Trojan herd

A new computer virus has alarmed all of Israel

An unprecedented scandal is breaking out in Israel. Police say it is the largest computer crime in the country's history. Famous Israeli writer Amnon Jaconte told law enforcement that chapters of his unpublished book were being published on the Internet without the knowledge of the author. Jaconte suspected that someone had broken into his computer and thus gained access to the book. Suspicion fell on 41-year-old Michael Hafrati, the former son-in-law of the writer, who has recently been living in the UK. As the Israeli police press service told Vremya Novostey, “Hafrati managed to create a new version of a Trojan horse-type computer virus that allows you to read information from other computers, even if the owners took care of their complete security.”

This whole story would not have made so much noise if the matter had been limited to the hacking of Amnon Jaconte’s computer. But Interpol's London office found that Hafrati had sold his Trojan horse to at least three Israeli private investigation agencies. They installed this program on the servers of various large companies in order to gain access to proprietary information. The detectives sold the information they received to competing companies.

According to the police, private detectives infected computers with a virus through CDs with the presentation of certain business proposals. Along with other files on the disk, the virus became active. Police found that information stolen from infected computers was transferred to several FTP servers located in different European countries. “Methods of providing protection are designed, as a rule, for attacks from the outside,” Vlad Zhilin, an employee of the famous computer company Cisco, explained to a Vremya Novostey correspondent. “In this case, no antivirus could recognize the Trojan horse, since the virus was installed directly on the company’s servers , apparently using CDs."

The anti-fraud unit of the Tel Aviv police district conducted a secret investigation into this crime, codenamed “Horse Racing,” for six months. Last week, the creator of the virus, Michael Hafrati, and his wife Ruth, who is believed to have been the seller of the product, were arrested in London at the request of Israeli authorities. Hafrati's lawyer said his client does not deny that he created the virus, but, according to the defense lawyer, "he did not know that this was a criminal offense." 11 private detectives involved in the theft of information were also arrested. Many of them are former employees of the Israeli security services, in particular the General Security Service (Shin Bet). While trying to interfere with the investigation, the 17-year-old son of one of the suspects was detained. According to the police, the young man, upon learning that his father was detained, rushed to his office to destroy evidence.

Among those arrested are high-ranking employees of such well-known companies in Israel as the satellite television company YES, mobile operators Pelefon and Selkom, and the automobile company Meirs-Volvo. They are suspected of carrying out actions classified by Israeli law as industrial espionage. The victims of Trojan horses were companies such as the cable television company NOT, the mobile operator Orange, the influential financial newspaper Globes and many others.

The Israeli stock exchange responded to this scandal by falling the price of securities. Shares of the Bezeq telephone company, which owns a controlling stake in Pelephone, fell by 3% during the day. However, as the management of Pelephone told Vremya Novostey, “the company and its employees did not resort to illegal methods of obtaining information and are ready to fully cooperate with the investigation to prove this.” The editorial office of the Globes newspaper told a Vremya Novostey correspondent that “gathering information about competitors is a fairly common phenomenon in business circles. However, in this case, of course, we are talking about clearly illegal actions, and it is possible that the consequences of this scandal will be felt for a long time in all sectors of the Israeli economy without exception.” The head of the Bank of Israel, Stanley Fischer, said the same thing yesterday. In his opinion, “the scandal about industrial computer espionage will negatively affect the investment policy of foreign companies in Israel.”

Dmitry DUBOV, Jerusalem