Alleged cryptocurrency money launderer Denis Mihaqlovic Dubnikov made his first appearance in the Oregon U.S. District Court yesterday, the Department of Justice announced. This week, the 29-year-old Russian citizen was extradited from the Netherlands to the United States to face charges related to a ransomware laundering scheme.
The ruse included Ryuk ransomware attacks that targeted individuals and organizations in the United States and other countries. The case alleged that Dubnikov and his accomplices were involved in the 2019 money laundering scheme, which collected $70 million in ransom from victims. Prosecutors accused Dubnikov of being directly responsible for gathering $400,000 in revenue.
The Ryuk family of ransomware was first identified in 2018. Cybercriminals used the software to attack thousands of victims worldwide. When implemented on computers and networks, the ransomware program was capable of encrypting files and deleting system backups. It worked by gaining access to storage drives within and externally connected to the computer, as well as drives remotely connected to the computer's network.
After gaining access, Ryuk held the victim's system or files hostage while criminals demanded ransom payments. According to Malwarebytes, typical ransom amounts could be a few hundred thousand dollars. Ryuk cybercriminals used phishing emails to target high-profile organizations.
Authorities announced in 2020 that criminals using Ryuk were attacking many different industries, but U.S. hospitals and health care providers were at greater risk of being targeted. The Justice Department's Ransomware and Digital Extortion Task Force worked on investigating Dubnikov and his alleged co-conspirators.
After collecting the ransom payments from victims, Dubnikov and his accomplices allegedly used the funds for international financial transactions. These transactions were intended to cover up the crime by hiding the source, location, and other identifying information that could reveal Ryuk and its cybercriminals.
Authorities detained Dubnikov in the Netherlands in November 2021, Radio Free Europe/Radio Liberty reported. The outlet stated that Dubnikov's U.S.-based lawyer Arkady Bukh said his client denied the charges and that all of his cryptocurrency exchanges complied with the law.
Dubnikov's five-day trial is scheduled to begin in October. If he is found guilty, he could face a maximum sentence of 20 years in prison.