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Meet The Entrepreneur Who Launched A WhatsApp Rival From A Colombian Prison

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This article is more than 7 years old.

The view from Mayer Mizrachi Matalon's jail cell is a fine one; clumped red-brick houses, the undulating emerald fields of Bogotá, Colombia, mimicked above by white furrowed clouds.

Inside the rusted bars of La Picota prison, reality bites. Small bunk beds, shelves cluttered with packets of assorted foodstuffs, buckets used to store water for washing, drinking, brushing teeth, cleaning the toilet.

His two roommates are wanted for aiding terrorists and drug crimes, typical of the inmates at infamous La Picota. Like Mizrachi, 28, they say they are innocent.

Outside his cell’s door are cold showers, non-kosher food that Mizrachi, who is Jewish, can't eat. Inmates play table tennis and hang their laundry in a cloistered mess hall. They eye one another suspiciously. During his time here, Mizrachi has experienced threats of violence and rape from baying prisoners, many accused of helping run the drug trade that's ravaged South America. Relentless fear. It's been five months now.

Inside Mizrachi’s head, the awful, unanswerable question runs in a loop: How did I get here?

From party planning to prison

As the end of 2015 drew near, Mizrachi was burning out. His company, Criptext, had spent the year raising a small pot of money, $500,000 in a seed round all from uncle Joseph Matalon, as it tried to expand beyond its original tech: a plugin that allowed Gmail and Outlook users to recall emails and encrypt their messages. That tool garnered some press attention and, the company tells me, nearly 20,000 users (an official Google page reveals there are just under 11,000, some of whom clearly weren't happy with the service judging by the reviews).

Mizrachi wanted a vacation before embarking on his next big project, the launch of a refreshed Criptext Messenger, a potential rival to Facebook-owned WhatsApp, currently the most popular cross-platform messaging app in the world. Rather than simply try to take on WhatsApp and other encrypted messaging apps, Mizrachi had bigger plans for Criptext, previously a business-focused app for Apple’s iOS and Google’s Android operating systems. He wanted customers, from hospitals to banks, to embed the tool in technology they already owned. In Mizrachi's master plan, the technology would let patients interact securely with doctors online, or online bankers message customer service without fear of being snooped on. It would do the same between real people and chat bots, which mimic real-life company representatives.

The inspiration for the expansion of Criptext came from a contract with the government of Panama to provide secure communications. Unfortunately for Mizrachi, that 2014 deal went sour. In the end, rather than liberate his business, the Panama problems turned a vacation into an indefinite prison stay, where the young entrepreneur would oversee the launch of Criptext Messenger, far from the comfort of his New York office.

On December 29, the day Mizrachi was due to get on his flight from Fort Lauderdale, Florida, where he’d briefly visited family, to Cartagena, Colombia, his mother warned him not to go. "I didn’t have a good feeling. I said don’t go, let’s stay here together, please. Don’t travel," Rebeca Matalon tells me. Mizrachi, a 28-year-old full of vim, ignored his mother, seeking a break from the madness of start-up life in New York. What better way to shed the stress than with a New Year's blowout with friends in a city replete with beauty, with pre-internet history?

But when he landed in Cartagena, Mizrachi was pulled aside at customs. He was told he was wanted for extradition by the government in Panama, where he owned a business (Innovative Ventures, the parent to Criptext, is registered in Panama. Criptext is based in New York). Video footage shows the young entrepreneur as he's escorted by officers of Colombia's national police wearing Interpol jackets, out of Cartagena airport to a van, and then on to a local jail. He appears either surprisingly calm or shell-shocked in the face of an incomprehensible twist of fate.

