In November 2021 the U.S. Commerce Department added an Israeli company to the same Entity List it uses for weapons proliferators. The company was NSO Group, maker of Pegasus — spyware that turns a phone into a silent informant. The stated reason was blunt: NSO's tools had been sold to governments that used them to target "journalists, businesspeople, activists, academics, and embassy workers," and to reach across borders to silence dissent. [SOURCE: U.S. Department of Commerce · CNN]
Pegasus was always sold as a lawful-intercept tool for terrorists and serious criminals. The documented use was wider: it surfaced on the phones of a Moroccan journalist, the widow of a murdered Mexican reporter, and associates of the murdered Saudi columnist Jamal Khashoggi. [SOURCE: Axios · CNN]
Trouble did not end the business; it reorganized it. In 2019 a new Israeli firm, Paragon Solutions, was founded by Ehud Barak — a former Israeli prime minister — and Ehud Schneorson, a former commander of the signals-intelligence Unit 8200. [SOURCE: The Citizen Lab · The Jerusalem Post] Its product, Graphite, does what Pegasus did — it breaks into encrypted messaging apps. The Financial Times reported that after Pegasus was found on Khashoggi associates' phones, Paragon declined Israeli-government requests to put Graphite into the Saudi arsenal: a marketing distinction, not a capability one. [SOURCE: Financial Times]
Then the capability changed passports. In December 2024 a Florida private-equity firm, AE Industrial Partners, acquired Paragon for a reported $500 million — figures up to roughly $900 million have been cited — and folded it into REDLattice, a U.S. cyber company already in its portfolio. [SOURCE: The Jerusalem Post · Times of Israel] ANALYTICAL: An Israeli spyware maker became, on paper, an American one. It is the maneuver that lets a capability the United States blacklisted in one company re-enter the market under a flag that is on no Entity List.
The customer, increasingly, is the U.S. government itself. A roughly $2 million contract between Paragon and Immigration and Customs Enforcement was paused in 2024 for review under the executive order restricting commercial spyware; in 2025 the Trump administration lifted the pause, clearing ICE to use Paragon's tools. [SOURCE: Infosecurity Magazine] Citizen Lab, the University of Toronto research group that tracks this industry, separately documented Graphite being used against journalists in Europe. [SOURCE: The Citizen Lab]
The most domesticated member of the trade is Cellebrite — the Israeli digital-forensics firm whose phone-unlocking kits are a fixture of law-enforcement work. Unlike NSO, Cellebrite is a public company: Cellebrite DI Ltd. trades on Nasdaq and files with the U.S. Securities and Exchange Commission, which makes it the rare surveillance-for-hire vendor whose ownership is a matter of record rather than inference. [SOURCE: SEC EDGAR]
