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DOJ Announces Recovery of Millions in Cryptocurrency that Colonial Pipeline Paid to Ransomware Hackers; Interview with Gov. Phil Murphy, New Jersey Ends Covid-19 Public Health Emergency; Bezos Will Be on First Crewed Flight of His Company's Rocket. Aired 3:30-4p ET

Aired June 07, 2021 - 15:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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PAUL ABBATE, DEPUTY DIRECTOR, FBI: And without a doubt every individual involved displayed that through the achievements reflected here today.

We continue to be committed to using the information intelligence we developed through our investigations to take early, meaningful steps to protect the public. And be preventive.

We will continue to work relentlessly and seek innovative ways to use or unique authorities, world class capabilities and enduring partnerships for maximum impact against our adversaries. Today we deprived a cybercriminal enterprise of the object of their activity, their financial proceeds and funding.

For financially motivated cybercriminals, especially those presumably located overseas, cutting off access to revenue is one of the most impactful consequences we can impose. When the FBI combines our law enforcement and intelligence authorities with those of our partners in government, and the cooperative relationship with private industry, and when we have victims willing to share information to further our collective efforts against cyber adversaries, we can have immediate, permanent effect on ransomware actors.

That is why it is so critical for victims to report intrusions to us as soon as possible, and then work with us to provide evidence and intelligence for our investigations, leading to recovery, attribution and ultimately, prevention. Victim reporting not only can give us information we need to have immediate real world impact on the actors, it can also help prevent future intrusions into other victim networks and prevent further harm from occurring.

With continued cooperation and support from victims, private industry and our U.S. and international partners, we will bring to bear the full weight and strength of our combined efforts and resources against those actors who think nothing of threatening public safety and our national security for profit. Thank you.

And I now like to invite to the podium the Acting U.S. Attorney for the Northern District of California, Stephanie Hines.

STEPHANIE HINES, ACTING U.S. ATTORNEY FOR THE NORTHERN DISTRICT OF CALIFORNIA: I want to thank Deputy Attorney General Monaco for inviting me to add my remarks.

Last week Deputy Attorney General Monaco spoke about the onslaught of ransomware attacks being carried out and suggested we all should focus organized resources on meeting this challenge.

As the Acting United States Attorney for California's Northern Judicial District, I am directing my office to continue to marshal the resources necessary not only to apprehend and bring to justice ransomware extortionists, but also to deprive them of the profits that incentivize their crimes.

Today we announced the seizure of millions of dollars in bitcoin paid by an innocent victim in ransom in a bid to regain control of computer systems. The extortionists will never see this money. New financial technologies that attempt to anonymize payments will not provide a curtain from behind which criminals will be permitted to pick the pockets of hard-working Americans. This case demonstrates our resolve to develop methods to prevent evil-doers from converting new methods of payment into tools of extortion for undeserved profits.

The Northern District of California is home to Silicon Valley, an area that year after year fuels remarkable, innovation and expansive innovative growth in the technology sector. As the nation increases its reliance on technologies developed within and exported from northern California, so, too, do we increase our reliance on law enforcement to develop, maintain and employ the expertise necessary to keep our technology safe.

Criminal actors employ aggressive, complex tactics to attack our infrastructure and our daily lives, and increasingly can do so from anywhere on the planet. Our efforts to disrupt and deter these threats must be creative and advanced.

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I want to thank or partners at the FBI for their professional deployment of expertise and for their skill in coordinating with the prosecutors in my office and with our colleagues in the criminal division components, to allow us to reach this result.

I'd like to turn the podium back over to Deputy Attorney General Monaco.

LISA MONACO, U.S. DEPUTY ATTORNEY GENERAL: Thanks Stephanie. OK, I think we're ready for a few questions.

UNIDENTIFIED MALE: Pete Williams, NBC.

PETE WILLIAMS, NBC NEWS: Ms. Monaco, how much of the money did you take out of this bitcoin account that you found? Did you clean it out, basically? Is it the first time the government has ever done this? MONACO: So, it's not the first time that the government has ever

seized cryptocurrency in connection with ransomware attacks. This is the first such seizure that the ransomware and digital extortion task force has undertaken.

