FBI warns Microsoft users about device-code scam

June 29, 2026

1–2 minutes

Summary

FBI officials said Kali365 phishing attacks can hijack Microsoft 365 access through device-code approvals, even without a stolen password.

Why this matters

The warning highlights a phishing method that can bypass normal expectations about password and multifactor protection. Users and IT teams can reduce risk by treating unsolicited device-code requests as suspicious and tightening Microsoft 365 sign-in controls.

Federal Bureau of Investigation officials warned Microsoft 365 users about Kali365, a phishing-as-a-service platform that targeted accounts through Microsoft’s device code sign-in process.

The FBI said Kali365 was first seen in April 2026 and had mainly spread through Telegram. The platform gave attackers AI-generated phishing messages, automated campaign templates, tracking dashboards, and tools to capture OAuth tokens, which can keep apps connected to an account without repeated password prompts.

According to the FBI, the scam did not rely on stealing a password. Instead, attackers sent phishing emails that appeared to come from a trusted productivity or file-sharing service and instructed users to enter a device code on a legitimate Microsoft verification page.

If a user entered the code, the attacker could capture access and refresh tokens and gain access to Microsoft 365 services, including Outlook, Teams, and OneDrive, without the victim’s password or another multifactor authentication prompt.

The FBI said a key warning sign was any unexpected request to enter a Microsoft device code, especially for a file, voicemail, invoice, or shared document the user did not request. Users also should be wary of urgent messages and avoid entering a device code unless they personally started the sign-in.

Microsoft said customers should follow the FBI’s recommendations and the company’s published best practices. It also said it works to disrupt phishing-as-a-service and account takeover activity, citing recent Digital Crimes Unit actions involving Fake ONNX, RaccoonO365, and Tycoon 2FA.

The FBI recommended that organizations restrict device code flow through conditional access policies, with limited exceptions for business needs, and audit current usage before making changes. The agency also recommended blocking authentication transfer policies and carefully excluding emergency access accounts if full restrictions were not possible.

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North Carolina

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At the party level, the North Carolina Democratic Party raised $3.5 million in the first quarter, compared with $2.2 million for the state GOP.

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North Carolina Democrats entered the 2026 midterms with a fundraising edge in several major races, though analysts said those totals alone will not determine the outcome.

Former Gov. Roy Cooper, now running for U.S. Senate, had raised more than $26 million by March 31, compared with just over $8 million for Republican Michael Whatley, a former Republican National Committee and North Carolina GOP chair. Cooper ranked fifth among Senate candidates nationally this cycle in total fundraising.

In individual donations, Cooper reported $10.68 million, compared with $3.75 million for Whatley and $4.59 million for Sen. Thom Tillis by the end of March. Whatley still outpaced past North Carolina Republicans at this stage, raising about twice what Sen. Ted Budd had raised by this point in 2022. Cooper, however, had raised more than three times what Democrat Cheri Beasley had raised by the end of March 2022.

Charles Hellwig, a Republican consultant, credited Cooper’s political network and national support. “Cooper has all the national push, just on a bigger scale, and he’s got decades of his own network and decades of longtime Democratic donors,” he said.

Election forecasters Sabato’s Crystal Ball and Cook Political Report no longer rated the Senate race a toss-up and instead listed Cooper as the favorite, though both still viewed it as close. Western Carolina University political scientist Chris Cooper said that shift could reduce outside spending in North Carolina if national groups focus on tighter contests elsewhere.

A similar gap appeared in the state Supreme Court race. Justice Anita Earls had raised more than $2.4 million as of Feb. 14, according to a March report to the State Board of Elections, while Republican Rep. Sarah Stevens had raised about $240,000. Stevens also returned $8,300 in donations ruled illegal by the board while she was serving in the Legislature.

Republicans, however, could remain competitive through outside spending. Democratic consultant Morgan Jackson said that, as of mid-June, Republicans had reserved $88 million in airtime, compared with $31 million for Democrats.
Business

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Through July 13, shoppers can bring any Bed Bath & Beyond coupon to participating Bed Bath & Beyond + The Container Store and Kirkland’s Home stores nationwide.

The company said all coupons, including expired and faded ones, will be accepted and entered into the sweepstakes.

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Bed Bath & Beyond said the campaign is intended to prompt customers to look for old coupons in places such as kitchen drawers, glove compartments, attics, basements and scrapbooks.

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VA lead

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Spanberger said the budget responded to rising costs for Virginia families and included a new electricity-consumption tax on large data centers.

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With less than 48 hours before Virginia’s new fiscal year began, the General Assembly on Monday approved 14 budget amendments proposed by Gov. Abigail Spanberger, ending a months-long dispute among majority Democrats over the state’s two-year spending plan.

The House and Senate reconvened to consider changes Spanberger submitted Friday to the roughly $207 billion biennial budget lawmakers passed a week earlier after extended negotiations and a special session.

The amendments included technical and policy changes involving data centers, utility rebates tied to the Regional Greenhouse Gas Initiative, police facial-covering rules, gun legislation, firefighter cancer screenings, and pay increases for home care workers. Because lawmakers accepted all of Spanberger’s amendments, the budget became law without her signature.

