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FBI Investigates California Hospital Computer Hack

May 04, 2016 by Cogdell Law Firm

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The FBI is investigating the hacking of a Hollywood, California, hospital’s computer system after the hospital paid $17,000 in ransom to regain control of its files, according to a news report.

Hollywood Presbyterian Medical Center said that a hacker used malware to infect the hospital’s computers and then demanded 40 bitcoin -- approximately $17,000 -- in ransom to get the decryption key to unlock the files.  The hospital’s CEO said the ransom was paid as the quickest way to restore the computer systems, and the Los Angeles Police Department was notified after the ransom was paid and the key was received.  The FBI took over the investigation from the LAPD.

By law, hospitals are required to report any data breach that affects more than 500 people.  Hollywood Presbyterian is a 434-bed short-term acute care hospital that is owned by CHC of South Korea.

Hospital staff noticed a problem with accessing the hospital’s computer network and summoned IT workers who discovered malware that had encrypted a number of files, preventing workers from accessing medical records.  The hackers demanded a ransom in exchange for the necessary information to unlock the files.

Hospital CEO Allen Stafanek said that paying the ransom was the most efficient and effective way to regain control of the medical records, and that the malware has been removed from the hospital’s computer systems.

According to the Security Ledger, the FBI has said that paying ransom for a decryption key is the recommended path to take when companies encounter these situations.

“The ransomware is that good,” said Joseph Bonavolonta, the Assistant Special Agent in Charge of the FBI’s CYBER and Counterintelligence Program, during the 2015 Cyber Security Summit in Boston.  “To be honest, we often advise people just to pay the ransom.”

Although the hospital has not identified the source of the malware, the FBI said that it is usually installed via email attachments or downloads from infected websites.

Whether you are facing a serious federal white-collar prosecution, a state murder charge, or misdemeanor charges, The Cogdell Law Firm has the experience, knowledge and reputation you want for your legal team. When results matter most, contact Dan Cogdell at 713-426-2244 or dan@cogdell-law.com.