MonsterCloud Owner Indicted Over Alleged Ransomware Recovery Fraud
Summary
Prosecutors allege MonsterCloud owner Zohar Pinhasi falsely claimed to decrypt ransomware without paying attackers, then used client fees to pay ransoms without telling them. He faces wire fraud charges and pleaded not guilty.
Key points
- Prosecutors allege Pinhasi and a MonsterCloud employee charged clients for recovery services while misrepresenting the company’s decryption capabilities.
- The Justice Department says Pinhasi used client fees to pay cybercriminals and recover encrypted data without disclosing the ransom payments.
- From 2018 to 2023, MonsterCloud allegedly charged hundreds of clients more than $19 million and paid over $8 million in ransoms.
- Clients allegedly paid an initial exploratory fee of $2,500 to $10,000 before being offered more expensive recovery services.
- Pinhasi faces two wire fraud counts and one wire fraud conspiracy count; he pleaded not guilty and was released on a $2 million bond.
- The article notes that a 2019 ProPublica investigation had previously reported that MonsterCloud paid ransoms while claiming to use its own recovery methods.
Article Details
- Event Type
- Alleged wire fraud and conspiracy involving a ransomware remediation company that concealed ransom payments from clients.
- Impact
- Prosecutors allege Zohar Pinhasi and MonsterCloud charged hundreds of clients more than $19 million and paid more than $8 million in ransom during a five-year period ending in 2023, without telling clients ransom payments had been made. Pinhasi pleaded not guilty.
People
James C. Barnacle Jr.Assistant director of the FBI who commented on the allegations.Jon DiMaggioPrincipal researcher at Arkem Cyber who commented on the alleged scheme.Joseph Nocella Jr.U.S. attorney for the Eastern District of New York who commented on the allegations.Zohar PinhasiOwner and operator of MonsterCloud; accused of defrauding clients and using the monikers “Zack Silver” and “Zack Green” in some communications with cybercriminals.