The Israelis Behind History’s ‘Most Sophisticated Tracker Program’ That Wormed Into Apple

On August 10, Ahmed Mansoor, a human rights activist in the United Arab Emirates, received a text message that invited him to click on a link that would reveal new information about torture in jails in his country. Mansoor, who had been a repeated target of the regime, grew suspicious and turned over the message to researchers from Citizen Lab.

Mansoor’s gut feeling was correct. The link would not have led him to information on torture but rather would have taken advantage of three flaws that Apple was not aware of to surreptitiously hack his iPhone, turning it into the perfect spying device.

The researchers discovered that the malware enabled recording conversations, accessing photos, text messages and geographic location, and control of the phone such as remotely operating the camera or loudspeaker. The program was connected to 200 different servers, some of them leading to a Herzliya-based company called NSO Group and to software it developed called Pegasus.

Representatives of Lookout, a company involved in discovering how NSO’s malware operates, praised the company. “It’s the most sophisticated tracking software we have encountered, that completely takes over the device with just one click of a link,” one representative said.

Lookout said another advantage was the company’s ability to maintain secrecy – Pegasus hacks the device without its owner being able to detect its existence, and can only be detected by a lab.

For the past six years, almost all global technology companies have offered a hefty cash prize to hackers who could detect bugs in their systems and warn them – save for Apple.

Its iOS platform is considered particularly safe and many people handling sensitive issues choose Apple for this reason. Apple’s announcement last weekend about an urgent software update due to security problems signifies that the company finally realized that no one is safe in the new spying age.

The world is trying to resolve who is that Israeli company that toppled the behemoth Apple from Silicon Valley.

Fighting terror or violating human rights?

Omri Lavie, Shalev Hulio and Niv Carmi founded NSO in 2009, basing its name on the initials of their first names.

Carmi left shortly thereafter over disagreements with his partners. A group of investors, headed by Eddy Shalev, a founding partner of Genesis Partners, hold 30% of NSO. The investors only put $1.8 million into NSO until its acquisition in 2014 by Francisco Partners, a private equity firm, for $130 million. Reuters reported in 2015 that the fund was looking to sell NSO for $1 billion.

NSO’s operations remain in Herzliya Pituah, employing 200 people, more than twice as many as two years ago. “We insisted that all intellectual property remains in Israel, that the development center remains in Herzliya and not move to Silicon Valley or anywhere else outside Israel,” Hulio, the CEO, wrote on Facebook after the acquisition. NSO’s annual revenue is estimated at $100 million.

The Israeli media reported in 2012 that Pegasus was sold to the Mexican government for $15.5 million to help it fight the country’s drug cartel.

The New York Times reported last week that NSO’s targets have included Rafael Cabrera, a Mexican journalist who uncovered conflicts of interests among the country’s ruling family.

In other cases, according to the report, NSO’s tools were adapted for use against targets in Yemen, Turkey, Mozambique, Kenya and the UAE.

Its tracking software is sold like a weapon, supervised by the Defense Ministry’s export branch. The ministry lets NSO sell the software only to certain countries with good relations with Israel, and not to businesses.

The entrepreneurs assert that the technology is meant to help fight crime and terror. However, the incidents described indicate that foreign governments have used Israeli technology more than once to violate their citizens’ human rights.

Israel is a star of the global interception and tracking industry. According to Bloomberg, there are some 230 companies, prominent among them being Israeli Verint, European Nokia-Siemens, French QOSMOS and Amesys, American Blue Coat and SS8, Italian Hacking Team and British Gamma.

Other prominent Israeli companies are Alut, Cellebrite and Elta, as well as Israeli-American Narus, which Lockheed Martin acquired. Israeli company Nice disengaged last year from the defense market, which generated limited profitability for it and unflattering headlines about problematic regimes using its products.

Developing a solution for their software

Lavie and Hulio, 35, have owned companies since their high-school days in Haifa, teaming up for joint entrepreneurial ventures. Hulio served six years in the army, half in intelligence and later as a search-and-rescue commander.

In reserve duty, he has joined all of Israel’s rescue missions in recent years, including in Nepal, Haiti and Turkey. Lavie served in artillery before starting to study business administration at the University of Haifa, while Hulio started studying law at Herzliya’s Interdisciplinary Center, but they both dropped out in favor of entrepreneurship.

In 2007 they founded their first startup, MediAnd, which helps viewers locate and buy items appearing on the screen.

It closed after three years, ending in a court case with the third founder, Yael Lerner Levy.

They founded their second startup, CommuniTake, a year later to supply solutions for cellular operators to remotely identify problems and support. The two left it following disputes with their cofounders before forming NSO.

In 2013 they teamed up with Avi Rosen, the former vice president for development at Cyota, Education Minister Naftali Bennett’s security information company that was sold to RSA for $145 in 2005. The three founded Kaymera Technologies, which develops cellular security solutions, in other words security from spyware like NSO’s.

“Anybody who sees the capability of NSO systems immediately thinks of ways to protect themselves against similar capabilities,” Rosen, Kaymera’s CEO, told Bloomberg in 2014.

Kaymera has developed secure smartphones for governments and private customers worldwide, with annual sales estimated at $15 million. The company has raised $13 million, $10 million of that amount in February. Its investors include Hong Kong-based GOEC Go Capital Ventures and Israeli angels Yariv Gilat and Eddy Shalev, who has accompanied the entrepreneurs the entire way.

Kaymera is located in Herzliya Pituah, in the same building as NSO. However, the company asserts Hulio and Lavie are not involved in Kaymera’s daily operations.

NSO commented: “The company develops products to help governments fight crime and terror. The company only sells to authorized government bodies, subject to all security export laws.”

The company stressed that it does not operate the systems for its customers, but rather only develops the technology. “The contracts signed with clients require strictly legal use of the technology, only for investigating and preventing crime and terror.”