A former ransomware negotiator for DigitalMint was sentenced to 70 months in jail for deceiving his employer’s clients and conspiring with ransomware affiliates to extort a combined $75.3 million from five U.S. companies he was entrusted to aid during their moments of extreme crisis, the Justice Department said Thursday. 

Angelo John Martino III shared confidential information he gained from his work as a ransomware negotiator, including victim organizations’ negotiating positions and insurance policy limits, to extract the maximum payment for himself and other BlackCat affiliates he colluded with in backchannels.

Five of Martino’s victims hired DigitalMint, which assigned the 41-year-old to conduct ransomware negotiations on their clients’ behalf — a rare position he exploited to play both sides, effectively conducting ransomware negotiations with himself and his co-conspirators.

The five victims, all of which paid a ransom between April 2023 and September 2023, include a nonprofit that paid a nearly $26.8 million ransom, a financial services company that paid nearly $25.7 million, and a hospitality company that paid almost $16.5 million. 

DigitalMint hired the South Florida-based man in 2022 after he was already engaging in criminal activity, according to court records. The husband and father of two young children had a long history as a cybersecurity professional, dating back to at least 2015, with previous stints at Booz Allen Hamilton, Tracepoint and TRM Labs.

Martino surrendered to U.S. Marshals in March, was released on a $500,000 bond, and pleaded guilty in April to conspiracy to obstruct, delay or affect commerce or the movement of any article or commodity in commerce by extortion. He faced up to 20 years in prison.

Martino also admitted to conspiring with Kevin Tyler Martin, another former ransomware negotiator at DigitalMint, and Ryan Clifford Goldberg, a former manager of incident response at Sygnia, to deploy BlackCat ransomware, also known as ALPHV, against five additional U.S. companies between April and November 2023. 

Goldberg, Martin and Martino split proceeds from a nearly $1.3 million ransom payment they received from a medical company in May 2023, but did not successfully extort a financial payment from the other four victims.

Goldberg and Martin pleaded guilty in December to participating in a series of ransomware attacks and were each sentenced in April to four years in prison. 

DigitalMint insists it had no knowledge of Martino’s criminal acts. “The actions of Martino and his co-conspirators were deliberately concealed from DigitalMint and were in clear violation of the company’s values, ethical standards and the law,” a company spokesperson told CyberScoop in a statement.

The company also reiterated that it immediately terminated Martino and suspended his access to systems when the Justice Department notified the company it was investigating him in April 2025.

“DigitalMint maintained controls consistent with industry standards, including background checks and compliance procedures, but Martino intentionally hid his conduct from the company, including through separate, unauthorized communication channels that the government’s filings describe as accessible only to Martino and the BlackCat negotiators and affiliates,” the spokesperson added.

DigitalMint has yet to directly answer questions about whether it refunded its clients who were victimized by Martino. 

“We are not able to discuss specific client relationships or fee arrangements due to confidentiality obligations,” the spokesperson said. “We remain committed to our clients and will continue to maintain strict confidentiality on all commercial matters.”

The case against Martino showcases an extreme, albeit rare, example of the dark underbelly of ransomware negotiation as a practice. The pitfalls of ransomware negotiation are excessive and these backchannel negotiations, which remain largely unscrutinized, can go awry for various reasons.

Officials describe Martino as a ‘double agent’ driven by greed

Prosecutors said Martino obtained an ALPHV affiliate account that he shared with his co-conspirators and received a portion of the ransomware payments for his involvement in the conspiracy.

Authorities have seized $10 million in assets, including a bayfront home with an estimated value of $1.68 million, a second single-family home with an estimated value of $396,000, and cryptocurrency wallets controlled by Martino. Law enforcement also seized multiple vehicles, a food truck and a 29-foot luxury fishing boat that Martino obtained using proceeds from his crimes.

“Angelo Martino’s victims shared heartbreaking accounts of how their businesses were nearly destroyed, while the people they hired to help them instead betrayed them to ransomware gangs,” A. Tysen Duva, assistant attorney general at the Justice Department’s Criminal Division, said in a statement. “Today’s sentence accounts for the harm Martino caused and demonstrates that the Department of Justice can and will identify and prosecute cybercriminals to the fullest extent of the law.”

Court records include a series of chats Martino held with co-conspirators and victims that exemplify the lengths he went to betray DigitalMint’s clients and empower his accomplices with crucial tips for a successful negotiation strategy.

