EDITORIAL
'Thieves Emporium': Part 7 – The First Botnet
By Max Hernandez - August 23, 2015

Continued from last week

Synopsis: Special Agent Weidemeyer broke a large Internet-based counterfeiting ring and is holding one of the members (Sven) in solitary confinement. The next step for law enforcement is to trace down his suppliers. But another ring member (Eddy) got clean away. Unfortunately for Weidemeyer, that man is on the make in a very dangerous new way.

The First Botnet
Part 7

Arnold Wilson Parker sat with his back to the French doors of his upstairs study. Light from a gloriously clear winter sky streamed past his shoulder, fell on the bare wooden floor, and filled the room with a golden glow. Facing him, across a coffee table on a worn leather sofa, sat Maxwell Stein, the recently re-elected Governor of the Chicago Federal Reserve Bank. Together, they were discussing the primary question all central bankers forever grapple with: How to milk the most out of their country's currency. The objective is to create as much spendable money as possible without causing noticeable inflation.

"The key," expounded Stein, "isn't how much you create, but whether you maintain confidence while you're doing it."

To those not in the know, it would appear that central bankers have many tools to accomplish this task, but, in fact, they have few. One, of course, is lying. Make a credible promise that you are going to keep a tight money supply and the public will expect their dollars will purchase more tomorrow. Velocity will drop. Then you can do the opposite as long as (and this is a key) the public doesn't notice you are doing it.

The second tool of central banking, then, is the ability to hide new money creation. This can be done in several ways. For instance, you can loan money to another country in the form of a 'currency swap.' The other country will have some of your currency and you some of theirs. Both of you can spend it, putting more money into circulation, but hiding what is happening because those funds only show on the books as international loan guarantees. The complexity of the financial world makes it easy to hide money printing, even in large amounts, if you just exercise a little restraint.

The problem now facing Parker and Stein was not the stealth creation of money, which Stein had gotten very good at, but the suppression of the inflation that had begun to rise in spite of all measures taken to maintain public confidence. The specific solution now under discussion was one of the favorite deceptions of central bankers.

"So you think it's inevitable?" asked Arnold, speaking of a loss of confidence in the dollar.

Stein nodded. "At the rate we're going, the slide will start sooner rather than later. When that happens, you won't have many arrows left to shoot."

"Back to the gold standard then?"

"We'll have to hide behind it sooner or later. Better start planning for it now."

There was no arguing with the assumption inherent in the first part of Stein's analysis. Politicians have to buy off the voters to stay in office. That cost money. Lots of it. Right now, tax increases weren't politically feasible and bonds were dead. The only way to come up with the money was to 'print' it.

"Isn't there something else we can do? To maintain confidence, I mean?"

"Financial manipulation has its limits. Eventually, it will fail. We better be ready with the gold standard dodge," said Stein.

"OK. I see that. What should we do? To get ready, I mean."

"The Fed has to own more metal."

"You don't have enough already?"

"Not enough to be believable. If we announce a new 'gold standard,' we have to own enough physical metal to make it credible."

"How do we get it?" asked Arnold.

At first glance, this didn't seem to be a very difficult question. On paper, at least, the United States held very large stores of gold in Fort Knox, West Point, and New York. In fact, at the moment, the country was the OPEC of gold possession. Unfortunately, possession is not the same as ownership. All three stockpiles had either been pledged, sold, or already belonged to some other country or financial institution. The metal still on U.S. soil was only there for safekeeping. On deposit, so to speak. The Fed owned almost none of it.

So, one option was to simply appropriate it all. Steal it, if a more honest word may be used. Tear up the agreements with private bankers and foreign governments. It was an act worth considering, but the risks were too great to undertake just now. Private bankers constituted a large percentage of Stein's political backing. Any act that alienated them was not a good idea.

As for foreign governments, they were the same people that Parker would need when it came time to organize a unified world government. To steal their national gold supply now would not only sink his dream of the ultimate Globalist objective, it would be construed as an act of war by many of those countries. He did not want to risk an open conflict with a united Europe, as absurd as that idea might seem at the moment.

