Friday, August 26, 2011

Complete DHS Daily Report for August 26, 2011

Daily Report

Top Stories

 Three million gallons of raw sewage are streaming into the Missouri River each day in Omaha, Nebraska, after heavy rains took out four pumping stations the week of August 22, adding another six million gallons to untreated water daily since a station went out in June. – KETV 7 Omaha (See item 26)

26. August 24, KETV 7 Omaha – (Nebraska) Heavy rain takes out four pumping stations. Heavy rain the week of August 22 took out four pumping stations in Omaha, Nebraska. Three of the pumping stations — Pierce Street, Hickory Street, and River View — could be offline for weeks since their electrical components are underwater. Three million gallons of raw sewage is streaming into the Missouri River each day as a result, adding another six million gallons to untreated water every day since a station went out in June. With the gates closed since June, there is no place for heavy rainfall to go. ―When you get this much water, it pools up. It either floods transformers or it causes power outages to where the water cannot go anyplace. And it shorts out everything, and it’s a major repair to fix those,‖ one official said. The city plans to have a meeting with Federal Emergency Management Agency officials later the week of August 22. Source:

 The governors of Virginia, New Jersey, and Maryland declared emergencies for their states, and the North Carolina governor declared a state of emergency in the eastern part of the state August 25 as Hurricane Irene threatened the United States’ Eastern Seaboard. – CNN (See item 31)

31. August 25, CNN – (National) Irene’s flooding ‘could be a hundred-year event’. Four governors declared states of emergency August 25 as Hurricane Irene threatened to wreak havoc along the United States’ Eastern Seaboard. The governors of Virginia, New Jersey, and Maryland declared emergencies for their states, while the North Carolina governor declared a state of emergency in counties east of Interstate 95. If Irene continues along its current track, ―from a flooding perspective, this could be a hundred-year event,‖ The New Jersey governor said. He encouraged voluntary evacuations to begin immediately. In parts of North Carolina, mandatory evacuations were under way August 25. As of 2 p.m. ET, the Category 3 storm was pounding the Bahamas, with its eye over Abaco Island, the National Hurricane Center said. ―The core of the hurricane will continue to move over the northwestern Bahamas (August 25), and pass well offshore of the east coast of central and north Florida tonight and early (August 26). The hurricane is forecast to approach the coast of North Carolina on (August 27),‖ the center’s advisory said. Source:


Banking and Finance Sector

12. August 25, Reuters – (International) Chicago hedge fund manager pleads guilty to fraud. A former managing director of the collapsed Chicago hedge fund Lake Shore Asset Management pleaded guilty on August 24 for his role in what prosecutors called a $291.8 million worldwide fraud. The Canadian citizen admitted to one count of wire fraud, according to the office of the U.S. Attorney in Chicago. The 46-year-old has been in U.S. custody since December 2009, six months after a 27-count indictment against him was made public. He had been living in Hamburg, Germany at the time and was arrested there in July 2009. Under a plea agreement, prosecutors will recommend the maximum 20 years in prison. He will also pay about $154.8 million in restitution. According to the plea agreement, the man from 2002 to September 2007 obtained the $291.9 million from about 900 investors he fraudulently solicited to invest in commodity pools, for the purpose of trading futures. Prosecutors said he advertised annual double-digit returns from some Lake Shore investments, reaching as high as 55.5 percent, when in fact he was hiding millions of dollars of trading losses. They said he diverted about $33 million for personal use by himself and another Lake Shore director. The Commodity Futures Trading Commission won a court order in August 2007 freezing Lake Shore’s assets and a receiver was appointed that October. More than $100 million has been returned to investors so far, the U.S. Attorney’s office said. Source:

13. August 25, Media News Group – (California) Armored car robbery ends in bloody battle. A botched armored car robbery turned into a bloody shootout August 24, as two brothers exchanged gunfire with a guard and two Pinole, California police officers, leaving one robber dead and a cop and two others wounded. It was not the first time the brothers were suspected of armored car robbery. Police had warrants issued for both in connection with a similar attempt in May at a bank a mile away, police sources said. One of the brothers was killed and the other was wounded. The injured police officer was hospitalized August 24 with a shoulder wound. The August 24 holdup unraveled when the Loomis guard and two robbers shot rounds at one another about 9:20 a.m. in front of a Wells Fargo branch on Fitzgerald Drive. The robbers ran, one toward Fitzgerald Drive into the path of two Pinole police officers rushing to the emergency call and shot one officer, the Pinole police chief said. A second officer fired back, killing the man. The second brother briefly escaped, and droves of police from Richmond, Pinole, Hercules, San Pablo, and the Contra Costa Sheriff’s Office combed the shopping center with dogs searching for him. Emergency room workers at Doctors Medical Center in San Pablo reported the suspect had arrived with a gunshot wound. Richmond detectives months ago arrested one brother and a 25-year-old man after they tried to grab a bag of money from an armored transport guard May 25 at a different bank near Hilltop mall, law enforcement sources said. Source:

