forms of organized criminal activity plaguing law enforcers in this country and abroad.”

Illegal Spam "Botnet" Compromised Thousands Of Computers Botnets are summoned and controlled by third parties, usually without their owners' knowledge. Botnets unlawfully tap into the processing power and networking access of the individual computers that comprise them.

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