Quick answer: Federal prosecutors allege that the owner of a Miami cybersecurity firm told ransomware victims his software could recover their files without paying the attackers, when he was instead secretly paying the criminals for decryption keys and billing clients far more. In one reported example, he paid about $8,200 and charged a client $150,000. The charges are allegations, and the case is a reminder for Florida businesses to vet incident response vendors in advance and to use their cyber insurance carrier’s approved panel when an attack hits.
What Prosecutors Allege
According to Insurance Journal’s report, a grand jury indicted Zohar Pinhasi, owner of Miami-based MonsterCloud, in September on multiple fraud charges. He was arraigned in New York and released on a $2 million bond. Prosecutors say he told businesses hit by ransomware that his software could decrypt their files without paying the attackers, but that he allegedly paid the criminals for the key and charged victims much more without disclosing it. U.S. Attorney Joseph Nocella Jr. described the claim as falsely saying the firm could decrypt ransomware “without paying off the ransomers,” and FBI Assistant Director James Barnacle said the scheme “turned the victim’s crisis into his own profit center.” Mr. Pinhasi is presumed innocent unless and until proven guilty.
The reported indictment does not say whether victims had cyber insurance or whether any insurer paid the fees, so it would be speculation to say how coverage was affected. The story matters for a different reason: a ransomware attack is a panic moment, and panic is when businesses make costly vendor decisions.
Why Florida Businesses Are Prime Targets
Florida has a large base of small and mid-sized businesses, healthcare practices, law firms, property managers, and hospitality operators that hold valuable data but often lack a full-time security team. Those are the profiles attackers target, and our 2026 cyber insurance guide for Florida businesses explains the exposure in more detail. The FBI’s Internet Crime Complaint Center is the place to report cyber incidents and see current threat trends.
How Cyber Insurance Can Protect You From This Scenario
A well-structured cyber policy is more than a payout. It is a response system. Typical features include:
- A breach hotline and pre-approved panel of forensic investigators, breach counsel, and negotiators who are already vetted by the carrier.
- Incident response costs, including forensics, legal advice, notification, and credit monitoring.
- Business interruption and data restoration coverage for downtime and rebuilding systems.
- Cyber extortion coverage, subject to policy terms and legal requirements, which should be handled through counsel and law enforcement guidance.
Using an unapproved vendor can create coverage disputes, since many policies require carrier consent before incurring response costs. Call the carrier’s hotline first.
A Vendor-Vetting Checklist for Ransomware Response
- Decide who you will call before an attack. Write the carrier hotline, your agent, and your breach counsel into an incident response plan.
- Be skeptical of guarantees. No vendor can promise to decrypt files without a key. Ask exactly how recovery works.
- Demand written scopes and itemized invoices, including any third-party payments made on your behalf.
- Verify credentials and references, and search court and regulator records for the company and its principals.
- Keep offline backups and test restoring them. Good backups reduce the need to deal with criminals at all.
- Involve counsel and law enforcement early, since payments to some sanctioned groups can create legal exposure.
The Bigger Lesson: Fraud Follows Every Crisis
Florida businesses see this pattern after hurricanes as well, when unscrupulous contractors target distressed property owners. Our post on hurricane contractor fraud covers the same principle: a legitimate crisis is when verification matters most.
Frequently Asked Questions
Does cyber insurance cover ransomware attacks in Florida?
Many cyber policies cover incident response, data restoration, business interruption, and in some cases extortion payments, but terms, sublimits, and conditions vary widely. Insurers also expect baseline security controls such as multi-factor authentication and backups.
Can ransomware be decrypted without paying?
Sometimes, if a flaw in the malware or a publicly available decryptor exists, but no one can guarantee it. Be wary of any vendor that promises recovery without explaining the method.
Should I use my own IT vendor or the insurer’s panel?
Start with the carrier’s hotline. Many policies require the insurer’s approval of vendors, and panel firms are already vetted for cost and credibility.
Where do I report a ransomware attack?
Report to the FBI through the IC3 website and notify your insurance carrier and counsel as soon as possible.
What should a Florida small business do now?
Confirm you have cyber coverage, locate the claims hotline, enable multi-factor authentication, and test your backups.
Talk to a Florida Risk Advisor
Highlight Risk Services helps Florida businesses compare cyber liability options and build a response plan before an incident. See what we do or contact us to review your coverage.
This article is general information, not legal, cybersecurity, or insurance advice. The case described involves allegations only.