In extremis, expropriation might be the only option, but it would be a very bad one. Much better for all concerned if the Fed established physical ownership by some more subtle means.

How to increase the Fed's gold holdings?

"We'll have to do it the hard way, I'm afraid," said Stein with a sigh. "We'll have to buy it."

Thank goodness we own the presses, thought Parker.

* * *

Under Weidemeyer's direction, Sven sent another gold package through the mails. After requesting instructions through the badlands, he got an address for a vacant house in Las Vegas. One of the growing army of bank repossessions, this one had stood empty for almost six months, maintained by a service company hired by the bank.

Before the package was delivered, the local Secret Service agent set up remote cameras to watch the mailbox and the surrounding property. This would be the only close surveillance for several reasons, including economics. To have personnel on site full-time would require three shifts of two agents each, meaning (if time allocated for travel and overtime is to be avoided) that ten officers would be required to perform a single 7-day/week stake-out.

The second problem was secrecy. This house, like most of the 200 serviced by this maintenance company, was on a small residential street, meaning a street with few curbside parked cars. A surveillance vehicle would inevitably arouse suspicion even if it were a delivery van with the observer hidden in the back.

In this instance, however, the Secret Service decided to spend the money. Two teams were stationed at the site, one at each end of the street hidden around the corner so as to minimize suspicion. Both were vans equipped to monitor the mailbox continuously.

About twenty-four hours after the package was delivered, a lawn crew showed up. They proceeded to clean up any trash, collect old newspapers, mow the lawn, and check the mailbox. The latter was necessary because, somehow, the post office did not have a hold-mail notice for this location. As a result, the box was full of junk mail and circulars. Several of the crew gathered around as the box was emptied, all taking delight in looking at the junk mail. From the vantage of the surveillance van, it was impossible to tell which laborer actually took the package.

Now the agent in charge had to make a decision. He could order an immediate intercept, block both ends of the street, and arrest all the perpetrators. But on what charges? Part of their contract with the bank required them to empty the mailbox once a week. It specified that mail other than advertising be marked 'Return To Sender' and re-deposited into the postal system. If they were picked up now, the crew boss would say that was what he intended to do with the package, he just hadn't had time to do it yet. In other words, all would get away.

The alternative was to follow the lawn truck back to its shop. That, however, presented its own set of problems. At the shop, the crew would disperse, each in his own vehicle, as it did after every workday. All would have to be followed, stopped, and searched to determine who had the package. If any of them were found with it, he would say he was given it to drop off at the Post Office the next morning on his way to work.

If one of the crew managed to slip away with the package, what could the authorities say? All had been handling the mail, all could say they saw the package but didn't take it. The Secret Service had no evidence to the contrary, so no arrests could be made.

Regardless of which action the Secret Service took, the results would likely be the same. The package would be consolidated with many others in a larger box that would be smuggled past outgoing Customs through the Las Vegas International Airport. And the address would never again be used as a re-mailer drop.

So the agent in charge chose a third alternative. He waited until the crew finished and left the scene. Together, returning to their shop, they were concentrated in a single vehicle. It was stopped at a sterile location, one where everyone was arrested without any opportunity to hide the package in surrounding shrubbery or buildings. Then the van and all its occupants were taken to a central facility where they were all placed in individual isolation.

For three days, three laborers and a supervisor were held incommunicado and sweated. The crew van, along with all the yard equipment, was inspected in excruciating detail. Hundreds of man-hours were expended in the attempt to find some further leads. In the end, the only accomplishment was the disruption of the yard service company's business week. True, this would hurt the badlanders that used this organization as a front, but they would more than make up for that expense through their re-mailing of future shipments.

