Israel Hacker Heaven

Israel a Hotbed of Internet Attacks, Report Says

Because Israel is a hotbed of corporate malfeasance, spying and corruption.

24 December 2001

Fox News, beginning mid-December, reported a four-part series on alleged Israeli spying on the US telecommunication systems through firms which provide telephone billing and assist FBI wiretaps. Recently the series was withdrawn by Fox News without explanation. The series has been recovered from private archives for publication here.

It is also the source for software tied to the American corporate, military and intelligence establishment.

For the past five years, there have been growing fears that somehow, outsiders have been able to penetrate into the confidential computer files of government agencies, business entities such as banks and defense contractors and individuals.

Some of this appeared to be an attempt to obtain highly classified information that could be of use to others and in other instances, attempts to get into the personal, and corporate, bank accounts of individuals and corporations.

This is a brief study of some of the salient aspects of this problem of computer theft and espionage and we will start with the discovery of massive computer penetration in Israel. We will then consider further penetrations of American business and intelligence computer systems by agents of a foreign government as opposed to confidence men and then conclude with the use of the same methods to commit frauds on the gullible in the United States and elsewhere.

Some of the first public notice of this problem surfaced first in Israel in 2004 when Israeli law enforcement cyber crime experts discovered that what is known as a Trojan Horse (illicit spyware planted on an unsuspecting computer) had been inserted into about 60 major Israeli businesses. Isreali law enforcement subsequently indicted various members of three of Israel’s largest private investigative agencies on charges of criminal fraud. These spyware plants were in various commercial areas such as : Israeli military contracting, telephone systems, cable television, finance, automobile and cigarette importing, journalism and high technology. These intrusive spyware plants were nearly identical with ones developed by the American NSA and widely used inside the United States to glean political, economic and counter-intelligence information from a huge number of American businesses and agencies. Israeli investigators believed that there was illicit cooperation between the American agency and a counterpart in Israel.

These Trojan horses that penetrated the Israeli computers came packaged inside a compact disc or were sent as an e-mail message that appeared to be from an institution or a person that the victims thought they knew very well. Once the program was installed, it functioned every time the victim’s computer system was in use, logging keystrokes or collecting sensitive documents and passwords before transmitting the information elsewhere.

This clandestine theft of valuable commercial, military and political secrets is certainly not limited to Israel and many important agencies and individuals have become increasingly concerned about what is called “phishing” in which both con men and foreign (and domestic) intelligence agencies can locate, capture and use valuable personal, political and financial information. In September of 2005, the Anti-Phishing Working Group, an ad hoc group of corporate and law enforcement groups that track identity theft and other online crimes, said it had received more than 13,000 unique reports of phishing schemes in that month alone, up from nearly 7,000 in the month of October, 2004..

In late 2005, a new form of phishing, called “spear-phishing” emerged.

.So-called spear-phishing is a highly concentrated and far more effectove version of phishing. That's because those behind the schemes bait their hooks for specific victims instead of casting a broad, ill-defined net across cyberspace hoping to catch throngs of unknown victims.

Spear-phishing, say security specialists, is much harder to detect than phishing. Bogus e-mail messages and Web sites not only look like near perfect replicas of communiqués from e-commerce companies like eBay or its PayPal service, banks or even a victim's employer, but are also targeted at people known to have an established relationship with the sender being mimicked. American banks such as Chase and Bank of America are among those whose names are faked and also the online auction house of Ebay and the international money transfer firm of PayPal receive considerable attention from the international conmen and credit thieves. These thieves are not necessarily gangs operating for financial gain but also include theft of trade secrets, private corporate banking and highly sensitive military and political information.

Court remands top Israeli execs in industrial espionage affair
The Tel Aviv Magistrate's Court Monday remanded several people from some of Israel's leading commercial companies and private investigators suspected of commissioning and carrying out industrial espionage against their competitors, which was carried out by planting Trojan horse software in their competitors' computers.

Others said the combination of Israel's high-tech culture, fine-tuned in secretive military units, and a penchant for independent thinking made the scandal inevitable. Some of the world's top computer security companies, including Check Point Software Technologies Ltd., are Israeli.
The list of clients implicated in the affair reads like a Who's Who of Israeli blue chips: Amdocs Ltd., a business-software maker that trades on the New York Stock Exchange; the Cellcom phone carrier and three subsidiaries of the Bezeq phone monopoly, a long-distance carrier, cell phone provider and satellite TV firm.

At least one veteran fraud investigator in Israel said he wasn't shocked by revelations of widespread spear-phishing and the corporate espionage scandal last spring. "This case is not unconventional," said Boaz Guttman, a lawyer and former head of the cybercrimes unit for the Israeli national police. "Most of the crimes are not reported. The police here and in the United States only know about 5 percent of the cases. Hackers don't take a break, not one minute.