14. August 24, Associated Press – (Florida; New York) Ex-analyst ordered to pay $34.5M in SEC case. A federal judge August 23 ordered a former Moody’s Investors Service analyst to pay $34.5 million after he fled the country to avoid facing insider-trader charges. Government officials filed criminal and civil insider-trading charges against the analyst in 2009. The government has said the man received money for giving confidential information on company acquisitions to a leading figure in the Galleon case, the largest hedge fund insider-trading investigation in history. He has not responded to the suit and is believed to be in India, the Securities and Exchange Commission said. He was ordered to pay a $24.6 million fine and $9.9 million in restitution plus interest. The analyst, who was a hotel industry analyst for Moody’s in New York, was accused of passing tips about acquisitions on to a Florida investor who pleaded guilty in 2009 to criminal conspiracy and securities fraud charges. The Florida investor has been cooperating with the government’s investigation. The Moody’s analyst received cash from the investors and others in exchange for confidential information, the government said. The probe has resulted in more than two dozen arrests and 21 guilty pleas. It also has led to a second investigation into industry consultants who pass along inside information as the product of legitimate research. Source:

15. August 24, Miami Herald – (National) New charges linked to scam. A one-time Fort Lauderdale, Florida executive who is already accused of running the state’s biggest investment scam was charged again August 24 with laundering millions of dollars through homes in the Northeast, hiding assets from federal authorities and lying to a court-appointed receiver who was seeking to reimburse fleeced investors. The former Mutual Benefits Corp. vice president (VP) was arrested by FBI agents August 24 on charges of conspiring to divert tainted proceeds from the now-defunct company to buy properties in Camden, New Jersey, Maine, and New York City. The purpose: to support a ―lavish lifestyle’’ with his longtime partner, according to an indictment. The partner was arrested in Maine and will soon be transferred to Miami. The 54-count indictment charges the two men with conspiracy, money laundering, and obstruction of justice. The former VP was charged in the original fraud indictment in late 2008, along with his brother and two Fort Lauderdale lawyers, one of whom recently pleaded guilty. They were accused of conspiring to bilk investors on the sale of $1.25 billion worth of life insurance policies once held by people dying of AIDS. Some 30,000 investors lost $830 million between 1994 and 2003, according to prosecutors. The latest criminal case accuses the two men of plotting to funnel nearly $11 million of Mutual Benefits proceeds through a consulting business, using the money for their Northeastern homes and lying about the real value of their assets to the court-appointed receiver for Mutual Benefits. To obtain a favorable settlement with the Securities and Exchange Commission, the men submitted a series of false and misleading documents to conceal their true financial condition, according to the indictment. Source:

16. August 24, Associated Press – (New Hampshire) Secret Service joins probe of NH fake checks. Three men charged with passing counterfeit checks at a popular New Hampshire shopping outlet had a stash of hundreds of stolen identities from around the country, authorities said. The men each had eight to ten fake IDs on them and matching counterfeit checks when they were arrested August 23, the Tilton Police chief said. The Secret Service and U.S. Attorney’s office are joining Tilton police to unravel the scheme. Police said they were alerted to the trio by an off-duty loss prevention investigator who thought he recognized one of the men from a flier distributed at a national intelligence conference. Plain-clothed officers were able to verify the checks were counterfeit while the men shopped, the police chief said. Officers stopped their rented van as it exited the Tanger Outlet Center. Police got a search warrant for the van and found a trove of counterfeit check-printing equipment, magnetic ink to mirror that used on legitimate checks, and detailed information on hundreds of stolen identities, the police chief said. He said the men had made fake licenses bearing their image and using the stolen identity information. The men were charged with counterfeiting, check fraud, identity theft, and organized retrial crime. The three were operating throughout New England, hitting high-end stores as they bounced from state to state, he said. The men also were counterfeiting payroll checks and cashing them at big-box stores, the police chief said. He said he has already fielded a call from one store that is looking for a suspect who cashed more than $400,000 in counterfeit payroll checks. Source:

17. August 24, Naples Daily News – (Florida) Deputies: 3 men caught with 52 fake gift cards. Three Miami men face felony counterfeit charges after Collier County, Florida sheriff’s deputies found 52 fake gift cards among the 117 cards in their car August 22. Each man was arrested on a single charge of possessing counterfeit credit cards following a deputy’s discovery of the cards during a routine traffic stop, according to a sheriff’s office report. All three remain in Collier County Jail. The trio was pulled over for speeding on Interstate 75. A deputy asked for and received permission to search the car, the report said. A total of 117 gift cards and 38 cartons of cigarettes were found in the car, the report said. Scans showed the card number embedded on magnetic strips did not match the numbers listed on the front of 52 cards. The other 65 were valid. Lee County sheriff’s deputies made a counterfeit card bust August 23 on Interstate 75. The 46-year-old man was arrested and faces 43 charges of possessing counterfeit credit cards. Deputies said they found him with cards cloned to match a fake driver’s license, with the potential to make a total of $350,000 in purchases. Source:

