A Toronto-area cybersecurity executive arrested by the FBI amid a high-profile hacking probe colluded with cybercriminals to extort money from his own clients, according to U.S. prosecutors.The explosive allegations laid out in a U.S. court provide a clearer indication of how Edward Dubrovsky is suspected of being involved with “threat actors” linked to the notorious ShinyHunters cyber-gang. ShinyHunters claimed responsibility last month for hacking an FBI jobs portal and stealing a massive trove of data. The group typically demands ransom payments in exchange for not releasing the sensitive data it’s obtained. “The defendant was actually working on behalf of the threat actors,” assistant U.S. attorney Anthony Carissimi claimed before a federal magistrate judge in Philadelphia on Oct. 8, according to a court transcript obtained by CBC News.”Given that those are the charges and that is what he’s been arrested for, I suspect that his business will dry up,” the federal prosecutor added.Dubrovsky will contest the charges, his court-appointed defence said. Dubrovsky, 54, was detained earlier this month during a trip to Philadelphia for a cybersecurity conference. He was charged with an extortion conspiracy offence and “interference with commerce by threats,” according to a public docket.At the time, FBI director Kash Patel said the agency had arrested a “suspected co-conspirator” of ShinyHunters. The RCMP said it was aware a Canadian had been arrested in connection with the case.FBI director Kash Patel confirmed on Oct. 9 the agency had in recent days ‘arrested another suspected co-conspirator of the ShinyHunters group,’ the notorious cyber-gang linked to a hack targeting an FBI jobs portal. (Kylie Cooper/Reuters)During Dubrovsky’s 14-minute initial hearing in U.S. District Court, the federal prosecutor provided a brief overview of the case against the Canadian. He did not directly reference ShinyHunters or the FBI cyberattack.”The reason [Dubrovsky] is sitting here is because he was engaging in essentially a fraud involving his own clients, his own business partners,” Carissimi said.He said Dubrovsky was “clearly engaged in cryptocurrency exchanges with, among other people, a criminal element.” Carissimi told the court that Dubrovsky had been dealing in the cryptocurrency Monero, which the prosecutor said is “renowned for being untraceable.” He told the court that, while Dubrovsky has a Canadian passport, he’s originally from Latvia and at one point also held an Israeli passport.Tim Wright, a court-appointed federal defender, described the allegations against Dubrovsky as “completely untested.””He wants to fight this to clear his name because of his reputation, because he’s a businessman,” Wright said. Canadian firm CyberSteward shared this picture of Edward Dubrovsky signing copies of his book Cyber Extortion: Strategic Response at the NetDiligence conference in Philadelphia on Oct. 6. (CyberSteward/LinkedIn)Self-described ‘globally recognized’ expertOn his LinkedIn profile, Dubrovsky describes himself as a “globally recognized cybersecurity expert” who helps clients negotiate with ransomware attackers. He recently published the book Cyber Extortion: Strategic Response, intended for victimized companies.The day before his arrest, Toronto-based tech firm CyberSteward posted a picture of Dubrovsky signing copies of his new book at the NetDiligence conference in Philadelphia.Heather Osborne, NetDiligence’s director of global events and programming, told CBC News in an email that “to our knowledge,” Dubrovsky’s arrest “did not occur at our event, which ended at 11:30 a.m. on Oct 7.”CyberSteward has not responded to multiple requests for comment on the firm’s ties to Dubrovsky, and his employment status.Wright, the defence lawyer, said in court that Dubrovsky had planned to attend another conference in Canada on Oct. 15, then return to the U.S. for an event in South Carolina.”He is a very well known and well respected businessman in cybersecurity,” Wright said.The FBI’s criminal complaint remains under seal. The document would typically contain further details of the agency’s investigation into a defendant and specifics of any alleged offence.U.S. Magistrate Judge Scott W. Reid ordered Dubrovsky held in custody until he is transported to Texas, where the charges were filed and where he will appear for a formal detention hearing. As of Friday, public records from the U.S. Federal Bureau of Prisons showed Dubrovsky was still being held at the Philadelphia detention centre where he was taken on Oct. 7. WATCH | Dubrovsky arrested amid FBI hacking case:Canadian ransomware negotiator arrested in connection to FBI hacking caseEdward Dubrovsky, a Canadian cybersecurity executive who negotiates with ransomware hackers has been arrested in Pennsylvania as authorities investigate a hacking group that claims to have stolen FBI employee information.‘Every system’ is vulnerable, Dubrovsky once told CBCDubrovsky previously served as managing director at CYPFER, the firm tasked with helping the city of Hamilton, Ont., recover from a 2024 cyberattack. The company recently told CBC News that Dubrovsky wasn’t involved in the Hamilton file.Once hired as a York University cybersecurity instructor, he appeared in Canadian media as a commentator on related issues and was previously interviewed by CBC News.”Every organization uses vendors and service providers to do some of their business,” Dubrovsky said in 2018, “so every single system in the world has vulnerabilities.”David Shipley, CEO of the Fredericton-based firm Beauceron Security, told CBC News in an interview earlier this month that Dubrovsky’s case highlights his own longstanding reservations surrounding ransomware negotiators.”We have seen people fall from grace before,” Shipley recalled.He urged ransomware victims who have backed up their data to seek to restore uninfected files, rather than paying a ransom.”There’s no guarantee that paying [the attackers] gets you out of the pain,” he said.If you have a news tip related to this story, contact CBC News senior reporter Thomas Daigle by email: thomas.daigle@cbc.ca.
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