Int'l ad fraud trail leads to Tel Aviv's Rothschild Boulevard

M51's Tel Aviv offices  credit: Ofir Dor

Companies like Google and Amazon fell victim to a scam that infected Android devices to present false data to advertisers.

This past April, US-based cyber company Human Security revealed suspicions of a huge scam happening in the online advertising sector. The company's investigation, conducted in the first half of 2020, revealed that about a million Android devices worldwide were infected with malware that made them part of a botnet. The infected devices sent messages to online advertising platforms, like Google, Apple and Amazon, that led those platforms to mistake them for streaming video apps.

During the last 30 days of the investigation, the botnet devices sent an astonishing 650 million transmissions per day to the ad platforms, creating the impression that users were exposed to more and more ads through streaming apps. These fake views allegedly brought the botnet operators huge payouts from the ad platforms.

The fraud is suspected in the emerging area of Connected TV Advertising (CTV), where ads are presented to the audience watching Internet content via smart TVs and streaming devices (like Google Chromecast). According to eMarketer, this industry will log a $13.4 billion turnover in the current year, its virgin territory considered particularly prone to security breaches.

"We generally don’t assess the volume of fraud in such actions," a Human Security manager said in an interview. "But it's not hard to imagine that the material damage involved here is significant." According to estimates in the US, this is the sector’s biggest scam ever.

The investigation found that the Android devices were infected with spoofing software after downloading one of 29 seemingly innocent apps like games or flashlights. All the apps contained a program called TopTop, which contained the malware. In addition, in some cases the applications linked their terms of use to the website of a company called TopTop Media, or TTM for short. Following the investigation, Google and the other app stores removed all the apps containing TopTop software. Human Security announced that it had sent its findings to US law enforcement agencies, who have not yet announced the opening of a formal investigation.

TTM's website has already been taken down, but cached versions are available. The site describes the company in general terms as specializing in ad-tech and using artificial intelligence and data to create user optimization for advertisers and application developers. An interesting detail lurks at the bottom of the site where it states that it is "Powered by M51".

The company address indicated on the website is 21 Rothschild Boulevard, Tel Aviv, an address belonging to Israeli start-up M51 Group. The email address provided is of the same group. The Wall Street Journal and other international publications defined TTM as a M51 subsidiary operating out of Tel Aviv. M51 denies it is behind TTM, but a string of further evidence found by "Globes" also indicates there may be a questionable connection between the two.

A trail of connections between companies

The M51 Group was founded and managed by Ronen Menipaz, in his youth a Knesset lobbyist and nightlife bon vivant (at the Dizengoff and Yaya clubs), a former creative vice president of an advertising agency, and now a media entrepreneur. Menipaz was one of the founders of advertising company Meme Video, which in 2016 was sold to Israeli company Somoto in a deal consisting of $3.5 million in cash and shares and another $9.5 million contingent on meeting targets. In 2018, Menipaz founded M51, which a year later announced it had received a $3 million investment.

A well-known businessman was in the past presented as an investor and partner in the company, but he denies being involved in M51, and requested that we should not mention his name in this article.

In the same interview, the M51 was described as a grouping of 11 technology companies in the fields of fintech, games, ad-tech, and ed-tech, with about 100 employees. "Our group invests in groundbreaking projects that have a social and technological impact. Aided by the artificial intelligence and technologies we’ve developed, we can expand the ability to develop and distribute them, making them market leaders," Menipaz explained in the interview.

An investigation by "Globes" revealed many possible connections between TTM, against which allegations of involvement in fraud were made, and M51. In a 2019 Facebook post, an M51 employee promoted a rooftop event for vendors and customers at Rothschild 21, at the "Headquarters of M51 and the TTM Group". Another Facebook post promoted in September 2020 by M51 Group media representative Minkovsky Communications, showed group employees taking their children to the first day of school. One person is described as the TTM Demand Team Leader at Group M51.

The CEO was appointed by M51

In 2019, M51 itself promoted a post on its Facebook page in which TTM is described as a "subsidiary". The post links to an interview conducted with then-CEO of TTM, Michal Hanan, published on website People & Computers, in which she describes TTM as "part of the M51 family." In the interview, Hanan describes her role as including campaign building and media buying, technology project management, and overseeing a technical development team of five programmers.

In a brief conversation that "Globes" conducted with Hanan last week, she sounded completely different. She claims she was hired as a freelancer by M51, along with other workers, for several months in 2019 to promote TTM with potential investors. She claims she had no part in the professional side of the company and she did not know the details of its professional activity. "It was all fake. We had to leverage the company, bring in deals with investors, and brand the company in the media, but I was not involved in its activity," she said.

IVC Research Center’s start-up database lists Tal Nitzan as one of TTM’s founders. Speaking to "Globes," Nitzan initially confirmed that he was indeed the owner of TTM, but later retracted the statement, and referred "Globes" to PR woman Irit Meron for a response on behalf of TTM. Meron claimed that she had been representing TTM for half a year, but could not present any article related to the company in the print, broadcast or online media. Meron said she engaged in influencer activity related to applications promoted by the company.

There are also prominent connections between Nitzan and M51. In his personal blog, Nitzan describes himself as "Steroid Director at M51". Cross-referencing their LinkedIn and IVC profiles reveals that in the past Nitzan and Menipaz were involved together in ventures like now-defunct gaming company DrasticFun.

A company working under the radar

In fact, apart from being mentioned in conjunction with M51 Group, it is hard to find other references to TTM’s existence. It does not appear in the Register of Companies in Israel. From late 2019, mentions of the company disappear almost entirely, and at a certain point, as mentioned, its website was also taken down. M51 refused to provide any evidence regarding the identity of the entrepreneurs behind TTM, and referred "Globes" to Adv. Amit Bracha of Bracha & Co. Bracha is a partner, together with his father, in Minkovsky Communications, the public relations agency that represents the M51 Group.

Bracha claims that he holds in trust TTM shares on behalf of an Austrian businessman, who purchased them from Israeli-Americans at the end of 2019, in a deal brokered by Menipaz himself. Bracha claims the matter is under legal dispute in Austria because false presentations were made to the buyer and because of the company's illegal activities. Bracha said he was not allowed to give the names of those involved because of legal confidentiality. Asked by "Globes" whether he was not afraid to be a trustee of shares in a company that might find itself involved in crime, Bracha presented a letter he allegedly sent to the Austrian businessman in which he seeks to be rid of the shares as soon as possible. In this case, too, the name of the customer in question was blacked out.

Responses

TopTop Media stated: "TopTop is a media company with hundreds of suppliers and customers. As long as it was operational, the company was a leader in its field with an excellent reputation in the market. This report is recycled from four months ago and is a waste of ink. We would point out that TopTop is not connected to M51, aside from renting office space, and as a member of M51’s marketing acceleration".

M51 stated: "The M51 Group tried to strengthen TTM's marketing efforts and rented offices to it. M51 markets hundreds of companies and is not involved in the management or activities of the companies."

Published by Globes, Israel business news - en.globes.co.il - on August 29, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

M51's Tel Aviv offices  credit: Ofir Dor
M51's Tel Aviv offices credit: Ofir Dor
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