During an incident response with one of his victims, Martino told a BlackCat affiliate the company’s insurance carrier “was only approving small accounts,” according to his plea agreement. “Keep denying our offers and I will let you know once I find out the max the[y] want to pay,” he added.

“We don’t know how you came up with your demand but we are losing money operationally and all of our loans are going to turnover on us this year at double the interest rates,” Martino said in a negotiation chat visible to DigitalMint and the victim organization in the hospitality industry. “We are able to give you $1 million now, which is a very serious offer.”

Following Martino’s instructions, the BlackCat accomplice responded: “Well, you can keep that for the penalties and lawsuits which are coming your way in case we expose you. Time is ticking — we know how much you can pay. Contact your insurance. We know about them also. Stop wasting time.”

That victim company ultimately paid a ransom worth nearly $16.5 million at the time to receive a decryptor and the BlackCat affiliate’s commitment to not publish stolen data. Two other victims Martino represented via DigitalMint at the time paid $6.1 million and $213,000 ransoms for similar commitments.

“Angelo Martino sold out the very victims he was hired to represent, handing their confidential negotiating positions to BlackCat actors to drive up ransoms and enrich himself,” Brett Leatherman, assistant director of the FBI’s Cyber Division, said in a statement.

In a sentencing memo, federal prosecutors described Martino as a “double agent working to maximize the harm to his clients and the financial gain to cybercriminals who paid him a part of the ransom.”

Prosecutors added: “This was not a crime of opportunity or momentary weakness; it was a sustained abuse of a fiduciary-like relationship driven by a single purpose: greed.”

ALPHV/BlackCat, which first appeared in late 2021, was a notorious ransomware variant linked to a series of attacks on critical infrastructure providers. The Justice Department disrupted BlackCat in December 2023, seized sites operated by some of its affiliates, and said the FBI developed a decryption tool that helped hundreds of victims restore their systems and save about $99 million in ransom payments at the time. 

Martino is scheduled to return to court Sept. 17 to determine the amount of restitution ordered against him for his crimes.

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On Wednesday, Microsoft released two new red teaming tools — Rampart and Clarity — meant to help developers design more secure agentic software and assist incident responders in the face of ongoing breaches.

Rampart is built on top of PyRIT, an existing open automation framework Microsoft developed for red teaming generative AI systems. But while PyRIT scans already-built systems for security flaws, Rampart is made to continuously test code for vulnerabilities during the development process, encoding both adversarial and benign testing scenarios into the software development pipeline to flag exploitable bugs and dependencies.

Microsoft said Rampart was built to focus on cross-prompt injection attacks, where “an agent retrieves or processes potentially poisoned content from documents, emails, tickets, and other data sources that manipulate behavior indirectly.” It also confirms fixes or exploits work as intended through multiple rounds of testing, as opposed to tools that perform “single shot validation.”

The second tool, Clarity, can be run as a desktop app, a web interface or directly embedded into a coding agent to provide real time security engineering guidance to developers at the outset of a project. It can categorize and track different business objectives related to the code and highlight downstream security implications along with more secure by design alternatives.

Ram Shankar Siva Kumar, who founded Microsoft’s AI red team in 2019, told CyberScoop that the company has seen internal security benefits from using the tools, but believesRampart and Clarity’s growth depends on contributions from other developers outside the Microsoft ecosystem.

In the fast-moving world of AI, where vibe coding, rogue AI agents and a steady churn of new model releases create fresh security implications nearly every week, Siva Kumar said it was important to begin building foundational, AI-centric security processes into the software development pipeline.

“When you hear a lot of talk about AI safety and security, it seems to be a lot of philosophical debates,” he said. “You’ll see frameworks, you’ll see white papers, and I think we’re really past that time, now. We really need to start thinking of AI safety as an engineering discipline and trying to bring security where the developers are.”

Rampart’s potential utility to defenders goes beyond just securing software development pipelines. It can also be used during an active incident response to speed up or automate red teaming for hot fixes, patching and remediation.

Microsoft has used Rampart when investigating reported vulnerabilities in their own products. Siva Kumar said the tool was able to help condense a week’s worth of manual work —  replicating the vulnerability, identifying different variants of the same bug, then patching and re-testing those variants to ensure they’re no longer exploitable — into hours.

