HomeLocal NewsSacramento law firm sues cybersecurity company over $1 million ransomware attack

Sacramento law firm sues cybersecurity company over $1 million ransomware attack

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Sacramento, CA – A well-known Sacramento law firm, which represents police officers and deputies, has filed a lawsuit against a computer company for over $1 million. The law firm, Mastagni Holstedt, claims it suffered a ransomware attack after hiring the company, Lantech LLC, for cybersecurity services. The lawsuit was lodged in Sacramento Superior Court this week, accusing Lantech of failing to protect their data, resulting in the law firm having to pay a ransom to unlock their files.

When contacted, an office manager at Lantech, who chose to remain unnamed, refused to comment about the ongoing lawsuit. The suit also mentions the former owner of Lantech, Terry Berg, and another company, Acronis Inc., which provides backup data storage. Lantech did not reply to an email asking for comments, and Acronis has denied any involvement in the cybersecurity breach.

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The founder of Mastagni Holstedt, Davis Mastagni, has not made any comments regarding the lawsuit. According to the suit, the cybersecurity breach was carried out by a Russian-speaking hacker group known as “Black Basta.” This group, first identified in early 2022, is reportedly responsible for many ransomware attacks, forcing companies to pay out over $100 million to recover stolen data.

“In its first two weeks alone, at least 20 victims were posted to its leak site, a Tor site known as Basta News,” according to a March 2023 “threat profile” by the U.S. Health and Human Services Department’s Office of Information Security. “It exclusively targets large organizations in the construction and manufacturing industries, but was also observed to target other critical infrastructure, including the health and public health sector.

“While primarily targeting organizations within the United States, its operators also expressed interest in attacking other English-speaking countries’ organizations in Australia, Canada, New Zealand, and the United Kingdom. Threat actors that used the ransomware have additionally impacted organizations based in the United States, Germany, Switzerland, Italy, France, and the Netherlands.”

According to a Reuters report from November, the group known as “Black Basta” has stolen at least $107 million in bitcoin from its victims. The Mastagni law firm, which represents law enforcement officers facing disciplinary actions or criminal charges, mentioned in their lawsuit that they chose Lantech for cybersecurity after explaining their business’s critical need for secure computer networks and data.

The contract with Lantech required the company to handle cloud-based backups of the firm’s servers and data, the lawsuit states.

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“On February 24, 2023, Plaintiff began to experience connectivity issues when its employees tried to log into the firm’s terminal servers,” the suit says.

The Mastagni firm notified Lantech, which reported that “the problem had been resolved,” but computer network difficulties continued, the suit says.

“On February 26, 2023, plaintiff suffered a major outage of its servers and computer network which resulted in the loss of access to its servers and data,” the suit says. “Plaintiff reported the outage to Lantech and it was ultimately determined that Plaintiff’s cybersecurity, for which Lantech was responsible, was breached and that malicious ransomware had been installed blocking access to plaintiff’s servers and data.

“Thereafter, a ransom demand was made by a group known as Black Basta for plaintiff to recover access to its data.”

The law firm attempted to recover its data through Acronis “but discovered that its data backup had been deleted,” the lawsuit says.

“As a result, plaintiff was unable to restore its computer network with the data backup and eventually was forced to pay a ransom to the hackers to regain access to its data,” the suit says. “Even though defendants Lantech and Berg were aware that plaintiff’s network was experiencing a cybersecurity attack and that plaintiff was concerned about the security of its data, they failed to take steps to prevent the deletion of the cloud-based backup of plaintiff’s data which they had arranged with Acronis.”

In a statement to The Sacramento Bee, Acronis said it was not responsible for the law firm’s computer problems.

“As a cyberprotection company, we take security very seriously,” the company said in an email. “No Acronis systems or networks were compromised.

“Acronis and its partner deny any responsibility for what happened to the law firm’s systems and its data. Our investigation revealed that access credentials may have been compromised outside of our systems and used to delete the firm’s backups and execute a ransomware attack.

“Password protection is the responsibility of the customer. Acronis has not been served with the lawsuit and will not be commenting further on this litigation.”

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The lawsuit does not detail how much was paid in the ransom or how the payment was made. However, it accuses Lantech of negligence and breach of contract, and seeks damages exceeding $1 million. The cyberattack led to significant economic losses for Mastagni, including the ransom needed to regain data and access to their servers. Additional costs included fees for ransom negotiation and hiring computer security experts to manage and repair the damage to their network.

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