With regard to your first part of your question, Pete, I'll let the court documents speak for themselves. They lay out the probable cause that was presented to the Northern District -- to the judge in the Northern District of California, with regard to the tracing of the criminal proceeds to the DarkSide actors.

UNIDENTIFIED FEMALE: Hi, I was wondering, you know, does this mean, you know, based on this example, for other companies when this happens to them, does this imply that they should also pay if it's through cryptocurrency because of the blockchain technology and the way the FBI was able to track the money and seize it? I mean, is that the tactic that companies should consider?

MONACO: Look, the message we are sending today is that if you come forward and work with law enforcement, we may be able to take the type of action that we took today to deprive the criminal actors of what they're going after here, which is the proceeds of their criminal scheme.

We cannot guarantee, and we may not be able to do this in every instance, so the point here is, this is a very significant undertaking. This was an attack against some of our most critical national infrastructure in the form of the Colonial Pipeline. This represents the swift whole of government response represented in the work of this task force and our determination to go after the entire ransomware criminal ecosystem used by these types of criminal networks and their affiliates, which are targeting and going after, including in disruptive ways, our critical infrastructure.

UNIDENTIFIED MALE: Alex, ABC.

ALEX PEREZ, CORRESPONDENT, ABC: Thanks. So I guess when you boil down the figures though, they're still technically, walking away with roughly $2 million in cryptocurrency payments here.

So I wonder what you say to that argument that the deterrent factor really isn't here in this case because this group is based out of Russia and because of that isn't likely to face criminal consequences for these actions?

MONACO: Well, I'm not going to get ahead of the investigative efforts and the full consequences that -- associated with this ongoing investigation. But this represents the seizure and deprivation from criminal actors of exactly what they're going after, which is criminal proceeds of their scheme. And it was swiftly done based on and thanks to the quick notification by Colonial Pipeline.

It worked with the U.S. government and the message here today is, we will bring all of our tools to bear to go after these criminal networks, including the ecosystem and the illicit and the abuse, frankly, of the online infrastructure that they use, including digital currency, to perpetrate these schemes.

UNIDENTIFIED MALE: All right, thank you very much. If you have any additional questions, please send them to me and we'll get them answered for you. Have a great day, everyone.

MONACO: Thanks very much.

ABBATE: Thank you.

VICTOR BLACKWELL, CNN HOST: All right, so you've been listening to the breaking news there out of the Department of Justice that they were able to recover millions of dollars from the DarkSide, from that outfit that hacked Colonial Pipeline a few weeks back. And we all remember the gas shortage that happened after that.

Let's bring in Evan Perez, Alex Marquardt and former FBI Deputy Director Andrew McCabe to talk about this. Andrew, to you first. This is a win for the DOJ. It's a win for Colonial Pipeline. Is it a significant win in the overall fight that this country is facing against ransomware and hackers?

ANDREW MCCABE, CNN SENIOR LAW ENFORCEMENT ANALYST: Well, it is a win. It's a great result and it makes me enormously proud of my former colleagues at the FBI, and in DOJ, but -- and while I will say that if we are able to take the profit out of ransomware, you will see an enormous reduction in ransomware. But, as you've kind of alluded to, Victor, this is one case.

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And we have ransomware attacks on the -- you know, we have numbers in the several thousand every year in which the average ransom that's recovered -- that's taken by the attackers, you know, those numbers are going up $350,000 per attack was the last number I saw.

So, this is still an incredibly lucrative criminal business and it will continue, you know, undermining the effectiveness of all of our businesses and industries and governments here in the United States until we get our hands around it.

ALISYN CAMEROTA, CNN HOST: Evan, first of all, great reporting that you were able to break it for us on our program before the DOJ came out. But Victor and I were trying to follow along. Do we know exactly how much money they were able to recover and exactly how much money Colonial paid?

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Yes. The CEO of the company said they paid about $4.4 million. There's -- obviously, there is a value in bitcoin that translated into U.S. dollars. And lately, bitcoin has been falling in price, so it's -- you know, around $4.4 million is what they said that they paid, according to an interview that the CEO gave to "The Wall Street Journal."

