News
Israeli hackers charged with developing industrial espionage spyware
Posted on March 05, 2006

Ruth Brier-Haephrati, 28, and her husband Michael Haephrati, 44, alleged developers of the Trojan horse used by private investigators for corporate spying, were indicted on Sunday in the Tel Aviv District Court for a series of computer-linked crimes.

The Tel Aviv District Attorney's Office filed a 65-page indictment against the creators and distributors of the Trojan horse spy program, but announced at the same time that it had reached a plea bargain arrangement with the defendants.

"There is a plea bargain arrangement with Ruth and Michael Haephrati, but the prosecution usually presents the agreement to the court, and this is what we will do in this case as well," said Attorney Haim Wismonsky, senior deputy to the Tel Aviv District Attorney (Criminal Affairs.)

Wismonsky said he would reveal the agreement to Tel Aviv District Court next week. He told reporters that the defendants, Ruth and Michael Haephrati, had confessed to most of the charges against them.

Ruth Brier-Haephrati's confession describes the nature of the correspondence with the private investigators, the method of inserting the Trojan Horse and the extraction of information from the victims' computers.

Michael describes the software's capacities and his growing awareness of the investigators' criminal activities. He also describes how he provided continuing technical support for the software's operation.

Ruth Brier-Haephrati was charged with aggravated fraud, unlawful computer access, virus insertion, installing tapping equipment, invasion of privacy, managing an unlawful database, and conspiracy to commit a crime.

Michael Haephrati was charged with lesser offenses for assisting his wife in all the mentioned activities.

The indictment notes that the couple were co-managers of the firm Target-Eya registered in Israel, England and the US. Michael Haephrati developed and refined the Trojan horse program, while his wife, Ruth, marketed it and maintained contact with several private investigation companies which bought it and installed it in the computers of its clients' rivals.

It is also noted in the indictment that the software development began in 2000, when an attempt was made to market the program to various security bodies. Illegal usage of the program began in 2004 through private investigation offices.

The private investigation companies included Balali-Philosof Investigations, Krochmal Special Investigations and Modi'in Ezrahi - Investigations. The indictment included three separate sections on the relations between the Haephratis and each of the three companies and included appendices listing the victims who were spied on by each one of them. The victims included the Hot Group, Zilumatik, Mei Eden, Ace, Shekem Electric, Dubek, Steimatzki, Champion Motors, Ran Rahav Communications and Public Relations, Gestetner and many others.

Michael Haephrati and Ruth Brier-Haephrati

The couple was also accused of spying on the computer of Amnon Jacont and writer Varda Raziel-Jacont. Sections of a book the couple co-wrote mysteriously appeared on the Internet before it was published. Michael Haephrati had been married to Raziel-Jacont's daughter, Natalia. They became suspicious of Haephrati when he signed a nasty review of the book which appeared on the Internet with the secret code Jacont was using at the time to log on to his e-mail account. It was their complaint that led to the investigation against their former son-in-law and his current wife.

Michael and Ruth were arrested in May 2005 in London, accused of writing malicious spyware software which was bought by private investigators to help top Israeli businesses spy on their competitors.

Companies probed by the Israeli authorities in connection with the case include mobile phone operators, Cellcom and Pelephone, and satellite television provider YES. All firms have denied any wrong doing. The Trojan horse is said to have spied upon the Rani Rahav PR agency (whose clients include Israel's second biggest mobile phone operator, Partner Communications) and the HOT cable television group. Mayer, a company which imports Volvo and Honda cars to Israel is suspected of having spied on rival Champion Motors, who import vehicles made by Audi and Volkswagen.

Prosecutor Haim Wisemonski asked the court to order the couple held in custody until the conclusion of the trial.
SOURCE: Haaretz; Israel National News; The Jerusalem Post;