Ex-Ubiquiti engineer behind "breathtaking" data theft gets 6-year prison term

Ex-Ubiquiti engineer behind
May 2023

An ex-Ubiquiti engineer, Nickolas Sharp, was sentenced to six years in prison yesterday after pleading guilty in a New York court to stealing tens of gigabytes of confidential data, demanding a $1.9 million ransom from his former employer, and then publishing the data publicly when his demands were refused.

Sharp had asked for no prison time, telling United States District Judge Katherine Polk Failla that the cyberattack was actually an "unsanctioned security drill" that left Ubiquiti "a safer place for itself and for its clients," Bloomberg reported. In a court document, Sharp claimed that Ubiquiti CEO Robert Pera had prevented Sharp from "resolving outstanding security issues," and Sharp told the judge that this led to an "idiotic hyperfixation" on fixing those security flaws.

However, even if that was Sharp's true motivation, Failla did not accept his justification of his crimes, which include wire fraud, intentionally damaging protected computers, and lying to the FBI.

"It was not up to Mr. Sharp to play God in this circumstance," Failla said.

US attorney for the Southern District of New York, Damian Williams, argued that Sharp was not a "cybersecurity vigilante" but an "inveterate liar and data thief" who was "presenting a contrived deception to the Court that this entire offense was somehow just a misguided security drill." Williams said that Sharp made "dozens, if not hundreds, of criminal decisions" and even implicated innocent co-workers to "divert suspicion." Sharp also had already admitted in pre-sentencing that the cyber attack was planned for "financial gain." Williams said Sharp did it seemingly out of "pure greed" and ego because Sharp "felt mistreated"--overworked and underpaid--by the IT company, Williams said.

Court documents show that Ubiquiti spent "well over $1.5 million dollars and hundreds of hours of employee and consultant time" trying to remediate what Williams described as Sharp's "breathtaking" theft. But the company lost much more than that when Sharp attempted to conceal his crimes--posing as a whistleblower, planting false media reports, and contacting US and foreign regulators to investigate Ubiquiti's alleged downplaying of the data breach. Within a single day after Sharp planted false reports, stocks plummeted, causing Ubiquiti to lose over $4 billion in market capitalization value, court documents show.

Ubiquiti and Sharp's lawyer Matthew Myers did not immediately respond to Ars' request for comment.

Williams had pushed the court to impose a sentence between eight to 10 years, arguing that anything less would be perceived by the public as a "slap on the wrist." Sharp's six-year term is slightly less than that, but in a press release, Williams described the sentence as imposing "serious penalties" for Sharp's "callous crimes."

"He was disgruntled at his employer, planning to leave the company, and wanted to extort millions of dollars and cause damage on his way out," Williams said in his sentencing memo.