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THE TRADE SECRET: Firms That Promised High-Tech Ransomware Solutions Almost Always Ju
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As ransomware attacks crippled businesses and law enforcement agencies, two U.S. data recovery firms claimed to offer an ethical way out. Instead, they typically paid the ransom and charged victims extra.

by Renee Dudley and Jeff Kao, ProPublica

From 2015 to 2018, a strain of ransomware known as SamSam paralyzed computer networks across North America and the U.K. It caused more than $30 million in damage to at least 200 entities, including the cities of Atlanta and Newark, New Jersey, the Port of San Diego and Hollywood Presbyterian Medical Center in Los Angeles. It knocked out Atlanta’s online water service requests and billing systems, prompted the Colorado Department of Transportation to call in the National Guard, and delayed medical appointments and treatments for patients nationwide whose electronic records couldn’t be retrieved. In return for restoring access to the files, the cyberattackers collected at least $6 million in ransom.

“You just have 7 days to send us the BitCoin,” read the ransom demand to Newark. “After 7 days we will remove your private keys and it’s impossible to recover your files.”

At a press conference last November, then-Deputy Attorney General Rod Rosenstein announced that the U.S. Department of Justice had indicted two Iranian men on fraud charges for allegedly developing the strain and orchestrating the extortion. Many SamSam targets were “public agencies with missions that involve saving lives,” and the attackers impaired their ability to “provide health care to sick and injured people,” Rosenstein said. The hackers “knew that shutting down those computer systems could cause significant harm to innocent victims.”

In a statement that day, the FBI said the “criminal actors” were “out of the reach of U.S. law enforcement.” But they weren’t beyond the reach of an American company that says it helps victims regain access to their computers. Proven Data Recovery of Elmsford, New York, regularly made ransom payments to SamSam hackers over more than a year, according to Jonathan Storfer, a former employee who dealt with them.

Although bitcoin transactions are intended to be anonymous and difficult to track, ProPublica was able to trace four of the payments. Sent in 2017 and 2018, from an online wallet controlled by Proven Data to ones specified by the hackers, the money was then laundered through as many as 12 bitcoin addresses before reaching a wallet maintained by the Iranians, according to an analysis by bitcoin tracing firm Chainalysis at our request. Payments to that digital currency destination and another linked to the attackers were later banned by the U.S. Treasury Department, which cited sanctions targeting the Iranian regime.

“I would not be surprised if a significant amount of ransomware both funded terrorism and also organized crime,” Storfer said. “So the question is, is every time that we get hit by SamSam, and every time we facilitate a payment — and here’s where it gets really dicey — does that mean we are technically funding terrorism?”

Proven Data promised to help ransomware victims by unlocking their data with the “latest technology,” according to company emails and former clients. Instead, it obtained decryption tools from cyberattackers by paying ransoms, according to Storfer and an FBI affidavit obtained by ProPublica.

Another U.S. company, Florida-based MonsterCloud, also professes to use its own data recovery methods but instead pays ransoms, sometimes without informing victims such as local law enforcement agencies, ProPublica has found. The firms are alike in other ways. Both charge victims substantial fees on top of the ransom amounts. They also offer other services, such as sealing breaches to protect against future attacks. Both firms have used aliases for their workers, rather than real names, in communicating with victims.

The payments underscore the lack of other options for individuals and businesses devastated by ransomware, the failure of law enforcement to catch or deter the hackers, and the moral quandary of whether paying ransoms encourages extortion. Since some victims are public agencies or receive government funding, taxpayer money may end up in the hands of cybercriminals in countries hostile to the U.S. such as Russia and Iran. 
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