"Everybody is spying against everybody in Israel," added Mr. Guttman, who said he was representing one of the suspects in the Trojan horse investigation but was not authorized to reveal his client's identity. "You cannot be surprised by this because this is the way of life for companies today."

The Chalabi files recovered by U.S. intelligence and law enforcement provided enough information for the FBI to begin a criminal investigation of a Baghdad-Jerusalem-Washington syndicate that is profiteering from America's misguided invasion and occupation of Iraq. The investigation led to shadowy Israeli-owned firms registered in Delaware and Panama that were fraudulently obtaining contracts and sub-contracts to provide everything from cellular phones and VIP security to the interrogation of Iraqi prisoners using seconded members of Israel's feared Unit 1391 "special techniques" interrogation center. Not only were these firms operating in Iraq with the concurrence of the neo-cons in the Pentagon but some U.S. government officials were personally benefiting from the contracts.


The Economic Espionage law authorizes the FBI to act against foreign intelligence gathering agencies toiling on US soil with the aim of garnering proprietary economic information. During the Congressional hearings that preceded the law, the FBI estimated that no less that 23 governments, including the Israeli, French, Japanese, German, British, Swiss, Swedish, and Russian, were busy doing exactly that. Louis Freeh, the former director of the FBI, put it succinctly: "Economic Espionage is the greatest threat to our national security since the Cold War."



Joining scandal-hit NETeller and Torex Retail, Israeli mobile software group Adamind became the latest firm on the junior market to stand accused of nefarious behaviour. The revelation last Monday that it was being investigated by the Financial Services Authority on suspicion of insider dealing caused some critics again to question the efficacy of Aim's regulatory system, which is often blamed for letting inferior companies loose on investors.

Quick: What do Hamas terrorists have in common with Martha Stewart? No, we're not talking about their public-approval ratings. Rather, both may have drawn unwanted scrutiny in part because of the same piece of software.

The data-mining algorithms of ClearForest, based in New York City, are at work within both Israeli security agencies and NASDAQ. Israel uses them to drill for hidden connections among suspected terrorists: say, a pattern of phone calls shortly before each of several suicide bombings. NASDAQ uses the same software to detect block trades of stock quietly placed just before the release of company news — including sales by relatives of ImClone's founder, Sam Waksal, who this fall pleaded guilty to insider-trading charges, and his friend Martha Stewart, who remains under investigation (and has denied any wrongdoing).

Both NASDAQ and Israel's security services are sprawling organizations, bombarded daily with terabytes of information, any bit of which may prevent a catastrophe, whether measured in lives or in retirement savings lost to fraud. And these days, data-mining software, combined with technologies that connect disparate computer systems and databases, is making it possible for everyone from police departments to clothing merchants to global manufacturers to search through ever expanding data warehouses and draw valuable connections that would otherwise be lost to human eyes.

Israeli Citizenship has been linked to U.S. trading scandals and accusations of money laundering against Michael Zwebner. Mr. Zwebner is a good pal of PM Ehud Olmert and the disgraced rapist; Israeli President Moshe Katsav


Dear Jerusalem Post,
In searching for any mention of a Michael Zwebner and his company's business dealings (Universal Communications Systems Inc.) in Israel I came across a series of articles by a person of that name writing on commodities or metals for the 'Jerusalem Post' as late as 1997.They then seem to have come to a halt,for whatever reason,as a search of his name on your internet sight will show.

I was most surprised that mention of his most recent project,an 'AirWater machine', supposedly to provide water for the Israeli military, did not appear in your reputable newspaper.Also no mention was made of a demonstration that supposedly took place at the 'AQUA Israel 2004' exhibition.Nor was there any mention of his company's meeting with Israeli President Moshe Katzov, who was quite flattering of Mr.Zwebner's product, according to a BUSINESS WIRE PR put out by Mr.Zwebner's company, located in Florida and incorporated in Nevada,I believe.

Another of Mr.Zwebner's BUSINESSWIRE press releases further claims the U.S.army in Iraq has made 'an order to supply and ship a number of AirWater machines to the Gulf for immediate delivery to the US Army/Coalition Forces.'Another article from Australia interviewing Mr.Zwebner claimed the order was completed and the AirWater machines of the company are now operating in Iraq.

There are some posting messages on www.ragingbull.com's 'ucsy',or Universal Communication System Inc., message board that are less than flattering.Some people believe the sole purpose of the press releases has been what is termed a 'pump and dump' of a penny stock. Further another website that is a host of consumer complaints hints that President Moshe Katzov actually received remuneration for helping Mr.Zwebner tout or promote this stock whose shares were then dumped on U.S. or other investors as it was touted in fraudulent prs by the company.

http://www.fundstreet.org/...
December 13, 2005

Cerberus-Gabriel hedge fund buys stake in Leumi Bank
Israel is on its way to privatization. The banking sector is amongst the first ones to take a step in this direction. Bank Leumi was in the market recently and attracted bids from several players. Bidder names include strategic investors like Lev Leviev, IDB and Bill Davidson and also financial contenders like UBS, Deutsche Bank and Citibank. However the winner was an American Hedge fund, Cerberus-Gabriel.

