Did Israel set up a shell company for the deadly communication tools?

"Israel no longer needs collaborators. Its surveillance devices are in your pockets. If you are looking for the Israeli agent, look at the phone in your hands and those of your wives and children."

For Hezbollah leader Hassan Nasrallah, cell phones are not a trustworthy communication tool. In February, he publicly expressed this distrust in a televised speech.

Due to this distrust, Hezbollah has opted for the low-tech route by using pagers. Seven months later, on Tuesday, pagers used by Hezbollah members detonated simultaneously across Lebanon. One day later, other communication devices, such as walkie-talkies, also exploded.

Lebanese Health Minister Firas Abiad said on Thursday that 37 people were killed in explosions targeting pagers and handheld radios across the country, with 2,931 others injured.

Some media outlets have reported that Hezbollah's distrust of cell phones presented an opportunity for Israel. There is speculation that Israel may have established a fake pager shell company to sell Hezbollah pagers rigged with explosives.

A modern-day Trojan Horse

On Wednesday, The New York Times published an article reconstructing the explosion scene: at 3:30 p.m. Lebanese time a day earlier, the pagers beeped, alerting Hezbollah members to a message from their leadership in Arabic.

Seconds later, Lebanon plunged into chaos, with explosions, screams and sirens intertwining. According to the report, the explosive force was so powerful that adult men were thrown off motorcycles and slammed into walls. Shoppers fell to the ground, writhing in pain, with smoke continuously pouring from their pockets.

On Wednesday, during a funeral for victims of the pager explosions, another explosion occurred. This time, the deadly communication devices weren't pagers, but walkie-talkies.

For the Lebanese, the consecutive explosions of communication devices confirmed one thing: they were living in a world where even the most common communication tools could become instruments of death.

Israel has neither confirmed nor denied any involvement in the explosions of communication devices in Lebanon. However, 12 current and former defense and intelligence officials who were briefed on the attacks told The New York Times that Israel was the mastermind behind the operation. They revealed that the operation was complex and had been in the works for a long time.

For years, Hezbollah and other Iran-backed groups have been vulnerable to Israeli attacks using advanced technology. In 2020, Iranian nuclear scientist Mohsen Fakhrizadeh was reportedly assassinated by Israel using a satellite-controlled machine gun with artificial intelligence.

This is also why Lebanon has turned to using less modern communication devices like pagers. According to The New York Times, when Israel used precision strikes to eliminate senior Hezbollah operatives in Lebanon, Hezbollah concluded that if Israel was going high-tech, they would go low-tech.

Nasrallah believes that Israel is likely using cell phone networks to pinpoint Hezbollah operatives' locations. This is why Nasrallah has long advocated for the use of pagers within Hezbollah. The New York Times also suggested, based on reports from Hezbollah allies, that Israel had developed new techniques to infiltrate cell phones, allowing them to remotely activate microphones and cameras to spy on the phone's owner.

Three intelligence officials told The New York Times that Israel has invested millions of dollars in developing this technology. Rumors have also spread among Hezbollah and its allies that mobile communications, even encrypted messaging apps, are no longer secure.

Because of this, Nasrallah has banned the use of cell phones to communicate with Hezbollah operatives and has ordered that no operational details be discussed over phones. He also mandated that Hezbollah officers must always carry pagers and, in the event of war, use them to inform fighters where to go.

The New York Times, citing U.S. intelligence assessments, noted that although pagers have limited functionality, they can receive data without revealing the user's location or other critical information.

A shell company producing deadly pagers?

Hezbollah's concern over cell phones may have presented Israel with an opportunity.

"The scale of this operation suggests a complex supply-chain attack executed by a state actor," N.R. Jenzen-Jones, a director at the Armament Research Services, told Business Insider. "This would have required a significant investment in terms of manpower and other resources and likely months of planning."

The New York Times further reported that before Nasrallah decided to expand the use of pagers, Israel had already launched a plan to set up a shell company posing as an international pager manufacturer.

Politico reported on Wednesday that the pagers involved in the initial explosions were believed to have been produced by Gold Apollo. However, Gold Apollo later stated that these were branded products. Under a cooperation agreement, Gold Apollo authorized a Hungary-based company called BAC to use its trademark for sales in specific regions, but the product design and manufacturing were handled by BAC. 

Hungarian government officials noted that BAC does not have production or operational facilities in Hungary and is only registered at the address it declared, with no related equipment ever appearing in the country.

On Wednesday, BAC Consulting Chief Executive Cristiana Bársony-Arcidiacono told NBC that her company did work with Gold Apollo. However, when asked about the deadly explosions in Lebanon, she said, "I don't make the pagers. I am just the intermediate. I think you got it wrong."

Who the pager manufacturer is remains a mystery

Reports indicate that BAC did take on regular customers and produced a range of ordinary pagers, but its only major customer was Hezbollah. The pagers supplied to Hezbollah were not ordinary. According to The New York Times, these pagers were custom-made with batteries containing PETN explosives.

Brussels-based military and security analyst Elijah Magnier told AFP that if Israel were to embed explosive triggers in the new batch of pagers, it would need to access the supply chain for the devices.

The New York Times reported that starting in the summer of 2022, these pagers were slowly shipped to Lebanon. After Nasrallah publicly expressed concerns over cell phones, production of the pagers ramped up.

Two U.S. intelligence officials noted that the number of pagers sent to Lebanon increased over the summer, reaching thousands, and they were distributed to Hezbollah officials and its allies.

The three intelligence officials also told The New York Times that this company was indeed part of Israel's front line. The officials also revealed that at least two other shell companies were used to conceal the true identity of the pager manufacturers: Israeli intelligence officers.

"Israeli intelligence has infiltrated the production process, adding an explosive component and remote triggering mechanism into the pagers without raising suspicion," Magnier told AFP, raising the prospect that the third party which sold the devices could have been an "intelligence front" set up by Israel for the purpose.

"The fact that explosives were implanted in the pagers before reaching Hezbollah shows the challenges of securing electronics sourcing, especially with international shipments," Robert Khachatryan, CEO of Freight Right Global Logistics, told Business Insider.