IRS pays Israeli tech firm to help it investigate online undercover - report

An Israeli tech company is being utilized by the US Internal Revenue Service (IRS) in order to carry out investigations online while undercover, according to documents obtained by a Freedom of Information Act (FOIA) request by Vice News's Motherboard.

The company in question, Cobwebs Technology, was paid hundreds of thousands of dollars for the use of its technology in tackling cybercrime, Motherboard reported.

This comes amid renewed criticism of the IRS by Republican lawmakers, many of whom have spoken out against the Biden administration's attempts at strengthening the agency and some even calling for it to be outright abolished.

What is the Israeli firm Cobwebs Technologies?

Based in Herzliya and founded by alumni of IDF intelligence and special forces units, Cobwebs specializes in artificial intelligence-powered open source intelligence (OSINT), gathering intelligence data from all over the Internet, including social media, the deep web and the dark web. It has even supposedly used its system to prevent various different terrorist attacks throughout the world.

The company supplies its products to law enforcement agencies, government agencies (mainly for national security or critical infrastructure), as well as financial agencies around the world. Clients use the product for criminal investigations, human trafficking, drug smuggling, arms dealing, counter-terror, computer fraud, and money laundering.

However, the company has faced controversy before.

Back in 2021, Cobwebs, along with fellow Israeli tech firm Cognyte, was accused of using fake profiles to trick people into revealing private data, though it denied the allegations.

However, this revelation comes amid renewed focus on former Israeli intelligence agents going on to form cyber companies that have been used in controversial circumstances throughout the world.

The most notable example of this is the NSO Group, whose Pegasus spyware was found used by various allegedly authoritarian regimes to crack down on dissidents and journalists, among other examples.

Another more recent case is that of Team Jorge, a team of Israeli contractors who are allegedly responsible for manipulating over 30 elections around the world over the last 20 years through hacking, sabotage and automated misinformation.

Anna Ahronheim, Reuters and Shira Silkoff contributed to this report.