A baffling case

Mizrachi's case is, as one of his five lawyers Alexandre Vernot puts it, very strange, redolent of the Kafkaesque. Sometime last year, the Panama government put out an Interpol Red Notice for Mizrachi, claiming he was wanted for fraud against the government. According to his legal team, there are no official charges, but one of the few pieces of official documentation available online notes he is accused of breaching a contract to provide Criptext services to Panama, awarded in March 2014, though it doesn't specify how that deal was broken. A Panamanian government statement, on the postponement of a court hearing in February, explains that Mizrachi and unnamed "others" had been called before the country's criminal courts "for the alleged commission of crimes against the public administration." Panama, which has an extradition treaty with Colombia, applied for his extradition on January 6.

Speaking to FORBES from his confines, Mizrachi tells me the investigation relates to a contract with the Autoridad Nacional Para La Innovación Gubernamental (AIG), the Panamanian department for innovation and technology, to provide secure alternatives for email and WhatsApp (which has just become significantly more secure with its own end-to-end encryption). Court dockets from Panama show the AIG as the complainant in the case against Mizrachi.

There's much conflicting information about the nature and alleged breach of the contract. Rather than being accused of fraud, Mizrachi says the state alleged he embezzled money. Panama media reports indicate that is indeed one charge levelled by the government, though the chief complaint is that the software was not fully rolled out. Mizrachi describes both claims as absurd, as he was never a government employee, but a contractor paid by the AIG. He says he provided 100 licenses, which the government chose not to fully use. An audit ordered by Panama’s government, he argues, was inadequate as it looked at the number of devices using Criptext, rather than the number of licenses provided.

"They’re accusing him of a criminal act when basically it’s an administrative situation. It shouldn’t be a criminal act. It’s a dispute about a contract, which was just a license for nine months," Rebeca Matalon says.

Colombian police, according to a Reuters report from December, claimed the contract was worth $13.3 million, though there was no official comment from Panama. Mizrachi says the deal was worth just under $200,000 and only covered 100 employees. He claims the technology was delivered but stopped being used after just four months after the transition to a new government, led by Juan Carlos Varela.

Mizrachi provided FORBES with an email to a newly-appointed AIG director, Irvin Halman, dated October 28, 2014, in which he asked the director why the product wasn't being used. Mizrachi claims he was repeatedly ignored by Halman and had flown to Panama in July 2015 to speak with government investigators about their probe into the deal, only to be told he was not needed. He claims to have provided ample evidence to prove the contract was delivered. Though he knew about the government investigation, he had no idea they'd go as far as issuing a Red Notice that would lead to his precarious situation. (Halman had not responded to FORBES' inquiries at the time of publication. Former AIG director Eduardo Jaen is also under investigation by anti-corruption prosecutors in Panama).

If there are no charges and close-to-zero information on how the contract was breached, why the five-month long stay in a maximum security Bogotá institution? Mizrachi's family ties may provide a clue. Reports from December claim Mizrachi, a dual Jamaican and Panamanian citizen, is the nephew of ex-Panamanian President Ricardo Martinelli, but that's not quite true. His father is, in fact, in a relationship with the sister of Martinelli. In rather public spats, President Varela has accused the Martinelli regime of corruption, leading to the launch of an official investigation at the start of 2015. A week before Mizrachi's detention, Panama's Supreme Court ordered the arrest of Martinelli, who is believed to be living in Miami.

"He’s been caught up in some kind of web following the change of government. That’s no reason for him to be languishing in a Colombian jail," says Lord Anthony Gifford, an attorney specializing in human rights, working out of Jamaica and the UK.

The entrepreneur's representation believes egregious human rights violations have occurred. First, they claim Interpol did not carry out adequate checks before issuing a Red Notice, failing to check whether any charges had been filed. Second, he should not be incarcerated over what is essentially a contract dispute. Third, they claim to have paid the bail to have him released. Mizrachi provided a document that appears to show a $100,000 payment to Panama's justice division, dated February 23rd 2016. Panamanian media reported on January 19 a court had granted a petition for bail for that amount in January before he’d even reached La Picota, and yet he remains there. The justice department had not responded to a request for comment at the time of publication.

