Spying through the computer
Photo: Avi Cohen
Investigators confiscate computers
Photo: Avi Cohen
Suspect detained

Scandal shocks business world

Police say private investigators used spy software for business espionage; affair involves some of Israel leading companies. Police arrest senior executives, some may have fled country

TEL AVIV - Shocking revelations: Police suspect leading private investigators planted “Trojan Horse” spy software in the computers of high-profile Israeli companies in a bid to sell privileged information to competitors.


A publication ban imposed on details pertaining to the disturbing findings was lifted Sunday.


The affair reportedly encompasses some of Israel’s leading companies, including satellite television and cellular phone providers, and has already led to the arrests of senior executives.


However, police believe some of those suspected of received information illegally, including the CEOs of well-known companies, fled Israel in recent days.


The scandal marks the largest ever investigation involving computer crime in the history of the country. The investigation lasted for about six months and was code-named “Horserace.”


Author files initial complaint


During the investigation, police detectives were stunned to discover business espionage has largely become a norm in the local business world.


Among the companies suspected in the affair are satellite TV provider “YES,” cell phone providers “Cellcom” and “Pelephone,” and the importer of Honda and Volvo vehicles.


Both YES and Pelephone are subsidiaries of the telecommunications giant Bezeq, which claimed that it too was subject to industrial espionage by competitors. Bezeq insinuated that in-house documents were in the possession of rival cable companies.


The affair first came to light after local writer Amnon Jackont and his wife filed a complained with police. The couple told investigators parts of Jackont’s new book made their way to the Internet, even before the book was published.


The couple told police they suspect their former son-in-law, a computer expert, may be behind the affair.


Subsequently, police discovered that a “Trojan horse” software was planted in the computer and sent out documents and photos stored on it.


As it turned out, the developer of the software offered it to the police several years before, but negotiations with him were terminated once investigators discovered he also sold the program to criminals.


17-year-old son also arrested


Further examination revealed the software was produced for three leading private investigation agencies, which used it to penetrate the computers of leading companies.


The private investigators were able to commit the crime by mostly employing two methods: providing companies with a business offer on a disk containing the software, or sending a contaminated e-mail message to the companies.


Police were later able to locate the software’s creator, Michael Ha’efrati, who is indeed Jackont’s former son-in-law. The suspect did not have a criminal record and spent most of his time outside Israel, mostly in Britain and Germany.


About two weeks ago, Ha’efrati relocated to London, where he was arrested last Tuesday along with his wife Ruthie, suspected to be the contact person with the private investigators.


One of those arrested in the affair is the couple’s 17-year-old son, who attempted to erase apparently incriminating information from his father’s computer.


As it turns out, the software’s price was not overly high - about NIS 16,000 (close to USD 4,000) per each computer it was planted in.


Police said at this point it is too early to estimate the financial damage caused by the affair and added they are examining whether the espionage scandal was limited to Israel only.


פרסום ראשון: 05.29.05, 12:18
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