The 'Backdoor.IE_Patch' was first reported in March 1999. The PHO.EXE is originally used to spread the backdoor (i.e. hacker's remote access tool) files, but the file name could be different. The dropper is pretending to be a broken self-extracting ZIP archive. It even has a WinZip archive icon.
Disinfection & Removal
When PHO.EXE file is run it displays a messagebox with the following text:
WinZip Cannot open file: it does not apear to be a valid archive. If you downloaded this file, try downloading the file again. Please press F1 for help.
At the same time the dropper writes 3 files to \WINDOWS\SYSTEM directory: ADVAPI.DLL, ADVAPI32.EXE and ADVCCAPI.DLL. Then the dropper modifies SYSTEM.INI file. It adds a string 'ADVAPI.DLL' to 'DRIVERS=' string, so that ADVAPI.DLL will be run during next Windows startup.
Actually ADVAPI.DLL is only used to start ADVAPI32.EXE that will remain active all Windows session. This file is the server part of IE_Patch backdoor. It provides access to infected system for hackers having the client part of this backdoor.
Capabilities of IE_Patch backdoor include sending and receiving data (files), monitoring of existing application windows, listening to keystrokes. The backdoor has an empty e-mail form inside.
Technical Details: Alexey Podrezov, F-Secure