Israel holds couple in corporate espionage case

Reuters - An Israeli couple suspected of masterminding a computer virus that set off a major industrial espionage investigation was repatriated for trial on Tuesday under an extradition deal with Britain, police said.
Michael and Ruth Haephrati were arrested in their London home last year over allegations that a "Trojan horse" program they had developed was bought by private investigators who helped top Israeli corporations spy on each other's computers.
Israeli police spokesman Mickey Rosenfeld said the couple flew in overnight after Britain approved their extradition. Tel Aviv Magistrate's Court ordered them placed in custody for 10 days so that they could be interrogated by police.
Computer hacking carries a maximum five-year jail term in Israel, which can be increased if data theft is involved.
Israeli media said the Haephratis had offered to testify against their alleged clients in exchange for a reduced sentence. Their lawyer, Eli Zohar, confirmed only that contacts were under way with prosecutors at the State Attorney's Office.
"As of now, they [the Haephratis] are facing a whole package of charges," Zohar told Israel's Army Radio. "Our goal is to narrow down the proceedings as much as possible."
At least 18 other Israelis have been questioned in the Trojan horse case, including corporate executives. Several private investigators have been indicted on related charges.
Among companies probed by police in connection with the case were Israel's top mobile phone operator, Cellcom, and two subsidiaries of phone company Bezeq Israel Telecom -- cellular operator Pelephone and the satellite television provider YES. All of the firms denied any wrongdoing.
Police said the Trojan horse infiltrated the HOT cable television group that competes with YES, as well as foodmaker Strauss-Elite and the Rani Rahav public relations agency, whose clients include Partner Communications, Israel's second biggest mobile phone operator.
"Trojans" refer to malicious software often presented as an innocuous Web link or e-mail attachment that can infect a computer when opened.
Israel's Channel Two television, which interviewed the Haephratis by telephone last week from the British prisons where they were being held, said Michael originally developed the Trojan horse as a prank targeting his ex-wife's family.
According to the report, the Haephratis tried to market the virus to Israel's defense agencies before Ruth decided alone to sell it to private investigators representing corporations.
"I take full responsibility for my mistakes," she told Channel Two. "Michael always told me, 'Don't do it. Don't get in touch with the investigators. I have a feeling they are misusing the system.'"