Feds targeted in Clandestine Wolf phishing campaign

A tenacious team of Chinese hackers targeted several large federal agencies in June with a new spear phishing campaign that uses an undiscovered flaw in Adobe Flash Player.

Although the flaw used by the campaign, dubbed Operation Clandestine Wolf, has been patched since it was discovered in early June, it has nonetheless left some federal agencies scrambling to determine how much damage was done to their IT operations.

U.S. authorities and cybersecurity companies have attributed the campaign to an ongoing series of large-scale spear phishing and hacking efforts aimed at U.S. targets by a dogged group of Chinese hackers that uses bogus websites, social media and malware to access targets' networks, steal passwords and set up surveillance operations.

According to FireEye, the cybersecurity firm that uncovered the zero-day flaw in Adobe's Flash Player in early June, the backers of Operation Clandestine Wolf launched a large-scale phishing campaign against organizations in aerospace and defense, construction and engineering, high-tech, telecommunications and transportation.

However, according to an unclassified but restricted For Official Use Only security advisory from the Agriculture Department (one of several federal agencies affected), the campaign also had some large federal agencies in its crosshairs.

Sources at the targeted agencies told FCW that in the past few weeks, IT managers have been briefed by teams from the FBI and the Department of Homeland Security about Clandestine Wolf after some IT departments reported infiltrations of networks using spear phishing and attached malware.

In the briefings, the FBI and DHS told federal agencies that it was difficult to know whether the hackers had compromised systems but said they had targeted hundreds of employees. The USDA's security advisory lists about 400 individual employee names that had been targeted in the campaign. The advisory states that since the attack, no successful exploitations have been recorded, but the lack of such a report was not evidence that a system had not been compromised.

The advisory and FireEye's online statement said the newest campaign is backed by APT3, also called UPS, the Chinese hacker group responsible for the Operation Clandestine Fox and Double Tap hacks in 2014 that exploited flaws in Internet Explorer and Windows code.

DHS had no comment when FCW asked about the operation's impact on federal agencies, and FireEye did not respond to inquiries about the campaign.

Like most spear phishing campaigns, this effort singled out specific agency employees with innocuous-sounding email messages that contained a URL to a server hosting ScanBox JavaScript. That code would identify a user's vulnerable software and then download a malicious Adobe file that opened a backdoor into a target's network.

FireEye's statement about Clandestine Wolf notes that "this group is one of the more sophisticated threat groups that FireEye Threat Intelligence tracks, and they have a history of introducing new browser-based zero-day exploits (e.g., Internet Explorer, Firefox and Adobe Flash Player). After successfully exploiting a target host, this group will quickly dump credentials, move laterally to additional hosts and install custom backdoors. APT3's command and control...infrastructure is difficult to track, as there is little overlap across campaigns."