Russian brought to Oregon, faces trial in ransomware attacks

By ANDREW SELSKY (Associated Press)
SALEM, Ore. Aug. 18, 2022 1:54 p.m.

Suspect extradited to face charges for allegedly laundering thousands from ransomware attacks in the United States, including a hospital in Klamath Falls

A Russian who allegedly laundered more than $400,000 from ransomware attacks in the United States and abroad was extradited from the Netherlands to face trial in federal court in Portland, authorities said Wednesday.

Denis Dubnikov, 29, pleaded not guilty on Wednesday, the U.S. Justice Department said. He was indicted in August 2021 for his alleged role in an international cryptocurrency money laundering conspiracy.

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Dubnikov and his accomplices are accused of laundering ransom payments from victims of Ryuk ransomware attacks. The Ryuk ransomware impacted several U.S. hospitals in 2020, including Sky Lakes Medical Center in Klamath Falls, Oregon. The indictment says there were “multiple” victims in Oregon.

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Paul Stewart, Sky Lakes' president and CEO, said at the time that the center refused to pay any extortion and had to cut back on some elective and outpatient services while systems were down.

Ryuk is a type of ransomware software that encrypts files, attempts to delete any system backups and can target storage drives, including those accessible remotely via a network connection, the justice department said.

The indictment says a ransom note is placed onto the computer system when files are encrypted, and providing email addresses that victims could use to contact the hackers. The “Ryuk actors” also provide a cryptocurrency wallet address that victims could use to pay a ransom to have their files decrypted.

In July 2019, Dubnikov laundered more than $400,000 in Ryuk ransom proceeds, authorities said in a statement. Those involved in the conspiracy laundered at least $70 million in ransom proceeds.

Dubnikov was arrested in Amsterdam on November 2. A jury trial is scheduled to begin on October 4.

If convicted, Dubnikov faces a maximum sentence of 20 years in federal prison, three years’ supervised release, and a fine of $500,000.

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