Zohar Pinhasi claimed his MonsterCloud could unlock ransomware‑locked data without paying the cybercriminals, a promise that lured dozens of businesses into a high‑stakes gamble.
The indictment details a scheme that spanned months, during which Pinhasi collected $19 million from clients while secretly funneling $8 million to the very attackers who had seized their files.
In one highlighted case, a client paid $150,000 for a service that cost the hackers only $8,200, a disparity that prosecutors say amounts to a double‑layered fraud.
US Attorney Joseph Nocella Jr. warned that Pinhasi “re‑victimized” his clients, while FBI Assistant Director James C. Barnacle Jr. said the scheme turned a crisis into a profit center.
MonsterCloud’s website boasted proprietary tools and testimonials, yet investigators found no evidence of such technology, raising questions about the company’s marketing claims.
If convicted, Pinhasi could face 20 years per wire‑fraud count; the court will determine sentencing in November, a decision that could set a precedent for cyber‑crime prosecutions.