Working Apache SSHD, Hinted by Mule blog http://blogs.mulesoft.com/dev/mule-dev/making-sftp-testing-portable/

pom.xml

<!-- http://mvnrepository.com/artifact/org.apache.sshd/apache-sshd -->
		<dependency>
		    <groupId>org.apache.sshd</groupId>
		    <artifactId>apache-sshd</artifactId>
		    <version>1.2.0</version>
		    <type>pom</type>
		</dependency>

		<!-- http://mvnrepository.com/artifact/org.apache.sshd/sshd-sftp -->
		<dependency>
		    <groupId>org.apache.sshd</groupId>
		    <artifactId>sshd-sftp</artifactId>
		    <version>0.11.0</version>
		</dependency>
		

SFTPServer.java

package test.me.sftp;

import java.io.IOException;
import java.security.PublicKey;
import java.util.Arrays;

import org.apache.sshd.common.NamedFactory;
import org.apache.sshd.server.Command;
import org.apache.sshd.server.SshServer;
import org.apache.sshd.server.auth.password.PasswordAuthenticator;
import org.apache.sshd.server.auth.password.PasswordChangeRequiredException;
import org.apache.sshd.server.auth.pubkey.PublickeyAuthenticator;
import org.apache.sshd.server.keyprovider.SimpleGeneratorHostKeyProvider;
import org.apache.sshd.server.scp.ScpCommandFactory;
import org.apache.sshd.server.session.ServerSession;
import org.apache.sshd.server.shell.InteractiveProcessShellFactory;
import org.apache.sshd.server.subsystem.sftp.SftpSubsystemFactory;


public class SFTPServer {
	public static void main(String[] args) {
		SshServer sshd = SshServer.setUpDefaultServer();
	    sshd.setPort(22001);
	    
	    sshd.setSubsystemFactories(Arrays.<NamedFactory<Command>>asList(new SftpSubsystemFactory()));
	    
	    sshd.setCommandFactory(new ScpCommandFactory());
	    
	    sshd.setKeyPairProvider(new SimpleGeneratorHostKeyProvider());    
	    
	    sshd.setPasswordAuthenticator(new PasswordAuthenticator() {
			
			public boolean authenticate(String arg0, String arg1, ServerSession arg2)
					throws PasswordChangeRequiredException {
				System.out.println("Password auth: "+arg0);
				return true;
			}
		});
	    sshd.setPublickeyAuthenticator(new PublickeyAuthenticator() {

			public boolean authenticate(String arg0, PublicKey arg1, ServerSession arg2) {
				System.out.println("Key auth");
				return true;
			}
	        
	    });
	    
	    sshd.setShellFactory(new InteractiveProcessShellFactory());
	    
	    try {
	        sshd.start();
	        System.out.println(sshd.isOpen());
	        Thread.sleep(600000);
	    } catch (IOException e) {
	        System.out.println("Failed to start ssh server."+e);
	    } catch (InterruptedException e) {
			// TODO Auto-generated catch block
			e.printStackTrace();
		}
	}
}