Wednesday, February 29, 2012

Complete DHS Daily Report for February 29, 2012

Daily Report

Top Stories

• The U.S. Department of Energy said fuel markets in the Northeast could be significantly impacted if Sunoco closes a Philadelphia refinery in June. The closure could lead to tight supplies and price spikes. – Philadelphia Inquirer (See item 2)

2. February 28, Philadelphia Inquirer – (Northeast) U.S. report: Fuel markets ‘significantly impacted’ by refinery shutdowns. The U.S. Department of Energy February 27 said fuel markets in the Northeast “could be significantly impacted” if Sunoco closes its Philadelphia refinery in June, leading to tight supplies and price spikes in some areas. The report from the U.S. Energy Information Administration (EIA) said supplies of ultra-low sulfur diesel would be most affected by refinery shutdowns and transportation constraints. The potential loss of the Sunoco Philadelphia refinery “presents a complex supply challenge, and no single solution has been identified by industry participants that will address all of the logistical hurdles that must be overcome.” Pittsburgh and western New York state, which now are supplied through pipelines from the Philadelphia refineries, would most likely suffer if supplies of diesel and heating oil were constrained. Sunoco, headquartered in Philadelphia, announced in 2011 it would shut down its 335,000 barrel-per-day refinery if it could not find a buyer by June. The plant along the Schuylkill accounts for 24 percent of the refining capacity in the Northeast. Source:

• Iowa’s underground water supply may not be able to meet the future demand from industry and urban sprawl, according to a state agency. It said communities must now plan to drill wells or pipe in water from new sources. – Associated Press (See item 23)

23. February 28, Associated Press – (Iowa) Iowa may not have enough water to meet future need. Iowa’s underground water supply may not be able to meet the future demand from industry and urban sprawl, according to the Iowa Department of Natural Resources, saying some communities must start planning now to drill new wells or to pipe in water from new sources. The agency has been surveying water supplies in the state’s aquifers over the past 4 years, the Associated Press reported February 28. An Iowa State University geologist said Iowa has the poorest water planning in the Midwest, with plans that have not been fully updated since 1985. He said that could be a problem with water needed for ethanol production, geothermal systems, growing towns, and new industries. The DNR’s survey uses the latest computer modeling techniques to show which places will have water in coming years and which will not. Geologists need another 5 to 10 years to complete the project, which costs about $500,000 a year. Iowa gets most of its water from the Jordan and Silurian aquifers. Both are showing signs of stress, and geologists are already concerned about whether the Cedar Rapids-Iowa City area, one of the fastest growing parts of the state, will have enough water decades from now. Source:


Banking and Finance Sector

9. February 28, Detroit Free Press – (Michigan) Former city official indicted on $84 million kickback scheme. A former Detroit city treasurer has been indicted on charges he took bribes and kickbacks in a scheme that cost two Detroit pension funds $84 million in losses, the U.S. attorney’s office announced February 28. According to the indictment, the former treasurer took the bribes in exchange for approving more than $200 million in investments by the two City of Detroit pensions. It said the bribes, paid to the treasurer and his co-conspirators, came from individuals with business before the General Retirement System and the Police and Fire Retirement System of the City of Detroit. As city treasurer, the man was a member of the boards of trustees of the pension systems, and he had a responsibility to make decisions in the best interests of retirees and beneficiaries, authorities said. According to the indictment, between January 2006 and September 2008, when the treasurer conspired with others to defraud current and retired City of Detroit employees who contributed to the two pension funds. It alleges he deprived the employees of their right to honest services free of bribery and corruption. He is also charged with five counts of extortion or attempted extortion. Source:

10. February 28, Associated Press – (Maryland; International) Feds seize gambling site Bodog, indict founder. The sports gambling site Bodog was shut down and four Canadians indicted, including the site’s founder, for illegal gambling that generated more than $100 million in winnings, federal prosecutors announced February 28. The Web site’s domain name was seized February 27 and the indictments, which were handed down February 22, were unveiled February 28 in Baltimore, prosecutors said. The indictments follow federal prosecutions in 2010 of three of the biggest Web sites involved in online poker. More than 75 company bank accounts in 14 countries have been frozen, and authorities are seeking $3 billion in fines and restitution, in that investigation. Gamblers in Maryland and elsewhere were sent at least $100 million by wire and check from 2005 to 2012, the U.S. attorney’s office said, adding Bodog conducted a $42 million advertising campaign between 2005 and 2008 to attract gamblers to its Web site. The operation allegedly moved funds from Bodog’s accounts in Switzerland, England, Malta, Canada, and elsewhere to pay winnings to gamblers. The four Canadians face up to 5 years for conducting an illegal gambling business, and 20 years for money laundering. faces a fine of up to $500,000 for gambling and money laundering. The four indicted Canadians are not in custody, but arrest warrants have been issued for them, officials said. Source:

