Ryuk ransomware operator sentenced to 2 years in prison

The Armenian national was extradited from Ukraine to the United States last year and pleaded guilty to cybercrimes in July.

A 35-year-old Armenian national was sentenced to two years in prison for his involvement in a series of Ryuk ransomware attacks while living in Ukraine and Russia in 2019 and 2020, the Justice Department said Tuesday.

Karen Vardanyan was extradited from Ukraine to the United States last year and pleaded guilty to computer fraud and conspiracy to commit fraud and extortion in July. Vardanyan’s sentencing, which also calls for about $1.2 million in restitution to victims, matches terms of a plea agreement he reached with prosecutors.

Vardanyan and his co-conspirators’ victims include a Michigan-based company that paid a ransom of nearly $1.2 million in January 2020, a Watsonville, Oregon-based technology company that was attacked in December 2019 and a Texas-based school breached in February 2020, according to court records.

“Like Vardanyan, many cybercriminals are not masterminds of a complex ransomware or extortion scheme but nonetheless play an integral part in the success of these crimes,” read a memo signed by U.S. attorneys in the District of Oregon.

“Unfortunately, high rewards and a relatively low risk of detection are basic features of cybercrime. The only way to affect the cost-benefit analysis of these crimes is to impose meaningful sentences on those who are caught,” the U.S. attorneys added.

Prosecutors previously accused Vardanyan and his co-conspirators — Ukrainian nationals Oleg Nikolayevich Lyulyava and Andrii Leonydovich Prykhodchenko, and Armenian national Levon Georgiyovych Avetisyan — of illegally accessing computer networks to deploy Ryuk ransomware on hundreds of compromised servers and workstations between March 2019 and September 2020.

Ryuk ransomware was prevalent in 2019 and 2020, infecting thousands of victims globally across the private sector, state and local municipalities, local school districts and critical infrastructure, including a wave of attacks on U.S. hospitals.

Victims of Ryuk ransomware attacks include Hollywood Presbyterian Medical Center, Universal Health Services, Electronic Warfare Associates, a North Carolina water utility and multiple U.S. news outlets.

Justice Department officials said Vardanyan and his co-conspirators received about 1,160 bitcoins — valued at more than $15 million at the time — in ransom payments from victim companies.

Prosecutors said they found no evidence Vardanyan was still engaged in criminal activity at the time of his arrest. Vardanyan’s incarceration will be followed by three years of supervised release, and his conviction will have immigration consequences resulting in removal from the United States after serving his sentence.

Government

• After water attacks, Capitol Hill offers its own proposal for an AI-cyber test program

• Citing China, President Trump doubles down on hands-off approach to AI regulation

• Dems seek top-to-bottom assessment of CISA workforce

• International security agencies warn about North Korean hackers exploiting job seekers to steal crypto, data

Technology

• Researchers use AI to find widespread software decoder flaw 

• The AI hacking apocalypse is not inevitable

• What’s next for CISA's CDM program that gives cybersecurity tools to federal agencies

• Researchers say OpenAI agents were behind May hacking campaign targeting RubyGems

Threats

• Volexity spots another China-aligned threat group exploiting Chrome and Microsoft defects

• Microsoft and partners disrupt EvilTokens, a comprehensive cybercrime service for financial fraud

• Another worry for water systems: infostealer exposure

• Cisco alerts customers to second actively exploited zero-day in as many days

Policy

• Supreme Court denies Trump request to allow USPS mail ballot changes

• Cyberattack causes a flight delay? Airlines won’t owe you a hotel or meal

• Hawley probes OpenAI over Hugging Face breach

• Governments ‘buying time’ in race between innovation, security, national cyber director says