According to the Justice Department today they were able to recover the equivalent of about $2.3 million, again, from this cryptocurrency, from this bitcoin wallet that the FBI was able to track the payment to.

I think it's important to note a couple of things. I think the -- certainly, the message that the FBI and that Lisa Monaco, the Deputy Attorney General are trying to send is to companies. Call the FBI, see what we can do. It's not going to work every time, but at least give it a shot. So that's number one.

Secondly, I think it's important also that there's some specific circumstances here that allow the FBI to do this. One of the things is that the hackers were using -- or were demanding bitcoin. There are other types of cryptocurrency that some hackers and criminals are using nowadays that the FBI may not have as much success in tracking.

Bitcoin, I've certainly seen in a number of cases recently, you can see that the FBI, the IRS and other agencies have been able to figure out how to track some of those payments and that's a big deal for the criminal hackers.

Now the smart ones have stated to migrate to other types of cryptocurrency so that poses and additional problem for the FBI. And it means that this is a win and it's a very important one, but it might not be replicated in other cases.

BLACKWELL: Now, Alex, I remember when this was going on, the hack was on a Friday, I believe, and then by the middle of the next week, we had an official from the administration who was briefing from the White House saying that Colonial had not shared the details of the vulnerability from this hack, and that they were still standing by, if needed, for assistance. What we've learned today is there were behind the scenes early conversations that made this possible.

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: And that's extremely important. You know, you're essentially getting two messages from this administration amid this spate of ransomware attacks.

The first is, you know, please don't pay this ransom. But they certainly understand there are companies that are going to be in a very tough spot. You know, Colonial Pipeline is a perfect example of that. If Colonial Pipeline essentially hadn't paid the ransom -- and the reason they did, they said, was because they wanted to get their operations up and running.

Of course, they didn't know how long the attack would last. The government understands these companies need to pay these ransoms to get back online. So what they're saying also is, all right, if you're going to pay the ransom, or regardless, please share as much information with us as possible.

So that as Evan said, you know, if these payments are made, at least, you know, there's some information that they can follow, there's the money trail that they can follow to try to track these guys down. And if possible, as in this case, actually access that wallet and confiscate that money.

But Victor and Alisyn, the real challenge here is finding that middle ground. Getting companies -- and it's not just major companies like Colonial or JBS Foods, which we've been talking about for the past week. It's school systems, it's hospitals, you know, it's small and medium size organizations, local governments.

If they're -- if the government is going to ask them not to pay these ransoms, well then, they need to work with those organizations to try to come up with a middle ground. And what they're saying for now is just give us as much information as possible so we can do our jobs in tracking these guys down and shutting down these networks.

But then the next thing they say is, you really need -- and you heard this from Lisa Monaco there -- you really need to harden your defenses. You need to modernize your cybersecurity. And that those two things are really what they're saying right now in terms of what they want to see happen. They want all these organizations to make sure that their cybersecurity is much harder and then they say they themselves are going to really focus on the money trail, to track down and disrupt these attackers.

CAMEROTA: It was interesting to hear the breadth of what's been happening. I mean they just disclosed that DarkSide has been digitally stalking U.S. companies for the better part of last year, Andy, and that they -- more than 90 victims across various U.S. business structures.

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We just know about, you know, half a dozen, but there's been so many. I mean the FBI would be my first call. Why wouldn't a business call the FBI right away?

MCCABE: Well, I wish everybody had the same instincts that you do, Alisyn. And I thought that Deputy Director Abbate did a great job of kind of taking us a little behind the curtain there to how significant a threat DarkSide is.

I remember from my own time standing behind that podium that similar press conferences, is not an easy thing to do, but most -- well, I won't say most. Many companies are afraid that going to law enforcement and exposing the breach or the attack or the ransomware will have a negative impact on their brand image, on their, you know, on their financial position, down the line. So, many companies approach these things from a perspective of, let's keep this quiet. If we can afford it, let's pay the ransom to get our information back, and move on and nobody's the wiser.