Getting any full comment from those responsible for Mizrachi's detention is akin to talking to robots whose speech is limited to bureaucratic platitudes. "Unfortunately, I can’t answer your questions,” Panama government spokesperson Sandra Sotillo told FORBES. “That case was already sent to the Supreme Court to process his extradition." Sotillo would not say when Panama asked Interpol for a Red Notice or provide any more detail on the crimes Mizrachi is supposed to have committed. Panama may well have a case against Mizrachi, but it's refusing to elaborate.

The Colombian police did not respond to enquiries, though La Picota confirmed Mizrachi has been incarcerated there since January 20.

Interpol distanced itself from all responsibility. A spokesperson told FORBES over email: "Interpol cannot insist or compel any member country to arrest an individual who is the subject of a Red Notice. Nor can Interpol require any member country to take any action in response to another member country’s request. Each Interpol member country decides for itself what legal value to give Red Notice within their borders, including whether or not to arrest an individual and also whether to extradite or not.

“Interpol’s role is not to question the criminal proceedings initiated against an individual, nor to gather evidence, so a Red Notice is published ... based on a valid arrest warrant or judicial decision having the same effect issued by the relevant national judicial authorities.” They could not comment on Mizrachi's specific case, but noted his legal team could appeal to the Commission for the Control of Interpol’s Files, an independent body created to address such requests. Mizrachi’s team has not gone down that route, instead appealing to bodies in Panama and Colombia.

Thus far, his team's petitions have achieved little. Vernot says appeals to Colombia's minister of justice and Panama's foreign office have been fobbed off, both sides stating the decision on his extradition would eventually be made by the Supreme Court at an as-yet unspecified date. Appeals to criminal courts in Panama have yielded just as little.

The most recent attempt to get some kind of official recognition was a request for assistance from the Inter-American Commission for Human Rights. It's unclear how the group could help. And like Interpol, the IACHR said it could not comment on the matter, other than to confirm it had received the petition from Mizrachi's lawyers.

Life inside

Mizrachi tells me he went through two different prisons before his long stay in La Picota commenced. One sleepless night at the police station in Cartagena's old town was preceded by three weeks at a small detention center in Bogotá. The first thing they did when he arrived at La Picota was shave his head, his already trim ochre hair reduced to dark stubble, though it's now growing back.

The walk to his temporary holding cell was worse. "I could hear noise, so much noise, of people shouting and screaming. It sounded like a jungle. And it was scary, it was scary," he tells me from the prison. "I was disappointed in myself. I thought I got myself into this position, I let down my family and everyone that loves me, everyone around me." For a third time since his arrest, he cried.

Then the trip up to the top floor, where extraditable prisoners are kept, was similarly unpleasant, inmates shouting "nuevo,", the new boy was in town. "When I’m taken up, I’m paraded around," he adds. "They’re telling me everything that’s going to happen, who’s going to rape me, they’re screaming at me ... it was just mental torture, emotional torture."

Conditions at La Picota are favourable compared to some other institutions, like the deadly La Modelo in Bogotá. But there are just two showers for 80 inmates on his floor, running water available just three hours a day: one in the morning, one at midday, one at 2 p.m., he says. One particularly grim anecdote: though water can be purchased in bottles from a kiosk, for a two-week period they ran out, leaving no option but to drink from the faucet. "Everyone got sick ... That was really shitty because right at the same time was Easter. It was an entire week-long event, and no one worked, so we couldn’t get a doctor that entire week. My family tried to send in medication and they wouldn’t accept it."

There's no heating. Constant searches of persons and their cells. No outside area to roam, to taste emancipation. "It’s kind of like a Las Vegas casino, you go into the casino at 2 a.m. and at 2 p.m. and it looks exactly the same."

But he continues to work. The new consumer version of Criptext Messenger launched this month, though to little fanfare. Through various forms of communication, Mizrachi has managed to work on his business plan, review and test software, even make changes to Criptext Messenger from within the prison walls. That has provided some measure of sanity. Not shy of spinning his imprisonment into a PR opportunity, he wears his Criptext t-shirt when he needs to, as in the photos taken on inmates' smuggled mobile phones for this article.

