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Charges Against 5 Persons in E-Banking Malware Fraud

Five persons involved in stealing $450,000 from a bank account of the City of Carson, California, have been charged. They used a Trojan to contaminate the city treasurer's laptop for obtaining the required details to conduct the attack.

The malware that hit the laptop was a variant of the banking Trojan, Talex. The Trojan is a keylogger that enabled the attackers to steal the requisite account details.

The charge, filed in the District Court for the Eastern District of North Carolina, says, "It was an object of the conspiracy that the defendants would provide the user name and other login information and passwords for their personal online bank accounts to co-conspirators, both known and unknown to the Grand Jury, for the purpose of using their online bank accounts to receive and distribute unauthorized electronic transfers of funds from victim bank accounts". The records reveal that the suspects have not appeared in the court yet.

The theft was committed in May 2007, as per the reports. The five culprits - Deago Larase Smith, Jennifer Ann Woodard, Lance Corbett Holt, Anthony Leonard Bobbitt and John L. Quinn II - have been identified when they were trying to take out money from the Internet banking accounts where the city's money was initially transferred.

The city was finally able to get back nearly $44,000 of the misappropriated funds, but still the officials do not have any clear idea about how the malware was implanted or who implanted it. Carson treasurer Karen Avilla, whose laptop was infected in this case, said that investigators do not know whether it was a mail or some website that he clicked on to inadvertently install the malware, as per the news published by The Register on May 31, 2010. He added that it is an issue which investigators have not been able to solve.

Since this incident occurred, Carson has tightened the process for online transfers. Under the latest system, three officials get notification of any transaction which uses the combination of text, messages, mail and fax. Avilla stated that it will make sure that many people are looking at it.

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