Kaspersky Lab headquarters in Moscow.
The Israeli officials, who had detected the hacking two years ago, alerted the U.S. that Russian hackers were using the software as a sort of Google search engine for sensitive information, the Times reported, leading the Trump administration to order federal agencies to remove the Moscow-based cybersecurity software company's products from their networks.
According to officials involved, the Russians managed to hack into the home computer of an employee at the National Security Agency (NSA) through the anti-virus software installed on it and steal improperly stored classified documents.
Israeli intelligence agents discovered the exploit after they broke into Kaspersky's systems in 2014, and later tipped off United States intelligence agencies on the matter.
The current and former government officials who described the episode spoke about it on condition of anonymity because of classification rules, the Times said.
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The investigation alleges Israeli officials discovered the infitatration when they hacked into Kasperksy's systems.
In 2015, Israeli government hackers saw something suspicious in the computers of a Moscow-based cybersecurity firm: hacking tools that could only have come from the National Security Agency.
"Kaspersky Lab does not have inappropriate ties to any government, including Russian Federation, and it is unfortunate that news coverage continues to report anonymously-sourced claims, despite these sources not presenting the journalists any evidence to back up their accusations", the company said in a statement Tuesday.
The Israeli government notified the USA of this Russian intrusion, prompting months of discussion and a review of Kaspersky software, the Times reports. With US government agencies already directed to remove the software from computers, the writing is on the wall for the Russian software giant. Kaspersky Lab denied that it knew of Russian hackers or cooperated with them and said in response: "Kaspersky Lab has never helped, nor will help, any government in the world with tis cyberespionage efforts".
It has repeatedly denied having anything more than correct business ties to the Kremlin, saying it is "caught in the middle of a geopolitical fight".