Busted Alleged Russian Spies Used Steganography To Conceal Communications

In a case that smacks of a Cold War spy novel, the FBI has arrested 11 suspected Russian spies who for years had blended into day-to-day American life in the suburbs and cities. Aside from hiding their true identities and posing as legitimate American citizens, the suspects also masked their communications with their intelligence agency back home in Moscow, using an oft-forgotten form of stealth communication -- steganography.

According to U.S. Department of Justice legal filings, the defendants used a steganography tool, one that is not available commercially, to conceal their electronic communiques with Russian officials in the so-called SVR, a Russian Federation foreign intelligence body.

Steganography hides text or images within image files or other innocuous-looking files. The alleged spies used steganography to hide messages within digital images on websites: "The software package permits the SVR clandestinely to insert encrypted data into images that are located on publicly-available websites without the data being visible," according to one of the DoJ's legal filings. "The encrypted data can be removed from the image, and then decrypted, using SVR-provided software. Similarly, SVR-provided software can be used to encrypt data, and then clandestinely to embed the data in images on publicly-available websites."

FBI agents discovered the steganography software during their forensics investigations of computer disks they recovered in the Boston, Seattle, and New Jersey residences where some of the suspects lived, according to the legal filings (PDF), which detail how the suspects assimilated themselves in the U.S. in order to glean U.S. secrets, including nuclear weapons research, for Moscow.

To date, forensics and security experts have mostly considered steganography too complex to be much of a mainstream threat. But a study by Purdue University in late 2007 found that some criminals, indeed, were using steganography tools, mainly in child pornography and financial fraud activities. Purdue's preliminary research showed proof that steganography tools were installed on convicted criminals' computers in some cases.

Approximately 800 steganography tools are available online, many of them free and with user-friendly graphical user interfaces. Some security experts have worried that such easily accessible and easy-to-use tools could make it easier for bad guys to hide and move stolen or illicit data or information.

But for the most part, steganography hasn't been considered a serious threat in comparison to other cybercrime activities. James Goldman, professor and associate department head of Purdue's Department of Computer and Information Technology, says he hasn't seen much evidence of steganography use since his previous research, and funding for steganography research has basically dried up. He currently focuses on malware research, in general, including Zbot, which has been known to be distributed by Russian servers, for instance.

"Based on what I have seen from malware research, these people are incredibly adept at taking advantage of our assumptions and blind spots," Goldman says. "To be more specific, it would not surprise me if these adversaries know that we have de-emphasized our interest in steg and therefore making it all the more appealing to them."

James Wingate, director of the steganography analysis & research center at Backbone Security, and a vice president there, says the alleged spies' use of steganography indicates that other undercover groups hiding out in the U.S. are also likely using it for their covert communications. "I think this only serves to highlight the fact that use of digital steg is a much more widespread threat than anyone really knows," he says.

Meanwhile, among the communications decrypted by the FBI in its investigation was one between "Moscow Center" (referred to as "C" in the message) and two of the defendants, which U.S. officials say spells out the suspects' reason for residing in the U.S.: "You were sent to USA for long-term service trip. Your education, bank accounts, car, house etc. -- all these serve one goal: fulfill your main mission, i.e., to search and develop ties in policymaking circles in U.S. and send intels [intelligence reports] to C," the message read.

Law enforcement agents also copied a computer hard drive during a search of a New Jersey residence inhabited by one pair of the suspects, and found in their analysis an address book with links to a number of websites, which had links to other websites as well. They downloaded images from the websites and then analyzed the images, which contained more than 100 text files hidden within them.

The 11 defendants are being charged with conspiracy (PDF) and, in some cases, money-laundering as well. None have been charged with stealing any classified or sensitive information, however.

Have a comment on this story? Please click "Discuss" below. If you'd like to contact Dark Reading's editors directly, send us a message.