Armenian National Extradited to the United States Pleads Guilty to Ransomware Extortion Conspiracy

<p>PORTLAND, Ore.— An Armenian national extradited from Ukraine to the United States pleaded guilty yesterday for his role in Ryuk ransomware attacks and an extortion conspiracy targeting companies throughout the United States, including a technology company operating in Oregon.</p><p>Karen Serobovich Vardanyan, 34, pleaded guilty to conspiracy and computer fraud.</p><p>According to court documents, between November 2019 through April 2020, Vardanyan illegally accessed computer networks of victim companies to deploy Ryuk ransomware on compromised servers and workstations. Ryuk ransomware is a type of malicious software designed to encrypt data on a victim's computer or network and prevents the victim from accessing the encrypted files until a ransom is paid.</p><p>As part of the scheme, ransom payments were extorted from victim companies in exchange for decryption keys to regain access to their data. A ransom note was placed on the computer systems demanding ransom payments in Bitcoin, a form of cryptocurrency, and provided an email address that victims could use to communicate with the cybercriminals.</p><p>Vardanyan worked with his co-conspirators to attack a company in Michigan that paid 200 bitcoin or over $1.1 million at the time of payment to restore access to their network. They also attacked a company in Wilsonville, Oregon, and in February 2020 attacked a school in Texas.</p><p>Vardanyan and his co-conspirators illegally accessed computer networks of victim companies and deployed ransomware on hundreds of compromised servers and workstations. Vardanyan and his co-conspirators are alleged to have received approximately 1,610 bitcoins in ransom payments from the victim companies, which was valued at over $15 million at the time of payment.</p><p>On Feb. 22, 2024, a federal grand jury in Portland returned a three-count <a href="https://www.justice.gov/usao-or/pr/armenian-national-extradited-united-states-faces-federal-charges-ransomware-extortion">indictment </a>charging Vardanyan with conspiracy, computer fraud, and extortion.</p><p>Vardanyan faces a maximum sentence of five years in prison, a $250,000 fine, and three years of supervised release for conspiracy. He faces a maximum sentence of 10 years in prison, a $250,000 fine, and three years of supervised release for computer fraud. Vardanyan will be sentenced on Sept. 22. 2026, by a U.S. district court judge.</p><p>As part of the plea agreement, Vardanyan has agreed to pay over $1.1 million in restitution.</p><p>U.S. Attorney Scott E. Bradford for the District of Oregon made the announcement.</p><p>The case is being investigated by the FBI. It is being prosecuted by Katherine A. Rykken, Assistant U.S. Attorney for the District of Oregon.</p><p>The Justice Department’s Office of International Affairs provided significant assistance in securing Vardanyan’s arrest and extradition from Ukraine.&nbsp;The U.S. Attorney’s Office thanks the Ukrainian authorities for their assistance in this matter.</p>