Information Technology Sector

36. August 25, Softpedia – (International) Zero-day vulnerability exploited in PrestaShop. The PrestaShop developers warned users hackers are exploiting a zero-day vulnerability in the e-commerce solution and is urging them to deploy a fix. The vulnerability was identified when PrestaShop’s own Web site was hacked August 23, an event that put the development team in full alert. ―Last night, the PrestaShop’s official website,, was hacked, resulting in the misappropriation of a script intended for transcribing news information in the Back Office of PrestaShop stores,‖ the developers announced. ―The entire PrestaShop team dedicated ourselves to identifying and fixing this issue as quickly as possible. That fix has been completed,‖ they add. Versions 1.4, 1.4.1, 1.4.2, 1.4.3, and 1.4.4 of the popular open source e-commerce solution are vulnerable, but not all installations are necessarily affected. Source:

37. August 25, H Security – (International) phpMyAdmin updates close XSS hole. The phpMyAdmin developers announced the release of versions 3.4.4 and of their open source database administration tool. According to the security advisory, the maintenance and security updates close a hole (CVE-2011-3181) in the Tracking feature that leads to multiple cross-site scripting (XSS) vulnerabilities. The exploit is caused due to improper sanitization when input is passed to the table, column, and index names. For an attack to be successful, an attacker must be logged in via phpMyAdmin. Versions 3.3.0 to are affected and the developers consider the problem to be serious. Updating to phpMyAdmin or 3.4.4 fixes the problem. Alternatively, users can apply the provided patches. Source:

38. August 24, Network World – (International) MIT researchers craft defense against wireless man-in-middle attacks. MIT researchers devised a protocol to flummox man-in-the-middle attacks against wireless networks. The all-software solution lets wireless radios automatically pair without the use of passwords and without relying on out-of-band techniques such as infrared or video channels. Dubbed Tamper-evident pairing, or TEP, the technique is based on understanding how man-in-the-middle attacks tamper with wireless messages, and then detects and in some cases blocks the tampering. The researchers suggest that TEP could have detected the reported but still unconfirmed cellular man-in-the-middle attack that unfolded at the Defcon conference earlier in August in Las Vegas, Nevada. Source:

39. August 24, Help Net Security – (International) Install one trojan, get three more. Downloader trojans are often used by cyber criminals to thoroughly infect systems in order to extract anything that might be of value to them. Trojan.Badlib is a particularly effective piece of malware belonging to that particular category, effectively acting as a malware distribution network. When Badlib is firstly installed and detects an Internet connection, it tries to reach a C&C server in order to receive commands from it. It searches for it on a number of hard-coded domains, and if it does not find it, it proceeds to check out several IP addresses on a default list. Once the C&C is contacted, it instructs the trojan on where to download further malware. The response includes the number of files it has to download and their digital signature so as to make sure it downloads the right ones. According to Symantec researchers, Badlib is currently downloading three distinct trojans: Trojan.Badfaker, Trojan.Badminer, and Infostealer.Badface. Trojan.Badfaker’s goal is to disable the AV solution on the infected computer and to hide that fact from the user. Once it detects and recognizes the running AV software, it modifies Windows to boot into safe mode when it next boots up. Then, it deletes all the files and folders related to that AV it can find, but not before extracting the the icon from the main executable file, which it will continue to display in the system tray in order to preserve the illusion that the legitimate AV is still running. Next, it proceeds to disable the Windows Firewall and warnings from Microsoft Security Center, and ends with occasionally showing fake warnings about infections mimicking the (now disabled) legitimate AV. Trojan.Badminer aims at using the power of the infected computer’s GPU to mine Bitcoins. Infostealer.Badface’s goal is to harvest login credentials for a number of popular social networks. It does that by creating a local Web server through which the traffic destined for those sites is redirected. Source:

Communications Sector

40. August 25, Mohave Daily News – (Arizona) Suddenlink working to correct outages. As St. Louis-based Suddenlink Communications works to upgrade and replace the existing system left behind by NPG Cable, its technicians have had to make a number of post-replacement tweaks due to the region’s unusual temperature extremes in Arizona. For several weeks, Suddenlink technicians have been replacing the region’s old NPG ―nodes,‖ outdoor boxes that contain many of the components that control the phone, cable, and internet for the surrounding neighborhood. According to Suddenlink’s regional director of operations, each node provides service to between 250 and 400 households, with dozens of nodes spread throughout the company’s coverage area. The problem, he said, is that the equipment in each node is heat-sensitive, and it must be re-calibrated to work in the right temperature range. The regional director of operations acknowledged a fairly sizable outage had occurred along sections of Hancock Road over the weekend of August 19, creating a maintenance backlog for some customers in the area. Suddenlink is nearly finished replacing the region’s remaining nodes, and the new nodes should function better in prolonged heat waves than the previous ones did, he said. Source:

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