Report: FBI Probes Citigroup Breach

Federal officials say they are investigating loss of tens of millions of dollars; Citigroup says there was no breach or loss

Dark Reading Staff, Dark Reading

December 23, 2009

2 Min Read

Citigroup reportedly was hit by a major breach with ties to a Russian cybercriminal organization, but the financial institution denies any breach or monetary losses.

A Wall Street Journal article today reported the FBI was investigating the loss of tens of millions of dollars in a breach that may have spanned several months to a year. Sources in the article said the attack may have ties to the infamous Russian Business Network, which all but disappeared from the radar screen during the past couple of years.

But Citigroup, whose Citibank subsidiary was the victim of the attack, says the attack didn't happen, nor is there any FBI investigation. Joe Petro, managing director of Citigroup's security and investigative services, told the Journal: "We had no breach of the system and there were no losses, no customer losses, no bank losses."

It's unclear just how the attackers may have gotten access to Citibank's systems, but the report says the attackers used the so-called Black Energy botnet as one weapon. The Black Energy malware can be used to break into a system and steal data.

Michael Graven, a director at Mandiant, says the attack on Citigroup appears to be consistent with the attacks his firm has seen with Eastern European gangs during the years. "These [sophisticated] intruders understand their target, how it does business, and how its business systems are organized," Graven says.

"In banking, they understand how a banking system works, the ATM infrastructure, and how money moves through their target so they can get at it. They are hackers and they are bank thieves."

Meanwhile, security experts say the discrepancy between the report and Citibank's denial raises other questions.

"I understand why Citigroup doesn't want to talk about cyber security. Back in 2007 and 2008, their systems were tied to a major ATM heist connected with a Website breach at 7-Eleven convenience stores. Given the economic fallout from those events, it's no surprise they are going to be extremely cautious about anything to do with security," said Andrew Storms, director of security operations for nCircle, in a statement. "Still, this whole story smells pretty funny. Citigroup denies all allegations of a breach but the FBI won't comment? That's a pretty glaring inconsistency."

The federal government holds a 27 percent stake in Citigroup, which has more then $45 billion in TARP funds, Storms pointed out. "Given that the federal government is one of Citi's largest shareholders with a 27 percent stake, and that Citi still has over $45 billion in TARP funds, you have to wonder if there isn't some other triage being done here that has more to do with Citi's battered stock price than fair disclosure," he says.

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Dark Reading Staff

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