Zohar Pinhasi, former CEO of Monster Cloud, was indicted on federal charges for allegedly defrauding ransomware victims by charging high fees after secretly paying ransoms to hackers. The scheme, exposed by Pro Publica in 2019, involved misleading clients into believing their data was recovered without paying criminals. Pinhasi allegedly charged over $19 million while paying more than $8 million in ransoms, pocketing the difference. In one case, he paid $8,200 to hackers but billed a client $150,000. U.S. Attorney Joseph Nocella stated his office will prosecute those who profit from cybercrime. Pinhasi pleaded not guilty and faces up to 20 years in prison if convicted. The case highlights the growing threat of ransomware, often linked to foreign actors and exacerbated by AI tools.
Monster Cloud, based in Florida, was popular with law enforcement agencies unwilling to pay hackers directly. Clients believed the firm never paid ransoms, but Pro Publica’s investigation found otherwise. Pinhasi, a former Israeli military IT officer, claimed his methods were a "trade secret." He did not respond to requests for comment. The FBI called his actions a betrayal of trust, turning victims’ crises into profit. Ransomware remains a major national security concern.
Source: Hacker News · Summarized by HeadlinesBriefing