Ari Teman learned the hard way that it was illegal to list his rented New York City apartment on Airbnb. In March 2014, he was evicted after an Airbnb client held a sex party that trashed his apartment. It was worldwide news.

Being a standup comic helped Teman find the humor in this situation. “Aside from the illegal orgy destroying my apartment, it was a lovely weekend,” he tweeted at the time.

His entrepreneurial streak helped him turn his misfortune into a business, and he came to Israel to do that – during a war, no less.

“Two years ago, in the middle of Operation Protective Edge, I flew to Israel to perform standup for soldiers and folks stuck in shelters and to incorporate Friend or Fraud, a cybersecurity and artificial intelligence company in Tel Aviv,” Teman, 34, tells ISRAEL21c.

Ari Teman. Photo by Jammi Sloane York
Ari Teman. Photo by Jammi Sloane York

Why in Israel? “If you give Israeli developers a deadline and the perfect solution isn’t ready, they’ll still get you a solution. They’ll patch it together until they can get it perfect.”

Using a proprietary combination of computer-vision and recognition technologies, Friend or Fraud potentially could help clients in many different fields catch fraudulent or inappropriate account activity or interactions, such as identity theft, hacking or content stealing.

The first sister company powered by Friend or Fraud is SubletSpy, launched earlier this year to help landlords or neighbors catch illegal sublets on sites like Airbnb and Craigslist. In New York, for example, renters whosublet their entire apartment for less than 30 days can be evicted, and in Chicago a license is required for vacation rentals.

Though landlords in several US cities are using the web-based service, New York City is the main target market because many of the 107,000 Airbnb listings there are illegal – despite clear guidelines on the Airbnb website — and landlords face a $10,000 fine unless they detect the problem before the housing police do.

For a variable monthly fee, SubletSpy users enter an address into the system, along with photos and floor plans if they like, and the software matches that data with posted ads for sublets. Clients receive a detailed report they can use in housing court.

“I have a bunch of ex-Israeli Air Force signal-processing guys coding this thing,” Teman told New York’s PIX11 News, one of many media outlets to report on SubletSpy.

“It’s really exciting if you can catch illegal subletters because you can avoid fines and evict tenants who are running illegal hotels,” Teman tells ISRAEL21c. “We caught over 200 in our first month, while New York City’s Mayor’s Office of Special Enforcement catches 300 a year.”

One landlord, who wishes to remain anonymous, says he gave SubletSpy information on three of his buildings,“and they found illegal sublets in each one, even where I didn’t suspect.”

Teman adds, “Landlords don’t want Airbnb sublets in their buildings even if it’s legal because it’s a huge liability, and tenants don’t like their building being used as a hotel. It’s also a headache for property management companies because residential buildings are not designed for that kind of huge turnover.”

Exposing bank fraud, helping EMTs find addresses

Exposing illegal listings on Airbnb – which has declined to comment on SubletSpy – is not Teman’s ultimate goal. He sees the Friend or Fraud core cyber-tech powering many other services, from banking to criminal investigations, to locating the source of calls to emergency responders.

Friend or Fraud is hardly the only Israeli image-recognition and artificial-intelligence technology. Teman acknowledges the competition while touting the ease of use his team has built into the product.

“We’re able to pull 60 million records in under half an hour efficiently, and the interface is very easy even for people who are non-technological. We take massive amounts of information and present it elegantly and simply to the client.”

In September 2015, Friend or Fraud was one of 24 Israeli startups (and one of just six in cyber-technology) chosen to pitch at Visa Europe Collab, a new international innovation hub with a branch in Tel Aviv.

On June 29, Deutsche Telekom is providing a stage for Friend or Fraud to present its product to the German automotive industry, as the autonomous cars of the near future will have integrated cameras.

“If you’re looking for a certain address while driving, our technology can help,” says Teman. “It’s estimated that in America 10,000 people die each year because emergency responders can’t find the address phoned in to 911, or the caller doesn’t know the address where the incident occurred. You could text a picture of a building to 911 and our technology will find the address and tell 911 where the victim is.”

Friend or Fraud, which is headquartered in New York and has seed funding from two Israeli and two American investors, has a team of seven and is in hiring mode.

“We’re profitable a month into launching our first service, and we have more coming,” promises Teman.

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