* * *

Mr. Wu had a problem. Twice, after years of careful work, he had set up a counterfeiting ring inside the United States using the new Internet. And twice, that ring had been wiped out. Had his investors been solely interested in a financial return, he would be looking for other employment. Fortunately, that was not the case. So he had access to funds to make another attempt if he could come up with a good explanation for why this new effort wouldn't also become a smoking hole. Getting that explanation had stumped him until now. However, he had high hopes this meeting would change that.

Sitting across from him was a brash American who claimed to have a solution to his problem. That young man, known as Eddy, had been shooting off his mouth for the past year. Usually, such indiscretion was bad, but not this time. Eddy had been mouthing off to his family, telling them why the last counterfeiting operation Mr. Wu set up had failed and outlining to them, in painfully technical detail, how it could be made to succeed. And, because he asked them to, they had discreetly spread the word.

It eventually reached Mr. Wu. So, two weeks ago, he made it worth Eddy's while to fly halfway around the world for a little talk. Now Eddy, Mr. Wu, three Chinese technical experts, Mr. Wu's most trusted adviser, and a translator sat together in a posh penthouse overlooking the city of Shanghai.

"Yes sir, you see, Mr. Wu," said Eddy, "the guys I worked with were caught because the Feds traced their communications. Found their servers. Kept tracing until they knew where everyone hooked on. Waited until most were online, then BAM."

Mr. Wu's people had come to pretty much the same conclusion, though without the hand gestures.

The translator said, "Thank you for your analysis, Mr. Eddy. Mr. Wu finds it quite insightful. However, the issue that concerns him now is how to prevent it from happening again."

"Easy. Make the communications untraceable."

"And you have a suggestion for how to do that?"

"You bet! Ever hear of trojans*?"

There was some chatter as the translator, who was familiar with colloquial American English, discussed with the other participants the possible meanings of that question. After rejecting the thought that a male birth control device was under discussion, they picked the only other likely possibility.

"You mean the occupants of the ancient city of Troy?"

"Naa. I'm talking about the software programs those guys invented." Then, seeing that the joke didn't translate, he held up his hands, palms out, and tried to salvage what he could. "Sorry. Hoboken humor. Just kidding. You had to have been there."

Confused, but undaunted, the translator asked again: "Please. What is a trojan?"

"Right. A trojan is a program that's running hidden on some guy's computer. He doesn't know it's there because it was slipped in and camouflaged to look like something that belongs there. This particular trojan turns a computer into an Internet relay."

The translator turned to the others and spoke. Eddy took advantage of the pause to watch their responses. Under his flip demeanor, he was an astute observer of human nature. Here, in this opulent room, furnished with examples of all that was great from three thousand years of Chinese history, he watched their expressions for a sign of support or rejection. He particularly watched Mr. Wu.

That man listened without expression. He was a sphinx, somber concentration personified. Dressed, as were all of them, in expensive Western suits, he projected an air of superiority over his subordinates. In the discussions, he seemed more intent on listening than talking. Only at the end, when all had said their piece, did he speak. He asked a few questions, listened carefully to the answers, then gave instructions to the translator.

"Isn't that what a proxy server does?" the latter asked.

"Right. Same thing, actually."

"Then Mr. Wu wants to know how such a program would be better than a proxy server."

"Proxy servers keep logs. It's the law. But trojans don't care about the law. So no records for snoopy Feds."

The translator spoke to his colleagues. When he finished, Eddy continued.

"Now suppose four or five of these zombie computers connect in a chain. When one end gets a message, it's passed along until it gets to the other end. At one end is your customer, at the other is you. If the Feds catch your customer and try to trace communications back to you, all they get is the first zombie."

Some chatter went back and forth between the technical experts and the translator.

"What is a zombie?" asked the translator.

"A computer that's been infected with a trojan."

The translator turned again to his associates. More discussions, then the translator turned back to Eddy.

"Mr. Wu wants to know what is to prevent the authorities from putting a trace on the output of the first 'zombie' – is that the right use of this word?"

"Right. Yes, good on you, boyo. Yes."

"Thank you. I think. Mr. Wu wants to know what prevents the authorities from just running a trace back up the 'zombie' chain?"

