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Israeli Actress Seen as Corporate Spy -- WSJ

17 Nov 2017 7:32 am
By Mark Maremont, Jacquie McNish and Rob Copeland 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 17, 2017).

In a music video, aspiring Israeli actress Stella Penn Pechanac played a blonde-haired woman passionately kissing a man on a park bench. In a modeling assignment, she was a provocatively dressed redhead. In a university newsletter, she was a demure brunette wearing a plain blue scarf.

These days, Ms. Pechanac allegedly has put her acting talents to use in a different role: as an undercover operative for Black Cube, an Israeli investigative firm.

Ms. Pechanac, who couldn't be reached for comment, has been identified by multiple people as an undercover operative who, in separate assignments for Black Cube, used false names and elaborate cover stories to gather information from critics of film mogul Harvey Weinstein and of U.S. insurance company AmTrust Financial Services Inc.

Now, Ms. Pechanac has been named in a court filing by Canadian financial firm West Face CapitalInc. alleging she is one of several Black Cube operatives who used false names, businesses and websites in recent months to obtain sensitive information from its current and former employees.

It isn't unusual for companies to hire investigators to gather information on business rivals, but experts in the field say Black Cube's tactics are more aggressive than most. Ms. Pechanac's alleged activities in the three separate matters offer a rare view into a dark corner of corporate espionage.

The recent exposure also provides unwanted publicity for Black Cube, which describes itself as "a select group of veterans from the Israeli elite intelligence units that specializes in tailored solutions to complex business and litigation challenges."

Black Cube said it "applies high moral standards to its work, and operates in full compliance with the law of any jurisdiction in which it operates."

According to West Face's legal motion, the company discovered the alleged Black Cube operation aimed at West Face only last week, when The Wall Street Journal posted surveillance photos and video from an unrelated case of a mysterious operative using the name " Diana Ilic."

The woman later was identified by the Daily Mail and by multiple people interviewed by the Journal as Ms. Pechanac.

Several West Face employees immediately recognized photos of the woman as "Maja Lazarov," who claimed to be a London-based recruiter who had contacted the employees with potentially lucrative job offers, according to affidavits in the West Face motion. "I can confirm without hesitation that Stella Penn is the woman who falsely identified herself to me as Maja Lazarov," one West Face employee said in an affidavit filed Wednesday in an Ontario superior court.

In meetings, "Maja" allegedly asked the employees for confidential information about West Face. One was introduced to a supposed psychologist and convinced to take a personality test.

West Face's former corporate counsel, Alexander Singh, had two Toronto meetings in September with "Maja Lazarov," according to an affidavit included in West Face's motion. Mr. Singh said he later identified the woman as Ms. Pechanac.

He said he was flown in early October to London for dinner at a one-star Michelin restaurant, Galvin at Windows, to meet with the woman and two men to discuss a potential job opportunity with a Russian investment firm, according to his affidavit.

Instead, Mr. Singh said in an affidavit that he was "aggressively" questioned about details relating to West Face's legal fight with a rival firm, Catalyst Capital GroupInc., and asked to take a lie-detector test. Mr. Singh didn't take the test and no job offer materialized but he was "concerned that I was induced and forced to divulge what may have been privileged information," his affidavit said.

In the Wednesday motion, West Face said it believed that Black Cube had been hired to spy on it by Catalyst, a Canadian private-equity firm with which it is embroiled in multiple lawsuits, most relating to a 2014 takeover of a mobile-phone carrier.

Catalyst didn't reply to a request for comment. A person familiar with the matter said that Black Cube was investigating West Face on behalf of another client and that Catalyst wasn't a client.

Ms. Pechanac's Facebook page has been taken down and there was no response to emails sent to addresses that West Face employees said she used with them.

Many of those reporting interactions in Toronto and elsewhere with Ms. Pechanac described her similarly: a woman in her mid-30s with blonde or brown hair and an accent that sounded vaguely central European, who was sympathetic and friendly with women and sometimes flirtatious with men.

They say she gave addresses in London -- several different ones, which generally turned out to be untraceable shared-office spaces -- and claimed to work for companies or organizations that had generic-looking websites, some of which have since disappeared.

She sometimes made mistakes. In dealing with targets at West Face, she once referred to the wrong name for her supposed husband and misspelled the name of her purported recruiting firm, according to emails included in the West Face legal filing.

West Face last week tried to turn the tables. It hired a private investigator to shadow one employee, who had been invited to London by two men claiming to be recruiters, according to the legal filing.

While the West Face investigator took photos and observed from the next table, the recruiters tried to elicit information about West Face, according to the legal motion, which included a number of the photos.

The men who worked with Ms. Pechanac sometimes identified themselves with Russian-sounding names, according to the legal motion and several of those contacted. Two names turned out to match those of prominent Russian athletes. Another, Victor Petrov, resembles the name of the Russian president in the Netflix series "House of Cards," Viktor Petrov.

Ms. Pechanac served as a lieutenant in the Israeli Air Force and later studied acting and government, according to an online biography and other postings. She speaks Serbo-Croatian, Hebrew, English and conversational Spanish, the biography says.

Ms. Pechanac's family history is depicted at the Yad Vashem Holocaust museum and in multiple news accounts. She was born in Sarajevo, Bosnia. In 1994, her family was brought to Israel as refugees amid the Bosnian civil war.

They were welcomed in Israel because Ms. Pechanac's maternal grandparents had sheltered Jews during the Nazi occupation. Ms. Pechanac's mother, who was Muslim, converted to Judaism along with the rest of the family, the Yad Vashem site says.

Earlier this year, the Journal reported at least four individuals had filed whistleblower complaints with Canadian securities regulators alleging fraud at Catalyst and its publicly traded lending arm, Callidus Capital Corp., according to people familiar with the matter and documents reviewed by the Journal.

Callidus and Catalyst last week sued Dow Jones & Co., the owner of The Wall Street Journal, and Journal reporters Rob Copeland and Jacquie McNish for defamation over the article, and named Mr. Copeland as one of several co-defendants in the West Face lawsuit. A Journal spokesperson has said the news organization is "confident in the fairness and accuracy" of its reporting.

In the Weinstein matter, Ben Wallace, a writer who had been researching an article on the film executive, said he was approached late last year by a woman claiming to be a former mistress of Mr. Weinstein's named "Anna" looking for revenge. He has identified her as Ms. Pechanac.

A spokeswoman for Mr. Weinstein said: "It is a fiction to suggest that any individuals were targeted or suppressed at any time."

During one meeting, Mr. Wallace recalls, "Anna" was "welling up with emotion, but it didn't ring true." He adds: "It makes sense she went into private investigating, not acting, because I found her acting skills not stellar."

Write to Mark Maremont at mark.maremont@wsj.com, Jacquie McNish at Jacquie.McNish@wsj.com and Rob Copeland at rob.copeland@wsj.com

(END) Dow Jones Newswires

November 17, 2017 02:32 ET (07:32 GMT)

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