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Robert Pera. (AP Photo/Lance Murphey)
ASSOCIATED PRESS
A former cloud engineer at Ubiquiti Inc., a wireless tech equipment company founded and owned by billionaire and NBA Memphis Grizzlies owner Robert Pera, was arrested on Wednesday in Oregon. The ex-employee, Nickolas Sharp, allegedly stole gigabytes of confidential data from the company and then extorted his former employer for $1.9 million for the return of the files. Sharp, who worked at the New York-based tech company from August 2018 up until sometime around April 2021, also allegedly acted as an anonymous whistle-blower and planted damaging news stories claiming that a hacker was responsible for the theft. News of the security breach, which reportedly exposed customer account credentials, sent the stock tumbling 20% or $4 billion in a day in late March.
The biggest individual loser that day was Pera, who owns 75% of the company and whose fortune dropped an estimated $3 billion in hours. He’s now worth $17.1 billion.
“We allege Mr. Sharp created a twisted plot to extort the company he worked for by using its technology and data against it,” said Federal Bureau of Investigations Assistant Director Michael J. Driscoll, in a press release announcing his arrest. “Not only did he allegedly break several federal laws, he orchestrated releasing information to media when his ransom demands weren’t met. When confronted, he then lied to FBI agents. Mr. Sharp may have believed he was smart enough to pull off his plan, but a simple technical glitch ended his dreams of striking it rich.”
Ubiquiti and Pera did not immediately respond to requests for comment.
According to the indictment, released by the U.S. Attorney’s Office in the Southern District of New York, Sharp used his access as a senior developer at Ubiquiti to download gigabytes of confidential data in December 2020. In attempting to conceal his unauthorized activity in Ubiquiti’s networks, he ended up causing damage to the company’s computer systems. So in January, Ubiquiti dispatched a team to fix the issues — a team that included Sharp himself.
It was while Sharp was on this remedial team that he sent a ransom note to Ubiquiti, posing as an anonymous hacker. He demanded 50 bitcoin, worth $1.9 million at the time, in exchange for the stolen data.
According to the indictment, three minutes before Sharp’s given deadline to the company at 11:57 P.M. on January 9, 2021, he wrote, “No BTC. No talk. We done here.” He then included a link to a publicly accessible folder that included the data he had stolen from the company.
Two months later in March, the FBI executed a search warrant on Sharp’s home in Oregon, seizing some of his electronic devices. A few days after the FBI’s visit, Sharp posed as an anonymous whistleblower and told media outlets that Ubiquiti had suffered a “catastrophic” security breach and tried to cover it up. After these stories were published, the company’s stock fell close to 20% from March 30 to March 31, losing $4 billion in market capitalization, according to the indictment.
Sharp worked at Amazon as a software engineer before moving to Ubiquiti as a cloud lead engineer. He left Ubiquiti around the same time that the FBI issued its search warrant on his home. At the time of his arrest, according to his LinkedIn profile, he was a senior staff software engineer at video telematics tech company Lytx.
Ubiquiti and its billionaire CEO were unnamed in the indictment, which was unsealed on Wednesday. He started the company in San Jose in February 2005 while he was still working at Apple as a hardware engineer. A month later, Pera spent $30,000 (from Apple options and credit card debt) to build a prototype in his apartment and set up a website. He took the company public in 2011 and became a billionaire the year after. In 2012, he bought a controlling stake of the Memphis Grizzlies.
Pera, who keeps a low profile, has since moved the company’s headquarters to New York City. He has reportedly amassed $70 million worth of personal real estate in New York, Seattle and Miami Beach. More recently, according to local reports, he bought a luxury apartment in Taiwan’s Taipei for $20 million.