Unfortunately, that keeps the FBI and DOJ out of the position of being able to help, being able to warn others, learning from the attack, learning who the attackers are that are behind the specific incident, and helping to prevent from happening in the future. So, this early reporting is incredibly, incredibly important message. And I hope more people are getting it.

BLACKWELL: Andrew McCabe, Alex Marquardt, Evan Perez, thank you.

MCCABE: Thanks. CAMEROTA: OK next, New Jersey's governor lifts the COVID state of

emergency in that state as he races to meet President Biden's vaccination goal. He'll join us live on how they plan to do it.

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CAMEROTA: New Jersey's governor signing a bill that ends the state's COVID-19 public health emergency. New cases of the COVID-19 virus they are dropping dramatically as you can see on your screen, but New Jersey's economy is still working to recover. Roughly 30 percent of the state's small businesses shut down permanently in the past year and getting everyone back to work now at the ones that are reopening is proving tough.

New Jersey Governor Phil Murphy joins us now. Good afternoon, governor.

GOV. PHIL MURPHY (D-NJ): Good afternoon, Alisyn, good to be with you.

CAMEROTA: Great to see you in this time. OK, your state is currently at 62.8 percent of adults being vaccinated which is obviously high. Do you think that you're going to hit President Biden's 70 percent of U.S. adults vaccinated in less than a month by July 4th?

MURPHY: Yes, I think we will, Alisyn. It will be close. We've got a lot of different programs and initiatives that we're throwing at this, but our goal is to get 4.7 million fully vaccinated by the end of June. Again, I think it'll be tight but I think we're going to get there.

CAMEROTA: There are other governors who have taken I would say a less urgent approach. I mean, still encouraging people to get vaccinated, but I'm thinking of Mississippi's governor, Governor Reeves, who was on with Jake Tapper this weekend. Let me play what he said.

(BEGIN VIDEO CLIP)

GOV. JONATHON REEVES (R-MI): I encourage my fellow Mississippians to go get vaccinated but that's an individual choice and we've got to get out of this idea that central government in Washington, D.C. knows best on all decisions.

(END VIDEO CLIP)

CAMEROTA: What do you think of that message?

MURPHY: Yes, I don't see it that way, Alisyn, honestly, I see this as very little about centralized big brother government. I see this about making decisions based on the science, on the fact, the data.

You've pointed out at the top that our numbers have gotten dramatically better, and that's correlated without question to the vaccination program rollout. I'm proud of what we've done. I think we're among the biggest and far-reaching rollouts of any American state. We still have work to do, particularly addressing inequities in black and brown communes especially. But I think this is making decisions based on the facts, and that's what we're going to continue to do.

CAMEROTA: As you just mentioned, there's still a worker shortage in New Jersey, particularly right now at the Jersey Shore for the summer as you approach the summer. Business owners tell some of our reporters that the enhanced employment benefits are proving to be a disincentive to getting people to come back to work.

Here's what as far as we know it how the numbers work. Minimum wage in New Jersey per week $480. With the enhanced unemployment benefit it's $726. Would you consider as some governors are ending those early in your state?

MURPHY: No, we won't consider that, Alisyn. I think it's potentially one of the contributors to the labor challenges we have which I believe, by the way, are temporary. I think the economy has snapped back, thank god, by the way ahead of the labor market being able to catch up with it. I think you're seeing the same thing in raw materials and other inventories. I think it could be part lit 300 bucks but I also think it's access to childcare. It's schools are still at hybrid in a lot of our districts. I also think it's people that are afraid to get back in because of the pandemic.

[15:55:00]

The shore is booming, so I don't make light of the challenges because you can see it in restaurants and bars and what not but I do think this gets -- this gets ironed out over a period of time here.

CAMEROTA: How? I mean but what are you going to do about those that you just laid out?

MURPHY: Well, I think you -- among other things you're starting to see employers pay up, and I think that's probably inevitable and I think that will lead at least or may be a contributor right now to some mild inflation because if you're paying your staff more you're probably going to find an employer some way to pass that on to your customer, and my guess is that's going to be in the short term at least, that's going to be the ticket to -- to get fully staffed up.

