38 in US, Romania Charged in Phishing Schemes

Grant Gross, IDG News Service

Thirty-eight people in the U.S. and Romania have been charged in two indictments alleging they used complicated Internet phishing schemes to steal thousands of credit and debit card numbers, U.S. and Romanian authorities announced Monday.

The indictments, in U.S. District Court for the Central District of California and the District of Connecticut, focus on two related phishing schemes with ties to organized crime, the U.S.

Department of Justice said. Phishing involves sending e-mail messages that look like official correspondents from banks or credit card vendors in an attempt to get recipients to go to a fake Web site and enter their account numbers.

A grand jury in Los Angeles charged 33 people for their alleged participation in a scheme that targeted thousands of individual victims and hundreds of financial institutions. The 65-count indictment was unsealed Monday. Seven people were charged in a Connecticut indictment for their roles in an Internet phishing scheme, including two who were charged in the Los Angeles case.

U.S. authorities were acting on nine arrest warrants in the Los Angeles area and Romanian authorities acting on search warrants there Monday in connection with the racketeering indictments.

Among the charges in the Los Angeles indictments are conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act; conspiracy in connection with access devices; unauthorized access to a protected computer; bank fraud; and aggravated identity theft.

The RICO conspiracy charge carries a maximum prison sentence of 20 years, bank fraud has a maximum sentence of 30 years, and device fraud conspiracy has a maximum sentence of seven and a half years. The unauthorized access count carries a maximum prison sentence of five years, and aggravated identify theft carries a mandatory two-year prison sentence.

The Romanian members of the organization obtained thousands of credit and debit card accounts and other personal information through phishing, according to the indictment. The group sent more than 1.3 million spam e-mail messages in one phishing attack, the DOJ said.
The Romanians collected the victims' information and sent the data to cashiers in the U.S.

through Internet chat messages, the DOJ said. The U.S. cashiers used hardware called encoders to record the fraudulently obtained information onto the magnetic strips on the back of credit and debit cards. Cashiers then directed other criminals called runners to test the fraudulent cards by checking balances or withdrawing small amounts of money at ATMs.

The cards that were successfully tested were used to withdraw money from ATMs or point-of-sale terminals with the highest withdrawal limits, the DOJ said. Part of the money was then wire transferred to the supplier in Romania.

Seuong Wook Lee, a cashier in the scheme, pleaded guilty on May 15 in U.S. District Court in Los Angeles to racketeering conspiracy, bank fraud, access device fraud and unauthorized access of a protected computer, the DOJ said.

In the related Connecticut case, seven Romanian resident were charged in an indictment returned by a grand jury in New Haven on Jan. 18 and unsealed Friday. The indictment alleges the defendants used a phishing scheme to commit fraud in connection with access devices, conspiracy to commit bank fraud and aggravated identity theft.

The Connecticut investigation came from a state resident's complaint about a fraudulent e-mail message made to appear as if it originated from Connecticut-based People's Bank. The e-mail message directed victims to a computer in Minnesota that had been compromised and used to host a counterfeit People's Bank Internet site.

Investigators found that the defendants had targeted several banks and other companies, including Citibank, Capital One and PayPal.

On April 23, U.S. Attorney General Michael Mukasey announced a strategy to combat international organized crime.

"Criminals who exploit the power and convenience of the Internet do not recognize national borders; therefore our efforts to prevent their attacks cannot end at our borders either," Deputy Attorney General Mark Filip said in a statement. "Through cooperation with our international partners, we can disrupt and dismantle these enterprises, just as we have done today with these indictments and arrests."

Mozilla Opens Firefox 3 RC1 Up For Public Testing

By Jennifer Hagendorf Follett, ChannelWeb

Mozilla is one step closer to the launch of Firefox 3, rolling out Release Candidate 1 of the revamped browser for testing by developers and the open-source community at large.

The new version, based on the Gecko 1.9 Web rendering platform, adds several new features that will make Firefox 3 more secure, easier to use, and more personal, Mozilla said on its Web site. Firefox 3 also adds improvements for developers and will offer better performance, Mozilla said.

Mozilla Friday made Firefox 3 Release Candidate 1 (RC1) available for download from its site for testing purposes so that it can collect feedback from Web developers and the Firefox testing community.

Among Firefox 3's new security features is one-click access to site info to allow users to quickly see information on who owns a given Web site and whether the connection is protected from eavesdropping. New malware protection warns users when they land on a site known to install viruses, spyware and other malware.

Firefox 3 also offers simplified password management via an information bar that can be used to save passwords after a successful login, simplified add-on installation and a new simplified download manager that enables users to search for downloads by the name of the Web site they came from.

Mozilla also said improvements to its JavaScript engine will enable applications such as Google Mail and Zoho Office to run twice as fast in Firefox 3 compared to Firefox 2. It will also use less memory than previous versions.

Mozilla offered no timeframe for launching the final version of Firefox 3, though executives previously have said it will be available in June. "The final version of Firefox 3 will be released when we qualify the product as fully ready for our users," the outfit said in the release notes for RC1 on its site.

Gates says big changes in store for Internet in next decade

SEOUL, South Korea (AP) - Microsoft Chairman Bill Gates said there will be a vast shift in Internet technology over the next decade as he met Tuesday with South Korean President Lee Myung-bak.

"We're approaching the second decade of (the) digital age," the software mogul and philanthropist told Lee at the start of their meeting at the presidential Blue House, according to a media pool report.

"The Internet has been operating now for 10 years," Gates said. "The second 10 years will be very different."

Microsoft Corp., the South Korean government and South Korean companies are investing $313 million in information technology for vehicles, games and education, according to a Blue House statement.

Microsoft and automakers Hyundai Motor Inc. and Kia Motors Corp. announced earlier Tuesday a deal to use Microsoft's in-car software, which allows people to control music and telephones with voice commands.

