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Trojan Horse. This Israeli industrial espionage case seems far bigger than I realized from the initial reports:
But get this: the alleged culprits claim no law was broken!Israeli authorities have uncovered one of the nation's largest industrial-espionage scandals, charging that top business executives and private investigators used sophisticated software to infiltrate their competitors' computers and cull corporate secrets.
Police said 18 people are in custody, including the software programmers, an Israeli couple living in London. The probe implicated car importers, mobile-phone providers and the nation's main satellite-television company. Police said they were still sifting through documents and computer files to figure out the extent of the damage...
According to police, the programmers developed special software, called a Trojan horse, on behalf of three of the country's largest private investigation firms. The private investigators then sneaked the program into the computers of their clients' major competitors via seemingly benign email attachments. The Trojan horse gave the private investigators complete access to their victims' computers by using the Internet, police said.
How was the plot discovered? A mystery novelist noticed parts of his in-the-works novel and personal documents appearing on the Internet.Many of the 18 people arrested in recent days in the case denied breaking the law. "The software is totally legal. The question is if the use that my client made of the software was illegal – and the answer is 'definitely not,' " said Ofir Katz Neriah, the lawyer for one of the suspects.
Those arrested include a top executive from the YES satellite TV company, security officials who worked for Pele-Phone and Cellcom, and several private investigators...
The program was designed by Michael Haephrati, 41 years old, who was arrested last week in Britain along with his wife, Ruth Brier-Haephrati, 28, police said. The two were detained pending a June 3 extradition hearing.
What's more, the Post reports, the culprit Haephrati, with dual German-Israeli citizenship, was the model for one of the mystery novelist's characters.Police were first tipped off to the espionage when author Amnon Jackont began discovering that excerpts of a book he was in the process of writing were showing up on the Internet. More documents from his computer began appearing on the Internet, and someone tried to use his bank details to make transactions. Mr. Jackont realized his computer had been invaded and told police he suspected the spy was his stepdaughter's ex-husband, Michael Haephrati.
Will be staying tuned to this strange case, the largest industrial espionage case in Israeli history. One wonders, were these folks for hire only to the Israeli corporate and security world, or did they outsource their freelance Trojan Horse-creating talents elsewhere? A Debkafile report suggests Haephrati was questioned previously by British authorities for crimes committed in England, days before he was arrested by Scotland Yard on the Israeli extradition warrant.
Update: More from the Guardian and Ha'aretz. "Police placed Bezeq International CEO Avi Gabai under five days house arrest after he and two senior company employees were questioned under caution Tuesday evening as part of the investigation into the rapidly expanding industrial espionage-spyware affair...
Investigators said that the scope of the affair was extraordinary, but it seems that most of the arrests are over. Eleven private investigators are under arrest, and the police are trying to convince a number of them to testify as state's witnesses."
Update II: More from Debkafile, which connects the raider software implanted to the Promis software case. More from the Washington Post. "...Israeli newspapers, which had been alerted to the case last week but were prohibited from publishing details until the roundup was completed over the weekend, characterized it as the biggest case of industrial espionage in the country's history. 'No one remembers a case like this in Israel -- an affair with such scope of investigation involving technology at this high level,' said Chief Superintendent Rafi Levy, spokesman for the national police force..."