House Speaker Don Scott, D-Portsmouth, said the budget included investments in education, housing, and health care, along with 4% teacher pay raises, tax rebates, and what he called “the largest investment in public education in Virginia history.”

Senate Majority Leader Scott Surovell, D-Fairfax, said lawmakers set aside hundreds of millions of dollars in reserves amid economic uncertainty and possible Medicaid funding pressures tied to actions by Congress and the Trump administration.

Republicans said the process took too long and created problems for local governments finalizing their own budgets before July 1. House Minority Leader Terry Kilgore, R-Scott, said, “We finally passed the budget and got it moving finally today, 100 days late.” He also criticized the use of the budget process for major policy issues, though he said Republicans supported provisions including teacher pay raises.

Republicans also objected to amendments related to firearms and policing. Del. Eric Zehr, R-Campbell, supported a Spanberger amendment clarifying that some law enforcement officers may continue wearing facial coverings during undercover, tactical, surveillance, and executive-protection work.

A central issue in the budget talks was how to tax the data center industry. The final agreement kept Virginia’s sales and use tax exemption for data centers but created a temporary energy-consumption tax on the largest facilities. Surovell said data centers would contribute about $1.1 billion to $1.2 billion during the biennium.

Lawmakers also approved a provision tied to Virginia’s return to the Regional Greenhouse Gas Initiative that is expected to provide Dominion Energy customers an estimated $3 monthly rebate, plus funding for transportation, education, health care, flood mitigation, and local infrastructure projects.

The House also unanimously approved a grant program for cancer screenings for career firefighters.
Business

Microsoft shares near worst month since December 2000

The company has lost about $570 billion in market value.

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Microsoft shares were down about 17% in June, putting the stock on track for its worst month since December 2000, according to Bloomberg data published Monday.

If the stock finished the month at that level, it would mark Microsoft’s steepest monthly decline since it fell 24.4% in December 2000.

If shares recovered to finish the month with a loss smaller than 16.56%, February 2008 would remain Microsoft’s worst month since December 2000.

The decline came during a weak stretch for some of the largest technology stocks. State Street’s Technology Select Sector SPDR Fund (XLK) was still up 27% in 2026, compared with an 8% gain for the S&P 500. But the Roundhill Magnificent Seven ETF (MAGS), which tracks Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia, fell 10.7% over the past month of trading days and was down about 4% for the year.

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North Carolina

N.C. lottery posts gains, weighs staffing, sales risks

Through April, the lottery paid nearly $4.6 billion in prizes, or 76.4% of revenue. Through May, the games generated $1.04 billion for public education, about $45 million more than a year earlier.

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North Carolina’s Education Lottery, now in its 20th year, reported record results but told commissioners future growth may depend on visibility, national jackpot games, and employee retention.

Year-to-date sales through May were just under $6.6 billion, up 9.2% from the same period last year, according to Chief Financial Officer Greg Bowers. During the June 24 meeting of the North Carolina Lottery Commission, Bowers said digital instant games passed $3 billion in sales in the fourth quarter.

“We’re about 10.5% ahead of our gross gaming revenue targets for the year, which is very, very exciting to say that we’re outperforming the goals for the year,” Bowers told commissioners.

Digital instants, which allow players to fund accounts and play on computers or mobile devices, rose 22% in the first 11 months of the fiscal year compared with 2025. Scratch-off sales fell about 3%, though Bowers said some tickets exceeded expectations, including a $20 ticket marking the lottery’s 20th year.

That increase followed a December independent audit that found overall lottery revenue rose over the previous two years while education contributions were relatively flat. Lottery officials said higher payouts on digital instant games and smaller multistate jackpots reduced the amount shared with North Carolina schools in 2024 and 2025.

Bowers said North Carolina faced pressures seen in other states, including consumer budget strains and volatility in multistate jackpot games, which can affect ticket sales until jackpots rise.

Lottery officials said they planned to refine scratch-off and digital instant offerings and add more vending in retail stores. Sales are projected to increase 6.39% in 2027.

Commissioners also reviewed a yearlong compensation study and found that lottery employees’ base salaries were about 9% below market, while leadership positions were about 22% below market.

Commissioner Jason Roth suggested the lottery consider reducing benefits to raise base pay.

Commissioner Pam Whitaker opposed that approach, saying it could increase turnover. Chief Executive Officer Mark Michalko urged commissioners to consider pay adjustments beyond the 3% raises expected in the state budget.
North Carolina

Robeson County man pleads guilty in COVID fraud case

Phillip Collins faces up to 30 years in federal prison and a $1 million fine when he is sentenced later this year. He also will be required to forfeit $170,833.

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A Robeson County man pleaded guilty after federal prosecutors said he fraudulently obtained more than $170,000 in COVID-19 relief funds.

The U.S. Attorney’s Office for the Eastern District of North Carolina said Phillip Collins, 47, admitted to conspiracy to commit wire fraud tied to applications submitted through the Small Business Administration’s Economic Injury Disaster Loan program and the Paycheck Protection Program.