"As long as I have Skype and I have a keyboard and email, I can communicate with my team… This is limited, it has limited what I can do but it hasn’t stopped me from doing anything."

Contact with his family has also provided some succour. His mother, who is temporarily residing in Bogotá, visits once a week. Other family members fly down when they can. His twin brother Mark, meanwhile, is running Mizrachi's Twitter account, occasionally tweeting Panamanian officials, calling for justice.

But there's a pressing concern about Mizrachi's health. At a young age, he was diagnosed with a rare disease, a form of vasculitis known as polyarteritis nodosa (PAN). Usually seen in the middle-aged and elderly, it causes inflammation of veins, causing blockages and lack of blood supply to organs. Medication is limited to steroids, immunosuppressives and chemotherapy. If Mizrachi's illness returns whilst inside, his life may be at risk.

"He has flare ups, then it goes into remission," mother Rebeca Matalon says. "[It's] an autoimmune condition, you always get ill from it, especially under stress and under abnormal conditions."

Dr. Vas Novelli, who treated Mayer Mizrachi at Great Ormond Street Hospital in London from 1998 to 2007, tells me excessive stress certainly could lead to a return of symptoms, which include fever, swelling and seizures. If left untreated, they could lead to a heart attack or stroke, he warns. Dr. Novelli has compiled a report for Matalon to be included in the various petitions.

Rebeca Matalon, who moved to Colombia in January to provide her son with support, is worried but remains upbeat. "Mayer for me is a miracle," she tells me. "We have to be positive, we have to make good things happen to him."

What hope?

When they might happen is impossible to judge. At some point in the next few months, Panama will provide Mizrachi's lawyers with a full list of accusations. Vernot says the team has 10 days to reply. Then comes a period of limbo, which Vernot says could last another six months, until Colombia's Supreme Court makes a final decision. If that goes Mizrachi's way, he'll likely walk free, head home to New York and continue promoting Criptext.

The company, a small team of 16 working out of New York City and Ecuador, needs to prove a lot. It currently has no paying customers it can name. (Loaiza tells me one customer was a Brazilian firm called Shippify. He neglects to tell me he ran the company, later apologizing).

Criptext's cryptography is also unproven. Any encryption product worth its salt is subjected to rigorous independent testing from an unforgiving crypto community. Criptext will have to go through such an audit if it wants to compete with the Signal protocol, the underlying code behind WhatsApp's encryption. Loaiza provided FORBES with a brief paper on the company's method for providing secure transfer of data, which seems unremarkable.  In fact, the technology, looking at the limited information available, is similar to other encryption systems, according to University of Surrey cryptography expert Alan Woodward.

He's already noted one issue: "The idea is that their server is the honest broker that issues keys to smaller systems wanting to send each other encrypted data. These types of key management services are not uncommon but they do have a vulnerability - they know the key used by each party and so theoretically could leak that key if compromised."

Regardless of the quality of the tech, Mizrachi and his lawyers are optimistic about his personal wellbeing. They believe that not only do they have a rock solid case, they have the backing of the Panamanian people. Over Criptext, the CEO adds: "People in Panama have gone mad about this. They see it for what it is: a sleazy banana peel."

If Panama prevails? A fourth prison beckons. Whether Mizrachi is guilty of any crime, his incarceration for a breach of contract is, at the very least, baffling. At worst, it's illegal.

Additional reporting by Dan Alexander

CORRECTION: This article previously stated Mizrachi's father was married to Martinelli's sister. They are not, but are in a long-term relationship. The article was updated to represent that fact.

The article was also updated to note his uncle Joseph Matalon was the sole investor in the seed round.

UPDATE: The Panama Ministry of Foreign Affairs sent a statement through to FORBES on May 22 to explain the situation with Mizrachi's bail. The government department said the bail only applied in Panama. This meant that if he returned to the country he wouldn't be jailed, but would be required to remain there for as long as the investigation into his contract with the innovation department continued.

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