ID theft ring attacked retailers on multiple levels

A ring of identity thieves that targeted U.S. retailers used sophisticated and multifaceted attacks to steal more than 40 million credit and debit card numbers from TJX, OfficeMax, Barnes & Noble and other companies, according to court documents.

The attacks cost retailers and credit card companies tens of millions of dollars.

Members of the ID theft conspiracy used so-called wardriving techniques to find holes in wireless networks operated by retail stores. Once inside the networks, the thieves located and stole credit card transaction information stored on the retailers' networks, according to court documents.

The thieves also installed so-called sniffer software to capture password and account data on the stores' networks, and they used Internet-based attacks, including SQL injection attacks, to gain access to credit card databases.

The ID theft group stored the captured credit card numbers on compromised servers in the U.S., Latvia and the Ukraine, according to court documents. The thieves then encrypted the credit card numbers on those servers, according to the indictment document of Albert Gonzalez, the alleged ringleader of the ID theft scheme.

Gonzalez, of Miami, was indicted Tuesday in U.S. District Court for the District of Massachusetts on charges of computer fraud, wire fraud, access device fraud, aggravated identity theft and conspiracy. Ten other defendants have been indicted or charged with crimes in what's believed to be the largest ID theft and computer hacking investigation in the history of the U.S. Department of Justice, the DOJ announced Tuesday.

The indictment document for Gonzalez, who was working as an informant for the U.S. Secret Service while allegedly engaged in the scheme, sheds some light on the ID theft operation. The thieves were able to encode credit card information on blank cards that were used to obtain tens of thousands of dollars from cash machines in single visits, the court document says.

Among the attacks detailed in the court document:

-- In about 2003, Gonzalez and others found an unencrypted wireless access point at a BJ's Wholesale Club store. BJ's reported a breach of its computer networks in early 2004.

-- In 2004, other members of the ID theft ring compromised an OfficeMax wireless access point in Miami, and they were able to steal credit card data. After law enforcement officials in 2006 identified OfficeMax as the victim of a data breach, the company said it hired an outside auditor to conduct an investigation and found no evidence of a security breach. An OfficeMax spokesman didn't immediately return a message seeking comment.

-- In July, September and November of 2005, alleged ID theft ring member Christopher Scott compromised two wireless access points operated by TJX at Marshalls department stories in Miami. Scott used his access to repeatedly transmit computer commands to TJX's servers storing credit card information in Framingham, Massachusetts. TJX, which also owns TJ Maxx, HomeGoods and other retail outlets, reported data breaches in January 2007.

The IDG News Service is a Network World affiliate.