More than two months after authorities shut down a massive Internet traffic hijacking scheme, the malicious software that powered the criminal network is still running on computers at half of the Fortune 500 companies, and on PCs at nearly 50 percent of all federal government agencies, new research shows.

The malware, known as the “DNSChanger Trojan,” quietly alters the host computer’s Internet settings to hijack search results and to block victims from visiting security sites that might help scrub the infections. DNSChanger frequently was bundled with other types of malware, meaning that systems infected with the Trojan often also host other, more nefarious digital parasites.

In early November, authorities in Estonia arrested six men suspected of using the Trojan to control more than four million computers in over 100 countries — including an estimated 500,000 in the United States. Investigators timed the arrests with a coordinated attack on the malware’s infrastructure. The two-pronged attack was intended to prevent miscreants from continuing to control the network of hacked PCs, and to give Internet service providers an opportunity to alert customers with infected machines.

But that cleanup process has been slow-going, according to at least one security firm. Internet Identity, a Tacoma, Wash. company that sells security services, found evidence of at least one DNSChanger infection in computers at half of all Fortune 500 firms, and 27 out of 55 major government entities.

“Yes, there are challenges with removing this malware, but you would think people would want to get this cleaned up,” said Rod Rasmussen, president and chief technology officer at Internet Identity. “This malware was sometimes bundled with other stuff, but it also turns off antivirus software on the infected machines and blocks them from getting security updates from Microsoft.”

Computers still infected with DNSChanger are up against a countdown clock. As part of the DNSChanger botnet takedown, the feds secured a court order to replace the Trojan’s DNS infrastructure with surrogate, legitimate DNS servers. But those servers are only allowed to operate until March 8, 2012. Unless the court extends that order, any computers still infected with DNSChanger may no longer be able to browse the Web.

Rasmussen said there are still millions of PCs infected with DNSChanger. “At this rate, a lot of users are going to see their Internet break on March 8.”

Tom Grasso Jr., an FBI supervisory agent at the National Cyber Forensics & Training Alliance in Pittsburgh, Pa., said the DNSChanger Working Group — the industry and law enforcement coalition that’s handling the remediation — has been discussing what to do about the upcoming deadline, but he declined to offer specifics.

“We’re certainly exploring all different options to minimize whatever impact there’s going to be on a lot of people,” Grasso said.

Even if the DNS Changer working group manages to get the deadline extended, the cleanup process will likely take many years. At least, that’s been the experience of the the Conficker Working Group, a similar industry consortium that was created to help contain and clean up infections from the infamous Conficker Worm. That working group was formed in 2009, yet according to the group’s latest statistics, nearly 3 million systems remain infected with Conficker.

Given the Conficker Working Group’s experience, shutting down the surrogate DNS network on March 8 may actually be a faster — albeit more painful — way to clean up the problem.

“I’m guessing a lot more people would care at that point,” Rasmussen said. “It certainly would be an interesting social experiment if these systems just got cut off.”

Individuals in charge of a large network can learn if any systems are infected with DNSChanger by sending a request to one of the members of the DNS Changer Working Group. Home users can avail themselves of step-by-step instructions at this link to learn of possible DNSChanger infections.

Where do you come down on the decision to extend the Mar. 8 deadline? Register your vote in the poll below. Feel free to sound off in the comments.

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Tags: Conficker Working Group, DCWG, DNS Changer Working Group, DNSChanger, Internet Identity, NCFTA, Rod Rasmussen, Tom Grasso