11. February 28, Washington Post – (Maryland) Suspect used nuclear threat to rob Pr. George’s banks. Prince George’s County, Maryland police are on the lookout for a man they believe has committed a string of bank robberies by threatening to detonate a nuclear weapon, the Washington Post reported February 28. Police have released surveillance images of the suspect, who they believe has robbed at least four banks in the county since late December. The most recent robbery occurred February 27 at a M&T Bank branch in Clinton. The suspect walked into the bank and passed a note to a teller demanding money. Police said the same suspect is linked to three previous bank robberies — February 9 at a Capital One Bank branch in Largo; January 10 at a SunTrust Bank branch in Upper Marlboro; and December 29, 2010 at a Wells Fargo Bank branch in District Heights. In each incident, police said, the suspect handed a note to a teller demanding money and fled on foot. Each note contained a threat to detonate a nuclear weapon. The suspect did not show any visual evidence of such a device, according to a police spokesman. Source:

12. February 27, Fort Lauderdale Sun-Sentinel – (Florida; Tennessee) Palm Beach County residents charged with mortgage fraud. The U.S. attorney’s office in south Florida said it filed charges February 27 against several Palm Beach County residents alleging a multi-million dollar mortgage fraud. A former Wachovia Bank vice president and a local lawyer are among those charged. The defendants sought financing higher than the sales price for 17 properties in Florida and Tennessee, according to a press release from the attorney’s office. One of the defendants submitted loan applications containing false information and documentation, including false verifications of bank deposits from a Port St. Lucie man, who was then an assistant vice president for Wachovia, the U.S. attorney’s office said. The defendants were charged with one count of conspiracy to commit mail fraud in connection with the plan that involved $8 million in loan proceeds and $500,000 diverted for personal benefit, according to the press release. If convicted, the defendants face a statutory maximum sentence of 30 years in prison. Source:,0,4065512.story

13. February 27, U.S. Commodity Futures Trading Commission – (Illinois) Federal court in Illinois orders former futures trader to pay over $6.6 million for cheating customers. The U.S. Commodity Futures Trading Commission (CFTC) announced February 27 it had obtained a federal court order requiring a former Chicago Board of Trade (CBOT) floor trader and registered floor broker to pay a disgorgement and civil monetary penalty of $6,608,750 for aiding and abetting another trader’s scheme to cheat customers who placed orders in Five-Year Treasury Note futures contracts. The order stems from a complaint filed in January 2008 charging the man with fraud and non-competitive trading. The order permanently prohibits him from engaging in any commodity-related activity and from registering or seeking exemption from registration with the CFTC. A floor trader sold 2,274 Five-Year Treasury Note futures contracts on behalf ofcustomers to the broker at an arranged price that was much lower than the market price in a manner that was not executed openly and competitively as required by CFTC and CBOT rules. Following the purchase, the broker sold 485 of the contracts back to the trader in another noncompetitive trade and sold the remaining 1,789 contracts on the CBOT’s electronic trading platform at the prevailing, higher market price, realizing a personal gain of about $1.65 million. The court concluded the other trader’s customers were “disadvantaged to the tune of $2,048,781.” Source:

14. February 27, Bloomberg – (National) FBI fraud probes increase as insider trading ‘widespread’. Open FBI investigations into corporate, securities and commodity fraud increased 8.8 percent as of September 30, 2011, compared to 2010, the agency said in a report released February 27. The FBI had 2,572 such cases open at the end of the 2011 fiscal year, according to the report, up from 2,364 in 2010. The FBI report included data on financial crime probes during 2010 and 2011. There was an increase in insider trading probes, which are a “widespread problem” that has plagued the “fair and orderly operation” of securities markets, the report noted. The FBI is making greater use of wiretaps and undercover operations, which may provide the “best evidence” to prosecute financial crimes, the chief of the FBI’s financial crimes section said at a briefing in Washington, D.C. The FBI used wiretaps or undercover operations in more than 40 corporate, securities, and commodity cases in 2011, compared to less than 20 in 2008. The number of cases involving falsified financial data “remains relatively stable,” according to the report. The number of pending mortgage fraud cases declined 14 percent to 2,691 in 2011 from the 2010 fiscal year. Fraud targeting distressed homeowners has displaced loan originations as the biggest source of fraud in many FBI field offices, the report said. The FBI also had 2,690 pending health care fraud investigations at the end of fiscal 2011, up from 2,573 in 2010. Source:

