News
A Shady Israeli Intel Genius, His Cyber-Spy Van and Million-dollar Deals
01 Jan 2021

“Meet Tal Dilian, one of the oldest hands in the often murky world of cyber surveillance. The ex-Israeli intelligence officer is showing us one of his new toys, a 9 million dollar van full of NSA level surveillance kit that he claims can hack a smartphone and snoop on all the messages within.” That is how a video filmed by Forbes magazine in August 2019 opened. The video showed Col. (res.) Tal Dilian, a former commander of the intelligence corps’ Unit 81 who was considered one of the Israel Defense Forces’ most promising officers back in the 1990s, sitting in a van in Larnaca, Cyprus and demonstrating its ability to hack into smartphones within a radius of 500 meters from the vehicle.

The interview, a rare and bizarre event in the shadow world of intelligence, stunned people who knew Dilian from both the army and the business world. Some treated it as a marketing ploy, others couldn’t understand how an intel officer who had suddenly become a multimillionaire in the cyber industry would speak so freely and publicly about an espionage product.

The Cypriot authorities were less tolerant. They confiscated the van and summoned Dilian for questioning. They suspected that the vehicle was meant for commercial espionage, despite Dilian’s claim that the products sold by his company, WiSpear, are intended only for states.

In December 2019, three of Dilian’s employees were arrested as part of the investigation against him, but were released two days later. Five months later, in May, a Cypriot newspaper reported that Dilian had been detained in March and that the investigation against him was still open. Dilian, the report added, denied all the allegations against him.

Dilian moved to Cyprus several years ago, and though rumors of his departure have circulated among his acquaintances, he apparently still lives there. In April, he was photographed sitting on the edge of the pool at his home in Limassol for a Reuters article about tracking tools used in the battle against the coronavirus.

The Forbes story resurfaced last  week in a suit filed against Dilian in the Tel Aviv District Court by high-tech entrepreneur Avi Rubinstein. The suit claimed that Dilian’s boasting cost their company a lucrative deal with a big private customer that it had worked with in the past. It also said the interview had led to both an international arrest warrant and a Cypriot arrest warrant being issued against Dilian.

The suit also named two other defendants, Col. (res.) Oz Liv, who preceded Dilian as commander of Unit 81, and businessman Meir Shamir. Together with Rubinstein, all four are shareholders in Aliada.

Aliada, according to the suit, is a group of cyberweapon companies whose products are branded under the name Intellexa. In May 2019, it added, the group recruited Eran Beck, a former head of the Military Intelligence’s cyber department, as its director of development.

The suit described Dilian as a key player and termed him a “colorful figure.” It also noted that he was forced to resign from the military in 2002 over suspicions of financial improprieties and charged that his conduct remained problematic after his discharge.

“After his discharge from the IDF,” it said, “Mr. Dilian continued to be involved in intelligence technology in the cyber industry [who] tends to open new companies in various territories and implement dubious deals, all with the goal of trying to enrich himself.”No defense briefs have been submitted yet.

Rubinstein’s main accusation is that in July 2020, Dilian, Liv and Shamir acted illegally to dilute his own shares through a pyramid of companies set up overseas. Some of those companies were established via front men connected to Dilian, including his second wife, Sara Hamou.

The suit implied that this transfer of Aliada’s activities out of Israel via shell companies, first to the British Virgin Islands and later to Ireland,  violated both Israeli and foreign defense export control laws. Aliada’s development team included Israelis working in Israel.

Another ramification of Dilian’s Forbes interview, the suit said, was damage to Intellexa’s products. Cyber-surveillance companies work by exploiting security breaches in cellphone operating systems, both Google’s Android and Apple’s iOS, to introduce so-called Trojan horse programs into the phones. But according to Rubinstein, the Forbes article led to three such breaches being closed between September and December 2019. As a result, Intellexa’s efficacy was reduced.

Right before these breaches were closed, the suit said, Aliada had received orders worth tens of millions of dollars.

Rubinstein claimed that as a result of the improper way the group’s controlling shareholders, and especially Dilian, operated, he had already decided that he wanted out of Aliada by early 2020. Nevertheless, he said, he agreed to continue working until March.

During those months, with the help of a former Israeli intelligence officer, he was able to discover other breaches in Android and iOS, and thereby “saved the Aliada Group’s cyberweapon suite,” the suit said. He then left the company, but was stunned to discover later that its assets had been transferred and his stake consequently diluted, it added.

Secret operation?

Dilian, 59, grew up in Jerusalem. His parents were artists who lived in the Yemin Moshe neighborhood, in a house that overlooked the Old City walls. In 1979, he was drafted into the army’s elite Sayeret Matkal unit, where he served as a platoon and then a company commander.

He eventually transferred to Unit 81, which is responsible for developing intelligence tools and helps the IDF’s special operations units and other defense agencies. Dilian held several posts in this unit and became its commander in 1998. He was even awarded the Israel Defense Prize for one of the projects he managed there, whose details remain classified.

But his promising career was derailed in 2002, when the Military Police began investigating him. The probe related to financial improprieties in Unit 81, including Dilian’s use of the frequent flyer miles he accumulated through his work for private trips. In addition, under his command, the unit spent money on furniture and renovations that it was claimed were necessary for secret operations, when in fact, no such need existed.

By Shuki Sadeh, Haaretz, 1 January 2021

Read more at Haaretz

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