Prosecutors said Collins submitted false loan applications for a Robeson County business, misrepresenting the company’s number of employees and gross revenue. Investigators said he also provided false tax documents and bank statements in support of the applications.

Officials said the approved loans led to $170,833 being deposited into a personal bank account controlled by Collins.

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US Politics

Supreme Court says states may count late mail ballots

Justice Samuel Alito dissented, joined by Justices Clarence Thomas and Neil Gorsuch. Justice Brett Kavanaugh joined part of the dissent.

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The U.S. Supreme Court ruled Monday, 5-4, that federal law does not bar states from counting mail ballots that arrive after Election Day if they were cast by then.

The case, Republican National Committee v. Watson, concerned a Mississippi law that requires ballots postmarked on or before Election Day to be counted if they arrive within five business days. Thirteen states have similar grace-period laws.

Justice Amy Coney Barrett, writing for the majority, said federal election law focused on when voters made their choice, not when election officials received ballots.

“The electorate’s choice is made when voting is complete, not when ballots are received,” Barrett wrote.

Barrett said the ruling addressed only the interpretation of federal law, not the U.S. Constitution or Congress’ broader authority to regulate federal elections.

Barrett was joined by Chief Justice John Roberts and Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson.

“If ballots received after election day are added to the set of ballots that dictate the election’s outcome, the electorate’s choice does not occur on election day, and the federal election-day statutes are violated,” Alito wrote.

Other states with some form of grace period are Alaska, California, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Oregon, Texas, Virginia, Washington, and West Virginia.

The Republican National Committee challenged the Mississippi law, which was defended by Mississippi Secretary of State Michael Watson, a Republican. The committee argued that the federal law setting Election Day for federal offices preempted state laws allowing ballots cast by Election Day but received later to count.

The 5th U.S. Circuit Court of Appeals ruled in October 2024 that ballots had to be received by Election Day. Trump also sought last year, through an executive order on elections, to require mail ballots to arrive by the close of polls. Much of that order was blocked in federal court.

At least 725,000 ballots were postmarked by Election Day in 2024 and arrived within a legally accepted post-election window. About 30% of voters cast a mail ballot in 2024, according to the U.S. Election Assistance Commission.

The decision came as disputes over mail voting continued. In March, Trump signed an executive order to restrict voting by mail by requiring states to provide lists of possible mail ballot voters to the U.S. Postal Service in advance. A federal judge recently blocked major portions of that order. The case is developing.
Military & National Security

VA cut claims processing times, reduced backlogs

The agency said it processed more than 3 million claims in fiscal 2025, a record, and reached 1 million completed disability claims for fiscal 2026 on Feb. 2, earlier than at any previous point.

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The Department of Veterans Affairs said processing times for disability claims, pensions and survivor benefits fell sharply as of 2026, while accuracy rates and backlog numbers improved.

In April, the VA said the average time to complete a disability claim dropped to 80.7 days from 141.5 days at the start of the current administration, a 43% decrease. The agency said its claims-processing accuracy rate rose to 94.02%, its highest 12-month rate in the past two years.

The VA said the average time to complete an initial Veterans Pension claim fell to 57 days from 170 days, a 66% decrease. Initial Survivors Pension claims fell to 73 days from 172 days, down more than 55%.

Processing times for Dependency and Indemnity Compensation claims, which provide benefits to surviving spouses, children and parents of service members who died in the line of duty or from a service-related illness or injury, fell to 73 days from 163 days, a decline of more than 50%.

Backlog figures also declined, according to the agency. In February 2026, the number of veterans waiting for VA benefits fell below 100,000 claims for the first time since 2020.

The backlog of initial Veterans Pension claims older than 125 days fell to 71 from 3,514, a 98% decrease. The Survivors Pension backlog dropped to 115 from 3,391, a 96% reduction. The backlog of Dependency and Indemnity Compensation claims fell to 2,257 from 13,501, an 83% decrease.

The VA also said it cut the average time to complete burial claims to 31 days from 70 days, a drop of more than 50%.

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US Politics

D.C. settles free speech suit over Guard protest

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Washington, D.C., reached an undisclosed settlement with resident Sam O’Hara over his detention while protesting National Guard troops by playing the “Imperial March” from “Star Wars” on a loudspeaker.

The District said the settlement upheld O’Hara’s free speech rights. The American Civil Liberties Union of D.C. had filed a First Amendment lawsuit on his behalf.

O’Hara began the protest in August 2025 in Washington. He said he walked behind National Guard troops while playing “Star Wars” music in response to President Donald Trump’s deployment of the Guard to patrol the District.

On Sept. 11, 2025, O’Hara said Beck confronted by a member of the national guard near 14th and Q streets Northwest who called D.C. police to “handle” him. O’Hara was handcuffed and detained for about 15 to 20 minutes.

The ACLU argued that the detention violated O’Hara’s First Amendment rights.

The settlement releases the city and other District defendants from the case in exchange for compensation to O’Hara.