An ex-Ubiquiti engineer, Nickolas Sharp, was sentenced to six years in prison yesterday after pleading guilty in a New York court to stealing tens of gigabytes of confidential data, demanding a $1.9 million ransom from his former employer, and then publishing the data publicly when his demands were refused.
In a court document, Sharp claimed that Ubiquiti CEO Robert Pera had prevented Sharp from “resolving outstanding security issues,” and Sharp told the judge that this led to an “idiotic hyperfixation” on fixing those security flaws.
However, even if that was Sharp’s true motivation, Failla did not accept his justification of his crimes, which include wire fraud, intentionally damaging protected computers, and lying to the FBI.
“It was not up to Mr. Sharp to play God in this circumstance,” Failla said.
US attorney for the Southern District of New York, Damian Williams, argued that Sharp was not a “cybersecurity vigilante” but an “inveterate liar and data thief” who was “presenting a contrived deception to the Court that this entire offense was somehow just a misguided security drill.” Williams said that Sharp made “dozens, if not hundreds, of criminal decisions” and even implicated innocent co-workers to “divert suspicion.” Sharp also had already admitted in pre-sentencing that the cyber attack was planned for “financial gain.” Williams said Sharp did it seemingly out of “pure greed” and ego because Sharp “felt mistreated”—overworked and underpaid—by the IT company, Williams said.
Court documents show that Ubiquiti spent “well over $1.5 million dollars and hundreds of hours of employee and consultant time” trying to remediate what Williams described as Sharp’s “breathtaking” theft. But the company lost much more than that when Sharp attempted to conceal his crimes—posing as a whistleblower, planting false media reports, and contacting US and foreign regulators to investigate Ubiquiti’s alleged downplaying of the data breach. Within a single day after Sharp planted false reports, stocks plummeted, causing Ubiquiti to lose over $4 billion in market capitalization value, court documents show.
In his sentencing memo, Williams said that Sharp’s characterization of the cyberattack as a security drill does not align with the timeline of events leading up to his arrest in December 2021. The timeline instead appears to reveal a calculated plan to conceal the data theft and extort nearly $2 million from Ubiquiti.
Sharp began working as a Ubiquiti senior software engineer and “Cloud Lead” in 2018, where he was paid $250,000 annually and had tasks including software development and cloud infrastructure security. About two years into the gig, Sharp purchased a VPN subscription to Surfshark in July 2020 and then seemingly began hunting for another job. By December 9, 2020, he’d lined up another job. The next day, he used his Ubiquiti security credentials to test his plan to copy data repositories while masking his IP address by using Surfshark.
Less than two weeks later, Sharp executed his plan, and he might have gotten away with it if not for a “slip-up” he never could have foreseen. While copying approximately 155 data repositories, an Internet outage temporarily disabled his VPN. When Internet service was restored, unbeknownst to Sharp, Ubiquiti logged his home IP address before the VPN tool could turn back on.
Two days later, Sharp was so bold as to ask a senior cybersecurity employee if he could be paid for submitting vulnerabilities to the company’s HackerOne bug bounty program, which seemed suspicious, court documents show. Still unaware of his slip-up, through December 26, 2020, Sharp continued to access company data using Surfshark, actively covering his trails by deleting evidence of his activity within a day and modifying evidence to make it seem like other Ubiquiti employees were using the credentials he used during the attack.
Sharp only stopped accessing the data when other employees discovered evidence of the attack on December 28, 2020. Seemingly unfazed, Sharp joined the team investigating the attack before sending his ransom email on January 7, 2021.
Ubiquiti chose not to pay the ransom and instead got the FBI involved. Soon after, Sharp’s slip-up showing his home IP put the FBI on his trail. At work, Sharp suggested his home IP was logged in an attempt to frame him, telling coworkers, “I’d be pretty fucking incompetent if I left my IP in [the] thing I requested, downloaded, and uploaded” and saying that would be the “shittiest cover up ever lol.”
While the FBI analyzed all of Sharp’s work devices, Sharp wiped and reset the laptop he used in the attack but brazenly left the laptop at home, where it was seized during a warranted FBI search in March 2021.
After the FBI search, Sharp began posing as a whistleblower, contacting journalists and regulators to falsely warn that Ubiquiti’s public disclosure and response to the cyberattack were insufficient. He said the company had deceived customers and downplayed the severity of the breach, which was actually “catastrophic.” The whole time, Williams noted in his sentencing memo, Sharp knew that the attack had been accomplished using his own employee credentials.
This was “far from a hacker targeting a vulnerability open to third parties,” Williams said. “Sharp used credentials legitimately entrusted to him by the company, to steal data and cover his tracks.”
“At every turn, Sharp acted consistent with the unwavering belief that his sophistication and cunning were sufficient to deceive others and conceal his crime,” Williams said.
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