The company has a one-year exclusivity deal on the software with Ford Motor Co. in the U.S., but that expires in November. Fiat also has been selling cars with the software.

"We're doing some very interesting work on automobile software," Gates said after having dinner with Lee. "That's a really wide open area where some very exiting things will come out of."
Lee, a conservative former construction CEO, swept into office in February with a vow to boost economic growth through deregulation and increasing foreign investment.

In the Blue House statement, Gates was quoted as saying that new deals would boost South Korea's economic growth by as much as $6.9 billion over the next five years.

Gates, at a later event sponsored by South Korean television network SBS, talked about the future of software and human interaction in the next decade.

"We can expect that the variety and quality of software will accelerate in the years ahead," the Microsoft co-founder said.

Gates added that "natural interaction" between hardware and software was finally becoming possible, citing as an example speech commands to computers.

"The whole environment will be very, very different," he said.

Microsoft also said Tuesday that it will invest $280 million to build a research and development center in China's capital Beijing, and will double the number of its full-time research staff in China to 3,000 in three to five years.

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IBM CEO Palmisano Says New Trends Will Spur Old Company

By Paul McDougall - InformationWeek

In addition to data centers, IBM expects to capitalize on the 3 billion people joining the middle class in the next 20 years.

IBM, which in recent years has struggled to grow its core software and services businesses, is counting on three trends to add some oomph to its top line, CEO Sam Palmisano said Thursday.

Palmisano said the company is poised to benefit from growth in emerging markets beyond the so-called BRICs -- Brazil, Russia, India, and China. IBM is also well positioned to extract more revenue from midmarket customers that want high-end technology and from large businesses that need to reduce data center costs and energy consumption.

"The world is changing ... and we need to make some adjustments," said Palmisano, speaking in Los Angeles to a group of IBM business partners.

Palmisano said IBM's efforts to expand its footprint in global tech hotspots like India and China have paid off, but noted that other parts of the emerging world are driving growth as well. "It's not just the BRICs, there are 50 or 60 others," he said.


"Three billion people will enter the middle class in our lifetime," said Palmisano. Much of that growth, he said, "will be supported by IT."


Another opportunity for IBM is the growing appetite among small and midsize businesses for enterprise-class technology. "That's a $500 million spend," said Palmisano.


Palmisano said IBM is also ready to profitably serve smaller customers thanks to its efforts to build out, along with Google, an infrastructure that enables it to deliver software and services through the Internet. The cloud, Palmisano said, is a virtual "application marketplace" that promises low overhead and high margins.

IBM's plan: to create a "Google like technical infrastructure that takes success in the consumer market and applies it to the consumer market," Palmisano said.

Palmisano said IBM also expects to profit from the fact that large corporate data centers need to be transformed in order to reduce space and energy requirements. "Those technologies have not been managed well," said Palmisano, noting that most companies spend three times more managing their data centers than they did buying the parts.

Data center modernization efforts will benefit IBM because it is, by virtue of its software, server, and services arms, the only vendor able to "solve problems end to end," Palmisano said.

"The solution is not a different router," Palmisano said. "Don't dumb down the problem."

Palmisano noted that IBM will be 100 years old in three years, but said that doesn't mean it can't cash in on new computing trends. "We don't mind being old. We're disciplined," he said.

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Adobe moves to broaden Flash reach

No doubt, Adobe System's Flash is popular: it's installed on 99 percent of all PCs, according to the company.

But when it comes to mobile devices and other non-PC platforms, Flash is an also-ran. One reason for that situation, according to Adobe, is the lack of good development tools and the company's own restrictive licensing.

A new program, announced by Adobe on Thursday, is intended to remedy that problem. The program, called the Open Screen Project, is an industry alliance, of sorts, initiated by Adobe that includes prominent device manufacturers, content developers, and telecommunications carriers.

Open Screen is being spearheaded by Adobe. But the company is working with Nokia, Sony Ericsson, Qualcomm, Chunghwa Telecom, Samsung, Motorola, NTT Docomo, Toshiba, Verizon Wireless, ARM, Intel, Marvell, NBC, MTV, and the BBC. It's "a who's who in the industry," said David Wadhwani, general manager and vice president of the Platform Business Unit at Adobe.

"It's time for the industry to provide a consistent platform for development across PCs, mobile devices, set-top boxes, and other platforms," said Wadhwani. "There are five times the number of connected devices than PCs in the world. The consumer market is demanding video and rich content across all of these screens," he said.

Adobe's answer to the problem--no surprise--is Flash, and later Adobe's AIR software. The company's goal is to establish Flash as the common runtime software on a variety of devices and to rapidly gain market share. What about Java, Sun Microsystems' "write once, run anywhere" software, you ask? Wadhwani dismisses Java's viability. "Java does happen to be running on these devices. But not necessarily write once, run anywhere."

Sun was not immediately available for comment.

Wadhwani said the Open Screen project has five basic elements. Adobe will remove license restriction on the .swf file format. "It is published already, but in order to view it you have to say you will not create a competing player," said Wadhwani. "We're lifting that restriction. People have been worried about vendor lock-in. This will remove that obstacle, and concern."

Adobe will also remove licensing fees for embedding Flash Player on devices. The software has always been a free download for PC users. But Adobe has charged for embedding on devices. Those charges will disappear with the next release of the software.

Adobe will also publish a variety of APIs and protocols related to Flash.

Clearly, some big names will likely not be participating in Adobe's plans. Sun and Microsoft, for starters. Sun has Java; Microsoft has a variety of Windows technology for mobile devices and has developed its own Flash-like software called Silverlight.

Apple and Google are also not involved in the project. Wadhwani said that Adobe will be actively recruiting additional partners, however.

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