Florida Cybersecurity CEO Indicted Over Ransomware Recovery Fraud

The Justice Department alleged that Pinhasi, who used the alias Zack Green, misled customers about MonsterCloud’s methods. “By falsely claiming to decrypt ransomware without paying off the ransomers, the defendant re-victimized his clients while extracting a hefty profit for himself,” U.S. Attorney Joseph Nocella said in an Oct. 7 press release. “Our Office will vigorously prosecute ransomware attackers who prey on Americans from across the world and those who cynically profit from their criminal activity.”

ProPublica’s 2019 article “The Trade Secret” centered on Pinhasi and the scheme and found that ransomware victims were harmed twice: first by hackers who locked their files and demanded ransom, and then by MonsterCloud, the Florida-based firm that misled clients about not paying ransoms. The indictment mirrors those findings, ProPublica reported.

Pinhasi told ProPublica in 2019 that MonsterCloud never promised clients that their data would be recovered by any particular method. “How we do it, it’s our problem,” he said. “You will get your data back. Sit back, relax and enjoy the ride.” He called MonsterCloud’s data recovery methods a “trade secret.”

Federal investigators found that Pinhasi allegedly charged clients more than $19 million over the course of the scheme and paid more than $8 million in ransom payments. In one example, he made a ransom payment of about $8,200 but charged the client about $150,000, according to the report. If convicted, he faces up to 20 years in prison.

In 2019, Pinhasi touted MonsterCloud’s ties to law enforcement as evidence of its integrity. Pistole, who also headed the Transportation Security Administration under President Barack Obama, was listed on MonsterCloud’s website as the only member of its “Cyber Security Advisory Council,” ProPublica reported.