Cerberus-Gabriel has purchased 9.9% of the shares of the bank. The purchase of this stake was for approximately $500 million. The fund also has the option of buying an additional 10.01% in the bank. This will bring the total shares quantum to 20% and is roughly valued at $1 billion. This option of additional purchase has to be utilized with in the next one and a half years.

Ehud Olmert, Finance Minister of Israel, is reportedly quite satisfied with the outcome. He feels that this is a positive development and will help the over all Israeli economy. He is amongst the top promoters of privatization move. In his statement he also mentioned that the purchase will ensure healthy competition between the banks and will definitely contribute a lot to the local market.

Another person quite happy with the development is Yaron Zelekha, the treasury's accountant-general, who led the tender. He sees it as fulfillment of the promise made to the people of Israel about privatization of the entire banking system in 2005.

Isreali Citizenship is good for avoiding prosecution in the U.S. as well.

The fugitive former chief executive of leading voice-mail-software maker Comverse Technology (CMVT) has been captured in Africa after a two-month international manhunt, U.S. officials announced Wednesday.

Details of the arrest of Jacob "Kobi" Alexander in the Republic of Namibia were not immediately available. But in a statement, U.S. Attorney Roslynn Mauskopf credited local officials in the southwest African nation for assisting the FBI in the capture.

Mauskopf said she would seek Alexander's swift extradition to face charges in federal court in Brooklyn. A call to his defense attorney in New York was not immediately returned.

The manhunt began in late July shortly before authorities unsealed a criminal complaint accusing Alexander and two other former top executives of secretly manipulating stock options for personal profit.

Before he disappeared, Alexander, 54, an Israeli citizen and a permanent U.S. resident, allegedly transferred $57 million to Israel, fueling speculation he may have fled there.

Two other defendants, former finance chief David Kreinberg and former senior general counsel William Sorin, surrendered in August and were released on $1 million bond each.

The complaint unsealed in federal court accuses the three men of making stock options more lucrative by backdating their exercise price to a low point in the stock's value. Usually, a stock option's exercise price coincides with the market value at the time of a grant, to give the recipient an incentive to drive the price higher.

Today fighting corruption and scandal in Israel is the political fallout as a result of the failed Lebanese war last summer.

Zamir served on the Supreme Court from 1994 until 2001, during which he was on the panel that considered the Ganot case. Since his retirement (Supreme Court justices take mandatory retirement at the age of 70) he has spoken out with growing harshness against corruption in Israeli public life and in particular against political appointments in the civil service. In recent years he has been chairman of the Jerusalem Center for Ethics, and two months ago he submitted to the Knesset the report of a public committee he headed following an episode in which an MK cast a double vote in a Knesset motion. The committee recommended adding new rules of ethics and toughening the sanctions that the Knesset can impose on its members.

Zamir is convinced that if Israel does not take urgent steps, it is liable to deteriorate within a few years to the place now occupied by some countries in Africa and Latin America. "We have to shout and say, 'Listen, we are sick,'" he warns. "Corruption really is a kind of chronic disease, which can be terminal." He goes to his study and returns with surveys showing that the Israeli public believes that the government is corrupt. "If the public thinks, even mistakenly, that the entire government is corrupt, that is a self-fulfilling prophecy. It leads naturally, and almost necessarily, to the loss of trust in the regime. And then what can replace it: the strong, clean leader. We know from the world's experience that the strong leader, even if he is at first clean, quickly becomes very dirty." Zamir quotes with unconcealed emotion what "the country's No. 1 security person," former chief of staff Moshe Ya'alon, told Ari Shavit in an interview in Haaretz, that corruption is more dangerous than the Iranian threat. "I agree with that. The security threat - missiles from Lebanon and Syria, or an Iranian nuclear threat - is viewed as concrete. We understand it, and we know the damage it will do. So people can become fearful and demand action, and these issues occupy a very high place on the public agenda. When it comes to corruption, though - in part because it operates in the dark and you don?t see it - people are not sufficiently aware of the danger. The result is that there is great indifference among the public, which was given expression, for example, in the last Knesset elections. Like cancer, you don't see corruption at its inception, you don't feel it spreading; you feel it at a certain stage, when it breaks out, and then in very many cases, it's already too late."

And it's revealing that the corruption is just business as usual thanks to the politics of privatization conducted by Olmert. Chickens, home, roost.



Find blog posts, photos, events and more off-site about:
Israel, hackers, internet, virus, phishing, spam, hacking, computers, security,