A Florida cybersecurity company owner has been charged in an alleged $19 million fraud scheme in which prosecutors say he secretly paid ransomware hackers to recover clients’ data while falsely claiming his company used advanced technology to decrypt files. Federal court documents filed in Brooklyn identify Nassau and Suffolk counties among the locations where the alleged crimes occurred.
Zohar Pinhasi, 50, of Hollywood, Florida, who also used the names Zack Silver and Zack Green, was arraigned Wednesday, Oct. 7, in federal court in Brooklyn on wire fraud charges. He was indicted Sept. 23.
According to federal prosecutors, Pinhasi owned MonsterCloud LLC, a ransomware remediation company that offered to help businesses recover computer files locked by cybercriminals. The company promoted what it described as proprietary tools and advanced decryption technology that could restore encrypted data without paying the hackers responsible for the attacks.
Prosecutors allege those claims were false. Instead, Pinhasi allegedly contacted the hackers directly, negotiated ransom payments and obtained decryption keys that MonsterCloud employees could use to attempt to restore clients’ files. The company then charged victims substantially more than it paid the cybercriminals.
In one instance in August 2023, prosecutors said Pinhasi paid approximately $8,200 to a ransomware attacker but charged the client approximately $150,000. Federal authorities allege that MonsterCloud collected more than $19 million from clients during the scheme while paying more than $8 million in ransom payments to cybercriminals.
Federal Court Filing Identifies Nassau and Suffolk Counties
Although the Justice Department’s public announcement does not identify Long Island victims, an information sheet accompanying the federal indictment specifically lists Nassau County, Suffolk County and elsewhere as locations where the alleged crimes occurred.
The indictment also describes two transactions involving victims within the Eastern District of New York, which includes Long Island and portions of New York City. On April 26, 2021, one victim allegedly wired approximately $175,000 to Pinhasi’s bank account in Florida. A second alleged wire fraud count involves an Aug. 2, 2021, telephone conversation between Pinhasi in Florida and a representative of another victim within the Eastern District.
The indictment does not identify the victims or specify whether either was located in Nassau or Suffolk County.
Company Allegedly Misled Clients About Its Technology
According to prosecutors, MonsterCloud advertised its services as an alternative to paying ransom demands and claimed to use advanced technology to recover encrypted files. The indictment alleges that the company also used testimonials, including endorsements from paid spokespersons, to promote its services.
In May 2019, one spokesperson questioned Pinhasi about whether the company actually possessed proprietary decryption software. Prosecutors said Pinhasi acknowledged that MonsterCloud did not have such technology.
“As alleged in the indictment, 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 Jr. said.
FBI Assistant Director in Charge James C. Barnacle Jr. said Pinhasi allegedly exploited businesses that had already suffered ransomware attacks.
The case is being prosecuted by the U.S. Attorney’s Office for the Eastern District of New York and the Justice Department’s Criminal Division. If convicted, Pinhasi faces up to 20 years in federal prison.
The charges are allegations, and Pinhasi is presumed innocent unless proven guilty.
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