Clarity, meanwhile, acts as a security adviser for software projects, prompting developers to consider potential risks in their design decisions and their downstream security consequences. With the rise of AI-generated code and agents, and execution becoming cheaper, this kind of proactive guidance is increasingly important.

“You’re going to be able to create apps, create MCP servers to pull things out from the internet,” said Siva Kumar. “The question is, ‘should you be doing it?’ And Clarity is a step in that direction. It is asking, ‘hey, should you be doing this in the first place?’”

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GitHub said late Tuesday that internal repositories were exfiltrated after an employee device was compromised through a poisoned Visual Studio Code extension, an incident that underscores the growing risks facing software development platforms and the ecosystems built around third-party developer tools.

The Microsoft-owned company said in posts on X that it detected and contained the compromise, removed the malicious extension version, isolated the affected endpoint and began an incident response investigation. The company’s current assessment is that the activity involved GitHub-internal repositories only.

GitHub also said a claim from TeamPCP, a hacking group behind attacks targeting software development packages, that 3,800 repositories were impacted was “directionally consistent” with its investigation so far. It said critical secrets were rotated Tuesday, with the highest-impact credentials prioritized first. The company said it continued to analyze logs, validate secret rotation and monitor for follow-on activity.

The company has not publicly named the extension involved or attributed the activity to a particular group. TeamPCP reportedly advertised the material for sale on a cybercrime forum and threatened to release it if no buyer emerged. 

Information surfaced Wednesday that the incident may be related to a separate issue with Nx Console, a Visual Studio Code tool that helps engineering teams organize large codebases, coordinate build pipelines and run tests efficiently. According to a security advisory posted on GitHub, one of the Nx Console maintainers was compromised in a prior security incident that leaked their GitHub credentials. An attack then used those credentials to push a malicious version of the extension to the VS Code Marketplace. Those credentials have since been temporarily revoked.

With millions of installs, Nx Console is a fixture of professional JavaScript development. It is exactly the kind of tool that sits deep inside a developer’s working environment, which would have direct access to source code, credentials and build systems.

NX CEO Jeff Cross posted on X Wednesday that his company has been working with Microsoft to determine the full scope of the incident.

“Initially, Microsoft indicated to us that there were 28 installs of the malicious version 18.95.0. Based on our own analytics for the compromised version, we currently believe the number of users who received the malicious package may be significantly higher; potentially over 6k installs,” the post reads.

“This is my top priority right now,” Cross continued. “Our team has been, and continues to be focused on understanding exactly what happened, helping affected users, hardening our systems and release processes, and being as transparent as possible throughout the investigation.”

The episode also follows a series of supply chain attacks involving npm, PyPI, Docker and other developer ecosystems. In those incidents, attackers have often targeted maintainers, packages or credentials rather than attacking end users directly. The multiple attacks show how fragile development environments have become as threat actors increasingly target them. A single compromised developer account, package, extension or build process can create access to many downstream systems.

GitHub has said it has no evidence that customer data stored outside the affected repositories was affected.

Visual Studio Code extensions are widely used by developers to add functions to Microsoft’s code editor, including support for programming languages, testing tools, cloud services and artificial intelligence assistants. Because these extensions often operate inside development environments, a malicious or compromised extension can be positioned close to source code, credentials and build systems.

“The thing people underestimate about VS Code extensions is that they have full access to everything on the developer’s machine,” Charlie Eriksen, a security researcher at Aikido Security, told CyberScoop. “EDR doesn’t cover this layer at all. What’s missing for most organisations is any kind of visibility into what’s actually running on developer machines and the ability to control it.”

Trojanized extensions have appeared in the VS Code Marketplace before. Security researchers have identified malicious extensions posing as legitimate development tools, including packages used to steal credentials, mine cryptocurrency or exfiltrate data. Some have accumulated large installation counts before removal, reflecting the difficulty of policing open plugin ecosystems at scale.

For GitHub, the breach comes amid broader scrutiny of the security of developer infrastructure. The platform sits at the center of software production for companies, governments, open-source maintainers and independent developers. Its internal systems and code are of obvious interest to attackers because GitHub’s services support code hosting, package distribution, automation and identity workflows across much of the software industry.

GitHub said it would publish a fuller report when the investigation is complete.

Update: May 20, 12:55 p.m.: This story has been updated with information about a related security incident with Nx Console.

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