"Good question. Good question. Tell Mr. Wu that's a very good question. The answer is that nothing stops them. Not, that is, if the second zombie is in the same country as the first. If it's not, though, the Feds have to go through a diplomatic dance to get someone in the country where it's located to continue the trace for them."

"Won't they get permission?"

"Eventually, maybe, if we wait. But we don't. Every few seconds, we send a message to all the zombies to break up the chain. At the same time, we tell four new zombies to start another one. Now the feds have to start over. Hell, we could make a new chain after every transmission if we wanted to."

"Wouldn't the government just go to the owner of the first relay computer and arrest him?"

"Not if the owner shows he didn't know the trojan was there. It could have been slipped in by a hacking program or email virus. As long as the owner shows he ran software scans, had some anti-virus programs installed, he'll be covered. Even if he put the trojan on himself. Besides, do we care if some teenage girl gets arrested because she didn't keep her computer clean?"

Chinese chatter resumed, ran on for a bit like a quick shower on a tin roof, then subsided. The translator turned back to Eddy and asked "If they wait long enough, won't they eventually get the addresses of all your infected computers? Then all they have to do is put a trace on all of them and wait until one connects with our server."

"Good question, boyo. You got some smart guys there, you know? I'm impressed. But, no, if you have thousands of zombies and you keep adding new ones to the pool faster than the old ones are cleaned and you choose your chain of computers at random, they'll never trace more than a few deep before they have to start over with a whole new set."

This triggered another chatter session. After several minutes, the translator said, "Mr. Wu wants to know if any of this has ever been done before."

"Hell's bells. Yes. Of course. All the time. Usually, trojans are put on some guy's computer to record all his keystrokes to steal credit card numbers, bank accounts, passwords, stuff like that. Linking them together in botnets is done to flood company servers, crowd out customers. For blackmail."

More chatter, then, "What is a botnet?"

"It's what I'm talking about. A network of zombies. Hey, this stuff isn't new, I'm just suggesting a new use for all of it. The names have been around for a long time."

More Mandarin discussions occurred, after which the translator asked that the meeting adjourn for the day so Mr. Wu could digest the issues presented.

The next morning, Mr. Wu proved why he had risen to his present position. Long ago, he learned not to join any enterprise unless the person running it had a deep personal commitment to its success. This young man did. He also knew the American market, had the necessary underworld connections, and, most important, was not Chinese. The latter was critical because, should this effort fail, the U. S. government must never suspect any connection with the Peoples Republic of China.

"Mr. Eddy," the translator asked, "Mr. Wu wants to know if you would build, manage, and rent such a botnet to one of his organizations in exchange for a large cash advance fee."

Suddenly, the expression 'skin in the game' came home to Eddy. Mr. Wu was clearly not a man to accept failure from a business associate. Eddy had a mental vision of his erect male organ sitting under the knife of a paper cutter as it sliced downwards. If he lost Mr. Wu's money, that would be the best fate that might befall him. This man was not to be trifled with.

Still, the genes in Eddy's blood didn't come from a family of milksops.

"Hell, yes. Tell Mr. Wu I said, 'Hell, yes'," said Eddy and the world's first botnet+ house was born.

__________

*See the Appendices for a detailed list of characters and crossing houses as well as a glossary of technical terms.

+At the time of this writing, www.shadowserver.org is actively tracking over 2,600 botnets directing over 60,000 zombies. Estimates of the total number of botnet zombies run as high as 24 million computers.

***

To continue reading, click here: Part 7. Previous installments of Thieves Emporium are available here: Introduction/Part 1, Part 2, Part 3, Part 4, Part 5, Part 6.

Thieves Emporium is available from Amazon in both paperback and Kindle and in epub format from Smashwords or Nook. Max Hernandez welcomes comments and feedback and can be reached at MaxHernandez@protonmail.ch.

© 2012-2015 Max Hernandez. Reprinted with permission.

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