Cyber firm Fifth Dimension had no clients other than the Israel Police despite having said it had five other paying customers, according to internal documents from 2017. The firm, chaired by Benny Gantz, is undergoing a criminal investigation on suspicion that it had fraudulently received funds from the police by misrepresenting its client portfolio and the development stage of its product.
The police contracted Fifth Dimension to conduct a pilot program at a cost of 4 million shekels ($1.2 million) – without conducting a competitive bidding process. At the end of the pilot, the police were planning to purchase the rights to the product at a cost of 50 million shekels, but the company had already gone out of business.
Last year, the State Comptroller released a report that said Fifth Dimension had told the police it had five paying customers and a product ready for use.
In reality, the company had no other customers when the contract with the police was signed and the ambitious product – an intelligence system that integrated a number of technologies to collect and analyze large amounts of data for investigative purposes – was still in a developmental stage.
The company’s presentations to investors and shareholders at the end of 2017 show that it told them a different story than the one they showed to the police. The documents show that the Israel Police was the firm’s only paying customer and basic components of the product were still being developed.
The company had another customer – the Fox fashion chain – but that was a pilot program, and no payment was involved. Fox was described as a “strategic customer,” but no contract had been signed. The company also provided information about potential customers it was in touch with, including the Mossad and IDF, Cellcom, Bank Hapoalim and Playtika – but none of these entities ever signed a deal with Fifth Dimension.
As of the third quarter of 2017, the company was still in the development stages of voice identification and machine text analysis – relatively basic components of the product – a year and a half after it signed the deal with the police, according to the presentations provided to the investors and shareholders.
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Fifth Dimension was founded in 2014 by Doron Cohen, who was its CEO, and Guy Caspi. During its four years of operations, it attempted to develop a product to aid law enforcement agencies to gather and analyze data from multiple sources, such as security cameras, toll roads and cellular networks – and integrate all the information into a unified intelligence picture.
The firm recruited many former senior officials from the security forces: Former IDF chief of staff Benny Gantz was its chairman, and the company’s president was former deputy Mossad director Ram Ben Barak. Former police commissioner David Cohen and former acting police commissioner Bentzi Sau were hired as advisers.
Fifth Dimension closed down at the end of 2018, because of lack of sales and a cash crunch. All its employees were dismissed. The company had raised $50 million from investors such as CerraCap Ventures and UST Global.
A major investor, Russian oligarch Viktor Vekselberg, who is close to Russian President Vladimir Putin was unable to contribute more from his venture capital fund Colombia Nova Technology Partners after the United States imposed economic sanctions against him. No other fund was able to invest more in the company either because of the sanctions against Vekselberg. A prospective sale to Israeli cyber intelligence firm NSO Group was also blocked at the time for the same reason.