MonsterCloud CEO Charged With Wire Fraud Over Ransom Payments
Federal prosecutors say Zohar Pinhasi billed ransomware victims over $19 million while secretly paying attackers for decryption keys.
Zohar Pinhasi, the owner of the data recovery firm MonsterCloud, was arraigned Wednesday in federal court in Brooklyn after a grand jury in the Eastern District of New York indicted him on September 23, according to bleepingcomputer.com. He faces one count of conspiracy to commit wire fraud and two counts of wire fraud.
Pinhasi surrendered on Wednesday, pleaded not guilty and was released on a $2 million bond.
Prosecutors allege that Pinhasi and his co-conspirators told clients they used proprietary technology to recover encrypted data, but instead paid ransomware operators for decryption keys. According to the U.S. Attorney's Office, he facilitated more than $8 million in ransom payments and charged victims over $19 million.
If convicted, Pinhasi faces up to 20 years in prison.
Earlier reporting raised similar questions
A 2019 ProPublica investigation reported similar concerns about MonsterCloud, including that the company sometimes paid ransomware operators while claiming to offer a solution other than paying the attackers.
Quick answers
What is Zohar Pinhasi accused of?
Prosecutors allege he took payments from ransomware victims for a recovery service while secretly paying the attackers for decryption keys instead of using proprietary technology.
How much did Pinhasi allegedly pay and charge?
According to the U.S. Attorney's Office, he facilitated more than $8 million in ransom payments and charged victims over $19 million.
What penalty does Pinhasi face if convicted?
He faces up to 20 years in prison.