World
Computer Gang
Israeli police investigating "sickness" of industrial espionage.
DAN BARON
Jewish Telegraphic Agency
Tel Aviv
T
he uncovering of an industrial espionage
ring has Israelis running to their computers.
It began Sunday, May 29, when police
announced the arrest of at least 18 people from top
Israeli telecommunications companies — including
licensed private investigators — on suspicion of
using a "Trojan Horse" virus to steal secrets from
competitors' software.
"This is one of the gravest industrial and corpo-
rate espionage scandals ever in Israel," said Roni
Hindi of the Tel Aviv police fraud squad. The com-
panies said to be under investigation include mobile
telephone providers Pelephone and Cellcom, and the
satellite television service YES.
Those traded publicly took a tumble. But the
shock was felt beyond the privileged ranks of the
.
shareholders.
"In a country where there is a national ethos of
military secrets and everyone competes aggressively
with everyone else, the idea of a rival sitting on your
computer or servers is distressing," wrote Guy
Rolnik of the Israeli business magazine The Marker.
"Now this can also be explained as another expres-
sion of the erosion of established norms in Israel."
By Monday, even The Marker had become unwit-
tingly embroiled in the affair, with police saying it
may have been targeted by a Trojan Horse. So too
was The Marker's rival, Globes.
The concerns reached as high as the Knesset,
where National Religious Party lawmaker Shaul
Yahalom demanded that all parliamentary comput-
ers be scoured for spy software.
The Justice Ministry announced it was setting up
a computer-fraud unit. The move could not be more
timely, given reports that the Trojan Horse virus
found in Israel may be linked to similar espionage
20% Off any purchase
An Israeli checks a computer after security concerns.
cases in Europe and the United States.
It all began with a prank. Last November, Israeli
author Amnon Jacont was astounded to discover, on
the Internet, extracts of a novel he was writing
secretly. An investigation led police to conclude
Jacont was a victim of a Trojan Horse virus planted
by Michael Haephrati, an estranged former in-law of
Jacont's wife.
Haephrati, a London resident, is believed later to
have peddled the spy program to the Israeli telecom-
munications firms under investigation. Israeli
authorities have asked Britain to extradite
Haephrati.
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