CAMEROTA: That's exactly what we've heard for some of the Jersey Shore business owners and is that OK?

MURPHY: Is it OK to pay more?

CAMEROTA: No, is it OK that there's going to be a ripple effect that it's going to hit the Jersey Shore hard, that you're going to pass it along to your customers and that may make it less appealing?

MURPHY: I think at the end of the day, first of all, paying workers more money as opposed to less money is never a bad thing. So let's just stipulate that. That's a big driving reason why we've raised our minimum wage over a period of years to $15. I think the consumer probably ends up paying a little bit more, but at

the end of the day the small businesses will have a staff they need and god willing it will be worth it for the customer.

CAMEROTA: I want to ask you about that breaking news that we just had where the FBI came out and announced that they were able to recover some of the ransom that was paid by the Colonial Pipeline and they considered it a big win for law enforcement and for, you know, cutting into the DarkSide ransom hackers.

You guys are not immune to it obviously in states, certainly New Jersey has had its share of ransomware attacks. What can you do at the state level to stop this?

MURPHY: Yes, I always saw the headlines and I thought of the FBI announcement which is a terrific one.

Listen, we've been attacked and we've got a Department of Homeland Security and Preparedness that spends a significant amount of its time and focus on cybersecurity, and we'll continue to. So not only has the state been attacked and we are constantly making our systems more resilient but we have deep connections with our business community, with our research universities and work with them to share best practices to help them in any way that they can to harden their defenses.

I think that this is a new reality for all actors whether you're a private sector or public sector and I think the more that we can work together the more resilient the better defenses we'll be able to put up.

CAMEROTA: Before I let you go the Republican primary for people who want to run against you is happening, and a lot of them are trying to curry favor with former President Donald Trump. Do you expect former President Trump to get involved in this race and what would happen if he does?

MURPHY: I don't have any insight into the president's involvement or lack of it, but I would say this, the candidates who are running, I don't pay much attention to it, but whatever headlines I read they are each trying to out-Trump the other, get more and more to the right.

Frankly, I think this is a significant disconnect with the bulk of their own party. New Jersey has got a rich and strong tradition of both the Democrat and Republican party being viewed to be moderate and sensible. These folks seem to be tripping over themselves to get more to the right, so we shall see. We'll be ready to face off against whoever comes out of it and we'll continue to on our side try to most state forward and make decisions I mentioned earlier based on the facts and take our state to a better place.

CAMEROTA: Governor Murphy, great to see you at any time of day, thanks so much for being on.

MURPHY: Thanks for having me, Alisyn, take care.

CAMEROTA: You, too.

BLACKWELL: Be sure to join CNN at 8:00 Eastern as former President Barack Obama joins Anderson Cooper for a rare one-on-one interview. His thoughts on the state of democracy in America, the Republican Party and the radical -- racial divide I should say that exists in this country. That's tonight at 8:00 Eastern.

Well now to the richest man on the planet who will be heading to the edge of space.

CAMEROTA: Why not.

BLACKWELL: Because when you have that much money you go where you want to go. You go where you want to go.

Amazon CEO Jeff Bezos, he's putting himself on the first crewed space flight that his space company Blue Origin will take. The new Shepard rocket lifts off on July 20th, 15 days after he resigns as the CEO of Amazon. Bezos and his younger brother Mark who he calls his best friend will be on board.

Blue Origin says one seat will be given to the winner of a month long auction. Bidding has reached nearly $3 million so far. Looks like somebody outbid you, Alisyn

CAMEROTA: No, I have no interest in this.

BLACKWELL: Really?

CAMEROTA: I have no interest in this. Do you an interest in going into space. I find my daily commute to be stressful enough.

BLACKWELL: I feel like if I had the opportunity I would go.

CAMEROTA: You would?

BLACKWELL: I absolutely would.

CAMEROTA: Bidding is open.

BLACKWELL: Little rich for my blood. The Lead with Jake Tapper starts right now.

END