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16 July 2020

Group-IB helps to detain fraudsters that used cloned SIM cards to steal money from banks’ VIP customers

With the assistance of Group-IB, an international company that specializes in preventing and investigating cyberattacks, the Moscow Criminal Investigation Department has detained the organizers of a criminal group that focused on reissuing SIM cards and stealing money from Russian banking customers. The group had been active for several years and its damage is estimated at tens of thousands of dollars; even inmates at detention facilities were among its victims.

SIM card reissue fraud peaked in 2017–2018, when criminals hacked the Instagram, email and messaging app accounts of popular bloggers, entrepreneurs, celebrities, and sports starts and demanded a ransom to restore access. Many of these offences were related to gaining access to online banking services and stealing money from the victims’ bank accounts.

One threat group targeted Russian banks’ VIP customers. To collect information about their victims, the fraudsters used special database check services on Telegram channels or underground forums. The owners of these services are usually well connected with insiders at banks with a high level of access. As such, not only can they gain access to the personal data of a particular customer, they can also check their bank account balance — all in real time.

Figure 1. Ad promoting database check service posted on an underground forum

At the next stage, the fraudsters used an underground SIM card recovery service, which is quite popular on the Darknet. An employee of the underground service forged powers of attorney (the form costs about $21 on forums; in addition, forged stamps are used or alternatively the forms are printed out using a color printer) and reissued SIM cards at mobile operator stores in Moscow and the Moscow Region. They used a forged driving license as an ID.

Once the cloned SIM card was activated, the victim lost connection and the new SIM card owner sent a request to the bank to get a one-time code to access the victim’s mobile banking service. In a number of cases, the forger did not even bother to send the actual SIM card; instead, they simply sent or dictated the codes over the phone. The money ($700—$1,400 on average) was transferred from the victims to third-party accounts and through a series of transactions was then cashed out in other cities, e.g. Samara.

In 2017-2018, the fraudsters were able to steal large sums of money almost immediately. However, starting in 2019, when banks stepped up their fight against fraud, they needed more time and could only make transactions 24 hours after a SIM card duplicate has been issued.

That’s the reason why criminals had their eye on wealthy people who were confined in places of detention. A binding requirement that the fraudsters had for all the victims was the existence of a mobile banking app and money on their mobile phone accounts. It should be noted that it is prohibited for the inmates at the Russian Federal Penitentiary Service (FSIN) facilities to use mobile phones, however, there have been cases when smartphones were brought into prisons and even entire prison call-centers were discovered, which resulted in a collaborative initiative of the Russian Internal Ministry, the Russian Federal Security Service and FSIN to block mobile services in places of detention.

The numerous cases of money theft from the customers of Russian banks have prompted law enforcement to probe into the matter and initiate criminal proceedings. During the investigation, the staff members of the Moscow Criminal Investigation Department identified the members of the criminal group and engaged Group-IB experts. The group’s two organizers were detained in Moscow’s districts of Kommunarka and Solntsevo, while their accomplice, who reissued SIM cards, was detained in the Moscow Region. Another member of the group, who was responsible for cashing out the stolen money, was detained in the Russian city of Samara. It is noteworthy that one of the group members had previously been convicted for analogues crimes related to SIM- card reissuance in 2014-2015, but after regaining freedom returned to familiar business.

During the search, the police found a large number of SIM cards, notebooks, smartphones and feature phones, as well as fake IDs, such as passports, driving licenses and payment cards, to which the stolen money was transferred, along with SIM cards linked to these cards. To store confidential data, the fraudsters used encrypted USB drives. The detainees confessed to the fraud. As a result, criminal proceedings have been initiated in accordance with the Russian Criminal Code (Article 159). There are several criminal episodes in this case, the number of victims is increasing, the total damage from their activities is estimated to be tens of thousands of dollars.

Unlike all known vishing (voice phishing) fraud schemes — when scammers trick victims into revealing confidential banking data, such as CVV or OTP codes — this SIM card reissue fraud doesn’t target general public and is aimed primarily at wealthy people. There are more banks now which have data exchange agreements with mobile network operators to counter fraud. Such agreements allow banks to temporarily block access to mobile banking in case a SIM card duplicate has been issued. The banks require a re-activation of an online banking account. But this is not a common practice yet.

Sergey Lupanin

Sergey Lupanin

Head of Investigation Department, Group-IB

In order not to fall victim of this scam, Group-IB experts recommend to approach your mobile operator and write a formal letter that would ban your mobile operator from duplicating your SIM card without your personal presence. In this case, the fraudster will not be able to reissue your SIM card and use it to gain access to the mobile banking app. It is also important to approach your bank to learn what steps it will take if notified that SIM card is changed.

Group-IB is one of the leading providers of solutions aimed at detection and prevention of cyberattacks, online fraud, and IP protection. Group-IB Threat Intelligence system was named one of the best in class by Gartner, Forrester, and IDC.

Group-IB’s technological leadership is built on company’s 16 years of experience in cybercrime investigations all over the world and 60 000 hours of incident response accumulated in the largest forensic laboratory in Eastern Europe and a 24/7 CERT-GIB.

Group-IB is a partner of INTERPOL, Europol, and a cybersecurity solutions provider, recommended by SWIFT and OSCE. Group-IB is a member of the World Economic Forum.

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