The accused ringleader of a cyber fraud gang that allegedly rented out access to a criminal cloud hosting service known as “Avalanche” is now a fugitive from justice following a bizarre series of events in which he shot at Ukrainian police, was arrested on cybercrime charges and then released from custody.

Gennady Kapkanov. Source: NPU.gov

Gennady Kapkanov. Source: NPU.gov

On Nov. 30, authorities across Europe coordinated the arrest of five individuals thought to be tied to the Avalanche crime gang, in an operation that the FBI and its partners abroad described as an unprecedented global law enforcement response to cybercrime.

According to Ukrainian news outlets, the alleged leader of the gang — 33-year-old Russian Gennady Kapkanov — did not go quietly. Kapkanov allegedly shot at officers with a Kalashnikov assault rifle through the front door as they prepared to raid his home, and then attempted to escape off of his 4th floor apartment balcony.

Ukrainian police arrested Kapkanov and booked him on cybercrime charges. But a judge in the city of Poltava, Ukraine later ordered Kapkanov released, saying the prosecution had failed to file the proper charges (including charges of shooting at police officers), charges which could have allowed authorities to hold him much longer. Ukrainian media reports that police have since lost track of Kapkanov.

Ukraine’s Prosecutor General Yuri Lutsenko is now calling for the ouster of the prosecutor in charge of the case. Meanwhile, the Ukranian authorities are now asking the public for help in re-arresting Kapkanov.

kapkanovguns

Weapons police say they seized from Kapkanov’s apartment. Source: npu.gov.ua

Built as a criminal cloud-hosting environment that was rented out to scammers, spammers other ne’er-do-wells, Avalanche has been a major source of cybercrime for years. In 2009, when investigators say the fraud network first opened for business, Avalanche was responsible for funneling roughly two-thirds of all phishing attacks aimed at stealing usernames and passwords for bank and e-commerce sites.  By 2011, Avalanche was being heavily used by crooks to deploy banking Trojans.

The U.K.’s National Crime Agency (NCA), says the more recent Avalanche fraud network comprised up to 600 servers worldwide and was used to host as many as 800,000 web domains at a time.

Kapkanov, in blue with his hands over his head, standing on his 4th-floor balcony. Image: npu.gov.ua

Kapkanov, in blue with his hands over his head, standing on his 4th-floor balcony. Image: npu.gov.ua

Kapkanov's drivers license. Source: npu.gov.ua.

Kapkanov’s drivers license lists an address in the United Kingdom. Source: npu.gov.ua.

Source: krebsonsecurity

In what’s being billed as an unprecedented global law enforcement response to cybercrime, federal investigators in the United States, United Kingdom and Europe today say they’ve dismantled a sprawling cybercrime machine known as “Avalanche” — a distributed, cloud-hosting network that for the past seven years has been rented out to fraudsters for use in launching countless malware and phishing attacks.

The global distribution of servers used in the Avalanche crime machine. Source: Shadowserver.org

The global distribution of servers used in the Avalanche crime machine. Source: Shadowserver.org

According to Europol, the action was the result of a four-year joint investigation between Europol, Eurojust the FBI and authorities in the U.K. and Germany that culminated on Nov. 30, 2016 with the arrest of five individuals, the seizure of 39 Web servers, and the sidelining of more than 830,000 web domains used in the scheme.

Built as a criminal cloud-hosting environment that was rented out to scammers, spammers other ne’er-do-wells, Avalanche has been a major source of cybercrime for years. In 2009, when investigators say the fraud network first opened for business, Avalanche was responsible for funneling roughly two-thirds of all phishing attacks aimed at stealing usernames and passwords for bank and e-commerce sites.  By 2011, Avalanche was being heavily used by crooks to deploy banking Trojans.

The U.K.’s National Crime Agency (NCA), says the more recent Avalanche fraud network comprised up to 600 servers worldwide and was used to host as many as 800,000 web domains at a time.

“Cyber criminals rented the servers and through them launched and managed digital fraud campaigns, sending emails in bulk to infect computers with malware, ransomware and other malicious software that would steal users’ bank details and other personal data,” the NCA said in a statement released today on the takedown. The criminals used the stolen information for fraud or extortion. At its peak 17 different types of malware were hosted by the network, including major strains with names such as goznym, urlzone, pandabanker and loosemailsniffer.At least 500,000 computers around the world were infected and controlled by the Avalanche system on any given day.”

The Avalanche network was especially resilient because it relied on a hosting method known as fast-flux, a kind of round-robin technique that lets botnets hide phishing and malware delivery sites behind an ever-changing network of compromised systems acting as proxies.

“The complex setup of the Avalanche network was popular amongst cybercriminals, because of the double fast flux technique offering enhanced resilience to takedowns and law enforcement action,” Europol said in its statement.

It’s worth noting here that Avalanche has for many years been heavily favored by crime gangs to deploy Zeus and SpyEye malware variants involved in cleaning out bank accounts for a large number of small to mid-sized businesses. These attacks relied heavily on so-called “money mules,” people willingly or unwittingly recruited into helping fraudsters launder stolen funds.

At the time of the takedown, the Avalanche cybercrime infrastructure spanned more than 180 countries, according to The Shadowserver Foundation, a nonprofit group that helped authorities gain control over the Avalanche domains. Read more on Shadowserver’s role in this effort here.

The Avalanche crime infrastructure.

The Avalanche crime infrastructure. Image: Europol

Source: krebsonsecurity