Trojan-creating couple gets prison time

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An Israeli couple that created a trojan that helped Israeli companies spy on each other were sentenced to prison today, several media outlets reported.

A Tel Aviv District Court judge sentenced Ruth Haephrati to four years in prison and her husband, Michael Haephrati, who acted as an accomplice, to two years.

The pair confessed to developing the virus and then selling it to private investigators, whom they taught how to distribute the malware to obtain confidential corporate information on behalf of clients.

The private investigators then used the information to help customers spy on their competitors.

The couple, arrested last year in London and extradited to Israel for trial, were ordered to pay victims $427,000 in compensation. Ruth Haephrati's charges included fraud, privacy invasion and unlawful computer access. Her husband was charged with assisting his wife.

The incidents touched off a major industrial espionage scandal in Isarael. As a result, authorities investigated some of the nation's largest telecommunications firms. Several private investigators were indicted on similar charges.

Michael Haephrati developed the trojan, while his wife marketed it to several private investigators who bought the code and installed it onto the computers of its clients' rivals.

Experts were encouraged to see governments and law enforcement agencies cracking down on the problem.

"Industrial espionage through illegal software use is on the rise, and the only way to stamp it out is by ensuring that the guilty parties don't get off lightly," said Carole Theriault, senior security consultant at Sophos. "By dishing out both a jail sentence and a hefty fine, the Israeli court has sounded a stern warning that will hopefully deter others from committing such misdemeanours."

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