Diamond processing technology provider Sarine Technologies Ltd issued a statement saying two Indian nationals have been arrested in Tel Aviv on suspicion of attempting to illegally obtain Sarine's confidential intellectual property.
According to Sarine, a couple of months ago, its employees reported to company management that they had been approached by a third party offering to buy key intellectual property pertaining to Sarine's diamond manufacturing products.
Sarine engaged the services of a private investigator who, posing as a Sarine employee, continued to correspond with this third party. An initial meeting took place in Tel-Aviv in June between the private investigator and two Indian nationals, who arrived in Israel specifically for the meeting. The terms of the proposed deal were agreed and a second meeting was set up in Tel Aviv last week.
During this meeting the prime suspect and a relative, who is also an Indian national residing in Israel, the owner of a company dealing in rough diamonds and a member of the Israel Diamond Bourse, handed over $100,000 in cash, as an advance payment against an agreed $1 million to be paid in exchange for Sarine’s Galaxy system schematics, list of parts and vendors and its software source code.
Immediately after the exchange, Israeli police arrested the suspects. They were remanded to six days custody by a Tel Aviv magistrate’s court, pending further investigation. The prime suspect's relative was released, as even though he admitted the money was his, the court accepted his claim that he was not aware of the terms of the proposed deal, remarking that his presence at the meeting "smelled foul" but was not sufficient to establish complicity. A third suspect, who had attended the initial meeting in June, and is known to be in Israel, remains at large and is being sought by the Tel-Aviv police for questioning.
In response to these events, Sarine CEO David Block stated, "Sarine is fully committed to, and invests millions of dollars in the advancement of the diamond industry. We wish to reiterate that Sarine will aggressively defend its intellectual property in all places and at all times, with all the means that are necessary and appropriate. Unfortunately, this is another example of how far and how low unethical players will go to attain our technology illegally."