A London-based Israeli couple are at the centre of one of
the world's largest industrial espionage and computer hacking
scandals.
Computer specialist Michael Haephrati and his wife Ruth are accused
of supplying the sophisticated Trojan horse software used by
private detective agencies to spy on scores of top Israeli
firms.
But police believe this is just the tip of the iceberg, and firms
worldwide, including those in the UK, may have had confidential
information compromised after being infected by spyware supplied by
the Haephratis.
The couple were remanded in custody after an appearance at Bow
Street Magistrates Court on 26 May and are now facing extradition
to Israel.
Their arrest followed an international investigation by the
computer crime unit of the Tel Aviv fraud squad, Interpol, police
in Germany and the US, and the UK's National Hi-Tech Crime
Unit.
Michael Haephrati, who has homes in London and Germany, provided
his services through London-registered computer consultancy, Target
Eye. The company lists its specialities as security, intelligence
and spyware.
According to Israeli police, Haephrati, who honed his computer
skills during his three-year military service with the Israeli
army, charged $2,000 (1,100) a month to supply and maintain custom
designed Trojan horse spy software.
The full extent of the industrial spying operation has yet to be
discovered, Peal Liat, superintendent at Tel Aviv police
headquarters, told Computer Weekly.
"Right now it is a very sophisticated investigation. We have
something like 150 different computers that were taken by the
investigators. Every computer they open, they discover more. Every
day it gets us more companies that ordered the information and more
companies that were infected," she said.
Israeli police are investigating the role of 15 senior executives
from top Israeli companies, after they allegedly hired detective
agencies to obtain confidential information from their competitors'
computer systems.
Telecoms companies, advertising agencies and public relations firms
are among more than 20 organisations known to have been
targeted.
Twenty-two staff from Israel's three leading private investigation
firms have been arrested. The son of one of the chief suspects,
allegedly discovered deleting files after being interrogated by
police, has also been arrested, and faces a hearing in a juvenile
court.
The agencies are accused of conducting industrial espionage on a
huge scale against scores of computers belonging to listed
companies and private individuals, according to documents lodged at
Tel Aviv Magistrates Court.
Further arrests are expected as Israeli police complete forensic
analysis of the computers seized from the offices of private
detective agencies, Israeli firms accused of spying on their
competitors, and Haephrati's London company.
Police believe the net could extend beyond the borders of Israel
and that Haephrati may have sold his services to investigative
agencies in the UK, Germany and the US.
Haephrati is accused of offering Trojan software to detective
agencies Modi'in Ezrahi, Krochmal Special Investigations and
Pelosoff-Ballai.
The agencies used the software, which was delivered by e-mail or
given to targets in the form of CD-Roms containing business
software, to retrieve confidential material for their
clients.
Their investigations ranged from gathering evidence of marital
infidelity to obtaining copies of companies' takeover documents and
confidential business plans for competitors.
The Trojan was highly sophisticated and capable of evading
detection by anti-virus systems, said Liat.
"They were able to see everything, from e-mails to documents to
information. And they were able to copy it and take it out. We
think the Trojan had the ability to log keystrokes."
The Trojan sent images and documents to FTP servers in Israel,
Germany and the US, court documents reveal.
Additional research by Hazel Ward in Jerusalem