Virus Causes Data Breach at Massachusetts Unemployment Agency

An aggressive worm known for stealing sensitive information was found on the computer network for the agencies handling unemployment claims in Massachusetts.

Cyber-criminals may have used malware to steal personal information from the Massachusetts unemployment offices, according to the state agency.

As many as 1,500 computers in the Departments of Unemployment Assistance and Career Services were infected with a virus beginning April 20, the Massachusetts Executive Office of Labor and Workforce Development said on May 17. Computers in the mobile One Stop Career Centers that work with claimants were also infected.

Even though EOLWD immediately worked with Symantec to remove the malware, W32.QAKBOT, it learned on May 16 that the infection hadn't been "remediated as originally believed," leading to a data breach.

"I apologize to our customers and recognize that this is an unwanted problem," Joanne F. Goldstein, Secretary of Labor and Workforce Development said in a statement.

W32.QAKBOT is a worm that spreads through network drives and removable drives, according to the Symantec's Security Response page. After the initial infection, usually the result of clicking on a malicious link on a Web page, it can download additional files, steal information and open a back door on the compromised machine. The worm also contains a rootkit that allows it to hide its presence and it works slowly to avoid detection. "Its ultimate goal is clearly theft of information," said Shunichi Imano, a Symantec researcher.

There is a "possibility" the virus collected confidential claimant or employer information, such as names, Social Security numbers, Employer Identification Numbers, email addresses, and residential or business addresses. The affected system also contained bank information of employers.

"These days, whenever I hear of a big corporate infection that's very hard to get rid of and people are struggling, I immediately think of Qakbot," Roel Schouwenberg, an antivirus researcher at Kaspersky Lab, told WBUR, a Boston NPR radio station.

Qakbot is especially aggressive and normally targets online banking, although it has the ability to mutate itself to switch targets and change its methods. The cyber-criminals behind the infection could have remotely instructed the virus to go after names, addresses and Social Security numbers stored in the state systems instead of focusing on banking sites, Schouwenberg said.

"Only" the 1,200 employers that file their quarterly statements manually with the departments could be impacted, according to the EOLWD. Goldstein was "hopeful" that the actual impact on businesses and residents was "minimal." Most of the 180,000 businesses tend to file online and are likely not affected.

There is "no mechanism" available to determine the actual number of individuals impacted, the EOLWD claimed, but any claimant who had their file manually accessed could be affected. For a claimant to have their data stolen, the staff member would have had to type in the information at an infected workstation.

"In a nutshell, if your computer is compromised, every bit of information you type into your browser will be stolen," according to Patrick Fitzgerald, a senior security response manager at Symantec.

Anyone who "conducted business" from April 19 to May 13 that required a staff person to access their file online with DCS, DUA or at a One Stop Career Center should consider themselves impacted and put a fraud alert on their credit for their protection, EOLWD said.

The system has been shut down and the breach is no longer "active," according Goldstein. The department is currently contacting all affected residents and has already notified "all relevant and necessary" state and federal agencies for assistance in remediating the breach. The list includes the Attorney General's Cyber-Crime Unit, the Office of Consumer Affairs and the Federal Bureau of Investigation.

"We take our customers privacy very seriously. Unfortunately, like many government and non-government organizations we were targeted by criminal hackers who penetrated our system with a new strain of a virus. All steps possible are being taken to avoid any future recurrence"