Information Technology

34. February 28, H Security – (International) PostgreSQL updates close security holes. The PostgreSQL development team published updates for all actively supported branches of its open source relational database to fix bugs and close security holes found in the previous releases. Versions 9.1.3, 9.0.7, 8.4.11, and 8.3.18 correct a problem that prevented permission checks from being performed and a bug that may result in the successful verification of a spoofed SSL certificate. An input sanitization error that could be used to execute code when loading a pg_dump file was also fixed. These vulnerabilities could be exploited by an attacker to bypass security restrictions or conduct spoofing attacks and manipulate data. Versions up to and including 9.1.2, 9.0.6, 8.4.10, and 8.3.17 are affected; all users were advised to upgrade. Source:

35. February 27, Ars Technica – (International) SSL fix aims to mend huge cracks in ‘Net’s foundation of trust. An open-source software developer proposed an overhaul to the Internet’s secure sockets layer (SSL) authentication system, aiming to minimize damage that would result from the compromise of one of the authorities trusted by major browsers. Under version two of his Mutually Endorsing Certificate Authority (CA) Infrastructure proposal, people connecting to Google Mail, Twitter, and other sites protected by SSL would draw on one of three randomly selected notaries to verify that the digital credential being presented is valid. By comparing the SSL certificate’s contents to data contained in the voucher returned by the notary, the person’s Web browser or e-mail program could quickly spot credentials that have been forged, even when they have been signed using the private key of a legitimate certificate authority. The notaries — or “voucher authorities” as they are called — would be made up of existing CAs. Source:

36. February 27, IDG News Service – (International) Malware authors expand use of domain generation algorithms. Malware authors are increasingly adopting flexible domain generation algorithms (DGAs) to evade detection and prevent their botnets from being shut down by security researchers or law enforcement agencies. DGAs are generally used as a fallback mechanism for sending instructions to infected computers when the hard-coded command and control servers become unavailable. The algorithms generate a list of unique pseudo-random domain names every day. Clients ina botnet attempt to connect to them and receive commands when the primary servers cannot be reached. Knowing the algorithm allows malware authors to predict which domain names infected computers will attempt to access on a certain date, so they can register one of them in advance. Source:

For more stories, see items 10 above in the Banking and Finance Sector and 37, 38, and 39 below in the Communications Sector.

Communications Sector

37. February 28, Wall Street Journal – (International) Ship accidents sever data cables off East Africa. Undersea data cables linking East Africa to the Middle East and Europe were severed in two separate shipping accidents in February, causing telecommunications outages in at least nine countries and affecting millions of Internet and phone users, telecom executives, and governments, officials said. A ship dragging its anchor off the coast of the Kenyan port city of Mombasa severed a crucial Internet and phone link for the region February 25, crippling electronic communications from Zimbabwe to Djibouti, according to a public-private consortium that owns the cable. The Indian Ocean fiber-optic cable, known as The East African Marine Systems (Teams) was the fourth cable to be severed in the region since February 17. The Teams cable wsd rerouting data from three other cables severed 10 days ago in the Red Sea between Djibouti and the Middle East. Together, the four fiber-optic cables form the backbone of East Africa’s telecom infrastructure. Telecom companies were reeling the weekend of February 25 as engineers attempted to reroute data. The chief executive of West Indian Ocean Cable Co. said the Eastern Africa Submarine Cable System, the Europe India Gateway, and the South East Asia Middle East Western Europe-3 cables were severed at the same time, about 650 feet below the Red Sea. The cables were severed far out to sea, but he said a passing ship could have caused the damage because the Red Sea is unusually shallow. He said cable ships would repair the Red Sea cables within about 3 weeks. The general manager of Teams said plans were also under way to fix the Mombasa cable. Source:

38. February 27, Pensacola News Journal – (Florida) Internet outage fixed. Cox Cable has fixed an outage that affected 3,000 to 5,000 customers who live in Pensacola, Florida, the Pensacola News Journal reported February 27. The customers lost Internet and cable service. The outage appeared to be the result of a construction crew inadvertently cutting a Cox fiber line, a Cox public affairs manager said. Source:|newswell|text|FRONTPAGE|s

39. February 27, North Kitsap Herald – (Washington) Fiber cable cut, phone service out for 1,100 CenturyLink customers. A fiber optic cable was cut in the Kingston, Washington area, February 27, causing an outage affecting 1,100 CenturyLink customers. A CenturyLink spokeswoman said she did not know who or what was responsible. “The outage impacts inbound, outbound and Internet services as well as 911 services,” she said. “It is CenturyLink’s priority to restore 911 services as soon as possible.” Source:

40. February 27, KCSR 610 AM Chadron – (Nebraska) KBPY back on air. Western Nebraska’s Real Rock KBPY 107.7 FM Hay Springs is back on the air February 27, but was running at lower power. After assessing the situation, engineers were able to get the station back up and running. However, the station will go off air for a brief time February 28 for final repairs to be made. The expected down time will be just 30 minutes. The station had been off the air since late February 25 when two problems were found at the transmitter site. KBPY is expected to be operating at full power by February 28. Source: