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MonsterCloud CEO indicted on U.S. fraud charges over ransomware recoveries
ProPublica said a federal grand jury indicted MonsterCloud CEO Zohar Pinhasi last month, alleging he paid ransoms while telling clients he could decrypt files without paying hackers.
- propublica.org is now reporting this
- New headline Was: “Data Recovery CEO Indicted for Allegedly Scamming Ransomware Victims”
- Our desk filed its story
A federal grand jury last month indicted Zohar Pinhasi, chief executive of Florida ransomware-recovery firm MonsterCloud, on charges that he defrauded clients, ProPublica reported, citing the Justice Department1.
Prosecutors allege Pinhasi told customers he could recover encrypted files without paying hackers, then paid ransoms and billed victims a markup, according to the report1.
U.S. Attorney Joseph Nocella, in an Oct. 7 press release quoted by ProPublica, said the defendant re-victimized clients by falsely claiming he decrypted ransomware without paying ransomers1.
Federal investigators found that over the course of the alleged scheme Pinhasi charged clients more than $19 million and paid more than $8 million in ransoms, ProPublica said1.
In one example cited in the report, he paid about $8,200 in ransom and charged the client about $150,0001.
A spokesperson for the U.S. Attorney's Office said Pinhasi pleaded not guilty; if convicted he faces up to 20 years in prison, according to ProPublica1.
The indictment tracks findings from ProPublica's 2019 investigation of MonsterCloud, which reported that some clients, including local law enforcement agencies, hired the firm because they believed it would not pay ransoms1.
Pinhasi, who went by the alias Zack Green, told ProPublica in 2019 that MonsterCloud never promised a particular recovery method1.
"How we do it, it's our problem," Pinhasi said then, adding clients would get their data back1.
Reached this month, he hung up; messages left with MonsterCloud and his attorney were not returned, ProPublica said1.
The Justice Department's October release did not address ProPublica's 2019 finding that former FBI deputy director John Pistole appeared in a MonsterCloud promotional video; Pistole was not named in the indictment, and the U.S. attorney's office declined to comment on that connection, the report said1.
