January 18, 2017 By Paul Wallin


The Rise of Ransomware Forces California to Change Its Laws (PC 523)

“Give me your lunch money or I’ll beat you up.” That sentence, growled by an elementary school bully, is how many of us are introduced to the notion of extortion.

As we get older, the substance of the demand is fundamentally the same, but the context becomes more complex. Extortion can involve threats to commit physical harm to the victim or the victim’s family members, or to do harm to the victim’s reputation. The demand may be for money, or for the performance of some task that the extortionist cannot do alone.

Now that we are almost two decades into the 21st century, and much of our economy is built upon information technology, we are seeing a new type of extortion: holding computer data hostage until a demand for payment is met. To accomplish this, sophisticated cyber-extortionists use a tool known as “ransomware.”

What is Ransomware?

Imagine that, without your knowledge, someone changed the locks on your car and would not give you the key until you paid him or her a large amount of money. That is essentially how ransomware works. It is Trojan horse software that is usually delivered to a computer or network when the user navigates to a website or opens an email with a hidden virus. The software encrypts the user’s data, holding files hostage until a code is entered (which typically requires making a payment to the hacker).

Ransomware cases can involve the data of individual persons or large businesses. The most prominent example involved the locking of data at Hollywood Presbyterian Medical Center in February 2016. Crypto-extortionists locked hospital staff out of electronic records and systems until payment was made in the form of bitcoins, a digital currency that can be used and traded anonymously. In this case, the ransom was reported to be around 40 bitcoins, worth approximately $17,000.

Why Do We Need a New Law Against Ransomware? (PC 523)

Ransomware in California has been prosecuted under extortion law that is not a perfect fit for these cases. The crime of extortion under PC 518 requires the threat to be delivered before the act has taken place. In a ransomware case, the act has already happened before demand for payment is made. The data is already locked from the person to whom it belongs. Ransomware, therefore, is actually more like “data kidnapping” than it is extortion.

Because of this, and because of the increasing amount of cases (it was reported that ransomware generated $209 million in payments in the first three months of 2016), prosecutors needed a new tool to fight this crime. The California legislature responded by amending Penal Code Section 523 to make it a crime to introduce ransomware into any computer, computer system, or network with the intent to extort money or other consideration. This crime is punishable by up to four years in county jail.

Contact Wallin & Klarich For Help with Your Case

If you are accused of using ransomware to extort money from an individual or organization, you will need the help of an experienced criminal defense attorney. For over 40 years, our attorneys at Wallin & Klarich have been successfully defending our clients accused of extortion and other serious crimes. We will use all of our skill and knowledge to help you obtain the best possible outcome in your case.

With offices in Orange County, Riverside, San Bernardino, Los Angeles, San Diego, West Covina, Torrance and Victorville, there is an experienced Wallin & Klarich criminal defense attorney available to help you no matter where you work or live.

Contact our offices today at (877) 4-NO-JAIL or (877) 466-5245 for a free, no-obligation phone consultation. We will get through this together.

AUTHOR: Paul Wallin

Paul Wallin is one of the most highly respected attorneys in Southern California. His vast experience, zealous advocacy for his clients and extensive knowledge of many areas of the law make Mr. Wallin a premiere Southern California attorney. Mr. Wallin founded Wallin & Klarich in 1981. As the senior partner of Wallin & Klarich, Mr. Wallin has been successfully representing clients for more than 30 years. Clients come to him for help in matters involving assault and battery, drug crimes, juvenile crimes, theft, manslaughter, sex offenses, murder, violent crimes, misdemeanors and felonies. Mr. Wallin also helps clients with family law matters such as divorce and child custody.

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